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Finance Bill

I have recognised that the Government had a legitimate motive for moving to limit tax relief on top earners in the context of a 50 per cent. tax rate. However, the right hon. Lady has not answered the question that I put to her: does she think it fair that someone earning £150,000 can put £100,000 into their pension fund and get full relief at 40 per cent., but someone earning £200,000 and putting £20,000 into their pension fund cannot get relief above 20 per cent.? That does not seem fair either. Will the Financial Secretary confirm one issue in his winding-up speech? There is a great deal of concern in this country about the growing apartheid between private and public sector pensions. I want him to confirm whether in unfunded final salary pension schemes the value of the notional contribution that is subject to the tax clawback will be based on an actuarial calculation. Will the value of that contribution be added to gross salary for the purpose of calculating the £150,000 threshold? Take as an example a senior civil servant on £120,000—actually, they might be a middle-ranking civil servant on that salary these days. The real value of their pension rights imply an annual contribution of, say, £35,000. How will that be treated to ensure a level playing field between unfunded public sector pension schemes and private funded schemes? On the anti-forestalling regime, which has understandably been put in place to prevent people taking advantage of the delay in the implementation of the arrangements by making very large contributions to pension funds, does the Financial Secretary recognise that what is proposed penalises those who are not making regular payments, at least quarterly? Does that not betray a certain mentality in Her Majesty's Revenue and Customs—that the people to be looked after are those in the pay-as-you-earn system in 9 to 5 jobs? Does it not betray a woeful failure to understand the lives and lifestyles of the self employed, those who have irregular incomes and people whose incomes depend on the success of the small businesses that they run? Such people are typically advised to make annual or semi-annual contributions to their pension funds, but they will be excluded from making their usual contributions under the arrangements that the Financial Secretary has set out. This may be another case of HMRC having pulled the wool over Ministers' eyes. Will the Financial Secretary consider the matter urgently and give an assurance tonight that he will ensure that those who have made regular contributions in the past—even if they have not been as frequent as quarterly contributions—will not be inadvertently caught by the anti-forestalling measures? The Bill risks being a missed opportunity to prepare Britain for economic recovery in a climate of continued fiscal restraint—a world where equity and saving will replace excessive debt and easy credit, and where green industries, local, close-to-market manufacturing and new services will rise to balance out Britain's over-dependence on the financial and property sectors and on public spending growth. It is not too late; substantial—one might even say fundamental—changes have been made in previous Finance Bills as a result of parliamentary pressure and belated attention to outside experts. I hope that that will happen this time. A strong and powerful signal needs to be sent that Britain is open to the world for business and that in the recovery we have resolved, despite our problems, not to look inwards and withdraw from the challenges of global competition, but to embrace those challenges. We need to signal that we are determined to create the competitive, world-class business environment that will attract the jobs, trade and investment to secure Britain's prosperity well into the 21st century. To do that, we need continuity, simplicity, fairness, transparency and certainty in our tax regime. The Bill does not achieve that, and this Labour lot cannot achieve it. Change is needed so that Britain can begin the process of rebuilding an economy shattered by Labour's recession.