Pensions Bill

It seems to me that one of the main points of parliamentary scrutiny around the work of the authority will be through the second pension Bill next year, when we will have the opportunity to scrutinise in detail the product of its work. I see that as being a very important outcome of scrutiny for this House and another place. In tabling the amendments the noble Baroness has raised some worthy and interesting points concerning the provision for the Secretary of State to issue guidance to the delivery authority about the discharge of its function. The authority will be a non-departmental public body, which during its initial phase will be funded entirely through government grant. As such, I believe that it is right that the Secretary of State is able to issue appropriate guidance from time to time to facilitate a constructive relationship with the authority. However, Amendment No. 123 would mean that the delivery authority could simply disregard any guidance issued under Clause 20(6). Clause 20(7), which the amendment seeks to remove, ensures that the authority thinks about such guidance but is not bound by it. The authority will be independent but, as I explained, during the initial stage it will advise the Secretary of State and, in particular, support the Government in understanding the operational and commercial implications of options for personal accounts. It is important that the Secretary of State can be sure that his guidance willat least be considered. By that, I mean that the authority, in ““having regard to”” guidance, must take it into account, but it is not obliged to follow it. If it does not follow the guidance, it will be obliged to explain why it has not done so. I understand the noble Baroness’s concerns in tabling Amendment No. 124. In tabling an amendment to specify that guidance issued by the Secretary of State must be subject to such a consultation process, I believe her intention is to ensure that there is ongoing engagement with stakeholders on the development of personal accounts. I hope I can reassure her that we have fostered a consensual approach in developing proposals for personal accounts. We have consulted widely on the proposals, both formally and informally. Indeed, we will shortly be publishing a response to our December White Paper consultation. The great number of responses we had to the White Paper is indicative of how successful our consultation has been. We intend that it will continue as we move forward. As my honourable friend James Purnell indicated in Committee in the other place: "““We will continue to do that, to hold a range of seminars and to consult people widely … we will continue to be open in our dealings with the authority””.—[Official Report, Commons, Pensions Bill Committee, 6/2/07; cols. 311-12.]" The relationship between the Government and the authority during this initial phase will be based around the provision of advice. We should not mistake it for a formal relationship, such as that which exists between regulators and the Government. An effective relationship, based on dialogue, is clearly crucial in the initial phase and, as I explained, the Secretary of State’s ability to issue guidance is undoubtedly a key part of this. In the light of that, laying such information before Parliament, as Amendment No. 125 suggests, would appear somewhat heavy-handed. It is not possible to specify what every piece of guidance might cover. Indeed, it is likely that much of the guidance will be issued on an ad hoc basis and will concern administrative or presentational matters—for instance, the format of a report or the presentation of advice. Other guidance issued by the Secretary of State might concern the policy or commercial issues that the authority is being asked to advise upon. Making provision for the Secretary of State to issue guidance enables him to suggest areas where the expertise and knowledge of the delivery authority could be put to best use. Requiring such guidance to be made public, as the noble Baroness seeks to do, may inhibit the provision of free and frank advice. However, we will of course make public such information as is appropriate in accordance with conventions relating to non-departmental public bodies. For example, the management statement and financial memorandum will be published. I hope noble Lords will agree that it would not be appropriate to tie down the relationship between the Secretary of State and the authority in the detail that is envisaged in these amendments, although I fully take on board the noble Baroness’s comments about the need to be transparent and open in the way that we work. I hope that I have picked up all the points that she made. If not, I will be very happy to remit further.