LORDS AMENDMENT (Hansard, 17 November 2004)

§ Baroness Hollis of Heigham
My Lords, I beg to move that the House do not insist on its Amendment No. 298 to which the Commons have disagreed and do agree with the Commons in their Amendments Nos. 298A to 298K in lieu thereof.
The other place was concerned, first, that the intention of Amendment No. 298, proposed by the noble Lord, Lord Higgins, seemed to be that the scheme-based pension protection levy should be used to collect administration costs of the PPF. We considered it essential that a clear distinction was drawn between the PPF income used to pay compensation and that used to cover administration costs. That approach is in accordance with the funding principles of other non-departmental public bodies.
Secondly, the amendment required the Secretary of State to lay regulations before Parliament before any changes were made over the proposed levies that the PPF board should collect in any given year. We do not think it right that Parliament should have to approve changes to the amount collected through the levies. It is important that the PPF operates at arm's length, as we see from the experience of the problems faced in the States.
Thirdly, the original amendment brought forward the restrictions on the levy ceiling and the 25 per cent rule controlling the amount collected, so it would have applied during the transitional period. Had the hoard been constrained in that way, its only option might have been to collect more than necessary to meet its liabilities for that year, in order that it was able to collect enough to meet its liabilities in subsequent years.
In addition to those provisions, the new clause inserted by Amendment No. 298 also required that the amount to be collected by the board via the risk-based levy be raised to 80 per cent of the estimated total to be raised. That was the only aspect that we fully debated. We agree that risk is very important in setting the levies. We acknowledge the concerns raised on Report. As a result, the other place has agreed an amendment in lieu that meets the concerns of Opposition Peers that the board still be required to collect at least 80 per cent of the levies through the risk-based pension protection levy.
I hope that we have now responded appropriately to noble Lords' concerns, and that they will not insist on the original Amendment No. 298, except in terms of the amendments in lieu, which meet the substantive point raised but clear up some of the minor and highly undesirable consequences.
Moved, that the House do not insist on its Amendment No. 298 to which the Commons have disagreed and do agree with the Commons in their Amendments Nos. 298A to 298K in lieu thereof.—(Baroness Hollis of Heigham.)

§ Lord Higgins
My Lords, we debated the issue at very considerable length at earlier stages of the Bill. The core of our concerns—it has had widespread support outside—was that the risk-based element of the way in which the levy was raised should he at least 80 per cent, subject of course to the amendment that we discussed a moment ago on small companies. We also felt that there were a number of other issues, such as to what extent the Secretary of State should be involved in the maximum amount of the levy.
I am very glad that the essential item, on which we voted—the 80 per cent argument—has been accepted by the Government. In turn, I am prepared to accept the amendment agreed in another place to eliminate the other parts of the proposals, to which the Government objected. On reflection, they were probably right. I again welcome the fact that we have made progress in improving the Bill.

§ Lord Oakeshott of Seagrove Bay
My Lords, I am again delighted that the Government have responded to the concerns expressed from these Benches and the industry, and that we have an agreed and, I hope, workable solution.