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Pensions Bill

My Lords, I am surprised at what the Minister has just said. There is a paradox. He said that the amendments are faulty in that they are silent on the tax treatment of the fund, yet the Government have decided that the amendments are in breach of privilege because they deal with taxation. The amendments are either silent or they are not. Even more important, the amendments have been the subject of legitimate discussion on several previous occasions. For instance, on 15 November 2004, your Lordships’ House defeated the Government on the question of the maximum age for annuities. Then, on 17 November 2004, there was a further government defeat on the amendment tabled by my noble friend Lord Higgins to raise the age to 85. It is curious that suddenly privilege is invoked. The Minister owes us some further explanation. It may be that someone somewhere decided to protest about other amendments on the basis of privilege and to extend the protest to this group, failing to realise that the House has debated these subjects on many previous occasions. I think that the noble Baroness, Lady Hollis, responded in 2004. We are owed a further explanation. When I looked at the Official Report of the other place to see whether I could be persuaded by the arguments that had been used against these amendments, I discovered that no one had even discussed them because of the operation of a timetable Motion. I have not changed my mind, because no one in the other place tried to change it The Minister has once again put forward the case as he sees it. He is always very articulate, particularly about this terrible phenomenon of tax avoidance—being able to build up funds and avoid tax. I do not think that the Government have any right to tell pensioners what to do with their pension pot beyond what effect it can have on their eligibility for various benefits. The tax incentives that the Government give to encourage responsible savings in no way transfer the ownership of this money to the Government. In opposing the amendments on the previous occasion, the Minister claimed that the point of pension tax incentives is to provide an income in retirement ““and nothing else””. If this is so, why does he feel that it is his Government’s responsibility to involve themselves in how that income is spent? He described the minimal flexibility that is allowed—the possibility of taking up to 25 per cent of the pension as a lump sum—as a generous concession on the part of the Government. That is ridiculous. What possible business of the Government can it be if a pensioner decides to blow 30 per cent, 50 per cent or any amount of their pension pot, as long as they do not throw themselves on to benefits by so doing? This patronising and paternalistic attitude taken by the Government can be further seen by the noble Lord’s words when talking about the alternative secure pension regime that the Government allowed for those with a religious objection to annuities. He described people as ““piling in”” and trying to abuse the arrangements. Why do the Government consider it abuse when a person attempts to use a legal and profitable mechanism for investing his or her money? After all, the Government created this opportunity for people. What is wrong with them taking that opportunity? The Minister said in response to these amendments the first time round, and has repeated it a few moments ago, that to spend a pension pot on things other than an annuity was an improper use of tax-privileged savings. Can he explain the difference between spending your savings and spending the proceeds of an annuity? The only principled difference between my amendments and the current arrangements is the mechanism by which care is taken to stop pensioners falling on to benefits. That must surely be the only legitimate reason for the Government to intervene. This issue will not go away. I can only hope that when we table these amendments again, the Government will be in a more receptive mood.