Superannuation Bill

Debate between Lord Brabazon of Tara and Lord McKenzie of Luton

Wednesday 1st December 2010 Lords Chamber

[Lord McKenzie of Luton]

The purpose of this amendment is to consider alternative options to resolve the problem which the caps are said to be intended to address. We remain firm in our view that the caps are not necessary, are counterproductive and would present their own series of operational complications if they were ever in effect and applied.

As a responsible Opposition we have sought to get to the heart of the issue. Following deliberations in Grand Committee, we received a helpful letter from the Minister, dated 16 November. Based on this communication we understand that the Government’s concern is that, in the event of a challenge on the legality of any new scheme, the courts will reinstate the unaffordable current scheme. In his letter, the Minister notes that once litigation has been started, that alone will put a question mark over which scheme should be regarded as being in force at any one date before all the appeals have been exhausted. The Government are concerned that, in this interim period, the default position as applied by the courts will not be the new scheme which we understand the Minister intends to lay before Parliament in January, but the more expensive current scheme. The Minister states in his letter that it should be Parliament that decides the default position—which, by implication, is to be the caps. The Minister argues that if the challenge is on human rights grounds, the courts would not have the right to set aside limits in primary legislation but would be limited to declarations of incompatibility.

The purpose of our amendment is to address this uncertainty in another and, we hope, less complicated and more effective way. The effect of the amendment would be to state quite clearly in primary legislation what would happen during a period when the scheme was undergoing a legal challenge that had not reached a conclusion. Rather than revert to the caps, the Act would stipulate that the scheme in operation would be the default position until the validity of the new scheme had been determined. Things would eventually come out in the wash when the court process had run its course. We will come to a substantive debate on the caps in the next group of amendments, and we consider that there are compelling reasons to remove the caps in their entirety. We are supported in this position by the recent report by the Joint Committee on Human Rights which cast doubt on the benefit or extent of the certainty that the Government would achieve by relying on this mechanism.

I should make it clear that we do not intend to press this to a vote, nor are we wedded to this precise wording. However, we are firmly of the view that if the Government consider that a fallback in primary legislation is necessary—we do not—it must not be the caps locking in via primary legislation. The scheme most recently introduced, albeit by order, is potentially one way of achieving this. I look forward to the Minister’s reaction to this amendment. Perhaps, when he responds, he will also cover what alternative mechanisms have been considered to address his concern. I beg to move.

[The Chairman of Committees (Lord Brabazon of Tara)]

I understand that there is a mistake in Amendment 6 as printed in the Marshalled List. Instead of “(2) to (ii)” it should read “(2) to (11)”.