Pensions Bill

With these amendments, the noble Lord raises the relationship between transparent decision-making and effective regulation. This issue was discussed by the Public Accounts Committee in another place recently, and the Government and the regulator recognise that there is an important balance to be struck. The power to publish reports in Section 89 is a permissive power. It is for the regulator to consider when and in what circumstances to publish reports. When Parliament discussed this during the passage of the 2004 Act it agreed that this provision should be widely drawn to ensure that there are no restrictions on what the regulator is able to publish following an investigation. The regulator originally considered that, given the issues of confidentiality, it was better to approach this on a ““publish by exception”” basis. The Public Accounts Committee recently considered transparency in reporting as part of its scrutiny of the Pensions Regulator. It found that the regulator should publish determinations to bring clarity and transparency to regulator decisions. There was no question that this process necessitated changes to statute. In response to the PAC hearing, since December 2007 it has been the regulator’s policy to publish determinations on issues reserved to the Pensions Regulator’s determination panel unless there is a good reason not to. It has published detailed determinations in some high profile cases such as the Sea Containers and Telent cases. This publication policy is in the public domain. The regulator recognises the educative value in publishing reports and now has a firm policy that it should publish in all cases other than by exception. All past determinations were recently published on the Pensions Regulator’s web pages. I appreciate the intention behind the noble Lord’s amendment: providing as much transparency as possible in regulatory decision-making. However, it would make publication of reports mandatory and remove any exercise of judgment by the regulator on whether publication was appropriate. This additional administrative duty upon the regulator would not materially enhance its performance in the exercise of its statutory functions. It could constrain a regulator’s ability to depart from its published policy on the exercise of its functions even where justice and circumstances would otherwise require it, for example where there is a criminal investigation. It would also require the regulator to publish even when it considered that the circumstances of the case made the parties affected identifiable, even with anonymisation. In the regulator’s experience, employers and the pensions industry would have serious concerns with this proposal. The information would be of a commercial nature and usually sensitive. Even in an anonymised form there is a serious question of whether corporates would want to share this with other parties. Many clearance applications relate to future corporate transactions, and, as such, parties often require stringent confidentiality on the facts of the case. In some cases clearance will be sought for transactions that subsequently do not take place. It is important that parties feel able to share all relevant facts with the regulator without concern that details of their business position or potential strategic moves will be published. Such a mandatory requirement would undermine the industry’s trust in the regulator to maintain confidences, deterring potential approaches and interaction and generating uncertainty within the industry. This amendment would run counter to the regulator’s efforts to maintain the confidence of the pensions industry in maintaining confidential and commercially sensitive information. There is already transparency under the regulator’s current regime. The regulator provides both advisers and their clients—the applicants or trustees—with the detailed determination notices. These set out the reasons for the regulator’s intervention and provide advisers with a frame of reference about how the regulator operates. On the second amendment, the Pension Regulator’s determinations panel procedures give the panel a power to direct how a hearing will take place, potentially including what documents should be shared. The amendment would go wider in scope than is intended. It would make that apply to all determinations, even those not made by the panel. This would make the clearance process virtually unworkable given the number of documents involved. It could result in clearance applications undergoing investigations taking several months and raise questions about which documents corporates would want to share. I understand the noble Lord’s intentions, but there is a risk that such an approach could divert focus and resources from other areas that require regulatory action. As established and also under the Hampton principles, the regulator is risk-based, with the freedom to focus its resources on those issues that place members’ benefits or the PPF at the greatest risk. If accepted, the amendment could stifle the regulator’s ability to react quickly in clearance applications. Introducing these requirements on the regulator would simply constrain its flexibility to focus resources on key risks. It would be unnecessary unless the regulator considers the relevant information when making its decisions. Then such decisions could be open to challenge. If it would help the noble Lord, I would be happy to facilitate the opportunity for him to meet with the Pensions Regulator to discuss his concerns in greater detail. Perhaps, with his colleagues and other noble Lords, he might find this a fruitful way of getting further into these issues.