Pension Annuities (Amendment) Bill

Part of the debate – in the House of Commons at 1:06 pm on 11th January 2002.

Alert me about debates like this

Photo of Andrew Dismore Andrew Dismore Labour, Hendon 1:06 pm, 11th January 2002

I preface my remarks by declaring an interest: I have four money-purchase policies, so I would be affected by the Bill.

I am shocked by the allegation that I would take part in any attempt to talk out the Bill. The remarks of Mr. Forth are extremely misplaced. We have had an informed debate on an extremely important issue. The contribution of my hon. Friend Mr. Gardiner was extremely erudite and well informed. In fact, it was so well informed that I had great difficulty following some of the technical arguments in answer to the detailed points that arise from the Bill. I hope that, as my remarks progress, we will get back to a more level playing field, as suggested by Mr. Greenway, who commented on the fact that the debate had been non-partisan, and that issues had been discussed sensibly across the Floor. I hope that my observations will be taken in that context.

I congratulate Mr. Curry on securing his place in the ballot and introducing a Bill dealing with this extremely important subject. However, I question whether a private Member's Bill is the correct vehicle to bring in these complex, although badly needed, reforms to annuities, with all their tax consequences. In that context, I agree with the remarks of my hon. Friend Ms Stuart, who is not present at the moment.

The starting point when considering pension policy—whether annuities or other issues—is to look at the overall context. The Government's White Paper on the pension credit succinctly sets out the Government's position, which provides the context in which this debate is taking place. In the White Paper, the Government say:

"The Basic State Retirement Pension is, and will remain, the foundation for income in retirement. However, it has always been the case—right from the early days of state pensions—that people were expected to build up a second pension or other savings, on top of their Basic State Pension. Indeed, it is the fact that more people are retiring with good company or other personal pensions that explains why pensioner incomes have risen faster than the incomes of people in work. The task now is to encourage more people to save, and to make sure that it pays to save.

The Government's reforms are based on the principle that those who can afford to save have a responsibility to do so. In return"— this is the point that the right hon. Gentleman's Bill is trying in part to address—

"the Government should support those who cannot afford to save, and regulate the pensions and wider savings system effectively."

There is no doubt that there is a crisis of confidence in the concept of private pension provision following the mis-selling scandals of the 1980s and the Equitable Life fiasco, on which we focused at the start of the debate—before you took the Chair, Mr. Deputy Speaker. Responding to an intervention, the right hon. Member for Skipton and Ripon said that the Bill would solve that sort of problem. Furthermore, on 22 July, The Sunday Times reported:

"Even insurance firms are privately lobbying Labour for a change in the law. They argue that if annuities were not compulsory, the Equitable Life scandal would disappear overnight."

I intervened to challenge the right hon. Gentleman to explain to me, as an Equitable Life policyholder, how his Bill would address the issue. He said, probably facetiously, that if I listened to his two and a half hour speech, I would learn the answer. He spoke for half an hour, so perhaps the answer was in the other two hours, which he chose not to give us, no doubt to avoid being accused of talking out his own Bill.