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Baroness Buscombe moved Amendment No. 50B, as an amendment to the Motion that the House do not insist on its Amendment No. 50, to which the Commons have disagreed for their reason numbered 50A, at end insert "but do propose Amendment 50B in lieu thereof"—
On Question, amendment agreed to.
Motion, as amended, agreed to.
50B Page 21, line 40, at end insert—
"(2A) The provisions of Part 2 of this Act shall come into force in accordance with provision made by a Minister of the Crown by order.
(2B) An order under subsection (2A) shall cease to have effect on the expiry of the period of one year beginning on the day that an order is made under the provisions of section 20 unless both Houses of Parliament resolve that it shall further continue in force."
51 Page 21, line 41, leave out "or (2)" insert ", (2) or (2A)"
51A The Commons disagree to this Amendment for the following reason—
Because it is consequential on Amendments Nos. 49 and 50 to which the Commons have disagreed.
Lord Bassam of Brighton: My Lords, I beg to move that the House do not insist on its Amendment No. 51 to which the Commons have disagreed for their reason numbered 51A. I have spoken to this amendment with Amendment No. 49.
Moved, That the House do not insist on its Amendment No. 51 to which the Commons have disagreed for their reason numbered 51A.—(Lord Bassam of Brighton.)
On Question, Motion agreed to.
1.4 p.m.
A message was brought from the Commons, That they disagree to the amendment made by the Lords in lieu of an amendment disagreed to to the Pensions Bill for which they assign a reason.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, I beg to move that the Commons message be considered forthwith.
Moved accordingly, and, on Question, Motion agreed to.
359 Before Clause 229, insert the following new Clause— "Removal of compulsion to take annuities Notwithstanding any statutory provision or rule of law to the contrary, the requirement for pensioners to take their pension in the form of an annuity, together with the requirement to do so by the age of 75, shall cease to have effect, provided that the pensioner can demonstrate that he has resources to ensure that he will not become dependent on means-tested benefits."
359A The Commons disagree to this amendment for the following reason—
Because it would alter the area of taxation, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.
359B The Lords do not insist on its Amendment No. 359, to which the Commons have disagreed for their reason numbered 359A, but do propose the following Amendment No. 359B in lieu thereof—
Insert the following new Clause— "Amendment of rules to take pension annuities by the age of 75 Any statutory provision or rule of law requiring a pension to be taken in the form of an annuity by the age of 75 shall be amended so that the age limit is 85."
359C The Commons disagree to this amendment for the following reason—
Because it would alter the area of taxation, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.
Baroness Hollis of Heigham: My Lords, I beg to move that the House do not insist on its Amendment No. 359B to which the Commons have disagreed for their reason numbered 359C.
I shall try to be brief, because I suspect that there are few new arguments left to advance. We are now embarked on a process that we will need to approach carefully and responsibly; if we do not, we will go into further rounds of ping-pong and increase the jeopardy to the Pensions Bill and all the important measures in it. I am sure that no noble Lord wishes to see the Bill go down on the basis of a dispute over an amendment that was never part of the original Bill and is not part of the core arguments behind it.
The amendment concerning the raising of the maximum required age for annuitisation was reversed in the other place for the same reasons as was its predecessor on the previous day. Once again, and
As noble Lords will be well aware, the elected House has now spoken twice. It must therefore be evident that any other such amendment that this House agrees will be reversed on the same grounds, with the future of the whole Bill becoming increasingly precarious with each attempt. The Bill seeks to secure DB schemes both for the Pension Protection Fund and, in the shorter term, to help those who have already lost their pensions through the financial assistance scheme. It is therefore with considerable regret that I see the amendment tabled today.
I shall not repeat all the arguments; I doubt whether it would make much difference to noble Lords' minds at this stage. However, I wish to make three points. First, even were the other place to decide, quite implausibly, to let this type of amendment succeed at the third attempt, we could clearly not simply write it into the Bill at this stage without causing the utmost legislative confusion and uncertainty for those whose best interests we all seek to protect. If there were to be change, that change must be for future legislation.
Secondly, as my right honourable friend in the other place and I have repeatedly stressed, the Government are engaged and focused on this question. Noble Lords and their honourable and right honourable friends in the other place have clearly drawn our attention to the work and the data emerging from the Pensions Commission. We are therefore committed to revisiting the question of annuitisation age, on a careful and urgent basis, once the commission reports. In the light of the debates in your Lordships' House and the range of views expressed, I cannot believe that the commission could possibly overlook the issue. So, again, if there is to be a change, we are indicating the approach route to it.
I shall return to where I started. We are here today not really debating the question of annuitisation at all; we are debating the fate of the Pensions Bill, and the measures, including the key protection measures, for people whose pensions may otherwise be at risk after 20, 30 or 40 years of seeking in good faith to work and secure their pensions. If we prolonged this debate, those measures would be put at risk. For the sake of that Bill and of all those people, I now urge noble Lords to show the humanity, wisdom and possibily even the generosity that I would expect them to exhibit at this stage. I ask the noble Lord not to press the amendment and to allow the Bill finally to pass.
Moved, That the House do not insist on its Amendment No. 359B, to which the Commons have disagreed for their reason numbered 359C.—(Baroness Hollis of Heigham.)
Lord Higgins rose to move Amendment No. 359D, as an amendment to the Motion that the House do not insist on its Amendment No. 359B, to which the Commons have disagreed for their reason numbered 359C, at end insert "but do propose Amendment No. 359E in lieu thereof—
The noble Lord said: My Lords, the noble Baroness has, as far as one can see, rested her argument on the overall situation with regard to the Bill. There is a simple way round that dilemma: the Government should accept the amendment that I have just moved. It is entirely sensible and appropriate in all the circumstances.
The Government have been incredibly determined not to give anything away on the issue. We moved an amendment that was fairly wide-ranging. It had two aspects, as we discussed in earlier debates. We have since narrowed it down to the simple question of age. It will not have the consequences that we would like to see, and we have made it clear that the incoming Conservative government will attend to the matter at an early stage. The arguments have been discussed at length. I was going to say "ad nauseam", but that is merely the feeling that one has as one comes to the end of 90 hours of debate on a Bill.
None the less, the overall question in the original amendment that I proposed should be addressed. We have compromised: we suggested that the age limit should be 85. We are now compromising on our compromise, and it is only the intransigence of the Government that is creating the problem on which the noble Baroness relied almost exclusively in rejecting our amendment.
Naturally, I read with interest the debate in another place. We have discussed the extraordinary position of the Minister of State for Pensions, Mr Malcolm Wicks. In a previous debate, he could not even distinguish whether the figure that was being used in the debate—2,500—referred to the amount of money or the number of people. He got the two mixed up. He was the same yesterday. At the beginning of the debate, when he was seeking to reject the amendment that we are now discussing—Amendment No. 359B—he put forward a series of arguments to the effect that the matter was privileged and that the Commons ought not to agree to it, while relating his remarks to Amendment No. 359A, which was actually the government amendment. It took some while and several interventions, including interventions by the Deputy Speaker, for the Minister to find out where he had got to. His response was:
It was perhaps a little immodest of him to compare himself with presidents of the United States. Also, it was a rather derogatory remark. Clearly, he had not listened to the speech made at the Lord Mayor of London's banquet a few days ago, when the Prime Minister suggested that one ought not to make derogatory remarks about presidents of the United States, in particular Mr Bush. Mr Wicks is pretty much off the party line, not to say generally confused.
The noble Baroness did not repeat the arguments from earlier debates, although, no doubt, she believes that they also cover the issue that we are now discussing. She relied on two things. First, she relied on the very complicated proposal included in the Finance Bill by the Chancellor of the Exchequer that sought to do something to deal with the problem. As I have pointed out, his system is virtually incomprehensible, and the number of people who will take advantage of it is not likely to be great, in the same way as only a limited number of people take up tax credits and so on.
The other point, which the noble Baroness did not make, was that, in any case, the Chancellor's scheme does not come into effect until 2006, so a lot of people who are approaching 75 will not even be able to take advantage of it, whereas they would have been able to take advantage of what we propose. I do not know the reason for the delay; perhaps, no one, including the Chancellor, understands the scheme. Alternatively, it is because of the vested interests of those who will have a protected market for the provision of annuities.
The other argument that the noble Baroness put forward in an attempt to deal with our earlier amendment and, I presume, this one, was that we must wait for Turner. The best way to sum that up would be as a policy of "procrastinate now". Turner does not report until after the general election. The Government are relying on him to suggest a way to sort out the appalling chaos in our pension system, which has resulted from the actions of the Government since 1997.
Why do we suppose that Mr Turner, who presented an admirable summary of the factual situation, is the person best qualified to tell this House or the other place how we ought to reform pensions? It is essentially a matter for politicians. I do not think that waiting for Turner, in that sense, would do anything to help the situation, whereas our amendment would.
The noble Baroness referred to the overall position on the Bill. There is the Pension Protection Fund, which was in the original Bill, and the financial assistance scheme, which was added at a late stage in the Commons. Helpful though such measures are—I do not dispute that—and despite the unfortunate side-effects that the Bill will have, encouraging some employers to abandon final salary schemes, in order to avoid a levy, the PPF and the FAS are sticking plasters on a gaping wound created by the Chancellor's actions, particularly the change in advance corporation tax, which has depleted the resources available to pension schemes by some £25 billion. It is interesting to compare that amount with the £400 million that the Chancellor has put forward for the financial
The Minister in the other place sought to argue that the amendment would affect the "area of taxation". I was mistaken the other day in thinking that the reason for which the Commons rejected our original amendment was based on a formula that was not normal. I gather that it is not used as frequently as some of the others but is used on occasion. We ought to consider the matter. The phrase "area of taxation" is much too vague to allow us to distinguish whether the basis on which your Lordships' amendments are rejected is sufficiently precise. At all events, it is not the least bit clear how the proposal will seriously affect taxation.
The trouble is that Mr Wicks seems to have difficulty reading out his brief precisely. That is not something of which I would accuse the noble Baroness. She always reads out her brief very precisely. Not only that, she then explains in her own words very cogently what it actually meant. Mr Wicks, on the other hand, appears incapable of doing either, so it is difficult to understand from the debate in the Commons the exact grounds on which he rejected the amendment and argued that there would be an increase in taxation. We must reject the argument picked up by some parts of the press that it is somehow a tax loophole. It is not. No doubt, the noble Baroness can explain it all to us.
It is appropriate for your Lordships again to take a view on this. As I say, it is a compromise of a compromise. It is only the intransigence of the Treasury—of course, it is the Treasury that is driving these issues, not the Department for Work and Pensions, which is more preoccupied with problems in the Child Support Agency and so forth—that is really at stake. This is a reasonable amendment. I beg to move.
Moved, as an amendment to the Motion that the House do not insist on its Amendment No. 359B, to which the Commons have disagreed for their reason numbered 359C, at end insert "but do propose Amendment No. 359E in lieu thereof".—(Lord Higgins.)
359E Insert the following new Clause—
"Amendment of rules to take pension annuities by the age of 75
Any statutory provision or rule of law requiring a pension to be taken in the form of an annuity by the age of 75 shall be amended so that the age limit is 80."
"Indeed. If I mis-spoke—as I think certain American Presidents occasionally do—I apologise"—[Official Report, Commons, 17/11/04; col. 1430.]
1.15 p.m.
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