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Mr. Webb: I was not remotely attempting to write off annuities, although they may not be appropriate for everyone. We are in favour of choice. People of 75 who are allowed to continue with draw-down and to keep a capital sum might be better placed to pay for their own long-term care, whereas those who buy an annuity get a pension stream that will never cover long-term care costs. Might that be another attraction for the Government of more flexibility?
Mr. Timms: That is an interesting point. As the hon. Gentleman knows, we are considering the arrangements for long-term care and will make an announcement in due course. There are attractions in various forms of flexibility that are not currently available and we need to keep an open mind. Throughout this debate, hon. Members have been asking for greater flexibility, and no one has suggested that there is a panacea that would allow us to convert a lump sum pension pot into an income stream to support people through their retirement.
The current arrangements are easy to criticise, but it is hard to come up with genuinely radical alternatives. There is certainly scope for discussing the details and whether it might be appropriate to have extra elements of flexibility. The great virtue of an annuity is that it provides a guaranteed income for the remainder of a person's life, however long that turns out to be. That is an important virtue.
It has been suggested this morning that it is rather patronising to be concerned that people will blow their savings on a Ferrari when they retire. Whatever the other considerations, the Government would need to think long and hard before signing up to an arrangement that could lead to people facing a sudden financial crisis in their 80s or 90s. I have seen some suggestions for alternatives that are quite open about the fact that they run out after
25 years, on the ground that most people do not live longer than that after retirement, but it would be wrong to go down a route that could lead to a crisis for people at exactly the time in their life when they would least want to be confronted with one.
Annuity rates have fallen, but so has inflation. Lower inflation means that the purchasing power of a fixed-value annuity is now maintained much better than it was in the past. The rates for index-linked annuities are especially interesting. Five years ago, an indexed annuity would have produced an annual pension, for a man aged 65, of £6,600 from a fund of £100,000. The comparable figure today is about £5,800: a reduction of only £800 a year and a much smaller fall than that in the rate of level annuities.
That comparison is instructive and it is as well to bear those figures in mind in considering whether the value offered by annuities is significantly worse today than it was five years ago. The evidence does not support that thesis. Over the same period, people's pension funds have enjoyed the benefit of substantial stock market growth, and fund growth has helped to mitigate the effects of the fall in annuity rates.
The open market option for holders of personal pensions means that fundholders can shop around.
Sir Robert Smith:
People nearing retirement will not have had the full benefit of stock market growth, because their fund should have been managed in recognition of their age.
Mr. Timms:
That is a fair point, but, if one compares the past 10 years with the previous 30, it is clear that returns on equities have been very much better.
Life offices that act as annuity providers have a very good track record for security. There has been no significant failure associated with them, owing to the underwriting process that secures the payment to an annuitant so that the liability is matched to suitable assets. That feature, guaranteeing income, is the real strength of the annuity system.
There are already forms of annuity, such as with-profits annuities, that allow pensioners to share in equity growth; but that inevitably exposes the pensioner to increased risk. The hon. Member for Arundel and South Downs suggested that those were not widely taken up because of Inland Revenue rules. I do not agree. I think that it is the inevitable risk that has deterred people. They are available as an option for those who want them.
We have considered whether there is a viable alternative to annuity purchase that would guarantee income for the rest of the annuitant's life, but none has so far been identified. The Treasury is open to suggestions from the industry.
The value offered by annuities is not as poor as is often suggested. I have seen no evidence that the providers of annuities are making exceptional profits, which they would be if some of the criticisms that have been levelled at them were valid.
Stakeholder pensions are identified in the Welfare Reform and Pensions Bill as money purchase schemes. I want stakeholder pensions to enjoy--
Mr. Deputy Speaker (Mr. Michael Lord):
Order. It is time for the next debate.
Mr. Martin Caton (Gower):
In 1949, a Labour Government gave us the National Parks and Access to the Countryside Act, which established national parks with the twin purposes of promoting their conservation and public enjoyment. It also established areas of outstanding natural beauty, where the objective was landscape conservation. I hope that today's debate--50 years after passage of the legislation--will allow us to celebrate our designated areas of outstanding natural beauty in England and Wales. I also hope, however, that we will not be afraid to focus on the weaknesses that have been exposed in the legislation over the past half century, or to consider how, in the years ahead, we might improve the protection of some of our most precious landscapes and habitats.
The designation "area of outstanding natural beauty" was created by section 87 of the 1949 Act. The first thing that we can celebrate is the very fact that that Government, in that legislation, recognised the need to maintain our most beautiful countryside as places in which to work, to live and to play while protecting its special qualities.
We can still, 50 years later, rejoice in the title of areas of outstanding natural beauty, as it tells us what we are talking about: some of the finest landscape and most environmentally important countryside in the whole of England and Wales. Although we might quibble about whether the countryside that we are talking about is truly natural, for most people the title communicates very well what we are trying to say, and does so far better than titles such as national park, nature reserve, site of special scientific interest, special area for conservation or special protection areas.
Unfortunately, it could also be argued that creating the title AONB was almost all the legislation did. The legislation called for designation of parts of our countryside as outstanding, and, in the title, explained why they should be so designated. To be fair, I should add that the Act also made provision for land-use planning arrangements, which, although possibly imperfect, have helped enormously in protecting those special places.
The Act did not provide for the administration of AONBs. It said that they should exist and why, but did not say anything about how--how they were to be managed--or about who was to manage them or to finance that management. That contrasts with the situation of national parks, which were created in the same legislation. Questions of who and how in relation to national parks were answered fairly clearly in the 1949 Act, and were further dealt with in the Environment Act 1995.
The failure to make provision for positive management of AONBs was not an error, but was a result of the thinking of that time--particularly in the Hobhouse committee's 1947 report, which led to the legislation and which stated:
Perhaps, 50 years after passage of the Act, the most remarkable feature of our AONBs is how much has been built on such a flimsy foundation. I hope that colleagues on both sides of the House who represent constituencies that include AONBs, or parts of them, will take this opportunity to talk about what is happening--for good or ill--on their patch, to help Ministers as they assess the best way forward for landscape protection in those very special areas.
I should like--to set the ball rolling--to talk briefly about the AONB in my own constituency of Gower, to demonstrate not only some real achievements but some failings that were partly caused by the omission in the 1949 Act.
The fact is that the Gower peninsula itself set the ball rolling. In 1956, it became our first designated area of outstanding natural beauty, in recognition of the national importance of its landscape, particularly its coastal landscape, and its wildlife and clear historical identity. It began the process of AONB recognition across England and Wales.
For many years before designation, Gower had, quite rightly, been appreciated for its special qualities. Its complex geology produces a wide range of scenery in a comparatively small area. It ranges from the south coast's superb limestone cliffs and broad sandy beaches, to the salt marshes and sand dune systems in the north. Inland, large areas of common land--dominated by sandstone heath ridges--are a feature, and its rich natural environment of heath, grassland, fresh and salt water marsh, dunes and oak woodland were nationally renowned even before the war. That was reflected, from 1933 onwards, in a number of early acquisitions by the National Trust.
Nevertheless, it took some intense lobbying before, on 9 May 1956, L. Strang, chairman of the National Parks Commission, and his secretary, Harold Abrahams, signed the designation order. The designation has been a matter of pride for Gower residents ever since. However, even in 1956, Gower people were worried about the availability of resources, after designation, for maintenance and improvement of the environment in their area.
At the time, the then National Parks Commission proposed an extensive series of grants for landscape management. The proposal, however, was never implemented, so that the burden of providing resources for conservation of that nationally important area has fallen on local authorities, sometimes with the help of partner agencies. In fact, the nearest that we have come to putting into practice the National Parks Commission's 1956 idea occurred in the 1990s, under the Tir Cymen agri-environment scheme, in which Gower was apilot area. The scheme enabled some very valuable environmental improvement work and enthused our local farmers. I hope that the scheme's replacement, Tir Gofal, will build on the earlier experiment's achievements.
Since 1956, it has been mostly up to local councils to try to protect the Gower AONB as best they could. However, with no statutory requirement for positive
management, the record has been patchy. For example, in the 1960s, an AONB warden was appointed to implement small-scale projects and to patrol the area, but to do so without an overall strategic plan. When the warden retired in the early 1970s, his post lapsed.
Similarly, in 1973, when the importance of Gower's unspoilt coastline was recognised by its designation as a heritage coast, a heritage coast warden was appointed by the city council, and several initiatives on various degraded sand dune systems were implemented. However, there was no heritage coast management plan, and no links to wider AONB work. When the heritage warden retired, he, too, was not replaced. Time was lost, and, with it, stone walls, traditional boundary hedges, stone-faced banks, old barns and goodness knows what coastal and inland wildlife habitats also were lost.
Only in the 1990s, with publication of the Gower management plan and appointment of AONB staff, did conservation really move forward. Now, we have integration and co-ordination of the work of the agencies involved in countryside management in the AONB. However, a real threat is still posed by the absence of core funding and statutory responsibility. Gower AONB's long-term protection is still by no means guaranteed.
I believe that the situation at the Gower AONB is similar to that of AONBs across the country. There are now 36 areas of outstanding natural beauty in England, and four such areas in Wales. Additionally, a large part of the Wye valley AONB is in England, with a smaller part of it in Wales.
All 41 AONBs, with our national parks, represent the finest landscapes in our country and are an absolutely vital part of our national heritage. They range from the Solway coast to the north Wessex downs; from the Norfolk coast to the Cotswolds; from the Cornish coast to the Clwydian range. Their beauty is matched only by their wonderful variety.
As I have mentioned national parks, I should affirm that AONBs are not second-class national parks, but are equal in quality. They are distinguished from the latter in the legislation on the basis of access for extensive outdoor recreation, not on the basis of beauty or ecology. However, although AONBs are equal in beauty and environmental quality, they are not equal in treatment.
National parks have authorities to manage their protection and public enjoyment. They also enjoy a high profile and guaranteed funding, which is not true of AONBs. Although AONBs often have to deal with national-park scale problems, they do so without resources that are anywhere close to those available to national parks. For instance, the Cotswolds, at 2,038 sq km, is much larger than the national parks, and the Chilterns, with 52 million day visitors a year, receives more visitors than most national parks in any year. Can it be right that the law fails to provide that those special areas must be managed to protect them, fails to identify anyone to do the job, and fails to provide for resourcing the work?
Even now, when, thanks to local initiative, a lot of good work is being done, 13 of the 37 AONBs in England have no management plan in place. Some have not appointed an AONB officer, or set up a joint advisory committee. With no statutory requirement and no long-term funding, that is hardly surprising. As an aside, I should tell the House that we in Wales do not even have the benefit of additional financial resources directed to the English AONBs as an interim measure.
The Countryside Agency submitted advice to the Government on the future of AONBs last June. The Countryside Council for Wales followed, with a similar submission to the Welsh Office in January. Both organisations expressed concern about the increasing pressures of modern society on our vulnerable high-quality country areas, and about the threat from changing farming economies to our treasured landscapes.
The Countryside Agency made specific recommendations to ensure effective management, adequate financial provision and improved development controls in our AONBs. It calls on the Government to give a lead in their planning decisions to demonstrate the very high degree of protection that AONBs should enjoy. It calls for a statutory obligation on all public bodies to have regard to the need to enhance the natural beauty of AONBs. It calls for highway authorities and the Highways Agency to act on their duty to have regard to the purposes of the designation of protected countryside, and suggests the use of transport policy and programmes to channel funds into schemes that protect our finest countryside.
The agency argues that agri-environment schemes should cover all farm land in national parks and AONBs. It calls for Government funds to cover the costs of management services for visitors and recreation in designated areas, and suggests that this funding be supplemented by lottery and European Union finance. It calls for local authorities to be statutorily required to pursue the objective for which AONBs were designated, and to produce AONB management plans.
11 am
"There are many areas of fine country in England and Wales which are not included in our selection of national parks but yet possess outstanding landscape beauty, are often of great scientific interest and in many cases include important holiday areas. While in the main they do not call for the degree of positive management required in National Parks . . . their contribution to the wider enjoyment of the countryside is so important that special measures should be taken to preserve their natural beauty and interest.
30 Jun 1999 : Column 282
In the 1949 Act, those conservation areas became AONBs. I suspect that, even then, the belief that those areas did not require positive management was mistaken. Consequently, the need for such management has become ever clearer.
We recommend, therefore, that the Minister of Town and Country Planning should designate areas of high landscape quality, scientific interest and recreational value as Conservation Areas."
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