Pensions — 9 Jul 1997

I beg to move,

That this House condemns the Government's assault on pension funds through the removal of tax relief on dividend income of pension funds in direct betrayal of their election pledges; agrees with the National Association of Pension Funds that this is the biggest attack on funded pension provision since the War; believes the brunt of the cost of the Windfall Tax will also fall on pension funds; warns members of occupational schemes that they and their employers will have to increase contributions to maintain benefits; further warns personal pension holders that they will need to pay higher premiums or suffer significantly lower pensions; believes the Government is guilty of mis-selling personal pensions if it refuses to spell out how much this tax change will cost pension holders; demands that the Government increases the contracted out rebate to avoid large-scale contracting back into SERPS; deplores the total absence of consultation about these far-reaching changes in company and pension taxation which has resulted in shoddy, hastily prepared and ill-thought-out proposals; and calls for the Government to withdraw these measures until it has prepared a Green Paper on future reform of company taxation and its implications for pension provision.

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"condemns the failure of the last Government to foster security in retirement for either today's pensioners or pensioners of the future; supports the present Government's objective of a decent income for all in retirement; believes that the best way to achieve this is by developing second pensions building on the foundation of the basic state pension; commends the Government's decisive action on the past mis-selling of private pensions; endorses the measures taken in the Budget, particularly the reforms to corporation tax, which will help to create a climate encouraging higher investment and a higher sustainable growth rate increasing the capacity of the economy to support decent pensions; supports the Government's welfare- to-work proposals, which will improve the employment opportunities for thousands of people, enabling them to save for their own retirement; and welcomes the Government's commitment to review pensions and achieve security in retirement for all."

There are many ways in which some pensioners can share in increasing prosperity.

Labour was right. It has made the challenge even more difficult, particularly for the Minister for Welfare Reform, who will now have much difficulty working this little conundrum out.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:--

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