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Mr. Duncan Smith: On a point of order, Mr. Deputy Speaker. We have today witnessed a most significant disaffection in the House. The governing party is split over an important issue affecting severely disabled people. Is it not right that the Secretary of State should come to the Dispatch Box to explain what he will do to change the legislation?
Mr. Deputy Speaker: The Chair has no views about such matters.
New Clause 13
Duty as an employer to offer payroll deduction facility
'.--(1) It shall be the duty of an employer to offer all employees a payroll deduction facility under which he shall, at the request of the employee, deduct contributions to any approved pensions scheme from that employee's remuneration, net of tax.
(2) No charge shall be made to any employee or to any approved pensions scheme in connection with the provision of this facility.
(3) An approved pensions scheme, for the purposes of this section, means any pensions scheme which shall have been--
(i) approved by the Inland Revenue under Part XIV of the Income and Corporation Taxes Act 1988; and
(ii) registered for this purpose by the Occupational Pensions Regulatory Authority or by the Financial Services Authority.'.--[Mr. Quentin Davies.]
Brought up, and read the First time.
Mr. Quentin Davies (Grantham and Stamford):
I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker:
With this, it will be convenient to discuss the following amendments: No. 83, in clause 1, page 2, line 20, at end add--
Government amendments Nos. 42 and 43.
No. 80, in clause 3, page 3, line 41, at end insert--
No. 81, in page 3, line 41, at end insert--
Government amendments Nos. 44, 28 and 46.
Mr. Davies:
It has been a very dramatic afternoon. Almost anything that occurred--[Interruption.]
Mr. Deputy Speaker:
Order. The business of the House is continuing. Hon. Members should leave the Chamber quietly.
Mr. Davies:
Almost anything that occurred after this afternoon's events would be an anticlimax. Indeed, the events of this afternoon are without precedent in this Parliament--and for quite a long time before that.
The Government have tried to muzzle Parliament using a disgraceful guillotine motion, which denies theHouse the right to vote individually on Government amendments. We are not allowed to take issue with Government amendments, to select between them or to move our own amendments. If the many countries around the world that so admire British democracy were to learn of the way in which we conduct our proceedings in this place--a Government with a substantial majority have forced through an obnoxious measure affecting disabled people by the use of a guillotine--they would be quite shocked. They would wonder what kind of Parliament we have.
It now falls to me to speak to new clause 13 and amendments Nos. 83, 80 and 81 in my name and those of my hon. Friends. New clause 13 is in some ways a summation of the Conservative Opposition's views on the Government's stakeholder pension proposals, so it might be sensible if I were to address that last, and proceed to it by dealing first with the other amendments.
Amendment No. 80 deals with the vital matter of the advice that people need when they make the decision, which is crucial to their future, as to whether they should invest in a pension, and if so, what kind of pension. The Government have clearly effected an amusing U-turn on that matter.
Mr. John Bercow (Buckingham):
Does my hon. Friend agree that it is unfortunate that, as he begins to address a series of important matters, the Secretary of State has left the Chamber? Does my hon. Friend think that the right hon. Gentleman has done so in something of a huff?
Mr. Davies:
If the right hon. Gentleman has any human feelings--I am sure that he has--he must be feeling intensely embarrassed. As my hon. Friend knows,
Mr. Deputy Speaker:
Order. We cannot have all this arguing and shouting across the Floor of the Chamber.
Mr. Davies:
We can all feel some sympathy for the Secretary of State's wish to hide his face at this juncture.
Kali Mountford:
Will the hon. Gentleman give way?
Mr. Andrew F. Bennett (Denton and Reddish)
rose--
Mr. Davies:
I shall be happy to give way to the hon. Gentleman in a moment, but the hon. Lady, who played such a charming part in our Committee proceedings, caught my eye first.
Kali Mountford:
I am grateful to the hon. Gentleman for giving way--he is always courteous. Will he describe to the House the embarrassment that the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), the shadow Secretary of State, must also be suffering?
Mr. Davies:
I have no idea to what the hon. Lady is referring. No Conservative Member is suffering embarrassment about this afternoon's proceedings; far from it. There is no gloating, because this is an important matter and we have not succeeded in securing the necessary protection for the interests of disabled people, but our attitude is clearly far from being one of embarrassment. I will now give way to the hon. Member for Denton and Reddish (Mr. Bennett) if he still wants to intervene.
Mr. Bennett:
It seems odd that Conservative Members are making a fuss about my right hon. Friend the Secretary of State leaving the Chamber when the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) did exactly the same. Obviously, he had decided that this is not a key issue.
Mr. Davies:
The hon. Gentleman not only gives me the opportunity but almost obliges me to make a point that I did not intend to make because I do not want to add to the Secretary of State's discomfort at a difficult moment for him. However, in the light of the hon. Gentleman's intervention, I must remind the House--we were all here and witnessed it--that my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) was here throughout the proceedings that lasted from Monday night until Tuesday morning. He may have left, as I did, for a few minutes at a time for particular reasons, but he was here for almost 14 hours, as many of us were. The Secretary of State managed four minutes in the Chamber, so embarrassed was he already at the growing storm created by his clumsy and insensitive handling of the matter.
I must return to the important issue of advice. Labour Members sprung up to try to intervene on my speech and divert me from my course because, as I said, the Government have performed a hilarious U-turn on the matter. I would be the last person to try to take advantage
of someone who had honestly changed their mind, provided they had the straightforwardness and honesty to say so and, if carrying out public responsibilities--as the Government self-evidently are--to explain to the House and the public why they have changed their mind. Instead, we have had a 180 deg U-turn on advice, with the Government pretending that it has not been a U-turn.
I shall read one or two quotations to make it absolutely plain how the Government's position on advice has changed so much. I shall start with the Green Paper, "A New Contract for Welfare: Partnership in Pensions", which the Government produced as recently as December 1998--the document that we have had occasion to refer to in our proceedings several times, and which I do not doubt that we shall have to refer to again. On page 56, at paragraph 48, it says:
The Minister obviously took notice of those points, because he started subtly to nuance his position and then began to do a complete volte-face. For example, in Committee he said exactly the opposite of what he had told The Daily Telegraph only two months before. He said:
'(10) Approved Group Personal Pensions shall be deemed to be stakeholder pensions for the purposes of this Part.'.
'(5A) The fifth requirement is that the employer shall require a certificate from the designated scheme to the effect that none of his employees will be admitted to membership of that scheme without evidence that that employee has taken independent advice in relation to his pension provision.'.
'(5B) The sixth requirement is that, for the purpose of calculating the income tax payable to the Inland Revenue under PAYE in respect of an employee exercising his option under subsection (5) above the employer shall disregard--
(i) the first £5,000 per annum of any pensions payments made under this section, or
(ii) such amounts as shall be calculated by reference to age-related tables supplied by the Inland Revenue showing the percentage of earnings which may be claimed as tax-deductible contributions to personal pensions schemes,
provided that the employee shall be given the right to choose between £5,000 per annum and the relevant age-related percentage of earnings.'.
"We intend to reduce, as far as possible, the need for individuals to seek financial advice when they consider joining a stakeholder pension scheme."
That was very plain, and it is clear that the Minister of State continued in that frame of mind for at least another few months because, on 30 January, he was quoted in The Daily Telegraph as saying:
"we can enable more people to make a reasonable decision about joining a pension scheme without the need for detailed individual advice."
Once we got into Committee, I made it plain to the Minister that it was thoroughly irresponsible to think of people taking a decision on a matter as important as their pension without detailed individual financial advice. I also made it plain to him that the Government, by their ham-handedness and incompetence, had introduced into pensions a degree of gratuitous complexity, fragmentation and detail, which made it even more necessary for people to seek advice.
"It is vital that people can seek financial advice when they consider joining a pension scheme and that they will receive good and accurate advice."--[Official Report, Standing Committee D, 9 March 1999; c. 113.]
I quite agree with him about that. By 27 April, his boss, the Secretary of State, whom I mentioned just now in a different context, said:
"Certainly on something like a pension, which is more important than buying a house,"--
he is right about that--
"there has got to be some provision for advice".
Recently, the Minister of State gave a written answer to my hon. Friend the shadow Secretary of State for Social Security, in which he said:
"Appropriate information and advice for those who need it will be an important part of the decision-making process for individuals considering a stakeholder pension scheme."--[Official Report, 10 May 1999; Vol. 331, c. 53.]
Therefore it is absolutely plain that the Government have fundamentally changed their mind. I am glad that they have changed their mind, but I wish that they had had the straightforwardness, and perhaps the modesty--not a quality that has been pre-eminent in the present Government--to admit that they were wrong in the first place, and that they have come round.
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