moved Amendment No. 89B:

We on these Benches broadly support the amendment. The noble Lord is certainly right to say that this is one of the most important issues, if not the most important one, that arise from the Bill. Clearly, none of us can know at this stage what the effect of personal accounts will be and whether auto-enrolment will undermine existing schemes. It is very hard to disentangle that possible effect from the continuing decline of saving in pension schemes anyway. My only reservation is whether once a year is almost too much of a running commentary on matters which take a little time to become clear and whether every two or three years might be better.

The amendment would require the Secretary of State to report annually on the impact of auto-enrolment; on the take-up of qualifying pension provision; and on the length of time members remain in pension schemes, as well as contribution levels in qualifying schemes. Both noble Lords who have spoken have focused on the importance of seeking to guard against levelling down. We want to do everything that we can to preserve existing good quality provision. I believe that the noble Lord quoted me correctly as regards looking at the qualifying standard: it is the amount of money that goes in; it does not have to be calculated on the same basis as the definition of earnings in the Bill, or the band of earnings.

I am glad that the noble Lord has tabled this amendment because it provides me with an opportunity to outline our plans for monitoring and evaluating the impact of the reforms, which is very important. We are developing an evidence and data strategy to ensure that appropriate evidence is gathered on the pensions' landscape to enable monitoring and evaluation of the Government’s pension reforms. We have already started to engage with key stakeholders through a series of seminars on the current evidence base for pensions. We will publish a report of our work later this year and we plan to continue this dialogue with key stakeholders.

The Government already conduct regular surveys of the pensions' landscape at the industry, employer, and individual levels, including the Annual Survey of Hours and Earnings, which is an Office for National Statistics survey; the Employers’ Pension Provision Survey, a biennial DWP survey of employers; and the Occupational Pension Schemes Survey, an ONS survey of pension schemes, conducted each year. We are also conducting regular tailor-made surveys to track employers’ and individuals’ likely responses to the reforms. These include employers who plan to enrol their employees, anticipated participation rates, planned contribution levels and the likely impact on existing pension provision. A full evaluation is planned once the reforms have bedded in and then on an ongoing basis.

We will continue to work closely with key stakeholders, academics and other relevant government departments as we develop plans for the data and evidence strategy for monitoring the private pension reforms and for monitoring the Government’s wider reforms of the pensions system, including reforms to the state pension in the Pensions Act 2007.

The amendment proposed by the noble Lord, Lord Skelmersdale, would add further requirements on top of the plans that I have already mentioned. A new statutory duty would be placed on the Secretary of State, requiring him to produce an annual report on the impact of auto-enrolment. That duty in those terms may not fit well with the wider evaluation of the reforms and at worst could become a tick-box exercise.

In addition, if we had to adhere to that annual cycle as proposed, there is a risk that the proposed duty would perversely require the Government to impose additional reporting burdens on employers in respect of qualifying schemes. If we were required to produce a further annual report specifically covering participation and persistency in contributions in qualifying schemes, we could not rule out the possibility that we might need to seek further information or more frequent updates from employers, increasing burdens on them. For example, we may need to ask more frequently about participation rates among the job-holder population or the rates of deferred membership among the job-holder population, or the rates of deferred membership and opt in.

We believe that it is important to continue to work with key stakeholders to identify the questions that need answering: what data are already available to identify evidence gaps and what is the most effective way to fill those? It is important to concentrate available resources on a balanced programme of data collection, monitoring and evaluation that has been developed carefully with key stakeholders.

I hope that that has given the noble Lord the clear assurance that we need to monitor and evaluate because in doing so we will build our understanding. However, I do not believe that the proposed narrow annual survey and report is the right way to go. It could, at the margins at least, be counterproductive, and I therefore invite the noble Lord to withdraw his amendment.

I am well aware of the reports that the Government publish around the pensions arena, including those that the Minister mentioned. Although I did not say so, I was trying to get at whether the ongoing evaluation of personal accounts, and indeed the new pensions regime, would automatically be included in those reports. I am grateful to the noble Lord, Lord Oakeshott, for his minor quibble that reporting every year, as proposed in my amendment, would be a bit too frequent. I accept that, but I will read carefully what the Minister said on the existing reports in the pensions arena.

I also note that the Minister will monitor and evaluate the report on the consultation, to be published later this year. Is it the Government’s intention to publish it before we finish proceedings on the Bill?

I cannot give a precise answer to that, but I will check. I can see that it may be helpful if it can be published, but I am not sure that I can give that commitment without checking.

Perhaps I may take this opportunity to say a little more about the qualifying test and how the employer duty is discharged, which was raised by the noble Lord. Employers and schemes will receive plain English guidance on how to apply the qualifying test and to discharge the employer duties. We will consult on the content and format of the guidance. We have research under way to understand the information needs of small employers to ensure that we communicate with them in the most sensible way.

I am grateful for that extra information, but I am afraid that it prompts the same question. I would assume that guidance will not be in final form until 2011, but that will not help the worries of the pension scheme managers, to whom we refer as stakeholders, during the passage of this Bill. Would it not be possible at least to have draft guidance before we finish with the Bill to give an idea of the kind of thing that is expected of employers, and rather more than the Minister has been able to give on our various amendments? That would relieve their minds, and thereby relieve the minds of my noble friend Lady Noakes and myself. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 [Effect of failure to comply]:

moved Amendment No. 90:

I thank the noble Lord for this amendment because it gives me an opportunity to clarify an important point. Clause 30 aims to ensure that there is only one compliance regime for the new duties, which will be enforced by the Pensions Regulator. This means that an individual will not be able to bring an action against an employer solely—I stress, solely—on the basis that he has breached an employer duty provision. It does not affect any pre-existing right of action.

This amendment, which I understand is a probing amendment, removes that provision and enables individuals, alongside the regulator, to take action against the contravention of an employer duty. There will be a role for individuals in alerting the regulator to non-compliance through whistle-blowing, but allowing individuals to take action against employers directly could lead to duplication, confusion and increased employer burden as an employer could face action from the regulator and individuals at the same time.

We fully recognise the need for individuals to have access to other routes for redress if a situation of non-compliance has not been pursued or resolved to their satisfaction. A fairer, less burdensome way of achieving that goal is to enable individuals to make a complaint to the Pensions Ombudsman. The ombudsman may then decide to pursue an investigation. Individuals may already make a complaint to the ombudsman under certain circumstances; for example, where they are an actual or potential beneficiary of a pension scheme. We have tabled an amendment to ensure that jobholders opting out of pension schemes are among the groups of individuals who can make a complaint to the ombudsman. The proposed approach will ensure a clear and consistent compliance regime and minimise burdens for employers while providing appropriate protection for individuals. This amendment would undermine that approach. There is nothing in this clause that affects any pre-existing right. For example, where contributions are set out in an employment contract, the individual will retain the right to pursue missing contributions just as he would be able to pursue any other breach of contract. It is just in relation to the duties arising under the Bill where the Pensions Regulator is put in place to ensure compliance.

That might have been a hopeful opportunity, but it was also a fairly hopeful response. I shall come to this on another set of amendments, but I do not understand the difference between employment law and pensions law in this area and why they should be different. I agree with the Minister that if my amendment made it possible for there to be two prosecutions of the same employer for the offence, that would be total nonsense. I shall read carefully what he said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 90A:

For once, I am almost speechless. I will have to read carefully what the noble Lord has said when Hansard is published tomorrow. My only comment on this large group of government amendments concerns Amendment No. 91A. It would seem to be more appropriate to look for this provision in Clause 77, on definitions, which applies to the whole of Part 1. I offer that only as a thought. I do not expect the Minister to respond at this moment.

On Question, amendment agreed to.

Clause 30, as amended, agreed to.

Clause 31 [Compliance notices]:

moved Amendment No. 90B:

I am grateful to the Minister for explaining these essentially drafting and technical amendments so clearly. I was particularly impressed by his explanation of Amendment No. 90N, which leaves out the regulating power in Clause 31 on compliance notices. I am delighted that the Government have yet again seen fit to agree with the Deregulated Powers Committee.

On Question, amendment agreed to.

moved Amendment No. 90C:

The Minister has just exemplified a saying that I first heard on the west coast of Scotland: “We think better later”. Clearly, he has. However, it occurs to me that as an employer I am responsible for the actions of my staff. Therefore, I wonder what lies behind all this. Perhaps the Minister has explained already who the third party in question is. Therefore, I will have to read Hansard extremely carefully, unless the Minister is able to come back to me now.

I will try. There are two different things here. As I said, although those employer duties will fall overridingly on employers, there could be instances where an employer duty—for example, in relation to the provision of information—might fall on someone who is not technically the employer. There are further provisions where third-party compliance notices can be given, which is where someone might contribute to the failure of an employer duty. The distinction between those two is that, if the individual to whom the third-party notice is given or is due does not have the employer duty, he or she is not in a position to rectify that failure of duty, although there may be other things that he or she can do. Therefore, there is a distinction between compliance notices relating to employer duties, which could cover people other than those who are technical employers, and third-party compliance notices for those who might contribute to a failure but who themselves do not have the employer duty. I am not sure whether that has confused or enlightened the noble Lord, but I am happy to have another go at it if he thinks that that would help.

This looks like another subject for one of the Minister’s famous letters; I am grateful for the four that I received this morning on earlier discussions in Committee. In what circumstances would the third party be liable for compliance? I accept that the Bill says that to an extent there are third parties that are involved in all this, so I wonder whether the Government have their policy right. However, I shall look carefully at what the noble Lord has said.

Perhaps I may try to clarify this a little more. I want to differentiate between compliance notices in respect of failures of employer duties and third-party compliance notices where someone has in a sense contributed to a failure. For example, a third-party compliance notice could be given to a trustee of a pension scheme who has not properly given information to enable the employer duty to be fulfilled. It could also be a payroll provider for the employer who, by not doing something, causes a breach of the employer duties. Those are the sort of situations to which I am referring. However, the individuals or entities themselves would not actually have the duty and therefore there is a need to distinguish them from those who do have the duty. That is why there are two sets of compliance notices.

We are getting a little clearer. I can well understand that the trustee, for example, who has given information to the employer who then acts on it might well be prosecutable in certain circumstances, but I fail to understand why, for example, a member of the employer’s HR department should have a compliance notice issued against him, as I would have thought that the employer was responsible for his employees. I do not want to take this any further because it is a rather abstruse argument. I shall read carefully what the noble Lord has tried to explain three times now, which is probably enough for the rest of the Committee.

On Question, amendment agreed to.

moved Amendments Nos. 90D to 90N:

moved Amendment No. 90P:

moved Amendment No. 90Q:

moved Amendments Nos. 90R and 90S:

moved Amendments Nos. 90T to 90V:

moved Amendment No. 91:

The noble Baroness’s amendment seems fair and sensible. We look forward to hearing from the Minister what a reasonable administrative period would be or whether he thinks that there are practical problems. However, the principle that an employee should get the full benefit of the matching employer contributions if those contributions are delayed through no fault on the part of the employee—and as long as there is not a strong excuse on the part of the employer—seems to us to be the right one.

I start by thanking my noble friend Lady Turner for tabling this helpful amendment, whose intention I agree with. I am also pleased to note the support of the noble Lord, Lord Oakeshott. Clause 33 deals with the power of the Pensions Regulator to issue unpaid contributions notices to employers. This amendment would give the regulator the power, when issuing such a notice, to require the employer to pay interest on the arrears of contributions. When pension contributions are not paid on time, the scheme trustees lose the chance to invest the money on the workers’ behalf and there is a risk that as a result an individual’s pension pot may be smaller over time.

When this matter was discussed in the other place, we accepted the need for some compensatory payment that would put the worker into the position in which they would have been had the contributions been paid on time. We announced our intention to introduce an amendment to require employers to pay interest on late-paid contributions. Clearly it would be difficult, if not impossible, to assess completely accurately the loss of investment value to an individual worker, given the numbers of people involved and the different investment strategies and portfolios of individual schemes and investment managers and so on. However, it would be relatively straightforward to require an employer to calculate and pay interest on the arrears of contributions. Such payments would both recompense workers for the lost investment opportunity and give employers an incentive to pay contributions on time.

The Pensions Regulator’s powers to calculate and, where necessary, estimate the amount of unpaid contributions are set out in Clause 34. While I completely agree with the intention behind my noble friend’s amendment, we think that the ability to require interest to be paid would best appear in Clause 34, which is why we have tabled the government amendment. This will take the form of a power to require interest to be paid. The amendment would give the Pensions Regulator the power, when it issues such a notice, to require the employer to pay interest on the arrears of contributions should certain conditions apply. These conditions, along with the rate of interest and other technical details, will be prescribed in secondary legislation. This will allow for further discussion with the regulator and stakeholder consultation on the detail of how the provision will operate.

I hope that I have assured my noble friend that I agree with the principle that she has raised and I thank her for doing so. Given my assurances that the government amendment will deliver the same intention, I respectfully ask her to withdraw her amendment.

I thank my noble friend for that assurance. I also thank the noble Lord, Lord Oakeshott, for supporting the amendment. He is quite right about what is excessive delay—I understand that. In view of the assurances that the Minister has given, this is obviously a matter for regulation. I am glad that the principle has been accepted and, in those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 91A:

I wish to debate Clauses 33 and 34 standing part in order to ask the Government to explain the relationship between these clauses and the provisions of the Pensions Act 1995. What I am about to say is based on briefing from the Law Society of Scotland.

Clauses 33 and 34 deal with unpaid contribution notices. There are already sanctions and compliance powers in existence under Sections 87 and 88 of the Pensions Act 1995 relating to money purchase schemes. Can the Minister explain why these additional powers are being created in Clauses 33 and 34 and why the existing powers are not adequate?

I cannot see that the Bill repeals any powers in the 1995 Act but it clearly adds powers through these clauses and others. Can the Pensions Regulator act under both this Bill and the 1995 Act in respect of the same issues? Are the Government satisfied that they have not ramped up the regulatory burden on companies in a disproportionate way as a result of the Bill? I look forward to the Minister’s comments.

I thank the noble Baroness. I understand the import of the debate that she wants to have and I shall try to deal with the points she raises.

Clauses 33 and 34 form a key part of the overall compliance regime. Where employers are late in paying contributions, these clauses will enable the regulator to issue compliance with unpaid contributions notices to employers directing them to pay unpaid contributions into a pension scheme. These clauses build on and streamline the regulator’s current approach to following up late contributions and will enable it to deal with the higher volume of late payments expected after 2012. While it is expected that most employers will co-operate fully with the new system, it is possible that a minority will fail to fulfil their responsibilities. The compliance regime will therefore need to take firm action against this minority of employers without imposing unnecessary burdens on responsible employers.

The noble Baroness specifically asked why the regulator needs new compliance powers. The Pensions Regulator has a range of powers under existing pensions legislation, as the noble Baroness asserted. These include powers to issue notices, such as improvement notices, and civil penalties. As noble Lords are aware, the Bill introduces a range of new duties. We expect most employers to comply with those duties and, as now, the regulator’s focus will be on educating and enabling them to do so. But an effective enforcement regime is needed where these initial steps fail.

There are two reasons why new compliance powers are needed to enforce the new provisions. First, they are needed to ensure that the regulator can enforce compliance with the new duties in the Bill—for example, the regulator’s existing improvement notice powers would not apply to an employer who fails the automatic enrolment duty—and, secondly, more streamlined powers are needed to equip the regulator for its new compliance role.

That, in essence, is why the new compliance powers are needed. The noble Baroness asked which powers, if both potentially applied, would be used. The compliance powers provided in the Bill would apply. I hope that has dealt with the point but I shall try again if it has not.

Can the Minister explain why the Government are not removing anything from the 1995 Act if they are producing streamlined and better powers under this Bill? Is there not a case—there is always a case—for removing regulatory burdens, especially where so-called improved versions of legislation are introduced?

It is because the existing powers are needed to deal with the existing business of the Pensions Regulator; these powers are focused on the new duties that arise under the Bill. However, they are still relevant to the other powers and responsibilities of the Pensions Regulator. I have a note of the detail on that which I will be happy to share with the noble Baroness, but I expect there will be no appetite for me to do so at the moment.

The other point to bear in mind is that, to date, the Pensions Regulator regulates an environment where there is voluntary sign-up to pension arrangements. Obviously auto-enrolment takes us into a new era and there are likely to be many new employers coming into pension provision for the first time. I think overwhelmingly they will be supportive of it—some may be reluctant and will need support and guidance initially—but there will be a need for streamlined powers to enforce compliance where not.

The Minister has revealed his true clothes. We are back to, “All employers are potentially evading their responsibilities and so we have got to have bigger and better powers to bash them with”. I regret that the Minister has replied in those terms.

Clause 33, as amended, agreed to.

Clause 34 [Calculation and payment of contributions]:

moved Amendment No. 91B:

My colleagues in another place will be delighted that a clause of this sort is now to be included in the Bill, and I congratulate the Minister on moving this amendment, to which I do not object—but I have a problem. He said that employers could be made to re-enrol a worker where they have persuaded him to opt out with either financial inducements or any other inducements, perhaps payment of overtime. When all that is settled and the employer is clearly in the wrong, it may be that the worker in question will still want to opt out, now of his own volition. Has the Minister considered what would happen then in relation to Amendment No. 106A?

I can see that those circumstances might arise, and I do not see that they would be precluded. This clause says right at the start that,

“An employer contravenes this section if the employer takes any action for the sole or main purpose of … inducing a worker”,

and so on. If they originally took that action to induce a worker, the matter has been rectified and the worker has been enrolled but then decides to opt out, I do not fundamentally see a problem with that. There would be issues regarding evidence and the facts and circumstances of a specific case, but the opt-out should not be precluded in the circumstances the noble Lord suggests.

Obviously it is the worker’s absolute right to opt out, whether or not an inducement has been offered or even received. My question was directed to the effect of compliance, but if the Minister is saying that if a wrong has been committed, no matter what happens afterwards, whatever compliance notices, fines and so on are produced from the regulator, then I understand that point of view. I was just trying to clarify what the Government were actually thinking in this area, but I suspect that there is no point in pressing the point now.

I will reflect further on that point because it is an interesting one. However, if we are talking about the same act of inducement that first time around caused the employee to opt out, but after a compliance notice the employee was then auto-enrolled into an auto-enrolment scheme and then chose to opt out, one would have to consider the juxtaposition of those events and whether effectively the first inducement so tainted the subsequent decision that it was wrapped up in it. One would need to go into more detail. I am happy to do that and discuss it with officials. It is a practical matter; if there is evidence that there was inducement the first time around and there was an opt-out that followed pretty swiftly afterwards the second time around, there might be some difficulty with evidence. We will have a look at that; the noble Lord might even receive one of my letters on that subject.

I am very grateful.

On Question, amendment agreed to.

moved Amendments Nos. 91C to 91E:

moved Amendment No. 92:

If this amendment is agreed to, I cannot call Amendment No. 92A.

I am grateful to the noble Lord for raising the important issue of the policy on restitution. As we have already discussed, making contributions to pension schemes in full and on time is vital to the growth of the individual’s pension fund. This is one of the key intentions of the compliance regime and the focus of this subsection of the Bill.

Where employers are late in paying contributions for a short period, which will be set by regulations, we propose that they be required to pay only backdated contributions. Their worker can choose whether to pay their own missed contributions and elect to do so in instalments. However, where an employer is late paying contributions for a longer period, the worker may not be able to pay arrears of their contributions. Without the worker contributions, an individual’s pension pot will be significantly smaller over time.

In this situation, it would be unfair if workers were disadvantaged by their employer’s failure to pay contributions on time. Therefore, where the contribution arrears are for a longer period, the employer may be required to pay both their own arrears and those of their worker. As well as being fair to the worker, it should act as a strong incentive for employers to comply and pay contributions on time. The principle behind the clause is supported by a range of stakeholders, including Help the Aged, the TUC and Which?. Certain stakeholders, including Help the Aged and the TUC, have suggested that the period be three months. However, before we identify a period, I want to discuss it fully with stakeholders, including business organisations.

The amendment would remove the requirement on employers to restore missed worker contributions even where they had been non-compliant for a long period. It would mean workers ending up with a smaller pension pot, which, I am sure we all agree, would be undesirable. In addition, as I have just said, it would reduce the incentive for employers to pay on time and mean that scheme members lost out on the investment value of their contributions. I therefore urge the noble Lord to withdraw his amendment.

I described it as a probing amendment and it was a real description—noble Lords might think, “for once”. However, I still find a little confusing in paragraph (c) the words

“on the employer’s own account”

and shall read carefully what the noble Lord, Lord Tunnicliffe, said. I assume that it means for both of them, as I said in my opening remarks, but if I am wrong, I will no doubt get the answer from my reading of Hansard. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendments Nos. 92A to 92F:

moved Amendment No. 92G:

moved Amendment No. 92GA:

I congratulate the noble Lord, Lord Skelmersdale, on his hard work in drafting this, and for the extensive evidence of what is going on in DBERR. I am sorry that I am not as au fait with that as I should be. However, I am bound to say that this seems a pretty light slap on the wrist—or, should I say, half a slap on the wrist with the 50 per cent discount. I look forward to hearing what the Minister says, but the Conservative approach is rather lenient here.

I thank the noble Lord, Lord Skelmersdale, for this amendment. I understand that it is by way of a probing operation. He has raised issues about the penalty provisions in Clauses 35, 36 and 51. I shall also respond to his request for a clause stand part debate on the escalating penalty provision in Clause 36.

These are important provisions, and I thank the noble Lord for giving the Committee the opportunity to examine them more closely today. It may assist our consideration of these amendments if I begin with an overview of the compliance regime and the role of penalties within it. While we are confident that the majority of employers will meet their new duties, we need an efficient and effective compliance regime to maximise compliance. The proposed approach comprises three stages: educating, enabling and enforcing. The emphasis is on educating and enabling employers to meet their duties; only when that fails will the Pensions Regulator take proportionate, graduated enforcement action. That action will start with statutory notices, moving to fixed and escalating penalties if non-compliance persists. The availability of financial penalties will therefore play a small but significant role in securing compliance and enabling jobholders to access pension saving.

I understand that the noble Lord has tabled some of these amendments to explore why we have not adopted the same legislative approach and penalty structure as in the revised national minimum wage regime set out in the Employment Bill. Before addressing each of his amendments, it may be helpful to set out why our approach differs from the proposals for the minimum wage.

I reassure noble Lords that the compliance regime for the reforms in this Bill will accord with good practice and available evidence. We are building on analysis of other regulatory regimes, not only the minimum wage regime but also the compliance approach for PAYE requirements; the Companies House regime for ensuring that corporations file their accounts; and, internationally, the approach taken for the superannuation scheme in Australia. We are further developing the penalty regime in line with the recommendations of the Macrory review and with regard to the regulatory principles of transparency, accountability, proportionality and consistency.

There is no doubt that we are at a different stage from the national minimum wage regime, which is now in a position to place more specific provisions in the Bill in the light of practical experience and the data accumulated on the enforcement approach. That approach cannot be replicated for an entirely new regime. We have been clear on the maximum penalty levels, which are set out in the Bill and have broad stakeholder support, but the actual penalty levels should be set out in regulations. That will enable adjustments to be made below the maximum level in the Bill when it becomes clearer which approach is most effective. It will enable detailed consultation with the regulated community, and other stakeholders, on the structure of the penalty.

On the specific amendments tabled by the noble Lord to Clauses 35 and 51, since the provisions of the Employment Bill were carefully tailored to meet the needs of the national minimum wage regime, some problems arise when they are translated into the context of our new regime. For example, reducing the £50,000 fixed-penalty ceiling to £5,000 in Clauses 35 and 51 would make the regime out of step with the regulator’s current powers. Under Section 10 of the Pensions Act 1995, the regulator has the power to impose fines of up to £50,000. We believe that it is important to ensure that complying with the new duty is seen to be as important as complying with existing legislation. Several stakeholder groups, including the CBI, have indicated their broad support for this decision.

Secondly, the noble Lord’s amendment to Clause 35 would calculate penalties associated with unpaid contributions based on the amount unpaid, just as the Employment Bill calculates penalties based on the amount of underpaid wages. However, in the pensions context, we have a series of related duties, and there are practical implications of different breaches carrying different penalties. For example, an employer who does not automatically enrol one of their workers into a qualifying scheme inflicts much the same harm as an employer who does not pay over the relevant contributions to a scheme. It is therefore unclear why they should be treated differently. We are not ruling out the possibility of tying penalties in certain circumstances to the nature of the contravention. However, we would like the opportunity to conduct full preparatory research and engage in formal consultation first.

Thirdly, the noble Lord’s amendments to Clauses 35 and 51 place an early-payment discount in the Bill. Such a discount is a common feature of penalty-based regimes, and is a strong candidate for inclusion among the options to be brought forward in our consultation and regulations. Early-payment discounts promote rapid compliance, which is why the Government felt that it was crucial to place this in the Bill in the national minimum wage context. Time is of the essence when we are talking about remedying shortfalls in the pay packets of some of the most vulnerable workers in our society. The implications are not identical with reference to late payment of pension contributions—but, again, this is a strong candidate for inclusion in our regulations.

I hope that I have reassured the noble Lord with regard to the amendments tabled to Clauses 35 and 51. On the amendments to Clause 36, a similar question of penalty caps is raised in relation to escalating penalty notices. The amendment would cap the total amount payable for a single breach at £50,000. I shall explain why we chose to cap the amount of the daily escalating rate at £10,000 but not to cap the total amount payable under these notices. The essence of an escalating penalty is that its value directly reflects how long an employer continues not to comply. Such penalties will be applied only in cases of very persistent non-compliance. We are not alone in recognising the benefits of including escalating penalties in our toolkit; other regimes such as HMRC PAYE also have the option to issue them. I share the noble Lord’s concern that penalty levels should be proportionate and fair, but am concerned to maintain the intention that escalating penalties directly reflect the extent to which an employer delays meeting their responsibilities. A cap on the escalating penalty would effectively cap the period within which employers are deterred from continuing to breach their duties.

As for the noble Lord’s second amendment to Clause 36, the intention is to ensure that daily escalating penalties are issued only if an employer effectively ignores a preceding fixed penalty. I assure him that we have always envisaged a sequential issue of penalties as part of the wider graduated approach. However, there may be cases where the recipient of a fixed penalty notice may pay the penalty but does not put right the situation that caused it. In these circumstances, the regulator will require the option of issuing escalating penalties to ensure compliance.

I hope that I have reassured the noble Lord, and that he will withdraw these amendments, which I understand are probing in nature. I have set out the background to why these provisions are in the Bill in this form.

I am grateful for that long and fairly explanatory answer. I accept that there are already powers in previous legislation to allow the regulator to impose fines of up to £50,000. Can the Minister tell me whether the regulator has any powers to use escalating fines thereafter?

A compliance regime must be both efficient and practical. There will be small differences with the national minimum wage. However, the regulator having the power to impose £50,000 in certain circumstances does not mean that we could not take the opportunity of the Bill to review whether that has been effective, and whether £50,000 is the right level. How many times has the regulator used the maximum fine? If he has not, that is a good reason to look at the whole thing again. I am glad that the Government are prepared to look at a 50 per cent reduction for paying the fine early and consult upon it—the least that they could do under the circumstances.

I said this was a probing amendment and I meant it. Unless the Minister wants to come back to me, I shall withdraw it now.

I do not want to deter the noble Lord from withdrawing his amendment, but it might be helpful if I deal with a couple of points that he has raised. He asked whether there are currently escalating penalties. I understand that there are not. Penalties in the Bill should not generally signal a review of the Pensions Regulator’s powers. I presume that consultation and discussion of these powers might at least butt up against that.

On the argument that a system of penalties would put firms out of business, the primary aim of the compliance regime is to encourage the employer to comply. Financial penalties are only one of a number of tools to help us to achieve this. The compliance regime is designed to ensure that employers can make redress or put things right in the first instance. Penalties would only be imposed when employers continue to breach requirements after they have been told how to comply. The regulator will have some discretion on whether to enforce the payment of the penalty. In situations where the employer can demonstrate to the regulator that he is at risk of becoming insolvent if he pays the penalty, the regulator could exercise that discretion; for example, the regulator could withdraw the penalty to allow the employer to pay any outstanding contributions.

I am grateful. Clearly, however, the Bill contains a ratcheting-up of the compliance regime that already exists within the pensions framework, albeit for a slightly different purpose. I will have to look at that extremely carefully. I said that I would withdraw the amendment, and I will. However, I certainly reserve the right to bring back the issue in one form or another, perhaps one not directly relevant to the national minimum wage, at the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 92H:

moved Amendment No. 92J:

moved Amendments Nos. 92K and 92L:

moved Amendment No. 93A:

moved Amendment No. 94:

The Bill gives the Pensions Regulator power to review all notices that it may issue as part of the compliance regime. This includes compliance notices, third-party and unpaid contributions notices and fixed and escalating penalty notices. This provision is an important safeguard for those receiving such notices. The review will be wide-ranging, giving the recipient an opportunity to explain their case and provide further information that might be relevant to the decision to issue the notice.

The noble Lord has tabled two amendments to this clause and I am grateful to him for the opportunity to discuss the review process. With regard to the first, as my noble friend indicated, he echoes the House of Lords Select Committee on the Constitution, which has recently written to us on this matter. As the Bill stands, the regulator is allowed to suspend proceedings in relation to a notice while that notice is under review, but retains the discretion whether to use this option. Our approach throughout the compliance provisions of the Bill has been to give the regulator powers rather than obligations. This is intended to ensure maximum operational flexibility within the regime’s broad principles.

However, we take seriously the concern to ensure that, to quote the Constitution Committee,

“a branch of government should not be empowered to enforce sanctions against a person who disputes the factual or legal basis of the action in question”.

We are therefore further considering the rights to redress in light of the committee’s questions and will return at Report to present the final strategy to the House, with amendments if necessary. As I indicated, the Constitution Committee raised important questions in addition to that of a stay of proceedings. These relate to the absence of a right of appeal to an independent tribunal against certain notices, the opportunity to make representations before a notice is issued and the relationship between civil and criminal penalties. We are grateful to the committee for raising these important points, to some of which we responded last week.

In our response to the committee, we made a commitment to give further consideration to appeal rights, employers’ ability to make representations before statutory notices are issued, stay of proceedings where a review or appeal is under way and the regime’s approach to criminal proceedings. We are keen to continue this dialogue to ensure a satisfactory conclusion for the committee. I understand that the exchange of correspondence with the committee is placed in the Library. If that is not the case, I shall ensure that it is. I apologise for not making sure that noble Lords were aware of that before this debate, but this is work in progress. The noble Lord’s focus is consistent with the committee’s position. We need to look at this and perhaps bring forward amendments.

The noble Lord asked me about subsection (6)(b) and how substituting a different notice was different from confirming, varying or revoking a notice.

I asked what the difference was between varying a notice and substituting a different notice, because if you vary one it is by definition a different notice.

That is the point that I was trying to address. It seems to me that one example might be if one moved from an escalating penalty notice to a fixed penalty notice. That would involve substituting a different notice from the one that existed previously. Therefore, you are not confirming or varying that although you might be revoking it at the same time. I think that you could substitute something that was not a variation of the notice that previously existed. Therefore, I do not see how the noble Lord’s problem arises, but I am not sure that we need to get too engrossed in that. However, on the substantive—

Surely if a notice has an escalating penalty and you change that to a fixed penalty, that is varying it, is it not?

We are getting into semantics. It is a different form of notice. In some circumstances it may be appropriate to substitute a new notice. For example, the regulator may issue a compliance notice for failure to auto-enrol an employee, but if that employee leaves while the notice is under review, the regulator may then choose to revoke the compliance notice and issue an unpaid contributions notice. Varying a notice might comprise changing the amount of unpaid contributions. There is a distinction, which we could debate for the next hour or so if we wished. However, in substance, the point made in the noble Lord’s amendment chimes with the position taken by the Constitution Committee. We shall need to engage further with a range of issues and return to them on Report.

I am grateful for that answer. I was questioning why it was necessary to include “vary” in subsection (6)(a), although I did not express it in those terms. I have still not received a particularly clear answer, with or without the intervention of the noble Lord, Lord Oakeshott. However, that was only a tiny part of what I was after. It is clear that the suspension of a notice while it is being reviewed is in suspension, if I may put it that way. Over the summer the Government will consider how they intend to respond to the Constitution Committee’s suggestions and will come back with amendments on Report. I am extremely grateful for that and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 95 not moved.]

Clause 38 agreed to.

Clause 39 [References to the Pensions Regulator Tribunal]:

moved Amendments Nos. 95A to 95D:

moved Amendment No. 96:

I thank the noble Baroness for the opportunity to discuss the principle of having an imprisonment option for those convicted of the new offence under Clause 40 and to speak to the government amendments.

Where an employer wilfully fails to enrol or re-enrol jobholders into a qualifying pension scheme, those workers are losing out on the opportunity to save in a workplace pension with the advantage of an employer contribution. Given these serious consequences, the ultimate sanction for such non-compliance should be criminal prosecution. I stress that criminal prosecution will not be undertaken lightly. The regulator will have discretion over whether it is appropriate to bring about a criminal prosecution, and will generally use it only as a last resort. However, creating this offence will send a clear message to all employers that such behaviour will not be tolerated.

We have proposed three amendments to clarify the provisions relating to this offence to ensure that prosecutions can be brought against a wide range of employers. The first amendment, Amendment No. 97A, is a minor technical amendment to the drafting of the limit for fines applicable on summary conviction. Consistent with the way in which penalties are expressed in other legislation, the amendment refers to a fine not exceeding the “statutory maximum”, rather than to “level 5 on the standard scale”.

The second amendment, Amendment No. 97B, is a new clause designed to make responsible individuals in bodies corporate criminally liable for wilful breaches of the enrolment role. That deals directly with one of the points made by the noble Baroness about employers, if individuals, being sent to prison. Companies cannot be sent to prison, and the amendment extends the provision to people who as individuals in body corporates are responsible for wilful breaches of enrolment duties.

In a similar vein, the third amendment, Amendment No. 97C, is a new clause that will allow for the prosecution of employers who are set up as partnerships. It allows penalties to be paid from a partnership’s business funds and individual partners to be prosecuted. I am bound to say that this is a standard measure that brings the Bill into line with other legislation, such as the Gangmasters (Licensing) Act 2004. This is not unique. Together, this package of amendments ensures that the criminal offence provides a transparent and workable sanction of last resort.

On Amendments Nos. 96 and 97, as I said earlier our compliance policy has been developed as a three-stage strategy: first, to educate and inform employers of their duties; secondly, to enable them to simplify and comply easily with their duties; finally, to enforce them. There are therefore a number of opportunities for employers to meet their duties, and the criminal sanction is very much the back-stop of our enforcement strategy. It is in line with the regulator’s existing powers in the Pensions Act 2004, which includes the option of imprisonment for offences such as the intentional alteration or destruction of documents.

Other regulatory regimes, such as those set out in the Companies Act 2006 and the Health and Safety at Work etc. Act 1974, also have the option of imprisonment. The noble Baroness recognised that. She asked how many times these sorts of provisions have been used and individuals imprisoned. I do not have the data for the past 10 years, but they have been used to prosecute individuals for health and safety offences, and individuals have been imprisoned. I will try to get the data for which the noble Baroness asked.

Although our expectation is that the sanction will be rarely used, it is none the less an important deterrent. The new duties placed on employers are designed to ensure that millions of workers will have access to good-quality pensions savings, some for the first time. Failure to fulfil these duties therefore seriously jeopardises the retirement income prospects of these individuals. We need employers to take their responsibilities seriously. Given that the regulator will have powers to impose fairly large civil penalties, it is reasonable to suppose that employers who are unresponsive to these financial penalties may be similarly unresponsive to a fine imposed by a court. We therefore believe that it is right that an employer who “wilfully fails to comply” ultimately faces the possibility of imprisonment. I reiterate that our expectation is that the criminal sanction will be used rarely and only in the most serious of cases.

The noble Baroness pressed me to put on the record my understanding of what “wilfully fails to comply” means. I am cautious about doing so, because I do not want to put on the record an off-the-cuff comment that might be seen as a point of interpretation. However, if someone wilfully fails to comply, it has the components of deliberately seeking not to comply and possibly persistently not complying. This is not a new term. It is around in legislation, and I am sure that there is an appropriate precedent as to how it should be interpreted.

My note says that I hope this provides the noble Baroness with reassurance, and I ask her to withdraw the amendment. I suspect that it will not, but in any event I will move the government amendments in due course.

Now that we have had the opportunity to hear the noble Baroness’s and the Government’s amendments, may I briefly say what the attitude of those on these Benches is about this?

I quite agree with the noble Baroness that there should be no discrimination between large incorporated businesses and small individual employers, but it struck me that the government amendments deal with that fairly. I have heard what the Minister has had to say, and I think it is reasonable that there is ultimately a criminal sanction of last resort. By saying that, I in no way mean that most employers are trying to evade their responsibilities. I simply mean that we all understand—the noble Baroness with her great experience in accountancy will know this—that a small number of rogue employers do not play by the rules and that, if you think about it, an employer who persistently refuses to comply is ultimately stealing the employees’ money by not having the money in the pension scheme that should be there. With the Minister’s assurances, it is reasonable for there ultimately to be a criminal sanction.

I thank the noble Lord for his support. I re-emphasise the point, which I hope I made, that the offence applies to a wilful breach of certain employer duties. An employer who does not comply because of genuine inadequacy will be extremely unlikely to be found guilty of wilfulness. The use of “wilful” ensures that if employers fail to fulfil their duties through haphazard administration or forgetfulness, they will not be criminalised under these provisions. It is important that we get that clear.

The Minister focused his attention on the meaning of “wilfully”. That was not what I asked him. I asked him what conduct would amount to connivance, and the meaning of neglect. What actions would constitute neglect to bring individuals within the ambit of this criminal offence? It is reasonable to ask the Minister at the Dispatch Box how the Government believe the offence will operate.

The noble Baroness has quite properly posed some detailed questions. If I may, I shall reflect on them, write to her with some considered thoughts and expand on them rather than just try a definition from the Dispatch Box.

I am extremely surprised that the Minister comes to the Committee to introduce amendments that will massively increase the possibility of individuals being sent to jail for offences in relation to the duties under the Bill when he cannot even explain what is meant by the matters specified in Amendment No. 97B. That is not an acceptable way for the Government to behave.

Let me try again. “Neglect” covers wilful recklessness where the employer does not care. How is that as one definition? It seems clear enough.

The Minister is clearly not even trying, so we will not make much progress today. I hear that the Liberal Democrats think that banging up company directors is also a good thing—

That is beyond a joke. The noble Baroness knows very well that it is not what we said; it is not funny.

I exaggerated for effect. The Minister gave examples, all of which have occurred in the last 10 years, of increasing criminalisation of directors. The Government always have a good reason for seeing potential criminal failure, which needs to be deterred or—

I quoted the Health and Safety at Work etc. Act at the noble Baroness. That was 1974, so it was not created in the last 10 years.

I believe that the formulation of the offence was put in subsequently and was not original, but we can test that.

The Minister said that the Bill’s massive financial penalties—we have just debated them; certainly, we on these Benches are not convinced about them—had to be matched by a commensurate criminal penalty. That makes us wonder whether the scale of penalties for what is non-observance of financial obligations to employees deserves the regime being set up to deal with potential non-compliance. The problem is that, whenever a regime is set up for what the Government say is just one or two bad employers, it can inevitably be used against a wider number, especially by overzealous officials in organisations such as the Pensions Regulator, which in the first instance would have control over financial penalties. We will need to think carefully about how the penalties in the Bill are constructed and whether they are fair and proportionate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 97 not moved.]

moved Amendment No. 97A:

moved Amendments Nos. 97B and 97C:

moved Amendments Nos. 97D and 97E:

moved Amendment No. 97F:

I am grateful to the Minister for agreeing to split the amendments from an earlier group, which was gigantic—that is the only word for it. However, I am still somewhat confused. The essence of the amendments is to move Clauses 43 to 48 to after Clause 57, which I assume means that they remain in Chapter 3. Perhaps I misunderstood what he just said; I heard him mention Chapter 4, but I could not understand in what connection. Why is it necessary to move them a bit later in the Bill?

The purpose is to move the amendments to a new Chapter 4; subsequent chapters would obviously need to be renumbered. The benefit of that is to seek to concentrate in Chapter 2 the core issues around the Pensions Regulator’s powers and the compliance that goes with them. The issues around records and information are collected separately under a new chapter. There is no greater logic than that, as I understand it; it is just a reordering and those provisions do not change.

In that case, I must apologise to the Minister for not listening properly the first time round.

On Question, amendment agreed to.

moved Amendment No. 98:

Clause 43 will allow the regulator to request books and documentation from employers to demonstrate that they have complied with the new requirements. In addition, when the regulator is of the opinion that a person has failed to keep proper records, it will have the power to issue a civil penalty. Employers already keep records and documentation to illustrate that they are complying with legislative requirements. Therefore, very often the employer's own records will show one way or another whether it has complied with the requirements placed on it.

The noble Baroness's amendment would mean that if a company wound up, the regulator would no longer be in a position to require the former employer to provide records to show that while trading it was complying with the employer duty. Similarly, former employees of the company that had been wound up would almost certainly be left in a position where they could not enforce their rights against their former employer, because there would be no legal obligation on the employer to produce the very records that would prove whether it had been compliant. It may also be possible for employers who have for some time been deliberately ignoring legal requirements and who fear the intervention of a regulator simply to wind up their companies and then reopen for business under a different name a short while later. This behaviour has been observed in relation to the national minimum wage requirements and it may well be seen again when the employer duty comes into force.

On the specific question posed about the consistency of this with other legislation and whether it can be reconciled, there is some difficulty with it. Where an employer is wound up it effectively ceases to exist and may therefore not be covered by existing record-keeping requirements. It is effectively covered by the insolvency regulations, but these place a requirement on both liquidators and trustees to wait for one year before books and records can be destroyed. So I say to the noble Baroness that we need to think a little more about this and revert in due course. I do not believe that we have been fully able to cover and reconcile that inconsistency in the legislation. The point she raises is a good one and we need to take it away.

I thank the Minister for that and look forward to hearing further how the Government intend to resolve the issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43, as amended, agreed to.

moved Amendment No. 98A:

moved Amendment No. 98B:

moved Amendment No. 99:

In this context, can the Minister confirm that “premises” will mean only business premises and not someone’s home?

Where the regulator is of the opinion that an employer is not or may not be complying with its new duties under Chapter 1 of the Bill, it will need the power to conduct further investigations. It is important that regulators in whatever field have the power to conduct necessary investigative work. For example, HMRC’s inspectors have the power under Section 14 of the National Minimum Wage Act to require employers to produce records and to enter employers’ premises where necessary in the course of their investigation.

Section 74 of the Pensions Act 2004 gives an inspector appointed by the regulator the power to enter premises for the purpose of investigating whether an employer is complying with certain legal obligations relating to pension provisions. Clause 44 extends Section 74 of the 2004 Act to give an inspector the power to enter premises to investigate whether the employer is complying with the new legal obligations the Bill creates in Chapter 1, Part 1.

The noble Lord’s amendment would leave inspectors with the power to enter premises in the course of investigating, say, apparent irregularities of payments to pension schemes—the 2004 Act gives them that power—but to deny them that power in relation to the new duties created in the Bill, matters such as the requirements to automatically enrol eligible jobholders and calculate contributions accurately, and so on. That would seem a serious omission given the importance that we attach to saving for retirement and our commitment to helping low and medium-earning workers to provide for their old age.

I do not expect the power to enter premises to be used lightly. We expect the great majority of employers to comply fully with the new requirements, and many, if not most, of those who do not will have done so inadvertently and will put matters right as soon as their errors are pointed out. However, there may well be cases in which workers have raised concerns about the employer’s behaviour or its administration of the scheme, or where an inspector had good reason to suspect that an employer may be giving false or misleading information. In those circumstances a visit by an inspector may be necessary to resolve any concerns.

We are aware that some employers operate their business from their home address, and we expect that inspectors will take this into account when they plan to visit employers’ premises. The power of inspection will not apply where a dwelling house is not used for the purpose of trade or business. I hope the noble Lord is reassured by those explanations.

As for the general procedures by which compliance with the Act will be verified, the Act gives the regulator power to have large amounts of information, for example from HMRC. That sort of information will carry the great burden of ensuring compliance, and the power to inspect premises will rarely be used.

It seems that I am not the only one whose attention slips during a long and warm afternoon. I asked the Minister whether he expected the majority of investigations to be sparked by the jobholder or by HMRC. He did not tell me which he thought was the most likely. Secondly, I asked how many investigators the Pensions Regulator has now and how many extra he expects the regulator to need. I think that those are perfectly reasonable and sensible questions.

They may be perfectly reasonable and sensible questions but they are not in my brief. I am being briefed to react to the issue of entering premises and using investigative powers. We anticipate that the investigation of premises by the regulator will arise primarily from whistleblowing complaints; that is, where an individual has alerted the regulator to a potential instance of non-compliance.

I am reminded of a late noble Lord who was on the opposite Front Bench for some years. He had a cleft palate and was wont to say, “Not in my bweef, my Lords”, which is exactly the same response as we have had from the noble Lord, Lord Tunnicliffe. At some point, please may I have a letter from one Minister or the other to say how many investigators the Pensions Regulator has now? I still think that that is a perfectly reasonable question but it is quite clear that I will not get an answer tonight so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 99ZA:

moved Amendment No. 100:

moved Amendment No. 100A:

When I was a junior Minister in the Northern Ireland department, it was made clear to me that the Province was very keen to hang on to its own statute book. That also applied to some social security legislation, which, although it paralleled what was going on in the rest of the country, was not absolutely identical. It occurs to me to ask the Minister whether this position still exists or whether some sort of Northern Ireland order will accompany this legislation, when enacted.

I am sorry; I do not have the answer to that question and it would be wrong of me to try to guess it.

On Question, amendment agreed to.

moved Amendment No. 101:

moved Amendment No. 101AA:

moved Amendment No. 101B:

moved Amendment No. 102:

This amendment would disable the new provision for HMRC to share information with the Pensions Regulator for compliance purposes and it would eliminate existing data-sharing arrangements between the two. I understand that that is not the import of the amendment but I thank the noble Lord, Lord Skelmersdale, for giving us the opportunity to discuss this matter.

I am aware that lapses in data security in recent months have rightly caused great anxiety and wish to reassure noble Lords that we share that concern. I should like to explain why the data-sharing provided for in Clause 45 is vital and outline the steps that we are taking to ensure that the transfer and storage processes will be protected by the highest standards of data security.

HMRC, through its PAYE responsibilities, is the only holder of a comprehensive UK employer database. These data will allow the regulator to communicate with employers about their new duties and to run a registration process requiring employers to state how they will meet their new responsibilities. Without registration, compliance with the employer duties would be much lower, and millions could be denied access to pension saving. In addition, this subsection is designed to allow HMRC to share information about non-compliance which it has collected through tax and national minimum wage activities. This will help the Pensions Regulator to identify which employers are more likely not to comply with their new duties. Finally, the clause replaces the regulator’s existing gateway to exchange data with HMRC, which is crucial to the regulator’s ability to deliver its existing functions.

It is of course vital to ensure that data are transferred safely and securely. The Bill, and Clause 47 in particular, strengthens the legal safeguards of data shared by HMRC by increasing the maximum sentence that a magistrate can impose on Pensions Regulator staff who unlawfully disclose restricted data. This sanction also applies to anyone who unlawfully discloses restricted data which they have received from the Pensions Regulator.

The noble Lord referred to secondments or transfers between departments, which we discussed to some extent during the passage of the Child Maintenance and Other Payments Bill. There may well be arrangements for people to be seconded from one department to another, but when individuals arrive in a transferee department, they will be subject to the same procedures, processes and systems as any other employee in that department. The fact that they may have come from another department does not matter. They may bring expertise and experience with them, but this is not meant to be a loop round what should be a formal gateway.

The noble Lord also asked how the arrangement will work, particularly in relation to information related to non-compliance with the national minimum wage. The data-sharing arrangements have yet to be operationally finalised, but the clause will allow HMRC to provide the regulator with information regularly about employers who are not complying with other legislation. That could be at the request of the regulator or on HMRC’s initiative. Clearly, this needs to be formalised and procedures need to be set up. The key point is that that information flows on a structured basis and that it is protected. I hope that enables the noble Lord to withdraw his amendment.

This is obviously a recurring theme of mine. I am worried that to a great extent transferees have to have a form of amnesia as regards their previous employment. However, I shall not go into that matter tonight.

I do not think that was what I said. That misunderstanding may be running over from the previous legislation that we discussed. Transferring individuals between departments does not mean that they do not bring with them their expertise, knowledge and experience, which could well be brought to bear and made good use of. My point was that, simply because they come from another department, there should not be informal transfers of information and loops back to that department. The gateways are there on a statutory basis for very good reasons. Transferees or secondees, just like any other employee of the Pensions Regulator, will be subject to the same processes and procedures.

By using the word “amnesia” I meant that, if a particular individual who has just been transferred from Revenue and Customs has been looking at an employer’s account and it needs to be looked at again, he has to go back through the proper channels to be effective. I will not get into that argument now. I am grateful to the Minister because I think I have had an answer to my question, which is the spontaneous offering-up of names by HMRC. Of course it has the biggest database, if it does not lose it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 agreed to.

moved Amendment No. 102A:

I beg to move that the House do now resume. In moving the Motion, I suggest that the Committee stage begin again not before 8.33 pm.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.