(except clauses 4, 5, 20, 28, 57 to 77, 86, 111 and 282 to 289, and schedules 1, 3, 11, 12, 21 and 37 to 39) - Clause 270 - Commencement

Finance Bill – in a Public Bill Committee at 2:30 pm on 22nd June 2004.

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Question proposed [this day], That the clause stand part of the Bill.

Question again proposed.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary To the Treasury, Economic Affairs, Shadow Chief Secretary to the Treasury

I welcome you to chair our deliberations this afternoon, Mr. McWilliam.

I shall make only two points as we come to the end of the pension fund provisions. First, the clause provides for the Treasury to implement what it sees fit, when it sees fit. Does it intend to implement any of the measures ahead of A-day?

Secondly, and a related point, the Green Paper stated that the changes would come into effect a year earlier. The Minister will be aware that the changes are of considerable import to those aged 74 or 75. I have received many letters from people saying that they had expected to be able to make use of some of the changes relating to not having to buy an annuity at 75, but now, because the changes have been postponed for a year, they are just outside. Will the Government at least consider advancing the new option not to have to buy an annuity—admittedly it is specifically designed for certain religious groups—to a date earlier than the present start date of April 2006?

Photo of John Healey John Healey The Economic Secretary to the Treasury

I welcome you to the Chair this afternoon, Mr. McWilliam.

As the hon. Member for Arundel and South Downs (Mr. Flight) said, we have reached the final clause on pensions simplification and, as I am sure my hon. Friend the Financial Secretary would have said if she had been here this afternoon, in many ways we have reached the end in the Committee proceedings. However, in a sense this is the point at which the next stage of pensions simplification starts, because the clause sets out the date when the new regime will take effect.

I accept what the hon. Gentleman says about the importance of these issues, but it will take some time to prepare some of the schemes for such radical simplification. My hon. Friend considered all the arguments and the 2004 Budget before deciding to move implementation to April 2006. It was not a move that she took lightly, but we want to see the benefits of the new regime as soon as possible.

The hon. Gentleman asked whether the fact that only parts of the pensions simplification legislation come into force on 6 April 2006 means that we might

bring the start date forward. I assure him that we do not intend to do so. The new simplified regime for pensions will come into effect, as announced, on 6 April 2006 and not sooner.

The provision to allow orders or regulations made under the pensions simplification provisions at any time after the passing of the Bill is intended to ensure that any orders or regulations that are necessary to give effect to the simplified regime for pensions taxation can be made in advance of 6 April 2006.

Perhaps I may conclude, as I believe my hon. Friend the Financial Secretary might have done, in the way that she started the debates on pension simplification. She quoted the words of Geof Pearson, Sainsbury's pensions manager, who said:

''Although we helped shape the policy, it needs a Government that listens to the pensions industry. Sometimes we need to congratulate politicians and civil servants and now is the time."

I commend the clause to the Committee.

Question put and agreed to.

Clause 270 ordered to stand part of the Bill.