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Mr. Quentin Davies: I am grateful to the hon. Lady for her response to my points; she is saying all the right things. However, she will agree that the Government have known about the problem for many years and that they have been promising to take action for the past four years—since 2000. There must be a sense of urgency now. I was grateful that she referred to short-term measures that could be introduced before the deadline in 2007. Will she give us an indication of what those measures might be and the time scale in which they could be implemented? I am grateful for the general response that I have received, which will also have been noted by many people in the country with enormous pleasure and relief.
Ruth Kelly:
I thank the hon. Gentleman for his comments and assure him that officials in the Inland
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Revenue are already in touch with the Low Incomes Tax Reform Group and industry representatives to try to sort out the problem. We are especially determined, as are they, to try to solve the short-term cash-flow difficulties experienced by pensioners who are disadvantaged by the current system. I believe that one measure under consideration is giving pensioners the ability to claim back tax from the Inland Revenue within year, which should alleviate some of the cash-flow disadvantages to which he referred. We hope to resolve the problem by 2007, and he will agree that if we can both take short-term measures to alleviate problems, and look towards a deadline for resolving longer-term issues, that will represent progress. The Government are intent on solving the problem.
Government amendments Nos. 112 and 113 will clarify and make minor changes to the lump sum rules in schedule 29. They will ensure simply that the definitions of winding up lump sums and winding up lump sum death benefits apply to the whole of part 4 of the Bill, rather than only schedule 29. I urge the House to accept those amendments, and hope that the hon. Member for Tatton and other hon. Members have been reassured by my comments.
Mr. George Osborne: I join my hon. Friend the Member for Grantham and Stamford (Mr. Davies) in welcoming what the Minister had to say about his amendment. As he said, we have had previous assurances from the Government—perhaps not as full as the one given by the Financial Secretary—and we shall hold the hon. Lady to what she does rather than to what she says. I am sure that she means to implement these measures and, particularly, to provide short-term measures that she has talked about.
Amendment No. 34 is about the self-employed. The hon. Lady said that the regime was generous in terms of the amount of money that people could put in and that there was more than adequate leeway for the self-employed. She is right that the regime is generous, and I think that I said that. She said that any overpayments would be refunded, but she did not say that the self-employed would be able to make up any underpayments. The system does not help those who are not sure of their income from year to year. They may have zero income some years. They are not helped with their financial planning. However, the hon. Lady said that she would keep the matter under review. Just because she has received one representation on the issue, that does not mean that it was a bad representation.
Amendments Nos. 18 and 19 are about the limit of 50 scheme members. The Minister has not produced any evidence of a problem. She has asserted that there is a problem and has asserted also a general proposition about mortality risk for schemes with fewer than 50 members, but I have not seen any data, any evidence or any consultation paper. It seems that there is only a general view that perhaps this would be a good moment to introduce the provision. Although the Minister tried bravely to draw a distinction between the tax rationale and the protection rationale for so proceeding, it is basically a protection rationale.
The hon. Lady repeated what she said in Committee, which was that the Department for Work and Pensions is working on the matter and she will see what it comes up with and then reconsider the position. I would argue,
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as I did previously, that that is putting the cart before the horse. Let us see what the Department with primary responsibility for pension protection comes up with, and then see whether the Inland Revenue needs to do anything. The Inland Revenue is gold plating. It is putting in a requirement when it is not sure that it will be necessary. Who knows, in a year's time, with the next Finance Bill, we could find that the provision is removed, never having been law in terms of applying to schemes in practice. We shall see. At least the hon. Lady will take another look at what another Department does, which will be a first for a Treasury Minister.
I move on to the remaining amendments. I did not say that the Brethren were not happy with what the Government have done. I went to some lengths to say how pleased they were, and read out that they praised the Financial Secretary, my hon. Friend the Member for Arundel and South Downs (Mr. Flight) and other of my hon. Friends who, over a number of years, have advanced their arguments. I made it clear also that I was not trying to reopen the debate about whether it should be 70 per cent. of an annuity or 100 per cent. I had the feeling that the Minister's speech had been written before she listened to my speech, which was about a different point. It was about the age of 75, and about the fact that 70 per cent. applies to an annuity even by 75, notwithstanding the fact that the person may be 80, 85 or 90. I remind the hon. Lady that the Association of Consulting Actuaries felt that the provision was far too penal and would unfairly discriminate against religious groups. It felt also that the protection provided by both the 70 per cent. requirement and the annual review was more than adequate to protect the interests of the Exchequer. I felt that the hon. Lady did not deal with the substance of my argument, but there we go. Such is life.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
DEFERRED DIVISION
Mr. Deputy Speaker (Sir Alan Haselhurst): I must announce the result of the deferred Division on the Question of civil aviation. The Ayes were 248, the Noes were 138, so the Ayes have it.
[The Division List is published at the end of today's debates.]
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Finance Bill
5.30 pm
Schedule 29
Amendments made: No. 112, in page 455, line 41, at beginning insert
'For the purposes of this Part'.
No. 113, in page 461, line 18, at beginning insert
'For the purposes of this Part'.—[Dawn Primarolo.]
Clause 166
Amendments made: No. 114, in page 153, line 33, leave out
'recognised overseas pension scheme which is not a registered'
and insert 'qualifying recognised overseas'.
No. 115, in page 153, line 35, at end insert—
'(2) For the purposes of this Part a recognised overseas pension scheme is a qualifying recognised overseas pension scheme if—
(a) the scheme manager has given to the Inland Revenue notification that it is a recognised overseas pension scheme and has provided any such evidence that it is a recognised overseas pension scheme as the Inland Revenue may require,
(b) the scheme manager has undertaken to the Inland Revenue to inform the Inland Revenue if it ceases to be a recognised overseas pension scheme,
(c) the scheme manager has undertaken to the Inland Revenue to comply with any prescribed information requirements imposed on the scheme manager, and
(d) the recognised overseas pension scheme is not excluded from being a qualifying recognised overseas pension scheme by subsection (5).
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