Pensions Bill

My Lords, I shall speak to my amendment No. 78PA in the group, which is a probing amendment to try to tease out how hindsight might be used in the context of the defence. I am aware that subsection (5) of the defence clause refers to prevailing circumstances at the time. Clearly that is quite helpful, but there is considerable concern that people against whom the regulator will use these new powers may have a rather hazy memory about what they did in the past and, indeed, may not have access to papers. That may cause a problem, because the regulator will have absolute clarity about how things have turned out. Let me give an example. A person carrying out a commercial transaction in good faith uses some kind of financial innovation, but not to avoid pension liabilities. Subsequently, that same innovation is used to consciously detrimental effect. To what extent will the original transaction be damned by the later use of a particular technique? My amendment would not eliminate that problem, but it might make the business community more certain about how the regulator will judge the effect of particular circumstances, given that hindsight is a very difficult thing to avoid using when reaching judgments.