Date: 2023-04-19
Aaron Bell: It is a pleasure to follow my hon. Friend the Member for Poole (Sir Robert Syms). I rise to speak to clauses 18 to 25, which I support. I was unsurprised to hear that the Opposition do not support them. The shadow Health Secretary, the hon. Member for Ilford North (Wes Streeting), told The Daily Telegraph on 2 September that the cap was "crazy". He did not say that specifically about the NHS--although, as shadow Health Secretary, he obviously spoke about the NHS--but he called the cap "crazy". He then said: "I'm not pretending that doing away with the cap is a particularly progressive move... I'm just being hard-headed and pragmatic about this." Well, obviously that could not last. On the day of the Budget, the hard-headed and pragmatic approach from the shadow Health Secretary--the so-called "heir to Blair"--was handed over to the soft-headed and opportunistic approach that we saw in the response from the Leader of the Opposition. Actually, it was not in his response, because he had to go away and first check with some other people what the Labour policy was going to be, but Labour later came out against the policy, and has tabled amendments to strike the clauses entirely and replace them with new clauses, which I am sure the Government will oppose. To address the point about progressiveness, it is absolutely asinine to assume that the only test of any fiscal measure is whether it is progressive. We seek to do lots of things with our tax system: incentivise people, grow our economy, grow our productivity. The measures proposed by the Financial Secretary to the Treasury today, and by the Chancellor in the Budget, will do that. We want to incentivise people to stay in work and return to work. Like my hon. Friend the Member for Poole, I am not even sure that there will be a cost in the long run, because those who do not retire early will pay tax while they are earning their salaries. One big problem in our society is people retiring early with all the wisdom, experience and skills that they have at that stage of their careers. People are so productive in their 50s and 60s because they have accumulated so much knowledge, so to have people retiring early is a crying shame, not only for the country as a whole but for them, their patients and the people whom they serve in other ways. Also, those people will ultimately pay more tax when they claim their pensions; it is not a tax-free system. People might be exempt on entry into their pension scheme and exempt on returns, but they pay taxes when they draw their pensions, so taxes will be paid in the long run. The hon. Member for Aberdeen North (Kirsty Blackman) made a point about bankers, which was ably answered by the Minister. We still have a tapering of the annual allowance for people who earn incredibly large salaries, of which there are a number in this country, although not many in my constituency. As many on the Conservative Benches have said, we do not seek to divide people based on where they work or the nature of their jobs. Our tax system works for everybody. Our public sector has incredibly generous pension provision, as we have seen in recent discussions about strikes. That is why some people in the national health service, for example, have accumulated notionally very large pension pots. They are highly skilled, long-serving public servants who earn substantial salaries, particularly towards the latter end of their careers. If they have been on the scheme for a long time, they could be entitled to a pretty large pension, and we multiply it only by 20 to find out their defined benefit. So people in the public sector in defined benefit schemes are already better treated than people in the private sector, in which the same level of salary could not be purchased for PS1.07 million. I heard that argument from doctors, I put it to the Minister, and I am glad that the Chancellor listened in the Budget. I have heard the argument from others in Newcastle-under-Lyme that the system disincentivises people to continue working. We should be against that. Clause 18 abolishes the lifetime allowance, as we have heard. In clause 19, we quite rightly limit the tax-free lump sum. I do not think that it would be conscionable to have an unlimited lump sum, which could be abused. We also have a limit on the annual allowance and its tapering, so it would not be plausible for people with defined contributions on a normal career trajectory to challenge the sort of high numbers--PS2 million or PS3 million--that people are talking about. It is not just feasible for most people--unless they have exceptionally good returns from their pension investments--to achieve those sums in their lifetime. Another iniquity of the current system is that people can stop paying into their defined contribution scheme and--if in a bull market, for example--have no idea how much their scheme might increase by. Obviously, that is down to investment returns, for people who do not know where they stand with their pensions right up until the moment of crystallisation. As I said in my intervention earlier, and as my hon. Friend the Member for South Cambridgeshire (Anthony Browne) expanded on, there are all sorts of people who welcome this. They include people in both the private and the public sector, senior armed forces personnel, senior police chiefs, headteachers, people in the NHS and GPs. Dr Richard Fieldhouse, chair of the National Association of Sessional GPs, said of the shadow Health Secretary's comments: "Each person's pension fund is their embodiment of a lifetime's worth of delayed gratification. So any measures to motivate people towards this is to be welcomed, particularly when applied to us as GPs". That is what pensions are--pay deferred. From the Government's point of view, they are tax deferred as well. They are not tax waived or tax given away; they are tax deferred until the point at which the person, whether they work in the private or the public sector, gets the rewards for their labour. That is why I support what we have done in the Budget. The measure will simplify things for people, save lives in the NHS and, more than anything, encourage people, whatever their job is, to stay in work for longer, and that is all to the good of the British economy.