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Baroness Hollis of Heigham: The Government have a very clear view; that we meant to have stakeholder pensions to a ceiling of £3,600. The Government could have held firm on that view and simply said, "We are not going to move". On the contrary, we are trying to recognise the strength of the arguments put to us tonight and through other representations, and are consulting further to see whether we can move. But when we started off with this Bill we did not expect to be departing from our position of £3,600.

If your Lordships want the Government's position to be always unambiguous, that means that the Government will never listen to any propositions or amendments put forward by the Opposition. I am sure that is not a position that the noble Lord, Lord Goodhart, would wish to espouse.

Lord Freeman: I am grateful to the Minister for putting on record the basis of the calculation and am also cognisant of the fact that if governments are to shift their position, they have to consult, and it is not always possible or desirable for everything to be laid out in an

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inflexible way to begin with. I do not wish to press my amendment, and reserve the right to come back at a later stage.

Lord Higgins: The Minister gave a reply which in a number of respects is very comprehensive. But I have much sympathy with the view expressed by the noble Lord, Lord Goodhart. These are extremely important issues and obviously some degree of consultation is necessary. But we are not in the situation we were on the Tax Credits Bill where there were problems of consulting other departments. This is essentially a matter, as I understand it, between the Inland Revenue and the DSS. We have rather more time than we had in relation to the Tax Credits Bill. We are now only at Committee stage. One would have thought we might reasonably expect the Government to have come to a conclusion on this matter.

Baroness Hollis of Heigham: I am grateful to the noble Lord for giving way. I must say that that is an unusually uncharitable interpretation of what I said. I said that the Government went into the discussions when this Bill started in the other House with a clear view: £3,600 stakeholders. In the course of the discussion and also tonight we have had views put, backed up by representations from knowledgeable organisations with whom the Government are in partnership, that we should consider variance on this.

The Government could simply have dug in their heels and said, "Go away. We are not moving". We are not saying that. It is rather unfortunate because we appear to be damned if we listen and damned if we don't.

Lord Higgins: It is certainly not my intention to be uncharitable at all. We fully accept, as the Minister said, that instead of simply producing a fait accompli the Government are carrying out consultations and they will reconsider the position. That is an entirely reasonable view for the Government to take, indeed more reasonable than the one just suggested by the noble Baroness.

But having said that, it is equally reasonable on our side to say that we have a reasonable amount of time before this Bill completes its passage through this Chamber; we are only at Committee stage. And it is not unreasonable to ask the Government to take a view in the light of the consultations and representations. I am sure the outside bodies, which are all extremely expert and erudite in these matters, will be happy to make their representations at a technical level and then the Government can reach their conclusion.

If we on this side of the Chamber agree, that is fine; if we disagree, then we can table suitable amendments. This matter has been running for a good while before reaching this stage. It is not a matter where, other than considering the arguments, the Government need time to make a decision. Indeed, it is a question of sitting down, thrashing the thing out with those who are expert in such matters, and taking a view with which we may then agree or disagree. However, it is not satisfactory to leave the matter hanging totally in the air until after the Bill has received Royal Assent. I am entirely

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sympathetic to the noble Baroness who is seeking to be helpful. However, as on former occasions, I am seeking to press the Government to get together with officials, and others, and reach a conclusion on the matter.

Before I withdraw the amendment, perhaps I may throw one final stone into the pool--if that is not mixing metaphors even more--and ask the Government whether they would care to consider whether they need to make additional regulations under Section 111 of the Pensions Scheme Act 1993 if they are to fulfil what at present seem to be their intentions. Subject to that, although I do not expect the noble Baroness to reply, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 13 not moved.]

Lord Higgins moved Amendment No. 14:


Page 2, line 18, at end insert ("or other insurance contracts, annuity contracts or pension arrangements which satisfy prescribed requirements")

The noble Lord said: This is a much simpler provision than the one that we have just discussed. It would ensure that the seventh condition for the definition of a stakeholder pension scheme is amended to ensure that such a scheme accepts transfer payments from a broad range of pension arrangements. There are, of course, difficult issues involved here. However, if people want to transfer their assets into a scheme, it would seem appropriate for them to have the ability to transfer assets of the kind described in the amendment, as well as existing rights in other pension schemes.

There are other issues with regard to the question of accepting transfer payments. My understanding at present is that the Government will insist that the trustees--if they are trustees--of a particular stakeholder pension scheme will need to accept such transfers. However, that position is not the same as that applying to an ordinary occupational scheme. If I remember correctly, an ordinary occupational scheme has the right to refuse to accept transfer payments and, in any event, considerable negotiations have to take place as to the actual value of the transferred assets. Perhaps the Minister will be able to clarify that point.

However, as the amendment stands, it seems to be a reasonably flexible approach to having transfers for people who want to take out a stakeholder pension but who already have other assets which they would wish to include in the stakeholder scheme. I beg to move.

Lord McIntosh of Haringey: The minimum standards which we propose should provide members with important reassurance that schemes will, among other things, be flexible enough to accommodate the changes in circumstances that can occur during their working lives. That is why we are proposing that the stakeholder pension scheme members will, if they so choose, be able to transfer rights in other pension schemes to their stakeholder scheme. The ability to consolidate pension rights into a single fund will also make it easier for people to understand the current value of their pension savings. It will also help to avoid the proliferation of a number of small "pots", thus helping to secure better value for members.

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Our proposals already require stakeholder pension schemes to accept transfers of rights in occupational and personal pension schemes. Of course, as the noble Lord, Lord Higgins, made clear, there are other types of financial arrangements which are recognised as pension arrangements; for example, retirement annuity contracts and certain other types of annuity or insurance policies. Insurance and annuity contracts, for instance, can be used to give effect to a former employee's rights in an employer's occupational pension scheme. When our proposals for pension-sharing on divorce come into effect, spouses who become entitled to a share of their former spouse's pension will be able to purchase a deferred annuity if, for example, they are not members of a pension scheme at the time. These people may eventually want to transfer such rights into a stakeholder pension scheme.

There is nothing in our proposals which would prevent a stakeholder scheme accepting such transfers under the existing rules. If I have understood the amendment correctly, the noble Lord is simply seeking to build on our proposal so that stakeholder schemes are required to accept transfers from a broader range of pension arrangements.

I accept the weight of the arguments which I believe have prompted the amendment, but I would need to be sure that broadening the requirement would not mean placing undue burdens on stakeholder schemes and that there was no conflict with wider pensions legislation. Therefore, I should like to consider the amendment further. In the light of that assurance, I hope that the noble Lord will agree to withdraw it.

Lord Higgins: This is not only the best assurance: I think it is the only assurance! I am looking forward to further assurances, but in the light of the Minister's agreement to look at this again, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.15 p.m.

Lord Higgins moved Amendment No. 15:


Page 2, line 20, at end insert--
("(10) The ninth condition is that approved group personal pensions shall be deemed to be stakeholder pensions for the purposes of this Part.")

The noble Lord said: There are concerns outside that the Government's proposals could be damaging to occupational schemes and group personal pension schemes. The Government seem to have said very clearly, for example, in the Standing Committee on 3rd April that the provider of a stakeholder pension or a personal pension could not be the same. The conditional arrangements could be the same but people should be aware of the distinction between the two schemes.

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As I say, fears have been expressed outside that the position of the pension schemes, in which the noble Lord, Lord McIntosh, is very expert, could be adversely affected. Perhaps the noble Lord could tell us whether, in his view, this is so or not. I beg to move.


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