Pension Schemes Bill [HL] — House of Lords, 2020-06-30
Topic: Labor
Hugh Trenchard (Conservative, Centre-right): My Lords, while the Bill has generally been welcomed by the pensions industry and members of pension schemes, I worry that it may give the Pensions Regulator too much power. The new criminal offences contained in Clause 107 affect not only employers and senior associates of pension schemes. They could apply to anyone involved in such schemes: for example, trustees, banks and insurers. I therefore support Amendments 46 to 49, proposed by my noble friend Lady Noakes so eloquently and so well supported by my noble friends Lady Altmann and Lady Neville-Rolfe, which confine the new criminal offences to the employer and persons connected with the employer. It is absolutely right that the Government have acted to ensure that failures such as that of Carillion and BHS will no longer have a negative effect on members of pension schemes The offences created in Clause 107 are serious. They carry a potential seven years’ imprisonment and a civil penalty up to a maximum of £1 million. It is therefore right that these offences should apply as broadly as they do, but they should be limited in effect to the employer and the trustees of the pension scheme concerned. These penalties seem proportionate to the gravity of the crimes in certain cases, but both offences apply very broadly to "persons", with no requirement for association with the pension scheme. The Government’s intention may be that the measures are there to catch wilful and reckless behaviour, but the problem is that their potential ambit is wider—much wider—than just the reckless As currently drafted, the criminal offences could impact ordinary pensions and business activity, and, in distressed situations, they might act as a disincentive to corporate or business rescue—for example, by encouraging directors to file for insolvency to avoid the risk of criminal liability that might arise through seeking a turnaround plan or a pension scheme compromise. So far, attempts at making the measures clearer and more targeted have not succeeded. Regulator guidance on how the new powers will be used has been promised, but this has no special status in law The Pensions Regulator is not the only possible prosecutor in Clause 107 offences, as the noble Lord, Lord Hutton, eloquently pointed out in Committee. My noble friend Lord Howe explained that the Secretary of State would prosecute only as a last resort, such as if the regulator ceased to exist or changed. I find it hard to envisage that in such circumstances the whole of the current pensions legislation would not be changed I think that it is necessary to confine those who might commit these two new offences to connected parties; otherwise, many other persons might unwittingly, or unintentionally, become exposed to prosecution. For example, the fund manager of a pension scheme, in handling investments entrusted to him by the trustees of the scheme, might make investments or realise sales that negatively affect the value of a pension fund’s assets I think that these amendments are very sensible and I look forward to hearing the Minister’s reply.