New Clause (Hansard, 24 July 2000)

§ Mr. Rooker
I beg to move, That this House disagrees with the Lords in the said amendment.
With reference to the previous amendment, I must say that in all my years in the House, I have never before been present for a Division in which every vote for the amendment would have cost £1 billion.
Lords amendment No. 18 deals with concurrency. I will not detain the House for long. The Government have met the spirit of the amendment through the recent announcement by the Inland Revenue that concurrency with stakeholder pensions would be allowed on salaries up to £30,000 a year. That covers 87 per cent. of people in defined benefit schemes—a considerable number—at a cost of £155 million. Full concurrency would cost up to £400 million. In other words, it would cost about £250 million to cover the remaining 13 per cent. of people, which cannot be justified.
I hope that the House will accept the Government's view that we should disagree with the Lords in the amendment, but that the spirit of it will be met by Inland Revenue regulations.

§ Mrs. Jacqui Lait (Beckenham)
I, too, welcome the fact that the Government have moved to accept concurrency up to a salary of £30,000. Originally they were reluctant to contemplate such a figure, regarding it as a tax break for the rich, and said that they would consider concurrency for low and moderate earners.
Throughout our deliberations on the Bill, we have discovered how interesting are the Government's definitions of lower and moderate earners, which vary from time to time. For example, stakeholder pensions are available for "moderate earners" on £10,000 a year. My definition of a moderate earner is not someone who earns £10,000 a year, but we shall go with the Government.
6.30 pm
By increasing the limit to £30,000, the Government have responded to industry concerns that people should be able to take advantage both of an occupational pension scheme with defined benefits and a stakeholder pension. That makes it easier for people with a stakeholder pension to decide, for example, to accept a job that has an occupational pension scheme with a defined benefit. Other arrangements could have created a barrier.
There is also a benefit for people who have not provided for themselves as well as they should have done over the years, even under an occupational pension scheme. In those circumstances, the stakeholder pension can be used for an additional voluntary contribution.
813 An irony remains in the regulations. Perhaps the Minister cannot explain it; it may be down to the Inland Revenue. It is ironic that higher earners—those who are in an occupational pension scheme and earn more than £30, 000—are barred from buying a stakeholder pension for themselves, but can buy one for their non-working spouses, children or grandchildren. That applies to every Member of Parliament. It contradicts the class-conscious attitude reflected in the views on the tax break for the rich. The 13 per cent. to whom the Minister referred could take out stakeholder pensions for members of their families, who would consequently be able to take advantage of the tax break.
Conservative Members would prefer full concurrency, to avoid the ironies that I described. I understand that the Liberal Democrats also support full concurrency. Having pointed out some aspects that still require amendment, we welcome the Government's realisation that there is a need to make stakeholder pensions concurrent up to £30, 000. We therefore do not want to disagree with them.

§ Mr. Webb
Like the hon. Member for Beckenham (Mrs. Lait), I shall be brief, because we support the important concession that the Government have made. I believe that they made it during proceedings on the Finance Bill last week—but I stand to be corrected on that.
We have taken the view throughout our proceedings that the Government pay lip service to the notion of simplicity, while creating an awful jumble in the pensions regime. Full concurrency would be ideal, and far simpler than the Government's proposals. They have had to introduce a threshold and devise laws for the years to which the threshold will apply; it is not yet clear whether it will be indexed. Such matters add to the complexity of the system. We would therefore prefer full concurrency. However, we recognise that the Government have travelled a long way from their initial intransigence.
The hon. Member for Beckenham said that people who earned more than the threshold figure might contribute money to a pension for their non-working spouses or children. Good luck to them. Many such non-working spouses might not be those people's spouses when they reach retirement age. If we can ensure that they have pensions in their own right, so much the better.