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Clause 5 — Power to repeal high income excess relief charge

Part of Bill Presented — Superannuation Bill – in the House of Commons at 3:45 pm on 15th July 2010.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Education), Shadow DUP Spokesperson (Treasury) 3:45 pm, 15th July 2010

I have only a few points to make. The Conservative party's fortunes or misfortunes do not really affect us in Northern Ireland so I am not seeking to score political points or to say that the Tories are bad people, even though they may be considered to be so by many people. However, the basic issue that hits everyone in the face in considering this measure is how it sits with the claim by the Government that the Budget is fair.

The core of my argument is this: is this a fair way of dealing with this particular issue? Perhaps the Minister can confirm whether the Government have decided that the current system is so complicated that it needs changing to such a degree that the £3.6 billion will be unrealisable. If simplicity will result in less money, we are obliged to know where that money will come from. On the other hand, if the change is intended to raise the £3.6 billion-but not in the way that it is currently raised-logic dictates that it can be raised only by distributing its collection among people who are not currently paying towards it, which means going down the income scale. That is where the issue of fairness comes in.

The first question I want answered, therefore, is whether it is the intention to raise that £3.6 billion. If so, how will it be distributed? The shadow Minister admitted that the system put in place by the previous Government was complicated-that is probably one of the things exercising Treasury Ministers at present-but if there were a simpler method, I assume that it would have been tried already, because nobody wants to put in place an unnecessarily complicated system. It might well be that something that previously escaped the people who designed the pension tax relief has suddenly appeared to them. If so, perhaps a way can be found to keep the same distribution but collect it differently. Were that the case, however, I suspect that it would have been found already.

A second issue, on which the amendment is quite clear, needs to be addressed. The Minister indicated in an intervention that the power being asked for might never be exercised, but I suspect that it is being requested because it will be exercised at some stage. If that is the case, and if the Government have nothing to fear from the amendment, in the interest of ensuring a collective and positive response to the Budget, and so that it can be seen to be fair, a clear distributional analysis, which the amendment asks for, should not be something that the Government walk away from-the amendment should be easily accepted. I would be interested to hear from the Minister whether that part of the amendment will be accepted, or whether there is some fear about the Government's doing so. In our earlier debate about insurance, the Exchequer Secretary said that the amounts are so minimal that we do not need a full impact assessment, but the amount here is not minimal-it is £3.6 billion-so a distributional analysis should be called for.

The third comment I wish to make has already been made by other Members. We are going to have the current arrangements until the end of the year, then we will have the previous Government's amendments for the next year, and then we will have new arrangements for the following year. In this industry, people, including all of us as pension contributors, want some certainty about where our pensions are going, what kind of contributions we will have to make and so on. It therefore strikes me as odd that a Government who say they want to make the running of the economy more simple-by reducing red tape and bureaucracy for industry-should be having three systems in three different years. That seems to go against the arguments that the Government have put forward about how they wish to deal with industry and the economy generally.

For all those reasons, Opposition Members have legitimate grounds for wanting to raise their genuine concerns about the clause and move amendments to it, and are not doing so just as an exercise in political point scoring. I would prefer the clause simply to be removed, rather than the amendment be accepted, but I shall be interested to hear the Minister's response to the points that have been made.

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