Examination of witnesses (Questions 340
- 345)
WEDNESDAY 15 JULY 1998
MRS
HILARY
SIDDLE,
MR
ROBIN
ELLISON
and MRS
DIANE
BURLEIGH
340. That would be very kind.
(Mrs Siddle) Because that does include a view
on the Scottish perspective. Would that be helpful because there
is a lot of detail in that paper.
Chairman: That is
extremely helpful. Finally, we are concerned some of the repercussions
of the Landau case.
Ms Stuart
341. This is the third session when the
Landau case gets its outing without ever having had any
response of any significance. Maybe you would like to say something
of significance. What do you think the practical implications
of the Landau case are? Do we have a problem here which
needs to be addressed?
(Mr Ellison) Whether my response is significant
I leave for others to judge. There are a couple of points I would
like to make on Landau. First of all, it does not seem
to be settled law. We are seeing now opinions from senior barristers
that it does not have general application to other kinds of personal
pension. Those have not been tested in the courts yet but, certainly
looking at those opinions, they seem pretty well founded and I
would doubt whether Landau has a general application, but
we do not know yet. Secondly, there is a big difference between
treatment of personal pensions as property and occupational pensions
as property. That is an anomaly which seems to be unfair. It does
not seem right that there should be a distinction. I know the
Department of Trade and the Department of Social Security have
a discussion group going internally within government as to how
best to resolve this. My own view is that one should look at the
conclusions of the Goode Committee report following the Maxwell
affair, which went into this in some depth. Basically, it did
not look at personal pensions but, in respect of occupational
schemes, its view was that they should not be the property of
the trustee in bankruptcy.
342. That is very useful. It was always
my concern as to whether pensions became choses in action which
Goode did not want.
(Mr Ellison) There is an exception to that where
there has been a fraud on creditors. That applies to occupational
schemes as well. The creditors are protected but the general principle
is that people who have built up pensions over many years should
not have them taken away in bankruptcy.
Ms Stuart: That was
a useful contribution. Thank you very much.
Chairman
343. I am intrigued by the thought that
Mr Ellison has raised about the courts looking behind the legislation.
Would it be possible to do a very short note?2[3]
I think it is absolutely essential that these kinds of things
get thoroughly and properly investigated so that none of us gets
hit by unsuspected and unforeseen circumstances. This is exactly
the kind of thing that this process is designed for.
(Mr Ellison) I hope we have not made it too great
an issue. Pepper v Hart is only of modest application and
this kind of thing is not done commonly, but it is done on occasion.
344. I am not looking for a long treatise,
but just a couple of paragraphs. That would be very valuable for
us.
(Mr Ellison) If there is time just to add one
sentence on complexity, in particular, and simplification, one
of the difficulties in advising clients when it is very complex
is that it puts the fees up, which is not a good thing. One of
the reasons that this legislation is complex, amongst many others,
is the drive by the Revenue to try and ensure fiscal neutrality
between married couples and unmarried couples.
345. If you strip that out, it might be
simpler?
(Mr Ellison) If you strip that out. I think a
lot of the Revenue concerns are based on the fear—and we
do not think it is a genuine, founded fear—that people would
get divorced in order to gain tax relief on pensions. We think
people get divorced for many reasons but getting tax relief is
not top of the list.
Chairman: Thank you
very much. We are very grateful for the work you have done in
advance and the prospective work that you have offered to do for
us. Thank you very much indeed.
3 2 Not available at time of publication. Back
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