Retirement Income Reform Bill

Part of the debate – in the House of Commons at 10:04 am on 7 March 2003.

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Photo of Andrew Dismore Andrew Dismore Labour, Hendon 10:04, 7 March 2003

My hon. Friend is right. The problem is that the Bill purports to suggest a proposal that would deal with the position of the Plymouth Brethren, but it would create a series of other problems. We have to understand where the Plymouth Brethren are coming from, so we can understand that the hon. and learned Gentleman's proposals do not deal with their problems and how alternatives, if he had had the courtesy to engage with them and consult them, might have achieved that objective if incorporated in the Bill. In fact, those alternatives would have achieved a much wider benefit for rather more people.

The Plymouth Brethren believe themselves to be under an obligation to provide for their future through St. Paul's first letter to Timothy, chapter 5, verse 8:

"But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel."

That is the basis of the Plymouth Brethren's problems, and if we do not understand the basis of their views, how can we be sure that any vehicle to cater for them is properly designed?

Of course there are no votes in this—the Plymouth Brethren do not vote—but we must protect minorities, and the problem goes back to 1828. We ought to pursue a dialogue with them to try to find a way to meet the requirements and tenets of their faith, while satisfying the requirements of the Inland Revenue, which has its own tenets and, I am afraid to say, they are sometimes even more obscure than those of the Plymouth Brethren. In the end, however, we must try to satisfy their requirements. In their submission to the Select Committee on Work and Pensions, as part of our present inquiry, they set out in some detail—which I will not go through—alternative proposals for a locked-in individual savings account. The ISA proposals that they have put forward are something that the Treasury ought to consider as of more general benefit that just for the Plymouth Brethren. The Bill—I am afraid that the hon. and learned Gentleman in charge of it has now left the Chamber—proposes what is called a retirement failsafe fund, which is exactly the same as was proposed last time. As with the last time, however, the retirement failsafe fund is not defined within the Bill. I would have thought that hon. and learned Gentleman would have his tackle in order by now, but the Bill is silent on that point. It simply provides a Henry VIII clause to allow the retirement failsafe fund to be defined by, I presume, the Financial Secretary, through regulation. It is simply not worked out.

The proposed features of the failsafe fund, as I understand it, although they were not included in the Bill, were as follows: 150 per cent. of the fund would be required to purchase the mini annuity or the whole of pension savings would be sufficient; there would be an annual requirement to withdraw the minimum retirement income from the failsafe fund, the remaining fund would be kept separate but could be withdrawn at any time, and once an individual reaches 80 the two funds would be combined; the annual income would be the remaining fund divided by the number of years, until the individual reached 100—