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John Penrose (Weston-super-Mare) (Con): I support the Bill even though I accept that it does not do everything for everybody, and that there is a much larger issue at stake. It is wrong to oppose it because it fails to do the complete job all in one go. After all, it is a private Member's Bill and is necessarily limited in scope.

I think that the Bill will help three groups in society, which all deserve help, if we can manage it. The first of these groups are people who are trying to buy their first home. I am sure that we all have examples in our constituencies of people who are finding it hard to put together the money to put down a deposit on their first home. My constituency, for example, is within commuting distance of Bristol. The price of houses is rising rapidly and local people, particularly those on lower incomes, are finding it extremely hard to make that all-important and vital first step on to the housing ladder.

Ms Angela C. Smith: I return to my earlier intervention when I made the point that it will be precisely those people on lower incomes who will not be able to benefit from the provisions of the Bill, because they will not have the money in the first place to put into the plan. Deposits are too high and affordable housing has to be the answer for the sort of constituencies that the hon. Gentleman is talking about.

John Penrose: I accept that affordable housing will be part of the solution. However, I do not accept that it is the only answer. I think that the Bill sets out a useful and valuable contribution to helping people get on the housing ladder. It may not be the complete answer, but that does not mean that it is entirely a bad thing to do.

The second group of people who will be helped by this measure are those who have had forced upon them a career break of some sort. This is mainly to do with the opportunity to draw down part of the fund that has been created.

Anne Snelgrove (South Swindon) (Lab): Does the hon. Gentleman not accept that there are huge risks in drawing down a pension, which have been identified in the USA? Only a fifth of those in the USA who opt to unlock their pension fund on changing jobs plan to put their pensions into a new pension. They use the money, as the hon. Gentleman has identified, for housing or for
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a career break. Tax relief on pension savings is there to provide pensions, not tax release on house buying and adult education. These are areas that need different solutions, solutions that the Government are providing, which Opposition Members always vote against.

John Penrose: I draw the hon. Lady's attention to two points. First, the analogy with the USA is perhaps not an apposite one. The scheme that we are discussing is based on the Canadian model, which does not have the same parameters within which the USA model currently exists.

Secondly—this point relates particularly to adult further education—last night I attended a governors' meeting of my local FE college. There is great concern in the FE sector about the proposals that are being put about by the Learning and Skills Council and the effect that they will have on people who want to take up adult FE courses, particularly at level 3 and above, and the effective cuts in the funding of those courses. If those cuts are to take effect, it is vital that we find other ways of assisting people who are out of work for one reason or another. They may have been made redundant and need to change careers. They may have been forced into leaving their job through sickness and be on incapacity benefit. There are young mothers who are seeking to return to the work force after a period away. All these three groups need some help in returning to the work force. They also need some help in reskilling. Given the Government's current plans, with the Learning and Skills Council, they will not be helped. They need some additional provision. The Bill will help to provide it.

The third group, which is crucial, is that of pensioners. As an MP who represents a constituency with one of the highest proportions of pensioners, I have lost count of the number of pensioners who have complained about the requirement to buy an annuity at 75. In some cases that is the right thing to do, but they think that the lack of choice at that age takes away their dignity and the flexibility to make decisions for themselves. They accept the need for financial stability and, wherever possible, they wish to avoid becoming a burden on the state by drawing down state benefits. However, they want the respect to which their years entitle them, and wish to be allowed to make their own decisions rather than being told what they have to do. The Bill is a valuable and flexible measure that will restore a great deal of that dignity.

Finally, while those important groups in society need help, the Bill will have an economic benefit, as it should help to improve the savings ratio by reducing the number of pension schemes. Last night, I added up my pension schemes—perhaps this is a declaration of interest—and found that I have eight. I would be willing and able to save much more, and I suspect that many other people would too, if our pension schemes could be rolled into one. I therefore support the Bill.

11.49 am

Ms Dari Taylor (Stockton, South) (Lab): I congratulate the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind) on securing a high place in ballot. It is important that we discuss new proposals on retirement pensions, which are a serious problem, so he has my warm support thus far.
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The right hon. and learned Gentleman's proposal falls into four distinct parts. First, it suggests that we should increase the opportunities for long-term savings with tax incentives. I have no objections to that proposal save for the reservations that have already been outlined by other hon. Members. The hon. Member for Yeovil (Mr. Laws) dealt with the issue, as did my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry), who spoke eloquently about the problems of poverty that many of us confront day after day. It is the Government's role to prioritise need, but to support a scheme that excludes a large percentage of our constituents would put that role in jeopardy.

Sir Malcolm Rifkind: I am puzzled by the approach taken by the hon. Lady and one or two of her hon. Friends. They say that the Bill excludes many people and is not worthy of their support. Did the hon. Lady take the same view when the Government introduced stakeholder pensions, which are of no use to people in serious poverty because they are unable to make any savings at all? She and her hon. Friends welcomed stakeholder pensions because they help many people on lower to middle incomes, so why does she not take the same view of my proposals?

Ms Taylor: The right hon. and learned Gentleman is right that I supported stakeholder pensions. I did so because they are aimed primarily at the low-paid.

Sir Malcolm Rifkind: So is my Bill.

Ms Taylor: I disagree.

Secondly, the right hon. and learned Gentleman's measure would establish an amount of savings that can be taken from employer to employer. It is a flexible wrap-around measure, as he said, it is problematic. He should have discussed his proposal with the Federation of Small Business and the Chambers of Commerce. He laughed at me for making such a suggestion, but when I introduced the Cardiac Risk in the Young (Screening) Bill I spent three months with cardiac specialists to make sure that my proposals were effective and appropriate. The right hon. and learned Gentleman is well versed in these matters, and he should have adopted a similar approach. We should know what the Federation of Small Businesses says about the additional responsibility imposed by his Bill. Pension funds have been raided not once but many times, which makes us wary about trusting individuals who administer them. Of course, not all of them are at fault, but there have been enough worrying cases to give rise to concern.

Finally, the hon. Member for Bournemouth, West (Sir John Butterfill) is highly regarded in the House as a pensions expert. He said that actuary values were a problem. The response of the right hon. and learned Member for Kensington and Chelsea was not clear, but his own colleagues have already identified complications to which his proposals would give rise.

The third part of the proposal suggests that savings can be taken directly from income. Is it not superb that many of us who are employed could save from income?
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However, only 13 per cent. of women are eligible to receive a basic state pension. That tells us what their income is, and that they could not possibly save from it. They do not have an income from which to save. They are on low pay or, as carers, on no pay. The right hon. and learned Gentleman would have done the House proud if he had focused on that issue and challenged the authority of the House through his Bill. There would have been great support from Labour Members.

The fourth part is the proposal that savings should remain tax free, as it is savings directly that will achieve a pension. Again, I have no problem with that, but the Bill suggests a drawdown. I take my information from the Conservative website so I can be sure it is correct. Four examples are given. One is that people could take 60 per cent. or £40,000, whichever is the lesser, out of the account. They would have to repay it, though not until at least four years after the date that the money was taken out. If they did not repay the withdrawal, the money would be taxable. If my constituents were able to take £40,000 out of their pensions pot, I wouldn't half feel good. If I could take that sum out of my pension pot, I would feel good.The Bill is supposed to be for people on low and average incomes, but it clearly is not.

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