Clause 2 - Minimum retirement income
Pension Annuities (Amendment) Bill
9:30 am
Ms Ruth Kelly (Economic Secretary, HM Treasury; Bolton West, Labour)
The amendments are designed to be helpful. Clause 2 requires the minimum retirement
income to be set by the Chancellor of the Exchequer, by order. For the financial year in which the Act comes into force, the order must be made within two months of the date on which it is passed. In subsequent years, the order must be made annually.
The ongoing rule is inadequate, leaving uncertain the timing of future orders and the period for which they will have effect. Amendments Nos. 26 and 27 remove that uncertainty and ensure that the provision is workable. They make it clear that the minimum retirement income will be set to apply for each financial year and that the order setting the income level must be made before 31 January of the preceding financial year.
The Bill gives the Chancellor an unfettered power to set the minimum retirement income at any level that he chooses. One might assume that that power would be used reasonably by future Chancellors, but of course one can never be sure of that. Such a power should therefore be subject to parliamentary scrutiny. Amendment No. 28 provides that the order be made by statutory instrument subject to annulment by resolution of either House of Parliament.
Amendment agreed to.
Amendments made: No. 27, in page 2, line 44, after ''order'', insert—
''before 31st January in the preceding financial year''.
No. 28, in page 3, line 2, at end insert—
''(2) An order under this section shall be made by statutory instrument and shall be subject to annulment in pursuance of a resolution of either House of Parliament''.—[Ruth Kelly.]
Clause 2, as amended, ordered to stand part of the Bill.
Clause 3 ordered to stand part of the Bill.