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3.45 pm
Mrs. Liddell: From the right hon. Gentleman's statement, am I to take it that Conservative party policy is to restore advance corporation tax after the next general election, should it be elected?
Mr. Lilley: We will not commit ourselves on any matter whatsoever at this stage, here and now, to undo the damage that may be done by the Labour Government between now and the end of their regime. It would be foolish for us to do so. We will state our position in our manifesto for the next general election, after we have seen how much damage the Government have done and in how many spheres, and after we have determined what we can realistically promise to make good.
There can be little doubt that the measure will be immensely damaging. It can be little satisfaction to anyone to know that the best that the Minister can say about it is, "It's no worse than other Governments may do, although you may well find yourself lumbered with it, at least for a while."
I have received a letter from the Chartered Institute of Housing, which is not only a charity but a charity with a pension fund. It states:
Another important issue that has arisen in our debates, and on which the amendments touch, is that of the mis-selling of personal pensions. We all deplore such mis-selling, and we are all keen to see the matter resolved and proper compensation given as rapidly as possible. I wish the Economic Secretary every success in achieving that. However, private mis-selling cannot justify public mis-selling.
The essence of mis-selling is allowing people to purchase pensions or to invest in pensions without full or accurate information being available to them about the implications of their actions for their own circumstances. The Government have now changed the conditions under which people have invested, but they are so far refusing to give the relevant information, either generally, to the public at large, or specifically, via the insurance companies, about the impact of the ACT changes on the contributions that they need to make or on the pensions that they can expect to receive. The Government should ensure that such information is made available. If they do not, people may find themselves opted out of SERPS when they should be opted back in, or they may be tempted to opt out in future when they should not do so.
On 13 July this year, the financial section of The Mail on Sunday said:
If the Economic Secretary found any of the companies that she chooses to berate every month behaving in that fashion, would she criticise them? If they refused to give such information when selling a pension, would she put them at the top of her jawboning list, or would she say, "It all depends whether you are Government or private. If you're Government, you can do that sort of thing and
I'll pat you on the back and praise you. If you are private, I will criticise and attack you"? I will happily give way to the Economic Secretary, who is a frequent intervener, if she would like to tell us whether she approves of such behaviour by private pension schemes.
Mrs. Liddell:
I get the impression that the right hon. Gentleman thinks there is something wrong with the way in which the Government have tried to do something about pension mis-selling, but the point that he is making is spurious. The Government have gone to great lengths to ensure that people are aware of the implications for their long-term future of changes to their pensions. Indeed, had the right hon. Gentleman been in Committee, he would have heard the issue debated very fully. Perhaps it is because of the inadequacy of Conservative Members in Committee that the heavy guns have had to attend today's debate.
Mr. Lilley:
The hon. Lady should know that, by convention, neither the Chancellor nor the shadow Chancellor sits on the Committee, and that is why I was not on it. However, I was extremely proud of the role played by my team in the appallingly short time made available for proper consideration of the measure. Once again, the hon. Lady ignores the issue and is content to make party political points. Would she tolerate, let alone praise and advocate, the misinformation and lack of information that the Government are providing if the private sector companies that she seeks to regulate had behaved in such a way? If she is not prepared to answer such questions, we can only assume that she has dual standards on this matter, as on so much else.
Mrs. Liddell:
I am happy to make it perfectly clear that the Government have gone to considerable lengths to ensure that information is available to those buying pensions. We discussed the matter fully in Committee and, quite frankly, as a member of a Government who for eight years ignored pensions mis-selling, it is no wonder that the right hon. Gentleman cannot look me in the eye when I am responding to him.
Mr. Lilley:
To say that the Government are going to great lengths to make information available when they spent tens of thousands of pounds of public money producing a pocket Budget--
Mr. David Heathcoat-Amory (Wells):
It cost £50,000.
Mr. Lilley:
It cost the taxpayer £50,000, and its sole reference to this matter was an oblique reference to measures to promote long-term investment.
If the information is being made available outside the House, can it be made available inside the House? What will be the impact, for example, on a 30-year-old person who has been putting £100 a month into his or her pension scheme and who, as a result of the ACT changes, will have to reconsider the position?
The hon. Lady says that the information is being made available. Apparently, it was mysteriously made available in Committee, although none of my right hon. and hon. Friends who were present were aware of it. None of it is recorded in Hansard. Somehow the Hansard writer did not manage to get it down. Can she tell us the answer now? If she will not, I can tell the House about the
calculation by the Association of Consulting Actuaries. If someone put £100 a month into a pension fund before, they will now have to put in £112. It is right that people should know the impact of the changes on their financial circumstances. It is monstrous that the Government are not providing the information.
I advise the Minister to follow the example of the Trades Union Congress, which has published a leaflet on "Pension power for women" suggesting that women do not have enough information on pensions and should have more. For example, one question in the leaflet is:
The impact of the change extends to the pension funds run by local authorities. The hon. Member for Putney (Mr. Colman), from his distinguished position, spelled out the overall impact that it will have on the 99 local authorities that belong to local government pension schemes. He wrote:
"We consider that changes to ACT and its potential impact on pension funds will probably require an additional 0.5 per cent.-0.75 per cent. contribution from the Institute. This money will have to be found from funds that would otherwise be committed to the development of education and training which in turn creates employment opportunities in the housing sector. You will therefore appreciate our concern with regard to the Chancellor's proposals."
Of course, the institute's problem is mirrored across the country in pension funds and in organisations with pension funds, be they charitable or commercial. They are all having to consider the extra money that they will be required to put into their pension funds and which will therefore not be available either to invest or to usefor the charitable, educational or employment-generating purposes to which the Chartered Institute of Housing refers.
"Leading independent pensions expert Gareth Marr of Moores Marr Bradley says: 'We would advise anyone who is still contracted into SERPS to stay in because of the uncertainty now surrounding the returns that can be obtained on opted-out plans. We strongly advise those who have contracted out to get back in--unless the government increases the level of National Insurance rebates it gives them.'"
The newspaper also states:
"Steven Cameron, pensions development manager at Scottish Equitable, hopes the government will raise NI rebates to stop a possible flood back into SERPS. He says: 'For many, the advantage of opting out of SERPS has been significantly reduced and for some it has vanished.'"
How can it be other than mis-selling to allow people to make decisions without that information?
"Is there is a scheme I can afford?"
After the ACT change, there probably is not. The leaflet offers help in answering such questions as:
"I work part-time--Can I join my company scheme?"
The answer is, probably not. The answer may well be that it is not worth doing so now and it might be better to stay in SERPS. I am glad that the trade unions are taking over where the Government have failed to act and deliberately sought to leave people in the dark.
"It has been estimated that the abolition of ACT would add at least 3 per cent. or £300 million to our employers' pension costs. No such increase could be afforded by local authorities without making further cuts to services to their local residents".
The alternative would be to increase the council tax, if they were allowed to do so.
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