Clause 1 - Amendment of the Income and Corporation Taxes Act 1988
Pension Annuities (Amendment) Bill
11:15 am
Ms Ruth Kelly (Economic Secretary, HM Treasury; Bolton West, Labour)
I am interested that the right hon. Gentleman accepts that 35 per cent. might not be the correct level for an exit charge. That becomes more important under the terms of his Bill than under existing legislation. If the rate were set at 35 per cent., that would shift the momentum to give an advantage to people moving money from savings vehicles into pension vehicles. If the rate were set much higher, the advantage would disappear and some problems would be overcome.
All the problems would not be overcome, however, as several are inherent in the Bill. The rate at which the exit charge might be set is critical to the Bill. The figures that we have considered have not taken account of the 35 per cent. exit charge, but even if there were such a charge, the Exchequer would incur a great cost.
It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till Thursday 28 February at five minutes to Nine o'clock.