Formal minutes
Monday 19 July 2004
Members present:
Mr John McFall, in the Chair
| Mr Nigel Beard
Mr Jim Cousins
Angela Eagle
Mr Michael Fallon
Mr David Heathcoat-Amory
| Norman Lamb
John Mann
Mr George Mudie
Mr James Plaskitt
Mr Robert Walter
|
Draft Report (Restoring confidence in long-term savings), proposed
by the Chairman, brought up and read.
Ordered, That the Chairman's
draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 4 read and agreed to.
Paragraph 5 read, amended and agreed to.
Paragraphs 6 and 7 read and agreed to.
Paragraphs 8 and 9 read, amended and agreed to.
Paragraphs 10 and 11 read and agreed to.
Paragraphs 12 and 13 read, amended and agreed to.
Paragraphs 14 to 17 read and agreed to.
Paragraphs 18 and 19 read, amended and agreed to.
Paragraphs 20 and 21 read and agreed to.
Paragraphs 22 and 23 read, amended and agreed to.
Paragraphs 24 to 29 read and agreed to.
Paragraphs 30 and 31 read, amended and agreed to.
Paragraphs 32 to 34 read and agreed to.
Paragraphs 35 and 36 read, amended and agreed to.
Paragraph 37 read and agreed to.
Paragraphs 38 to 40 read, amended and agreed to.
Paragraphs 41 and 42 read and agreed to.
Paragraphs 43 to 45 read, amended and agreed to.
Paragraphs 46 and 47 read and agreed to.
Paragraph 48 read, amended and agreed to.
Paragraph 49 read and agreed to.
Paragraphs 50 to 52 read, amended and agreed to.
Paragraphs 53 and 54 read and agreed to.
Paragraph 55 read, amended and agreed to.
Paragraph 56 read and agreed to.
Paragraphs 57 and 58 read, amended and agreed to.
Paragraph 59 read and agreed to.
Paragraph 60 read, amended and agreed to.
Paragraph 61 read and agreed to.
Paragraph 62 read, amended and agreed to.
Paragraphs 63 to 72 read and agreed to.
Paragraph 73 read, amended and agreed to.
Paragraphs 74 to 76 read and agreed to.
Paragraph 77 read, amended and agreed to.
Paragraphs 78 to 83 read and agreed to.
Paragraph 84 read, amended and agreed to.
Paragraphs 85 to 91 read and agreed to.
Paragraph 92 read as follows:
"The IMA also made a plea for "rational
tax incentives" and pointed out that it was perverse that
the main beneficiaries of some current tax incentives were higher
rate rather than standard rate tax payers. Similarly Mr Bloomer
told us "a review of the overall taxation system of savings
would be worthwhile, because I am not sure the tax credits that
are available always go the most effective way." The Financial
Secretary acknowledged that the tax system had played a part in
adding to the "asymmetry of information between the consumer
and the provider." She also told us in the past "it
has been almost impossible for the consumer to compare products
because of different tax treatments," although she went on
to note that she hoped the new Sandler suite of simplified products
would make comparison easier for the saver. In addition, she told
us that the UK now had "the most simple tax regime in the
world applying to pensions." The Committee
welcomes recent moves to simplify some aspects of the tax regime
for pensions and long-term savings. It is important, given the
sums of money involved from the Exchequer, that the tax reliefs
and incentives granted to long-term savings are as effective as
possible in achieving their stated objectives. The evidence we
have received in the course of this inquiry suggests that by better
targeting and simplification there is substantial scope for improving
the effectiveness of the current tax regime in promoting savings."
Amendment proposed, in line 11, after the word "pensions.'
", to insert the words "The Government's current
tax regime for savers is incoherent, complicated and confusing.
Policy decisions since 1997 such as the withdrawal of advanced
corporation tax relief on pension fund dividends, the scrapping
of PEPs and TESSAs, the regulation of the stakeholder pension,
and the failure to index-link the state pension to earnings have
themselves undermined confidence in pensions and long-term savings."—(Mr
Michael Fallon.)
Question put, that the Amendment be made.
The Committee divided.
Ayes, 3
Mr Michael Fallon
Mr David Heathcoat-Amory
Mr Robert Walter
| | Noes, 7
Mr Nigel Beard
Mr Jim Cousins
Angela Eagle
Norman Lamb
John Mann
Mr George Mudie
Mr James Plaskitt
|
Another Amendment proposed, in line 16, to leave out the words
"by better targeting and simplification there is substantial
scope for improving the effectiveness of the current tax regime"
and to insert the words "there is substantial scope for
improving the coherence of the present complex tax regime".—(Mr
Jim Cousins.)
The Committee divided.
|
Ayes, 5
Mr Nigel Beard
Mr Jim Cousins
Mr Michael Fallon
Mr David Heathcoat-Amory
Norman Lamb
| | Noes, 4
Angela Eagle
John Mann
Mr George Mudie
Mr James Plaskitt
|
Paragraph, as amended, agreed to.
Paragraphs 93 to 98 read and agreed to.
Paragraphs 99 to 102 read, amended and agreed to.
Paragraphs 103 to 105 read and agreed to.
Paragraph 106 read, amended and agreed to.
Paragraphs 107 and 108 read and agreed to.
Paragraph 109 read, amended and agreed to.
Paragraph 110 read and agreed to.
Paragraphs 111 and 112 read, amended and agreed to.
Paragraph 113 read and agreed to.
Paragraphs 114 to 117 read, amended and agreed to.
A paragraph—(Mr Nigel Beard)—brought
up, read the first and second time, and inserted (now paragraph
118).
Paragraph 118 read, amended and agreed to (now paragraph
119).
Summary read, amended and agreed to.
Resolved, That the Report
be the Eighth Report of the Committee to the House.
Ordered, That the Chairman
do make the Report to the House.
Ordered, That the provisions
of Standing Order No. 134 (Select committees (reports)) be applied
to the Report.
Several Papers were ordered to be appended to the
Minutes of Evidence.
Ordered, That the Appendices
to the Minutes of Evidence taken before the Committee be reported
to the House.
Several Papers were ordered to be reported to the
House.
[Adjourned till Thursday 9 September at 9.15 am.
| 
