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Occupational Pensions

I am touched that Labour Back Benchers have such faith in the stock exchange as a measure of business behaviour. The study was done several years after the 1997 Budget and established my point that despite the Government’s expectations, which may have been reasonable, they did not achieve their aim. There was no change in investment behaviour. I tried to raise my fourth criticism in an amendment at the time, as did other hon. Members, and the intervention from the hon. Member for South-West Bedfordshire (Andrew Selous) was on this point. One of the unforeseen negative consequences was the impact on public sector schemes, in particular local authority schemes, which accounted for about 10 per cent. of pension fund assets. The effect of the change was to increase the Bill for local authorities by about £300 million. That was a substantial increase in council tax which was regressive and had a significant effect on local authority funding. It was clearly something that had not been thought through.