Pensions Bill — Lords Amendment — 17 Nov 2004 at 19:05

359 Before Clause 229, insert the following new Clause-"Removal of compulsion to take annuities

Notwithstanding any statutory provision or rule of law to the contrary, the requirement for pensioners to take their pension in the form of an annuity, together with the requirement to do so by the age of 75, shall cease to have effect, provided that the pensioner can demonstrate that he has resources to ensure that he will not become dependent on means-tested benefits."

359A The Commons disagree to this Amendment for the following Reason-

Because it would alter the area of taxation, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

rose to move, as an amendment to the Motion that the House do not insist on its Amendment No. 359, to which the Commons have disagreed for their reason numbered 359A, at end insert "but do propose Amendment No. 359B in lieu thereof":

359B Before Clause 229, insert the following new clause-

"AMENDMENT OF RULES TO TAKE PENSION ANNUITIES BY THE AGE OF 75 Any statutory provision or rule of law requiring a pension to be taken in the form of an annuity by the age of 75 shall be amended so that the age limit is 85."

The noble Lord said: My Lords, the noble Baroness spent some time this evening discussing the proposal on drawdown implemented by the Chancellor of the Exchequer a while ago. She did not, in fact, go into any detail on this during any of our previous discussions in Committee, on Report or at Third Reading. But what she said this evening confirms what we have always felt-that is, that this proposal is so complicated that it is unlikely to be taken up by many people, in the same way that the Chancellor's tax credits are not taken up. It cannot in any way be compared with the amendment which we originally tabled and which the Commons have now returned to us; nor, indeed, can it be compared with the simplicity of the amendment before us this evening. I start by taking up some points made by Mr Malcolm Wicks in another place in replying to the debate on these issues. It is interesting that the arguments that he put forward are not the same as those that the noble Baroness made this evening on the same points about privilege, and so on. In response to my earlier intervention, she said that he was reading out his brief. It may simply be that he has difficulty in reading out his brief. In any event, it cannot have been a misprint because his private office will have checked what he said and will have altered it only if there was justification for doing so. I want to take up the issue of privilege because the amendment has been returned to your Lordships' House in a slightly strange way. The arguments put forward by Mr Wicks in another place were as follows. He said that the Lords amendment, "allows annuities not to be paid where they might otherwise be paid". That has nothing whatever to do with privilege. He continued, saying that, "it extends tax relief by allowing more people in some circumstances to pass their tax privileged pension pot on to their survivors". In moving my amendment, which has now been returned from the Commons, I made it absolutely clear that we do not for one moment suggest that the proceeds of the pension pot should not be taxed in an appropriate way. So that point is totally invalid and Mr Wicks simply does not understand what was said. He went on to say that, "it allows in some circumstances for contributions to be made to pension schemes beyond the age of 75". It is possible to do so anyway, and so I have no idea why he said that. He then added that, "it reduces the instances when part of the tax relief given to contributions is recouped when an annuity is paid, and so on.-[Official Report, Commons, 16/11/04; cols. 1220-21.] That, again, is not the same as the argument which the noble Baroness put to us this evening. None the less, despite the curiosity of the arguments put forward by Mr Wicks, the Commons have returned the matter to us with a claim of privilege. We know what happens at the other end. If a particular issue is discussed and debated and if the Commons disagree with your Lordships' House, a committee is set up which retires to a little room behind the Speaker's Chair-I see the look of familiarity on the face of the noble Lord who is sitting behind the Minister-and they cook up some reasons. Strangely enough, the reasons often bear little resemblance to the debate that has taken place. The committee is chaired by the Minister in charge of the Bill. As I understand it, the normal form of words is that the amendment is rejected because it would involve a charge on public funds. The Commons do not offer any further reasons, trusting that that reason may be deemed sufficient. That is to say, they claim privilege. However, the form of words for this amendment is not conventional. It says: "Because it would alter the area of taxation, and the Commons do not offer any further Reason". Privilege is dependent on two things: ways and means, which is taxation, on the one hand, or the issue of supply, which is public expenditure, on the other. We are not allowed to interfere in those matters. It is put too broadly in the rather curious and unprecedented words-at least I cannot find a precedent form that is used in the amendment returning from the Commons-that it would alter the area of taxation. The House passes many Bills that alter the area of taxation and on which no claim of privilege is made.

On Question, Whether the said amendment (No. 359B) shall be agreed to?

Their Lordships divided: Contents, 207; Not-Contents, 136.

Debate in Parliament | Historical Hansard | Source |