Pension Protection Fund (Pension Compensation Cap) Order 2007

I am yet again grateful to the Minister for explaining these orders so clearly. Although putting them all into one speech makes life just a tiny bit more complicated than it would otherwise be, I pretty well understood what he said. The noble Lord ranged widely over the background to the orders and I understand why, although the noble Lord, Lord Oakeshott, and I were both involved in the discussions on the then Pensions Bill, which became the 2004 Act. We are well aware of the background. When we are ranging widely, I am tempted, as I have been in the past, to pursue the subject of the Chancellor’s disastrous decision to remove advance corporation tax from pension funds. But today I will let the Minister off the hook; indeed, for the first time in many pensions debates. But I put him on warning that I will not resist the opportunity that will come when we debate the Second Reading of the Pensions Bill in a few weeks’ time—or will it be quite so soon? The Government are under enormous pressure both in another place and over here to make compensation available to the thousands of people on whose behalf the Government were accused by the Parliamentary Ombudsman, of mis-selling pensions. When we last debated the matter, the Government had not decided whether to appeal the High Court’s verdict supporting the ombudsman. Have they decided now, and will it affect the timing of the remaining stages of the Bill, that is, the introduction of the Bill into your Lordships’ House? Also, are they still sitting on the fence as regards compensation? One of the suggestions I and my honourable friends have made is to roll the Pension Protection Fund, the subject of two of these orders, and the Financial Assistance Scheme into one operation—an idea to which, as far as I know, the Government have not yet responded. Are they able to do so today? In passing, an article in the Financial Times last week suggested rolling the Pensions Regulator and the PPF together. What is the Government's reaction to that? I turn now to the orders. The Secretary of State must by law make an order to increase the amount of the pensions compensation cap if on a review he recognises that the general level of earnings has increased since the last review. As the Minister has just told us, that level has apparently increased by 3.4 per cent—so this order increases it by that amount. He also said that only 90 per cent is paid, so this amounts to an increase of £885.70, which just beats inflation and so is worth having. However, I have a problem. If you compare this with the general level of earnings in the levy ceiling order, it is apparent that a different calculation has been made of the increase in earnings since the last review. That is to rise not by 3.4 per cent but by 3.8 per cent. Why the difference? I am sure that there is a very simple answer, but not being a mathematician, I cannot find it easily. There was originally some dispute about the amount the PPF levied to fund its insurance scheme for defined benefit schemes. Has the Minister heard any complaints about the proposal in this order to increase it? Indeed, did the managers of the PPF collect all the money up to the ceiling in the last year, or did they not need to do so? After all, a ceiling is the maximum amount that can be collected, it is not the amount that will be collected. It is worth considering whether the law on uprating needs to be changed. It may be a bit early to do this as we have not yet had a great deal of experience of the operation of the fund, but I put the thought into the Minister's head, because it is apparent from the levies amendment order that an extra levy no longer needs to be charged for the PPF ombudsman, as I think the noble Lord has just said. This is very healthy, but to return to the Financial Times article, is he necessary at all? Surely the Pensions Ombudsman could do both jobs? Having said that, I agree with all three orders.