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Brought from the Commons; read a first time, and to be printed.

21 Mar 1995 : Column 1131

Business of the House: Debate, 22nd March

The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the debate on the Motion in the name of the Lord Cledwyn of Penrhos set down for tomorrow shall be limited to five hours.—(Viscount Cranborne.)

On Question, Motion agreed to.

Pensions Bill [H.L.]

3.10 p.m.

Earl Ferrers: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Pensions Bill [H.L.], has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, I beg to move that the Bill be now read a third time.

Moved, That the Bill be now read a third time.—(Lord Mackay of Ardbrecknish.)

Lord Simon of Glaisdale: My Lords, before my noble and learned friend the Lord Chancellor collects the voices, perhaps I may venture to point out that this Third Reading is taking place the minimum of three working days after the Report stage. That interval is sufficient for a simple and short Bill, and particularly where the Report stage is little more than a mopping up of the Committee stage. However, that is far from the case with the Bill now before the House.

Important amendments were moved and accepted, some on a vote, with cross-voting on Report, many of which needed at any rate some drafting amendment. Therefore, it is the height of inconvenience to have the Third Reading following so closely in time. After a Report stage, or indeed any other stage, it is usual for your Lordships to write to the Minister and to receive a reply before the next stage. That has been impossible in this case.

We are very much in the hands of, and indebted to, the usual channels which arrange business, especially so that important issues upon which there may be a vote are taken at an early hour. However, I venture to suggest that a grave mistake has been made in this case.

Viscount Cranborne: My Lords, I believe that the House is ill advised if it does not listen to the advice that it receives from the noble and learned Lord, Lord Simon of Glaisdale, with even more than its usual attention. However, I venture to suggest to your Lordships that perhaps the noble and learned Lord may like to reconsider what he has just said. It is perfectly true that the minimum interval of three working days has been observed. However, the noble and learned Lord might also like to consider that business managers have

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tried to give rather more days, albeit not altogether working days, in between the printing of the Bill in its current version on 14th March and today. That gave seven clear days, although they include only three working days.

I hope that the noble and learned Lord is aware that we have a pressing programme of legislation, despite what the Opposition suggested after the Queen's Speech. Indeed, we have much business to get through the House between now and the Summer Recess. Like me, I hope that the noble and learned Lord is looking forward to an early assumption of the bucket and spade and that he will feel that there has been enough time in this instance, especially in view of the considerable detail with which the Bill has been examined, for him at least to look at what the Government propose in terms of timing with some degree of indulgence.

On Question, Bill read a third time.

Baroness Turner of Camden moved Amendment No. 1:


Before Clause 37, insert the following new clause:

Training for trustees

(". Regulations shall require trustees of occupational pension schemes to undertake an approved course of training within three months of appointment and where a person fails to comply with this requirement the Authority shall consider his disqualification under section 26.").

The noble Baroness said: My Lords, we are returning yet again to what I regard as an important issue; namely, the training of pension fund trustees. I became even more aware recently of the need to make training mandatory when I was invited to speak last week to a group of union members, most of whom were employee trustees. I spoke about the Bill and was asked to describe what had been happening during its passage through the House.

Those trustees were astonished to find out the very wide range of responsibilities that they would have as a result of the Bill and the penalties involved should they transgress. They clearly had not realised, even though they were individuals who take a keen interest in pension matters, precisely what was involved. They took the view that if they had all that responsibility in law, the least that could be done was to ensure that they were sufficiently trained to be able to deal with it. They did not believe—and neither do I—that it is sufficient to leave that to the voluntary process.

It seems to me that what is required is a provision under which all trustees are required to be trained in their legal duties and responsibilities within a specified time following their appointment. That would ensure that trustees were at least aware of the responsibilities imposed on them by law. Perhaps the new authority could then produce a code of practice in that area in consultation with interested parties. It is essential that that is not left to chance.

The amendment that we are attempting today differs from those previously advanced in that it envisages that regulations will require training to be provided, and it would be up to the authority to determine whether failure to take up such training in individual cases warranted disqualification. It really would not be

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sensible to insist that a trustee who might be professionally qualified in the pensions area should have to undergo training similar to that to be imposed on trustees with no such training or background.

As we have said on a number of occasions during discussion of the Bill, we are concerned that the penalties on trustees look fairly formidable. We do not want to discourage people from coming forward to do that necessary work. It is appreciated that there have to be obligations and responsibilities. As has been said so often during the passage of the Bill through the House, it is a question of getting the balance right. If people are to assume such responsibilities with confidence, they must have the necessary training to do so. We cannot be happy leaving that simply to a voluntary process. I beg to move.

Baroness Seear: My Lords, I should like briefly to support the amendment. We want trustees; and, indeed, we rely very heavily on them. The Government have resisted attempts to make the regulator powerful. Therefore, we are relying on trustees, members of the trustee boards, to understand fully what they are doing and to take the necessary action. However, they are also exposed to very considerable penalties. It is only right and proper, therefore, that they should be required to undertake training. Otherwise, they will find themselves confronted with responsibilities for which they have been totally and inadequately equipped and we shall find that people will not be prepared to take such responsibilities. As I said, I support the amendment.

Lord Boyd-Carpenter: My Lords, I believe that the amendment goes too far. The noble Baroness, Lady Turner, indicated that some of the people who became trustees were already very experienced in pension matters; indeed, that is the case. But, as I read the amendment—assuming that the regulations are made as the noble Baroness wishes—even experienced people would have to undertake a course. First, that seems to me to be a wasteful proposal; but, secondly, and perhaps more important, if someone experienced in pensions and pensions management is confronted, nonetheless, with the necessity to take a course when he accepts the appointment, he will be discouraged from accepting it. It may well be that the effect of this amendment will be to deprive pension funds of precisely the people who will be the greatest possible use —those already experienced in pensions; by which, of course, I do not always include for this purpose those who have served as Minister of pensions.

Baroness Dean of Thornton-le-Fylde: My Lords, I, too, support this amendment. I agree with some of the points that have just been made by the noble Lord on the Benches opposite. However, the Bill will introduce in pensions legislation punitive offences for which individual trustees may be liable. As I said at an earlier stage of this Bill, there are 12 offences which may render a trustee liable to suspension or removal from office. Seventeen offences carry a penalty of fines, 14 of which may be imposed on trustees. Five offences carry a criminal penalty, or a fine, or imprisonment, three of which may be imposed on trustees.

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I have considered these offences and I suggest to your Lordships that without adequate training—I am not talking about long training courses—to enable the trustees to understand their responsibilities, those penalties are extremely unfair, justified as they are with the amount of money for pension beneficiaries which is invested. For example, an offence can be committed, and a fine can be imposed, for failure of a trustee to make proper arrangements for member-nominated trustees. That is in the Bill, but trustees will have to know where to look for that offence, and they will have to understand it fully. It is an offence not to have or to maintain a statement of investment principles. That offence may be imposed on all trustees and a fine can be levied. There is an offence of illegal self-investment. Trustees have to know exactly what constitutes illegal self-investment. They need to be trained to understand that, because if they breach that part of the Bill they will have committed a criminal offence and a fine or imprisonment can be imposed. It is an offence not to keep proper books and records. I do not know how many trustees are responsible for keeping proper books or records themselves. They may have professional advisers who do that, but it is the trustees' responsibility at the end of the day to ensure that it is done. If it is not done, a fine can be imposed.

It is an offence to fail to make arrangements for the resolution of disputes. A fine can be imposed if a trustee does not take that duty on board. One could go on and on. A substantial number of breaches of the law can be committed in the pensions field and they can result in suspension from office, removal from office, the payment of a fine or indeed imprisonment. It is an offence to provide false information or to fail to provide information to the authority, compensation board or registrar. What information is that? How will trustees know what information they must provide if they are not trained in the basic rudiments of this Bill? I support this amendment. It asks for the training requirement to be set out in regulations. At Report stage I believe that the Minister touched upon that matter and he may accept this amendment. I hope that he does.


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