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Mr. Webb: The hon. Gentleman is making a most informative speech. Does he share my concern that the Bill needs to include detailed provisions on the questions that he has put, so that the House can properly debate those issues? It is important that we do not have a skeletal Bill with other provisions shunted through in statutory instruments that receive no real scrutiny.
Mr. Butterfill: The hon. Gentleman is well informed on these issues and I entirely agree with him. It would be wrong if the Bill were merely an enabling measure with statutory instruments to follow. As I said earlier, the devil is in the detail.
Other proposals in the Green Paper and the White Paper include a pensions cap of a £1.4 million lifetime limit. That is much too low. It would not even fund the 1989 Lawson cap on earnings. The actuarial profession almost universally disagrees with the calculations of the Government Actuary's Department, which came up with the figure of £1.4 million. The profession is convinced that the figure should be £1.8 million. I hope that the Government will look into that again; it is a question of how the actuaries do their maths and the GAD is in a minority of one on that figure. Again, time will be required for employers to renegotiate many employees' contracts, as they will be affected by the issue.
I also want to mention the effect on other tax matters. First, there is the knock-on question of retained benefits. It is wrong and unfair that a person taking a job at a pay rate lower than in his or her previous employment should suffer by having the previous higher contributions acting against the total that can be accumulated over a lifetime. Indeed, the lifetime limit means that we no longer need the retained benefits regime, and I hope that the Government will get rid of it, as part of this process.
The annual limits ought to go as well. They are a nonsense anyway, as many people have fluctuating incomes. Again, the cap means that there is no need for the annual limits. The annuity purchase also ought to go. I think that the Government are beginning to be persuaded of that, subject perhaps to a minimum level. That has been proposed in private Member's Bills by me and many other hon. Members. I hope that the Government will finally see the need to change the present structure.
If the annuity purchase requirements are eliminated, there will be a need to cater for people who will be just short of 75 years of age when the Bill comes into effect. I hope that the Government will allow an extension for them.
I hope that reform of the legislation will also cover legacy schemes and accrued rights. I think that the Government are proposing to do something on accrued rights, but a great many different legacy schemes exist, among them SERPS, graduated pensions and S2P. The White Paper refers to guaranteed minimum pensions, and I hope that the Government will sweep them all up into one regime. The Government Actuary has told me that that can be done, and that it would take about two years to do the calculations. That would alleviate much of the burden placed at present on employers, scheme trustees and civil servants.
The White Paper also refers to the legacy private schemes. Those schemes include the pre-70 scheme, the section 226 scheme, retirement annuity contracts, personal pensions, and schemes under the legislation passed in 1987 and 1989. They are all to be consolidated, but the difficulty is that they come under different tax regimes. The problem will be to come up with a system that is fair to the members of the various schemes and which will not cause huge disadvantages. I hope that the Government will look at that, as there is a severe danger of retrospective taxation.
Mr. Kevin Hughes (Doncaster, North): I am grateful for this opportunity to speak in the Gracious Speech debate. I congratulate my right hon. Friend the Chancellor on his excellent exposé of what would happen if the Opposition were ever to return to government. The Government's legislative programme is about fairness and the future, while the Opposition's proposals are clearly about division and a return to boom and bust.
This Queen's Speech builds on our previous legislation. In the last year alone, we have passed some important new laws that give new powers to the police and local authorities to tackle antisocial behaviour. The Government have set down tougher sentences for repeat offenders and sex offenders, and streamlined court procedures. They have tackled organised crime and terrorism, devolved power to front-line staff in the NHS, and offered more choice to patients.
I want to welcome in particular the inclusion in the Queen's Speech of legislation that will tackle domestic violence and give more support for the victims of crime, protect children with a new children's commissioner, improve housing by tackling bad landlords in poor communities, give people more pension rights and protect pension schemes, introduce a supreme court and abolish the role of Lord Chancellor, and get rid of the 92 remaining hereditary peers. If it were left to me, I would get rid of the lot.
I welcome the proposals to introduce an identity card. It appears that the higher education Bill will be a bit of a problem for the Government. I do not have a problem with the idea of top-up fees. On balance, it is perhaps right for people to make what would be a small contribution towards their higher education. However, I take issue with the possibility of breaking a manifesto commitment. Call me old-fashioned, Mr. Deputy Speaker, but I believe that the manifesto is a contract of trust with the electorate. I would not want to go back on a commitment without first, explaining why it is felt to be necessary, and secondly, being convinced that there is no other way of delivering the policy.
The Government will also introduce an energy Bill, which will be based on the White Paper published in February this year. It is crucial for our economy and well-being that we get this right. We need a Bill that delivers security of supply by using a diverse fuel mix. However, the White Paper sets us off down the uncharted path of being a net importer of energy. We have ageing nuclear plant and no plans to replace it. I am not a great fan of the nuclear power industry, but I recognise that we would be hard pushed to keep the lights on without it. I have a sneaky feeling that the Government know that too. Why else did they pour in £650 million earlier this year to prevent it from going bust?
We had an abundance of natural gas, but we squandered it to generate electricity, instead of using it wisely for domestic purposes only. At the rate we are using it, we will be lucky if we have any left in 15 years' timethen what? The White Paper plans for us to import energy down a huge pipeline stretching across the European continent from such politically stable countries as Uzbekistan. We have an abundance of accessible coal right under our feet. It is a reliable fuel that delivers base load electricity when and where it is needed. Across the world, particularly in the USA, Governments are investing heavily in coal because they recognise its reliability and potential. In the White Paper, our Government clearly plan for the demise of
Today, the Hatfield colliery in my constituency faces closure, although it sits on 80 million tonnes of good quality coal and has planning permission for an integrated gasification combined cycle power plant on the site, which can generate electricity from coal without the associated toxic emissions and can capture carbon, nitrates and hydrogen. We should ask ourselves why the US Government have invested $6 billion in developing such clean coal technology, yet the UK clean coal research and development budget totals a pitiful £25 million.
Last week, the coal investment aid scheme announced an amount of £60 million. It is only half what we expected, but I welcome it. It came just too late for Hatfield. Had it come in a seamless transition from the operating aid scheme that ended last December, I am confident that the colliery would not be facing the financial difficulties that it is this week. That is recognised and well summed-up in today's Yorkshire Post leader column, which says:
Despite what the Yorkshire Post says, we have had some help from the Government. I am grateful to them for the help that they have given to us so far, but I hope that Ministers will continue to do all that they can to help me to sustain Hatfield colliery in recognition of the available coal reserves and the possibility of developing integrated gasification combined cycle technology there.
To maintain the stable economy and build for the future, we need a safe and secure energy supply. It is foolhardy to plan to import the best part of our energy requirements. The Government should backtrack from that route, which will make our nation a hostage to fortune. It is hardly fashionable to talk about coal having a futurewindmills are more in vogue, even though they cannot produce the goodsbut the truth is that coal has served us well for generations and, with that new technology, it can continue to serve us for many years to come.