Sir, We are very concerned that the Government is about to introduce measures by the back door which will damage Britain’s competitiveness and further undermine its reputation as an attractive place to do business.
Within the next week, the Government will introduce some little-noticed amendments to the Pensions Bill which is currently passing through the House of Lords. Rushed through with the minimum of consultation, these amendments would give the Pensions Regulator sweeping new powers which are so ill-defined that we fear their effect will be to kill off takeovers and investment in businesses with defined pension schemes.
We very much agree with the Government that the interests of pensioners must be safeguarded. But there has been absolutely no evidence to suggest that the Regulator’s current powers are insufficient to protect scheme members.
Furthermore, even if one accepts the argument that the Government is right to anticipate all future possible threats, then the proper thing to do would be to set down in legislation the powers that the Regulator will have and the circumstances in which he can exercise them. That way, everyone would know where they stand.
Instead, the Government plans to leave the Regulator’s powers vague and to give it the right to intervene retrospectively for up to six years after a deal has gone though. Their only reassurance has been to say in effect that they are sure the Regulator will ‘do the right thing’ and behave reasonably.
No matter how reasonable the Regulator may be personally, these moves have already caused many deals to be aborted and stopped further ones from happening. Lawyers are giving explicit legal advice against investment because of these changes.
At this late hour, we urge the Government to reconsider, and at the very least to have a proper debate about the issue in Parliament, and then – if that is the will of the House – to introduce legislation which will clarify what the new powers of the Regulator will be. Otherwise, they will be delivering a further blow to investor confidence in the UK at a time when, given the state of the economy and the lack of deals in general, we can least afford it.
Yours sincerely
Simon Walker - Chief Executive, BVCA (The British Private Equity and Venture Capital Association)
Allen Blewitt - Chief Executive, ACCA (Association of Chartered Certified Accountants)
Christine Elliott – Chief Executive, Institute for Turnaround
Keith Barton - Chairman, Association of Consulting Actuaries
