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Lord Higgins: Clearly, we are not in agreement on how the matter should be handled. Its genesis arose as a result of pressure in the House of Commons. I understand that some matters cannot yet be decided, but there are a number of amendments, such as this one, which can be decided now and can be included in the Bill. Probably it would be right to move such amendments on Report. If the noble Baroness is telling me that the House of Commons will reverse an amendment which says that schemes should not be means tested, let us see what happens. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Oakeshott of Seagrove Bay moved Amendment No. 317A:

Page 207, line 27, at end insert—

"( ) The Secretary of State shall publish a report annually, setting out the basis on which assistance from the financial assistance scheme will be provided over the next year either confirming that it will provide total benefits to qualifying members equivalent to those they would have received had their scheme fallen within the scope of the Pension Protection Fund, or if assistance from the financial assistance scheme will be insufficient, specifying by what percentage those benefits will fall short of benefits received under the Pension Protection Fund."

The noble Lord said: I hope that it will be convenient to the Committee if I speak to Amendments Nos. 317A to 317D together, as they hang together. It would enable me to respond to some of the points and challenges made earlier by the noble Baroness to Members on this side of the Committee.

As I listened to the later stages of the noble Baroness's exchange with the noble Lord, Lord Higgins, I began to think that we had developed a very novel definition of parliamentary scrutiny whereby the Government ask the Opposition a series of straight questions, some of which I am happy to play the game on and give answers, but make it clear in advance that the Government's response to any questions from the Opposition will be, "Don't know" or "Won't say". I find that an odd way of behaving.

Baroness Hollis of Heigham: We are in the process of constructing a scheme. I do not blame the noble Lord, Lord Oakeshott, but the noble Lord, Lord Higgins, knows better. This scheme started to come to the surface five months ago, in May. I am being asked what individual bits will look like before construction is complete. It is unreasonable to ask us to make declarations at this stage. I suspect that if any

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Members opposite were sitting at this side of the Dispatch Box they would say exactly what I am saying now.

Lord Oakeshott of Seagrove Bay: I have listened very closely to the noble Baroness making that point several times. It is our turn now to make some points in response.

I have been asked a series of questions, to which I shall now try to respond, before asking further questions of my own and explaining why I believe my amendments are a useful aid to parliamentary scrutiny of this Bill and why I do not think that the Government would be binding their hands by accepting some of them. They have already accepted the principle of my first amendment.

I have already made clear in the first amendment our belief that the Government should stand behind the scheme and that it should be entirely government-funded. As set out in Amendment No. 317C, we believe that, given the great urgency that the Minister has highlighted, the FAS should come into effect within six months at the latest of the Bill's enactment. I invite the noble Baroness to say why, if there is such urgency, she cannot accept that amendment.

We also say that, where a qualifying pension scheme was closed while the sponsoring employer was solvent, it should be treated as a qualifying scheme for the purpose of this clause. That is a very clear proposal in our amendment. We wish to know whether it is a principle.

Our position is clear. We need to look a little at the background. We keep being told that the scheme has been in contemplation only since May. We all know that that is complete nonsense. There has been pressure for some sort of financial scheme and long discussions for many months. The problem was that the Government could not make their mind up and agonised about it for many months. Finally, in May, on one of the few occasions when the Chancellor of the Exchequer and the Prime Minister were on speaking terms, they got together and cobbled this scheme up. If it is being done in a rush, it is very much because the Government took so long to decide to do it; so that is not a satisfactory excuse.

This is not a "menu without prices"—those who have been in politics a long time may remember that phrase. The figure of £400 million has been plucked out of the air with no data, as the Minister has made clear. We do not think that it is unreasonable to say that it is wrong to invite Parliament to sign a blank cheque for £400 million of public money. Unless we can clarify some issues of principle about how the scheme will work, that is what we are being invited to do. We are not happy to do that.

In Amendment No. 317A I seek, not to set down any particular rate of payment, but to say that once a year the Government should make clear what the benefits will be, when they have decided that that aspect can be discussed, so that people can see the ratio of the benefits payable under the PPF. That would provide a

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clarification that in no way ties the Government's hands to us. Even since May we have had no specific indication of how this very important scheme will work. All that we are told is that the Government are thinking and looking at the data. That is not good enough; we will not accept it. The amendments are fairly modest, but they seek to clarify how the scheme will work, without tying the Government's hands. It is really not good enough to hide behind saying, "The scheme has been going only since May, so we do not know and cannot tell". We are not prepared to accept that blank cheque on Report, unless we have much greater clarification and, indeed, a proper answer on why the amendments are not acceptable, if they are not. I beg to move.

Lord Lea of Crondall: Without playing with words, it is quite interesting that the noble Lord twice said that he would not agree to sign a blank cheque. It is a funny sort of blank cheque if it has £400 million written on it. There is an important point here—that one has to begin from somewhere and work backwards. Not only is some £400 million not a blank cheque, but much that then has to be put into place arises from it.

Lord Higgins: I can take up the point that the Government are not writing a blank cheque. Nowhere have we been told that the figure will be set. In particular, the figure of £400 million was bandied around to placate those in a revolting state of mind in the other place—probably quite rightly. In fact, it is not £400 million. That is a headline figure and what the press statement says. In present-value terms, the figure is only £250 million.

More particularly, we are not clear whether that is a limit. Is it? Given the number of schemes that we are considering—250 or so have been included in the survey—we can consider, once we know that, whether it is the least bit adequate to deal with the problem. If we find, by a fairly simple arithmetical process, that it clearly is not, we need to define in the Bill itself exactly how the administration will take place.

There are real problems here, about some of which the noble Baroness is right—we will not know until we get more data. But some can be decided now without any great problem. In her usual helpful way, she sent round a note that said that one issue that we would need to consider was whether to have an initial cut-off date for support under the FAS. We are likely to need some cut-off point, to make it administratively feasible and to give some certainty about the funding arrangements. One option that we are considering is to use April 1997 as a starting point, as that is the date of the coming into force of the Pensions Act 1995. We should take into account the schemes that started to wind up shortly before April 1997 before reaching a conclusion.

That is not a range of issues that need to be considered in the light of the data, unless the Treasury is concerned that, whatever else happens, the figure will not be more than the present £250 million. If that is the position, fine—we know where we stand. The noble Baroness will say, "It is an absolute limit.

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Consequently, we will have to make some decisions on that basis". But there is no reason why the kind of issue that I have just mentioned cannot be decided now or put into the Bill. I say that because the people in these schemes are desperately worried about whether they will receive any help, any significant help, under the scheme. On the basis that we have just discussed, they could be told, "So sorry. Your scheme was on the wrong date and you will not get anything. Forget it". Alternatively, the Government could say, "Your scheme was on an eligible date. We have decided to take it from there and you will get something".

Data have nothing to do with that. It is a question of making it clear to people who are extremely worried about their personal position what they will get or whether they will get anything. There is no reason why that decision should not be taken by Report.

7 p.m.

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