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John Healey: I can confirm what is in the Green Paper and—as I indicated earlier—the Government's commitment to a full and wide debate on the future of annuities, but I cannot confirm the detail of what proposals we will make. The hon. Gentleman will be aware of the nature of a Green Paper and the issues deserve wider debate, but the detail of this Bill is not the place for that debate.
The hon. and learned Member for Harborough said in Committee that
- "just because we cannot help everybody that does not mean that we should not help anybody."—[Official Report, Standing Committee C, 2 July 2003; c. 20.]
Mr. Barry Gardiner (Brent, North): It is on the issue of dependants that I seek clarification from the sponsor of the Bill or from my hon. Friend the Minister. I probably cost the Treasury rather more than I had anticipated when I went to the Vote Office and asked for a copy of the Income and Corporation Taxes Act 1988. Given its size, I now appreciate how much work hon. Members did in previous years. We thought that we were hard done by on the Financial Services and Markets Act 2000 and the number of clauses—
Mr. Deputy Speaker: Order. I remind the hon. Gentleman that he is making an intervention, not a speech.
Mr. Gardiner: I am sorry, Mr. Deputy Speaker. I am grateful for your guidance. I shall stick to the point.
- "After the definition of 'authorised insurance company' there is inserted—"
John Healey: As my hon. Friend says, it is a highly technical point. I undertake to reflect on the issue. If my hon. Friend will accept that, I shall be happy to deal with the matter in detail once I have had a chance to reflect on the point.
I shall not develop my arguments as I might have done in other circumstances because I want to give the hon. and learned Member for Harborough time to respond.
The new clause does what currently tax legislation does not do, which is to define the terms "dependant" and "surviving spouse". Nowhere in legislation are these definitions laid down. At present, the Revenue uses discretionary powers in guidance notes for both personal and occupational pension schemes. In principle, the Revenue's proposals for simplifying the tax regime mean that it is moving towards a single and simpler set of rules covering all sorts of pension arrangements. The rules imposed by the Revenue under these discretionary powers are to be minimised, and in principle that must be right.
The Bill gives us the opportunity to take a step in that direction by defining "dependant" and "surviving spouse" for pension purposes. It also gives us the opportunity, but I do not propose to take it up now, to consider the consequences in terms of the provisions in the Bill. Suffice it to say that new clause 2 is simply designed to import current definitions into the taxes Act. It is intended to maintain the status quo until any wider changes are announced. I have in mind particularly the consultation document that was issued last month by hon. Friend the Minister for Industry and the Regions on the new legal status for civil registered partners—same sex partners. To be clear, that is not to say that unmarried partnerships will not be able to benefit under the current pension rules. As things stand, an unmarried partner of either sex can qualify for a survivor's pension if they were financially dependent on the scheme member at the time of his or her death.
To go further at this stage, as some propose, to try to provide an automatic pension for the surviving partner in the way that a widow's or widower's pension is provided for now, poses serious challenges that I do not propose to deal with now, and which need to be discussed and developed elsewhere. The new clause is designed to clarify things as they stand. Until a clear-cut alternative to a formal marriage is introduced such as the proposed civil registration, I see no alternative to defining "spouse" as the person to whom the scheme member is married, and "surviving spouse" as the person to whom the scheme member was married at the time of their death.
I turn briefly to amendments Nos. 2 and 3. The Bill makes it compulsory for the annuity benefit that a personal pension scheme must provide to be not less than the minimum retirement income that is set under clause 2. Of course, while the Bill attempts to keep the personal pension scheme member off state benefits, it would do nothing for the member's spouse or dependants. There is no provision to prevent spouses or dependants falling back on the state because there is no requirement that they should be provided for out of the minimum retirement income annuity. At present, most annuitants would want to, and do, provide for their spouses and dependants through, for example, joint life annuities.
Mr. Gardiner: I hate to raise the issue of Jeffrey John in the Chamber because it has been much discussed in another place, but the issue prompts me to ask what is the definition of a dependant person, and would it
include same-sex partners. It appears from the definitions that have been set out in the Bill that it would not be covered under the Bill as it is drafted.
John Healey: Generally, such definitions, as my hon. Friend will be aware, are a matter for the scheme's trustees and administrators. Generally, the Revenue does not seek to impose such terms on schemes. If Reverend John was interested in those issues, the definition would depend on the provider with whom he or his partner had annuities.
Finally, the correct level for the minimum retirement income annuity is subject to the amendments tabled by my hon. Friend the Member for Hendon (Mr. Dismore), which we may or may not reach shortly, so I do not propose to rehearse the arguments on that. Assuming that the Bill could be made to work, Government amendments Nos. 2 and 3 extend the Bill's underlying principle by requiring the minimum retirement income annuity to continue after the scheme member's death to his or her surviving spouse or dependant. The amendments would result in the annuity to the surviving spouse being set at 100 per cent. of the scheme member's annuity. That is logical, and would ensure that the surviving spouse stays off state support.
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Where there are sufficient funds, it is right that they should be used for both the scheme member's pension and the pension of any surviving spouse. Although we have made plain our reasons for opposing the thrust of the Bill on Second Reading, in Committee, and I hope, this afternoon, its form remains largely the same as when it was first introduced. That being so, it should at least work properly and logically in accordance with its purported underlying principle. It would certainly not be right for a scheme member to secure his own minimum income retirement annuity, then remove the residual fund at will, leaving his spouse or dependants unprovided for after his or her death. On that basis, I commend Government new clause 2 and Government amendments Nos. 2 and 3 to the House.
Mr. Garnier : In view of the time that is left, I am under no illusions about what will happen to the Bill. There is absolutely no need for the hon. Member for Brent, North (Mr. Gardiner) or the hon. Member for Hendon (Mr. Dismore), the two Friday boys who turn out to do the Government's business on these occasions, to get overexcited. In the past, we have had plenty of opportunities in their absence to have fruitful and intelligent discussions about the policy behind the Bill and its details. I congratulate the Minister on what he said in Committee and this afternoon—unlike his hon. Friends, he has approached our deliberations constructively.
I will acquit the hon. Members for Brent, North and for Hendon to a certain extent, because I largely agree with the amendments that they have tabled today. Indeed, I largely agree with the Government new clauses amendments that we are discussing. Of course, it is open to Government Back Benchers to engineer a sterile final few moments in the Bill's life, and no doubt their pensioned constituents will thank them for the line that they have taken on the Bill over the past few months. I
am pleased that the right hon. Member for Birkenhead (Mr. Field) is in the Chamber—his private Member's Bill has already received the treatment that the Government usually give to private Members' Bills that are designed to ameliorate pensioners' position.A delegation from ASW—Allied Steel and Wire—is in the Palace of Westminster today. The plight of those people and many others whose companies have failed to deliver on their pension promises is something that all of us in the House should be concerned about, irrespective of our party allegiances. I welcome the Government's constructive amendments and the way in which the issue behind the Bill has at last received attention from the Treasury. It is undoubted that the pensions crisis exists and that it is growing. Other than the issues that the Government face over weapons of mass destruction, the pensions crisis is probably the biggest political issue with which the Government, as the governors of this country, and we, as politicians, must cope.
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