HC Deb 11 June 1975 vol 893 cc584-6
Mr. Kenneth Clarke

I beg to move Amendment No. 11, in page 16, line 20 at end insert provided that that tax year begins not less than 12 months after the date upon which the draft order was laid before Parliament". The amendment arises from a rather odd amendment in Committee, when I moved an amendment dealing with the period of notice of changes in the contracted-out rate of contributions and made it clear that I had made a mistake in the wording, so that the amendment did not achieve the purpose I had had in mind. The Under-Secretary was quick to offer to accept the amendment, which would have changed the Bill in precisely the opposite direction to that which I had intended. I had some difficulty in being allowed to withdraw the amendment and reconsider the wording.

This amendment would give effect to the intention I outlined in Committee. It goes back to the question of the amount of notice contracted-out schemes will have of changes in circumstances affecting them, in this case changes in the contracted-out rates of contribution. Changes in the actuarial tables are also very much affected.

The difficulty is that every time changes of this kind are made, as they will have to be made from time to time, those running a scheme must reconsider its position and decide once more whether to continue to contract out, given the new arrangements. That involves taking advice from actuaries and fund managers, who may be pressed by other schemes seeking precisely the same advice, so that there will be delays.

If advice is given that the change in the contracted-out contribution rate is such that it is no longer advantageous to contract out, further delay takes place while notice is given to the members and trade unions, and there is consultation leading up to trying to cancel the contracted-out certificate with the Occupational Pensions Board, which can refuse cancellation until it is satisfied that all the consultation has been carried out.

In Committee I explained that it would take at least 12 months. Earlier in the debate I indicated that there are those who think it could take very much longer in many circumstances where a company is trying to contract out. The Government accepted the spirit of what I was saying in Committee. Although the Under-Secretary of State was anxious to take my amendment, in what he said he tried to reassure us that the Government realised that about 12 months would have to be the necessary notice in any individual case.

I ask the Minister, given that we have had this opportunity of reconsidering it, and that he must have known throughout that we were bound to have a Report stage debate, whether he now accepts that he can go beyond just saying that the Government realise that a period of about 12 months is involved, and whether he will accept writing into the Bill a commitment that there will be at least 12 months' interval between the announcement of changes and those changes coming into effect, so that schemes can have adequate time to reconsider their position.

Mr. Alec Jones

Having run this race over almost the same course, if I could be assured that this was the real intention of the Opposition on this occasion I would feel happier before I opened my mouth on this subject. But I can say to the hon. Gentleman that certainly we would want to help the Opposition as far as this amendment is concerned, and to help the industry. We are aware that there is a need for time for making allowances and are quite prepared to accept this in principle. We want to have a look at the wording of it further. Consequential amendments in other parts of the Bill will be involved.

Certainly we accept the principle behind the amendment and that there is a need for something of this type. I see that the hon. Member for Rushcliffe (Mr. Clarke) is looking surprised. I understand that if we are to avoid postponing any change for a further year it would be necessary to amend Clause 27 further. With that proviso, I would seek to put the right sort of amendments down in another place.

Mr. Kenneth Clarke

I am grateful for that assurance. I gather that the acceptance in principle goes to the extent of saying that my second attempt at drafting—which is as technically defective as the first, although nearer my intention—still needs improvement, but that the Minister is definitely saying that there will be amendments in another place which will meet the purpose behind it.

Mr. Alec Jones

Certainly.

Mr. Kenneth Clarke

In that case, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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