HC Deb 25 June 2001 vol 370 cc372-3
7. Dr. Nick Palmer (Broxtowe)

If he will take steps to require pension funds to facilitate full transferability of accumulated rights to other funds without deductions. [446]

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle)

Measures are already in place to ensure that people get a fair value for their rights when they transfer from one pension scheme to another.

Dr. Palmer

I congratulate my hon. Friend on her new responsibilities.

People who spend their entire lives in a rut working for one company are often better paid when they retire than those who switch between different employers. In some countries, that is prevented by the requirement on pension funds to pay the same amounts that they would require the employee to pay in if he was joining the company, but in Britain it is possible for someone to lose out successively every time he changes jobs. Does the Minister agree that that is undesirable in principle, and that pension funds should be encouraged to pay the full value?

Maria Eagle

I thank my hon. friend for his good wishes, and for asking me what is an extremely easy question for me to answer on my first day at the Dispatch Box.

I understand my hon. Friend's point, but it is important to bear in mind the fact that different schemes provide different benefits, and that transfer values between schemes must be fair both to the person who wants to leave and to all the other members of the scheme.

I cannot agree with my hon. Friend that staying in one job for many years means that a person is dull. I hope to stay in my present job for a good many years yet.

Michael Fabricant (Lichfield)

The hon. Lady will be aware that some funds suffered more damage than others owing to the £5 billion stealth tax imposed by the Labour Government soon after they took office. What assessment has she made of the final amount by which pensions will be reduced as a result of the stealth tax? Is it true that it could be as much as 23 per cent, in the case of those in their 40s and early 50s—such as myself?

Maria Eagle

The hon. Gentleman is being a little disingenuous in telling just one side of the story. He is well aware of the fact that we cut corporation tax at the same time as we introduced those other measures.