Clause 1 - Amendment of the Income and Corporation Taxes Act 1988
Retirement Income Reform Bill
3:15 pm
Mr Edward Garnier (Harborough, Conservative)
I shall be brief, as there is not much to be said in response to the Government's case. It reveals the mantra that we heard a moment ago; namely, that because we cannot help the whole of the population, we must not help any of it.
The Government's amendment, quite apart from again attempting to destroy the Bill, introduces a disincentive. If the Government are to be believed when they say that they want to reverse the 60:40 split between state and private pension provision, so that it becomes 60 per cent. private and 40 per cent. public, they must not continue to pour down disincentives on those who wish to save.
I want people to save for their old age and to be able to use every available financial instrument to provide for their own pensions. That does not mean that I do not want the state or others to help those who cannot do that, but it seems to me that it is a public good if people who can save are encouraged to do so. It seems to me that that is a good thing to support, whether one is a member of the Labour party, the Conservative party or the Liberal Democrats, and that that should not be controversial.
I also want people to have the freedom, on their death, to pass on the money that they have saved, whether it be in the form of houses, stocks and shares or pension pots, to their dependants, to adult family members or, if they choose, to charities and other good causes. That also seems to me to be uncontroversial and a public good. It is not necessary for the Government to introduce disincentives to make the general public behave in a responsible and sensible way in their old age. The belief that people will take improper advantage of the tax concessions to misuse their pension pots in some dangerous and unattractive way, strikes me as unreal. The Government should be a little more relaxed and should trust the public to behave sensibly with the money that they save for their old age.
I invite members of the Committee to resist the Government's amendment, because they seek to deny flexibility of income for people at the young age of 50 and refuse to allow people to make sensible planning for their retirement. Retirement planning ought to begin in one's 20s, 30s and 40s. Too often, people leave it until far too late. If the Government maintain the current scheme, or reinforce it through their amendment, that will damage their own policy of reversing the 60:40 split. I therefore invite the Committee to dispense with the amendment.