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Baroness Hollis of Heigham: Yes, my Lords, I said that on the one hand there is a transfer of risk and on the other hand there is also a transfer of cash, which is made possible more easily by the portability of DC schemes. I tried to suggest that the one offset the other, but that is a matter of judgment.
The trend away from DB schemes has been in evidence for 40 yearsnot for four years. It is due to a combination of long-term increases in longevity. Over the next 20 years the numbers of people over the age of 85 will double, although some of the more alarming statistics about our average life expectancy should be taken with health warnings. The big difference that has taken place over the past 200 years is not that people are living longeronce people reach the age of 20 they live much the same length of timebut there has been a reduction in infant mortality, and averaging conceals that fact.
There has been a combination of long-term increases in longevity and medium-term losses on the stock market, which, as my noble friend Lord Varley emphasised, may have wiped something like £450 billion off pension assets on some calculations, as well as short term issues with FRS17. I agree with some of the comments made by the noble Lord, Lord Higgins, on FRS17. I share his views and my right honourable friend in the other place shares his views, that an equalising of accountancy standards over, say, three years on the European standard, rather than that imposed by the accounting standards board, will be a more appropriate way forward.
The level of contribution is important. One of the reasons that employers under DC schemes are reducing contributions is because they are matching the contributions made by employees. The trouble is that many schemes are being set up for new employees who tend to be younger and, therefore, contribute less. We shall need to encourage employers to have foresight in relation to this matter, which not all young people entering the labour market can be expected to have.
I want to take issue with the fact that there is a savings crisis as opposed to a pensions crisis. I have looked at the chart lines on that, comparing the level of savings with the level of inflation over the past 15 or 20 years. It is clear that the level of savings tends to reflect the level of inflation. It is insecurity that begets saving. Instead, with low inflation and low cash returns, considerable savings have been transferred and diverted into house purchase. However, low inflation itself is vital. It is true that annuity rates have fallen, which in turn reflect low inflation. Much as pensioners would like, they cannot have high annuity returns and low inflation rates.
In this context, noble Lords have advanced the case of the David Curry Bill that the world will be a much better place, and there will be positive incentives to save if only people could ensure that they could pass on their annuity pot to their children in the future. It may have been the noble Lord, Lord Fowler, who said that my right honourable friend Mr McCartney in another place said that this was a rich man's privilege. I believe he should respect that information. As far as I can ascertain, to ensure that people have a pension pot that floats them off state benefits, which is the minimum that every one would require, would require an annuity pot of at least £200,000 or even £250,000.
If on top of that one strips out the tax privileges that ensured that there was protection against poverty in old agethere is no point in having a double provision of tax privileges for inheritance purposesone takes a further 30 per cent out of the pot. When one adds those two things together, one is saying that if those two points were built into the David Curry Bill they would benefit only the tiniest minority of pensioners and certainly not those pensioners facing any possible risk to comfort in their old age.
What really matters is the combination of return and inflation. I asked for work to be undertaken to find out what would happen if one had an annuity of £20,000 a year and how long it would take to be halved. At 2.5 per cent inflation it would take 29 years for that annuity return to be halved; at 5 per cent inflation it would take 14 years to be halved; and at 10 per cent inflation it would take eight years to be halved. Low inflation matters at least as much as high returns because that will protect people, particularly women, against poverty in their old age.
As many noble Lords have said, we have to be honest about the situation. It is not realistic to expect people to join the labour market in their early 20s, work for 30 or 40 years and out of that find themselves with a pension for a further 40 years unless employees
I return to a point I made earlier. The more we encourage married women into workover 70 per cent of them now dothe more they benefit from the Government's combination of our minimum wage policy, our change to the lower earnings limit, our favourable treatment of second earners under the new tax credit scheme, our development of the state second pension and our stakeholder proposals. When we put all of that together it is more likely that women, as spouses, as partners, will bring into the retirement family income a second occupational pension which may admittedly be modest, but which may make all the difference between getting by and having comfort in old age. I accept that his 40 years and in this case her 20 do not add up to 60; we do not get the effect of compounding. Nonetheless, it will be a significant contribution.
I conclude. The Government believe that they are doing their bit. We have provided stable economic conditions in which people can find, attain and hold down jobs. Youth unemployment has virtually disappeared in this country. We have reduced inflation, which is now lower in this country than anywhere in the OECD, so pensions hold their value. We are producing pension products for those who have not had access, through modest incomes, to unfunded and funded schemes alike, including stakeholders. We are making information available. We are ensuring that the right products are in place to offer choice and flexibility. And we are ensuring that the most appropriate regulatory regime exists. We are drawing on the expertise of Mr Pickering, Mr Sanders, Mr Myners and others, to ensure that that regime is the correct one.
But now it is up to individuals, with the support of employers, to ensure that they safeguard the future. The key to a secure retirement is to start saving enough early enough and to continue to do so throughout one's working life.
Lord Fowler: My Lords, this has been a short but important debate and I am grateful to all who have taken part. We are all agreed that savings for retirement need to improve. As my noble friend Lord Freeman and others said, we need to improve the climate for saving and we need to encourage pensions for, as both my noble friend Lord Higgins and my neighbour from the Isle of Wight, the noble Lord, Lord Oakeshott, said, we are facing a pensions crisis.
But I agree entirely with the noble Lord, Lord Varley; it is a crisis that we can tackle. That is clear. Indeed, valuable suggestions have been put forward in the debate on the measures that can be taken at this stage. I regard annuities as being one of the most important.
The Minister played a straight bat on virtually every proposal that was put forward. But I hope that the Government will not only take note of the warnings that have been given in the debateI sincerely believe that they are serious warningsbut will also take note of and take time to consider quietly the proposals that have been made during it from all sides of the House. I do not believe that we can allow the position simply to drift on in the present way.
The noble Countess said: My Lords, it is with a sense of sorrow that I table this prayer to annul the TSE (England) Regulations 2002. They were laid on 27th March 2002 and came into force on 19th April. Before we go any further, I should like to reassure noble Lords who are under the impression that it is unconstitutional for Members of this House to vote on a prayer to annul a statutory instrument that, while it is not done very often, there is no constitutional bar.
My concerns are serious concerns. We, in this House, as well as in another place, must ensure that the laws we make are compatible with the laws already on the statute book; that they are reasonable and proportional. I am not satisfied that these regulations meet those responsibilities. I am also certain that they are seriously over-prescriptive.
I declare my interests. My husband and I have a small herd of pedigree Blonde d'Aquitaine cattle, a flock of pedigree Black Welsh Mountain sheep and a herd of dairy goats. I have had an interest in animal health for many years and the Minister knows that the sheep were blood tested only yesterday under the voluntary scrapie scheme.
I have absolutely no political axe to grind, nor am I seeking vengeance for any act of this Government against the farming community. It is all very well for the Government, the Minister, or officials from DEFRA to say that most of these regulations have already been on the statute book. They may well have been. They may well have slipped past the parliamentary defences as these regulations very nearly did. That does not mean that they make good law. We are now looking at this particular piece of legislation, not what has been. Having almost accidentally discovered what I believe are serious flaws, I believe that we should now get it right.
I wrote to the Minister last week to outline my concerns. He replied with what I believe is a genuine attempt to reduce those concerns. Instead, unfortunately, he has increased them. He informs me that,
I have scoured Regulation (EC) No. 999/2001 for mention of animals other than bovines, ovines or caprinescattle, sheep and goats for the uninitiated. The only reference that I can find is in an amending regulation, (EC) 270/2002, Annex 1 Chapter B, headed: "Information to be presented by Member States in their report". Paragraph 9 states:
First, most farmhouses contain a farm office. So the inspector could, by law, have access to any farmhouse where there is an office because it is not used only as a dwelling. Secondly, there is no definition of a "TSE susceptible animal", despite the Minister's assurance to the Joint Committee that the definition was in the EC regulation. The EC regulation gives a definition of
For some inexplicable reason, dogs are excluded from the TSE (England) Regulations 2002, when all other animals, birds and fish are not. Why the distinction, and where is the authority? Are all those creatures, except dogs, TSE-susceptible? I understand that scientists have tried in vain to produce a TSE in pigs. Why are not pigs excluded? How is the alpaca keeper to know whether the inspector is right when he is ordered to lock up his animals? I am sure that all noble Lords will agree that there is a difference between a TSE-susceptible animal and an animal suspected of being infected by a TSE.
To put it plainly, paragraph 4(2)(k) gives the inspector power to kill any number of healthy animals that he thinks are susceptible to a TSE and, if the owner argues the toss with him or he thinks that the owner may do so, under paragraph 4(4), the inspector can take himself off to a justice of the peace to obtain a warrant to force the owner to comply. There is no provision for appeal. I have put that simply, but that is the essence of this part of the regulation. That is what we all objected to so much in the Animal Health Bill.
Many farmers now keep their personal business records, such as bank account details and addresses on their computers. Whether or not those powers are ever used, I suspect that they infringe the right to a personal and family life under the Human Rights Act 1998 and that the Data Protection Act 1998 will also be infringed. If we are to pass legislation, do we not have a duty to ensure that it will not immediately lead to legal proceedings under superior legislation?
I have covered only three pages of a 221 page document. I have read all the other pages and have repeatedly felt that the legislation should be in the form of a Bill that can be thoroughly debated. Your Lordships may think that this is just another whinge by a farmer. I wonder whether they realise that, while the regulations' principal targets are farmed animals, there is nothing to stop an inspector from entering a garden where one may keep a carp in a pond, ferrets in a shed, pigeons in a loft or grandchildren may have a rabbit in a hutch. Cats are not safe either, if they are outside a dwelling.
I note the amendment to my Motion tabled by the noble Lord, Lord Livsey of Tolgarth. I assume that he knows that nothing can be achieved by tabling a Motion to amend a statutory instrument, which is what his amendment will do if it is agreed to. A statutory instrument can only be annulled. If noble Lords agree to his amendment, sadly, I must assume that they are happy for our parliamentary system to be brought into disrepute and for our freedom to be drastically eroded.
The Minister, in his manuscript amendment to the amendment tabled by the noble Lord, Lord Livsey, is clearly trying to meet one of my concerns, but his amendment will have the same effect as that of the noble Lord, Lord Livsey. The Minister seems not to have grasped my concern about the constitutional and procedural aspects of the statutory instrument.
Various spurious arguments are being circulated about the effect of a vote in favour of my Motion. Scientists say that it will destroy all that they have built up over the years since BSE erupted in our cattle. The National Farmers Union protests that consumer confidence in British meat would immediately collapse and that our export market would be destroyed. When did we hear that before? Today, the Minister published a statement to the effect that the Government will be left without any powers over BSE and scrapie monitoring, prevention and eradication. He said:
(a) to give an undertaking that the period of time in which a veterinary inspector issuing a notice of intended slaughter shall permit representations to the Secretary of State shall be no less than seven days;
The noble Lord said: My Lords, first, I congratulate the noble Countess, Lady Mar, on the well-informed concern that she displaysshe has a record of that in animal health over a long period. I agree with her that governance by statutory instrument is unsatisfactory and governments of all persuasions increasingly use that device where primary legislation should be used. This statutory instrument is of great importance and the fact that it is 221 pages long is evidence of the detail that it contains.
The debate is balanced between the right of the public to be protected and the right of producers and their animals to receive just treatment. That is a finely balanced argument that must be weighed up in the legislation. There is no doubt that many peoplemyself includedfeel that the provisions in the statutory instrument for livestock breeders and producers tend to be over the top and gold-plated, with stringent provisions for the immediate slaughter of TSE-susceptible animals, entry to holdings and the forced removal of records from premises. In many respects, they replicate the powers of the Animal Health Bill, which was recently defeated in your Lordships' House.
In particular, there appears to be no provision for farmers and livestock breeders incidentally to appeal against an order by an inspector to slaughter animals. In my view, that infringes the rights of livestock producers and, as this is secondary legislation, there is no statement to proclaim that the instrument complies with the European Convention on Human Rights, which is incorporated in UK legislation.
Therefore, in my amendment I call for three measures to protect the rights of livestock keepers affected by the statutory instrument. The most important is contained in paragraph (b) of my amendment, which would allow for the nomination by the British Veterinary Association of an independent appeals adjudicator who can fairly assess and judge the issues without prejudice or influence from the Secretary of State. I have discussed the matter with the British Veterinary Association, which believes that such a mechanism could be put in place. Farmers and
Paragraph (a) of my amendment refers to seven working days, to allow sufficient time for proper informed representations to be made. The Minister's manuscript amendment would take away that timescale. Why? Do the Government require more flexibility with regard to time? How will they ensure that representations can be made against a notice of slaughter? The fact that TSE is not infectious, animal to animal, must be relevant. The situation with foot and mouth disease is entirely different, as it is highly infectious animal to animal and requires immediate action. There are clear differences between the two situations.
If more flexibility is required, have I unearthed a loophole by which the provisions for TSE can be applied to foot and mouth disease? That would bring us back to square one and the slaughter provisions of the Animal Health Bill that were opposed by most Members of the House. The time allowed for representations is a crucial acid test of the Government's integrity and their intentions for the statutory instrument. I require a definitive time limit, unless the Minister can persuade me otherwise. The reasons had better be good.
Paragraph (c) of my amendment refers to the never-ending march of technology. The scientific study of the diagnosis of BSE in cattle and scrapie in sheep is moving fast. This part of the amendment would allow the Minister to review the regulations in the light of developments.
A distinction must be drawn between the objectives of Statutory Instrument 2002/843 in controlling the effects of TSE on animal and human health and the means deployed to control the disease through the slaughter of TSE-susceptible animals. Such animals may or may not be carriers of TSE. In the case of scrapie, "susceptible" may mean only that the sheep carries a certain gene. There is an argument about destroying animals with a suspect gene. The concern of many sheep breeders is such that they believe that other desirable characteristics of the gene that may be worth preserving may be lost for ever.
The only real proof of TSE comes from tests carried out on the brains and specified risk materials of dead animals, hence the slaughter policy in the statutory instrument. The TSE monitoring provision in Part II, paragraph (7) of the statutory instrument which refers to animals on farms gives cause for concern about the powers that the Government require. Those fears were best expressed in a briefing note prepared by the British Veterinary Association. The association said:
The most important points include the fact that there is no independent appeal allowed by the statutory instrument. My amendment would redress that inequality. Secondly, the seizure of livestock or the property of livestock breeders and keepers would have an impact on the farmers' human rights. That is an unsatisfactory state of affairs and there should be adequate redress in the form of an independent appeal. Thirdly, possibly forcing the owner and his staff to participate in the slaughter of their own animals is a highly undesirable state of affairs. Anyone who has kept animals will know that most stockmen could not indulge in such a thing.
There is no clear statement in the statutory instrument that it cannot be extended to cover foot and mouth disease. The Minister must give us a clear statement to that effect. After all, the Animal Health Bill, which allowed for some rather over-zealous methods of disposing of livestock, was defeated. There is no clear specification of the genotype of TSE that might help identify susceptible animals, although that might be found in future legislation relating to scrapie. We cannot see what is meant by "a susceptible animal". That must be spelt out.
The noble Countess, Lady Mar, mentioned her fears about Part II, paragraph (7), sub-paragraphs (1), (2) and (3) of the statutory instrument. Those provisions are of concern to me, too. Provided that the Government accept the kind of redress suggested in my amendment, we can overcome some, if not all, of the fears that have been expressed tonight. At least, it would create a better balance between the rights of the public to receive clean, safe food and the rights of the producers to protect their living, their animals and their way of life. I beg to move.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty) rose to move, as a manuscript amendment to Lord Livsey of Talgarth's amendment, to leave out paragraph (a) and insert
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