SCHEME. ADMINISTRATOR (Hansard, 14 July 1987)

§ Sir Brandon Rhys Williams
I beg to move, in page 15, line 6, after 'Kingdom', insert `or in another member state of the EEC.'. I was rather surprised when I saw this provision because I do not know why it is there. I thought that I would ask my right hon. Friend to expand and give him an opportunity to do so. I have a particular interest here in that when I was a member of the European Parliament in 1981, I had the honour to be made the Rapporteur for the subject of the integration of the European market for capital. In the course of my work as Rapporteur I became totally convinced of the necessity for us to proceed as far as possible to regard Europe as a single capital market.
Of course, a pension scheme is pre-eminently a capital project, and it seems a little jarring and out of tune with the Government's stated policy of supporting the conception of the integration of the European market for capital to say that where personal pension schemes are concerned we will have this "United Kingdom only" label attached to them. There must be more to this clause than meets the eye, because it seems such a petty and unsuitable restriction to insert. I trust that my right hon. Friend will be able to explain just what benefit is likely to accrue if we retain this clause in the Bill.

§ Sir William Clark
I trust that my right hon. Friend will resist this amendment. We are dealing with annuities, and pensions paid by institutions in this country enjoy certain tax advantages. That is the main thing. How can we say, 1046 if a pension scheme is operated in Greece or France or Portugal, that the same fiscal system will be applied to those pension funds? No doubt this amendment is well-meaning, but it is highly impracticable. In any case, we are dealing with our own fiscal system and complete harmonisation with the EC may never come. Until it does, it would be ridiculous to try to transfer some of the operations, and certainly the operation of our pension funds or annuities, to any other member state. I hope that my right hon. Friend will not waste much time on this amendment.

§ Mr. Norman Lamont
I agree with my hon. Friend the Member for Croydon, South (Sir W. Clark) but in the interests of making progress I am not sure that a summary dismissal of the amendment would be the appropriate thing to do. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) is always pushing integration with Europe and he brings the same care, drive and point of detail to the pension fund debate. I am afraid that I must agree with my hon. Friend the Member for Croydon, South—

§ Sir William Clark
What are you afraid of?

§ Mr. Lamont
—even though I am afraid of my hon. Friend the Member for Kensington. Given the very generous tax reliefs that seem to dominate debates of this kind, it is essential that we have people within the United Kingdom jurisdiction accountable to the Inland Revenue. I should stress that it has always been a requirement of an occupational pension scheme that it has an administrator resident in the United Kingdom. We are simply proposing for personal pensions the same rules as apply to occupational schemes. They do not discriminate unfairly against the nationals of other EC states. As I say, someone within this jurisdiction must be accountable to the Revenue in order to ensure that the reliefs are not abused. A similar rule is contained in the Department of Health and Social Security regulations. My hon. Friend the Member for Kensington has been following those and will find that the rule is mirrored there.

§ Sir Brandon Rhys Williams
My right hon. Friend has explained that, as I understand it, the Inland Revenue would need to have someone living within the United Kingdom in order to proceed against that person if the scheme were to be improperly conducted. Obviously, in the same way that we do not like overseas landlords misconducting themselves behind foreign frontiers, we would not want scandalous abuse of the rules of pension schemes. It would seem to be a pity if there was no opening for competition and if the people providing facilities for personal pension schemes were to be excluded from doing so unless they were substantially British companies or British institutions.
I hope that the meaning of the clause does not preclude other institutions from other financial centres entering into competition, because that would be highly undesirable. On the other hand, if it is necessary for them to establish one of their managers here as a kind of Aunt Sally, the clause seems rather a small-minded provision and I am bound to say that I regret it. However, I do not think that it is of such serious importance that we need to divide on it. Unless my right hon. Friend has further remarks to make, I beg to ask leave to withdraw the amendment.