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Mr. Timms: It was simply a question of preparing the drafting and getting the work done in time, but we will shortly introduce the appropriate measures. I have no doubt that they will receive thorough scrutiny.
Mr. Clifford Forsythe (South Antrim): I did not hear the Minister mention Northern Ireland. Will he tell the House the position in that regard?
Mr. Timms: I think that the provisions I have described refer to Northern Ireland as well, but I shall check and come back to the hon. Gentleman if I am not correct. He is absolutely right to raise that point with me.
The purpose of amendments Nos. 66, 73, 76 and 77 is to ensure that income payment orders can still be made, despite the provisions in clauses 11 and 12. I apologise for this being a little confusing, but I am referring to clauses 11 and 12, which are already part of the Bill. My earlier remarks were about new clauses 11 and 12. The numbering is coincidental.
The amendments make it clear that there is a distinction between pension rights and the income deriving from those rights. Although pension rights are to be protected, the income deriving from such rights may be subject to an income payment order, but only for the period of the bankruptcy, which is normally three years.
7.45 pm
The purpose of amendments Nos. 54 to 60 is to specify in more detail how unapproved pension rights would be protected from seizure by the trustee in bankruptcy. In other words, the bankrupt will need to make the application, and it will be for the courts to decide whether rights in an unapproved pension arrangement should be treated as if they were rights in an approved arrangement, and so protected. The amendments include provision for the trustee in bankruptcy and the bankrupt to reach an out-of-court agreement that unapproved rights should fall outside the bankrupt's estate--a practical measure, designed to reduce court costs.
Amendments Nos. 53, 61 and 62 deal with another aspect of pensions and bankruptcy--the position of pensions which have been shared following divorce. These technical amendments are necessary to ensure that the provisions we are making for pension sharing on divorce work in harmony with those for pensions on bankruptcy.
Miss Anne McIntosh (Vale of York):
Can the Minister explain at what stage of divorce proceedings a party should put in a bid for pension sharing under the new provisions?
Mr. Timms:
These provisions concern what happens if bankruptcy occurs after a pension share; they do not concern the procedure for pension sharing itself. A number of new clauses and amendments, which we shall come to later, deal with the Bill's pension-sharing provisions. These matters concern bankruptcy subsequent to a pension share being arranged, when the question whether excessive contributions have been made--and what can be done if they have--arises.
The amendments make it clear that, in the period between the making of a pension-sharing order or agreement and the discharge of the resulting liability by the trustees of the pension scheme, the pension credits awarded to a former spouse are to be treated as if they were rights held by a former spouse.
Where the trustees of a pension scheme have discharged a pension-sharing order, the pension credit will have become pension rights belonging to the former spouse. The amendments will ensure that, for the purposes of the bankruptcy provisions, a pension credit which the trustees have not yet discharged will be treated in the same way. The bankruptcy provisions refer to the protection of pension rights, and these amendments are necessary to make it clear that a pension credit, once awarded, is a right.
Finally on this large group of amendments, in Committee we agreed to look into a point that was raised by Conservative Members. My hon. Friend the Under-Secretary agreed to take it away for consideration, in response to the hon. Member for Grantham and Stamford (Mr. Davies), and amendment No. 29 arises out of that.
As currently drafted, clause 11(9) safeguards the trustees when they have taken decisions before the date of the Inland Revenue's decision on tax approval, but will not know what decision the Inland Revenue has made until they receive notification of it. As such, it is quite possible that the trustees may have made a decision about the bankrupt's pension in the interim. For example, they
may have bought him an annuity. It was never our intention that trustees could be held liable for decisions made in good faith during that interim period. The amendment, therefore, will extend the protection afforded to trustees until the date on which they receive the notification from the Inland Revenue.
I return to the question that was asked about Northern Ireland, and I can give the hon. Member for South Antrim (Mr. Forsythe) an answer. Although there is separate legislation for Northern Ireland, it normally follows the legislation applying to Great Britain, but it will be for the Northern Ireland Assembly to decide what to do on this particular matter.
The protection and enhancement of pension savings is a key part of our policy. In cases of bankruptcy, though, we must also have regard to the rights of creditors. It would be wrong if people who become bankrupt could use pensions deliberately to put money beyond the reach of creditors. There must be some form of protection against that, which is what these measures seek to achieve. Necessarily, too, there needs to be some linkage with the new measures on pension sharing in the Bill.
I believe that the arrangements we are proposing are fair, building as they do on existing arrangements, and I commend them to the House.
Mr. Quentin Davies (Grantham and Stamford):
It would be churlish not to acknowledge that the Government have adopted an amendment that I put forward in Committee. They did not tell me that they would do so, but I am glad that they have. It is represented in amendment No. 29. We must be grateful for that--it is a rare event when the Government accept that anybody else may have a useful contribution to make to a piece of legislation. It is only fair to give them credit where it is due, however rare such occasions are.
However, if the Minister thought that that concession would spike my guns and that I would be terribly nice to him for the rest of the proceedings, I must disappoint him. Although the bulk of the amendments are of a routine, technical nature, three substantive issues arise out of the long list of new clauses and amendments. They arise in relation to amendment No. 68 and new clauses 11 and 12, and they reflect a sorry state of affairs.
All this is a pretty bad business. The Minister did not tell us that amendment No. 68 drives a coach and horses through a principle of which I thought the Government were proud. We might discuss that principle later this evening when we deal with pension sharing. It is that, once a pension share has been effected, it becomes the unconditional property of the beneficiary of that share--of the recipient of the pension credit, to use the terms in the Bill. Clearly, that provision has now been modified substantially by the amendment on insolvency. If it can be altered in this context, perhaps it can be altered in others, too, and it will be possible for courts subsequently to review pension sharing and make retrospective changes. That fundamentally alters the whole concept that has been sold to the House.
I find it thoroughly unsatisfactory that the Minister should bring forward this provision in relation to England, but not to Scotland. He simply says that the provision in relation to Scotland can be dealt with in another place. We know how these things work out. In practice, when the Bill comes back to this place the provision in relation
to Scotland will not have been given proper scrutiny. It will not have gone through a Committee stage in this place. After all, the House of Commons is supposed to be the primary legislature in this country. The provision will be debated in detail only, if at all, in the other place--a Chamber which the Government say is thoroughly unsatisfactory and undemocratic. It is contemptuous to treat Scotland in that way. The people of Scotland are entitled to feel more than a little aggrieved at the frivolity with which they have been treated.
That stricture applies to the whole treatment of pension sharing and insolvency in relation to pensions, as they are dealt with in the Bill. It is absurd that the Government should sell the Scottish people the idea that they now have, for the first time since 1707, a legislature of their own. The Scots have always had a fine legal system. It is one of the oldest systems of Roman law in constant, steady existence, yet the Scottish Parliament will not be allowed to discuss those matters. Scots law is different from ours. Scotland has its own company and family law, yet it will be unable to take decisions on pension sharing and insolvency as they apply to pensions because, those matters will be dealt with in Westminster in the way that we have just discovered--they will not be brought before this House at the same time as the corresponding English legislation.
The reality that we now see emerging explodes the fact that, for their own slightly squalid reasons, the Labour party has decided to sell a pup to the Scottish people. Now that it is confident of having become the largest party in the Scottish Parliament, although it did not achieve the absolute majority that it wanted, we are seeing how genuine is the Government's commitment to the idea of Scottish legislative devolution, and how thin, superficial and bogus are the concerns expressed by the Government for the Scottish people's right to have a greater and more direct say in their own legislation.
That brings me to the two new clauses, which are the substantive elements in this string of new clauses and amendments--new clauses 11 and 12. New clause 12 is the Scottish counterpart to new clause 11, and what I just said in relation to the Scottish Parliament's rights in this area applies very much to that. I shall say no more about that, but will focus on new clause 11, which is the heart of the matter. What is so unsatisfactory about this evening's proceedings is that there is a double insult to Parliament in how the Government have dealt with this issue.
As the Liberals pointed out, the new clause has been introduced with no explanatory notes. It is a significant new addition to the Bill and it has been introduced at the last minute with no explanations and minimum opportunity for anybody in the House to understand what the Government's contentions are, to consult outside bodies, to take legal advice, and to do the job that we are all sent here to do, which is to ensure that legislation is scrutinised properly. The Government obviously do not want us to do that and are trying to undercut Parliament's responsibility and diminish its role. It should be clearly recorded that that is the effect of the procedure that they have adopted this evening.
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