UK Parliament / Open data

Pension Schemes Bill

Proceeding contribution from Lord Bradley (Labour) in the House of Lords on Tuesday, 27 January 2015. It occurred during Debate on bills on Pension Schemes Bill.

I will be brief on this amendment because I share the concern of my noble friend Lady Hollis about the previous amendment, and I do not want to delay the Treasury Minister stamping his feet to get it sorted out as soon as possible.

This group contains amendments which, in their various ways, require the Treasury to publish updates on the key fiscal and behavioural effects caused by the freedoms and flexibilities introduced in this Bill and in the Taxation of Pensions Act. I wanted to return to the debate that we had in Committee and see whether this time I could convince the Minister of the importance of doing so. I hope that I am not unfairly characterising his argument in Committee by saying that the essence of it was that this is not necessary because the relevant data will be published elsewhere. He said that,

“there is no need, in the Government’s view, for further reviews of the Exchequer impacts of the policy as the Government have already committed to keep these under review through the usual processes”.—[Official Report, 12/1/15; col. 576.]

There are two reasons why I still believe that these amendments represent a good additional way of tracking the effects of the policy. The first is that while the relevant data may be published elsewhere, a single document containing the Government’s assessment of the effects, specifically of the new freedoms and flexibilities, would be a welcome addition and require the Government to focus on the overall effects of the policy.

The Government are fond of talking about how significant and novel the changes are. In the foreword to the recent update the Chancellor wrote:

“The government is introducing the most radical changes to pensions in almost a hundred years”.

It is therefore incumbent on the Government to go further than before in thoroughly monitoring the effects and ensuring the public have easy access to the information.

6.45 pm

The second reason is that other types of analysis are required by these amendments that may not be covered by the usual Treasury documents. For instance, we are specifically requesting that the Government conduct analysis on the use of salary sacrifice arrangements. It is still not clear whether the Government had properly thought through the potential loss of tax revenue that could result from these arrangements. The updated figures the Minister was kind enough to provide in Committee confirm that the Government revised up the amount of tax that could be lost in this way—after putting in place the £10,000 annual allowance—once a pension has been flexibly accessed. That rather suggests that the first estimate did not include salary sacrifice because if it had then the introduction of the allowance should have led the tax leakage figure to be revised down. I gave a specific example of this in Committee and would be grateful if the Minister would confirm again that the scenario I outlined has been fully recognised in the Government’s calculations. These amendments also require the Treasury to publish analysis on the behavioural effects of the changes and the effect on the annuities market, which I do not think would be part of the usual process of review, although I am clearly happy to be corrected.

Once more, I urge the Minister to reconsider the Government’s opposition to conducting the analysis outlined in the amendment. It is reasonable and proportionate given the speed with which these profound changes are being implemented and will help to ensure clarity and transparency of the effects of the policies, both inside and outside Parliament. I beg to move.

Type
Proceeding contribution
Reference
759 cc168-9 
Session
2014-15
Chamber / Committee
House of Lords chamber
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