ISAs, TESSAs and PEPs — 3 Mar 1998

I beg to move,

That this House welcomes the success of TESSAs and PEPs in extending popular saving and deplores the Government's proposal to abolish them and replace them with Individual Savings Accounts (ISAs); condemns the retrospective taxation of the most prudent savers who have accumulated more than £50,000; believes that ISAs will involve high administrative costs, especially because of the unnecessary and unfair lifetime limit on tax-free saving; and urges the Government to bring forward new proposals that would not involve retrospective taxation, would build on PEPs and TESSAs, would reduce the costs of administering the schemes and would not involve a lifetime limit on the amount that may be invested.

That was the height of deception. The Chief Secretary chose to deny the one assertion in the article that has since proved to be true, that Labour would abolish PEPs; but he chose not to qualify his clear assurances--which have since proved bogus--that Labour would do nothing retrospectively, that there would be no penalty for those with existing PEPs or TESSAs and that there would be no uncertainty in the tax regime.

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

"welcomes the Government's commitment, set out in the pre-Budget report, to consult on tax proposals, including the proposed ISA; believes that the ISA will extend the opportunity to save and invest and that the Government's proposals will ensure a stable and fair savings environment; commends the Government for its commitment to long-term economic stability and low inflation which is good for savers; and rejects any return to the boom and bust policies of the past which were so damaging to those on low incomes, savers and investors.".

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

The House divided: Ayes 142, Noes 329.*

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