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House of Lords
Thursday, 11 January 2007.
The House met at eleven o’clock: the LORD SPEAKER on the Woolsack.
Prayers—Read by the Lord Bishop of Southwell and Nottingham.
Pensions: Holden Trusteeship Review
Baroness Turner of Camden: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I take this opportunity to congratulate my noble friend on his new appointment and wish him every success with it.
To ask Her Majesty's Government whether they will review the effectiveness of lay involvement in the governance of trust-based and contract-based workplace pension schemes in light of the Holden Trusteeship Review, Putting Structure into the System.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My Lords, I thank my noble friend for her kind words. The Government welcome all contributions to the debate on the governance of pension schemes. The role of the trustee is a key element of the governance of occupational pension schemes. My honourable friend James Purnell, a Minister in the other place, met Brian Holden on 9 October to discuss the key findings of his review. Although some of the review's recommendations are consistent with government policy, the Government take the view that the direction suggested by Mr Holden does not sit with the risk-based proportionate regime that the Government have established.
Baroness Turner of Camden: My Lords, I thank my noble friend for that response. Is he aware—I am sure he is—that employers have been turning away from final salary defined benefit schemes in favour of contract-based money purchase schemes, which are increasingly being offered to new employees? In final salary schemes, there is usually provision for the election of lay trustees by the workforce. That does not normally exist in the more common money purchase schemes. Does the Minister think that that is correct? Could not something be done to ensure that the employees concerned have some means of representation?
Lord McKenzie of Luton: My Lords, I am aware of the movement away from defined benefit schemes, but the Pensions Regulator has commenced a consultation on how DC schemes should be regulated. On 13 November, the regulator published a consultation on how it proposes to address the risk to members in DC schemes and how it will regulate these schemes. The five common areas of risk outlined are poor
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Lord Skelmersdale: My Lords, we on this side of the House congratulate the Minister on his promotion to the Department for Work and Pensions, where I am sure he will prove just as effective and popular as he was as spokesman for the Treasury. Given the dismal state of pensions over the past 10 years, may I add slightly to what the noble Baroness, Lady Turner, has just said? Does the Minister now see a need for defined contribution schemes to have trustees, or does he remain happy to leave them in the hands of the pensions industry, which for defined contribution schemes has always been the case?
Lord McKenzie of Luton: My Lords, I thank the noble Lord for his kind words. I thought I set out a moment ago what is happening on that: consultation is under way, kick-started by the Pensions Regulator. It will run for a little longer yet. The state of pension schemes has been discussed in the House on a number of occasions. It is right that we should recognise what has happened to defined benefit schemes over the years. All informed analysis shows that the change has been brought about by increasing longevity, falling interest rates, which has had a significant impact on gilts, and the effect of equity markets. Those issues have caused the change and the move into defined contribution schemes.
Lord Addington: My Lords, in congratulating the Minister on his promotion, I have a sinking feeling that he will be every bit as good as his predecessor—so no free hits there. Is the Minister giving us an assurance that those paying into schemes will have a voice in the way that they are managed? That seems to be the nub of this interchange.
Lord McKenzie of Luton: My Lords, there is provision in the 1995 Act, which was amended and simplified in the 2004 Act, for there to be member-nominated trustees of occupational schemes. That is enshrined in legislation and is subject to the review of pension scheme regulation—to see whether that can be improved and made more effective and more risk-based in order to reduce the burden on pension schemes generally.
EU: German Presidency
11.11 am
Lord Dykes asked Her Majesty’s Government:
When they will next meet members of the Government of Germany to discuss the German European Union presidency and their principal matters of interest.
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The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Triesman): My Lords, our embassy in Berlin is in daily contact with the German Government on a range of issues. Ministers and officials have been in contact with their German counterparts since September about the German European Union presidency. These discussions have covered topics such as the future of Europe, enlargement, climate change and energy. Further meetings will take place during the EU ministerial councils. A White Paper on the prospects for the EU in 2007 will be presented to Parliament shortly.
Lord Dykes: My Lords, I thank the Minister for that Answer and wish the Government well in copying the Germans’ traditional enthusiasm for Europe. Sadly, the Berlin Government have always been far more forcefully opposed than Her Majesty’s Government to Guantanamo Bay, condemning even its existence. Like extraordinary rendition, it is a gross breach of international law and the conventions. Will the Minister meet urgently with his federal German counterpart, and possibly with Solana, to discuss joint initiatives in this presidency period with France, Spain, Italy and other interested member countries to persuade the United States to close down this abominable facility once and for all?
Lord Triesman: My Lords, the Government’s position on Guantanamo Bay is clear. Our position, if it needs restating to the House, is that it should be closed. I do not think there is a difference between any of the principal European allies on that matter. I cannot believe that the European Union as a whole will not seek to use its influence to ensure that it is closed as soon as possible.
Lord Anderson of Swansea: My Lords, does my noble friend agree that whatever priorities the presidency sets in foreign affairs are likely to be diverted by events? Does he also agree that the German Chancellor has set off at a great pace—first with her robust response to the Russians over Belarus, and secondly in seeking rapprochement with Washington and an initiative on the Middle East—that bodes well for the German presidency?
Lord Triesman: My Lords, my noble friend is completely right: there has been a great deal of energy since 1 January. I think that relations with the United States are on an improving curve and that the influence brought to bear on Russia on supplies, which were restored in the past 24 hours, are all very positive steps. There are very positive signs that this German presidency will bring rapid and effective engagement on all the international matters that have been of great concern to us as well.
Lord Stewartby: My Lords, given that the projected June summit will have an agenda that includes many items of importance for the future of the European Union, is it the noble Lord’s view that the United Kingdom’s interests would be best served by being represented at that meeting by a new Prime Minister?
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Lord Triesman: My Lords, the Prime Minister’s decisions on the timing of his departure, which he has announced, are a matter for the Prime Minister.
Lord Hannay of Chiswick: My Lords, does the noble Lord agree that it was in this country’s interest to give our full support to the German presidency’s efforts to revive a Middle East peace process and that, in so doing, we surely need to put together a really meaningful and creditable approach of a European kind to this which could perhaps sound out the ground ahead of the United States organising itself to resume the search for peace?
Lord Triesman: My Lords, I think that I have said in the House before that the European Union has an extremely important role to play in the search for peace in the Middle East. I am encouraged by the thought that the Germans will prioritise the matter, not least because they have forces in Lebanon and can see at close quarters the nature of the problems that have to be addressed. That will be an encouragement to them. But the greatest encouragement is that the Germans are plainly willing to bring all European partners into the discussion and to do so rapidly. Speed is of the essence in the Middle East peace process now.
Lord Tomlinson: My Lords, bearing in mind the important agenda that the German presidency has put before the citizens of Europe, will my noble friend join me in regretting that the newest parliamentary group to be formed, UKIP, has not taken the opportunity today to give us some expressions of its view? It has fallen at the first fence.
Lord Triesman: My Lords, I feel an abject want of seeing them myself. It has distressed me no end.
Lord Lawson of Blaby: My Lords, I think that many Members of the House were slightly surprised to note that, when the Minister read out the list of matters that the German presidency wishes to bring forward, he did not mention the revival of the so-called European constitution, which the Germans have made clear is likely to be a major objective of their presidency. Does the Minister agree that, should the constitution be brought forward and eventuate in anything that could be presented to the member countries, the wise decision made on the first constitution—that it must be put to a referendum of the British people—must apply also to whatever comes forward a second time?
Lord Triesman: My Lords, if a constitution that requires consent is produced, the Government have made a commitment to put it to a referendum. I do not want to speculate on the variety of documents that might emerge over this six-month period, but I want to report to the House that my right honourable friend Geoffrey Hoon set out in a Written Ministerial Statement on 5 December what he regards as the six principles that will be the guide to our consultations. They are: pursuing British interests as the first and foremost principle; modernisation and effectiveness;
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Lord Barnett: My Lords, can I ask my noble friend to ignore some of the comments made about a revision of the constitution, which would require the agreement of 27 member states and is therefore rather unlikely to happen? Would it not be better for the Government to support changes to the treaty, and not to talk about constitutions, in order to make the management of the Union rather more effective than it is at the moment?
Lord Triesman: My Lords, my noble friend makes an important point. There are now 27 members, and I think there is common agreement on the fact that the systems are not the easiest to manage. We need to be able to take decisions effectively in such a considerable pool of diverse nations, and we will need to find the means of doing so. For my own part, I would say that whatever happens in the coming six months, it is extremely unlikely to resolve all the questions about the constitutional draft that was the torment of parliaments right across Europe for the past two years.
Lord Howell of Guildford: My Lords—
Lord Grocott: My Lords, it is the turn of the Liberal Democrats. We have plenty of time.
Lord Teverson: My Lords, given the dual role of the German Government as president of both the European Union and the G8, surely one of the things that ought to be added to that list is a successful conclusion to the Doha round, which has been going on for several years now. Is this not one of the last windows of opportunity to prevent the world moving towards protectionism rather than open trading, as I am sure the Government and European Union would wish to see happen?
Lord Triesman: My Lords, I strongly associate myself with the lines that lie behind that question. As I think we are all aware, there has been discussion of the prospect of a European/United States agreement, which I fear would reopen the old view that there is a north/south aspect to this. The Doha round’s full title was always the Doha development round. It was about development. It was about lifting the poorest people on the planet to a point where they had a decent and prosperous future. That must remain our objective. The German presidency, whatever views it flirted with at some stages, has come firmly to that view as well.
Lord Howell of Guildford: My Lords, further to the valid point made by the noble Lord, Lord Barnett, the situation is perhaps not quite as easy as the Minister indicated. The Prime Minister—the present
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Lord Triesman: My Lords, the idea that anyone at a Dispatch Box could guarantee that this circle could be squared would be regarded as preposterous throughout the whole House, so I shall make no such attempt. As my right honourable friend the Foreign Secretary said in a debate on 18 December, the constitutional treaty is “in limbo”. It is a matter for all the states, not just for us, to declare on its future. Given what has happened over the past two years, the prospects seem minimal that it will be the set of arrangements around which there is a fruitful discussion.
Gambling: Regulation
11.21 am
Lord Roberts of Llandudno asked Her Majesty’s Government:
Whether they will take steps to ensure that the United Kingdom is the world leader in tackling the problems caused by online and other gambling.
Lord Davies of Oldham: My Lords, from September 2007 the Gambling Act 2005 will introduce one of the world’s strictest regulatory regimes. Tough new provisions include a duty on operators to act in a socially responsible way. On 31 October last year, the Government hosted an international summit for more than 30 jurisdictions, and the process of establishing international standards is now under way.
Lord Roberts of Llandudno: My Lords, I am grateful to the Minister for his answer. I refer him to the Department for Culture, Media and Sport’s 2003 position paper The Future Regulation of Remote Gambling, in which it expressed a wish,
First, have the Government monitored the consequences of online gambling? Solitary gambling—online gambling—can be as dangerous as solitary drinking. Have they monitored it in terms of stress, mental breakdown and gambling-induced poverty?
Secondly, what new action are the Government taking to assist those at risk? How much investment are they making to help those who fall victim to such gambling?
Lord Davies of Oldham: My Lords, on the second question, under encouragement from the Government the industry is contributing £3 million a year to the Responsibility in Gambling Trust to tackle the problems that the noble Lord identifies. Online gambling raises significant questions. We are concerned to ensure that as much of it as possible takes place within the United Kingdom jurisdiction, because the Gambling Act guarantees certain standards. Not all online gambling
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The Lord Bishop of Southwell and Nottingham: My Lords, is the Minister satisfied that the safeguards against the involvement of children and young people in gambling are adequate, particularly in preventing online gambling with the illicit use of credit?
Lord Davies of Oldham: My Lords, the right reverend Prelate will recognise that protection for children was a central point of the Gambling Act 2005. We will ensure that the commission keeps a watchful eye on that. Where misdemeanours occur, those responsible for providing the opportunity will be dealt with appropriately. There is a problem with regard to online gambling. That is why we have undertaken to monitor regularly the level of gambling in this country. At present, the percentage of problem gamblers in this country is very low.
Baroness Howe of Idlicote: My Lords, the need to protect children and other problem gamblers has already been raised. Is the Minister aware that turnover in the gambling industry has already increased sevenfold in the five years up to 2005? In view of that frighteningly rising tide, what are the Government planning to do to fulfil that fundamental objective—not least in the face of Mike Atherton’s truism that the more gambling there is the more addiction follows?
Lord Davies of Oldham: My Lords, it was in anticipation of the growth of gambling that we introduced the Gambling Act. Up until then we were relying on hopelessly outdated 1968 legislation. We have produced gambling legislation which is fit for purpose to control an expanding industry. There is no doubt that an element of the increased disposable income which follows economic growth is expressed in gambling. But it is a very small minority of people in this country who condemn gambling outright and think that no one should gamble.
Baroness Buscombe: My Lords, how do the Government propose to monitor online gambling?
Lord Davies of Oldham: My Lords, it is partly the responsibility of the Gambling Commission. There will be three-yearly reports on the development of gambling. This will be much easier with regard to gambling operations conducted within the United Kingdom and operations that are considerably more overt than online gambling, which is private. We have already sought to establish standards which online gambling facilities need to follow to meet our requirements.
Lord Acton: My Lords, in my compulsive gambling youth, bookmakers thought that socially responsible behaviour was to get me to bet as much as possible as often as possible. Has that changed?
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