Hinkley Point

Debate between Lord Holmes of Richmond and Lord Bourne of Aberystwyth

Wednesday 11th May 2016 Lords Chamber

[Lord Holmes of Richmond]

To ask Her Majesty’s Government what the current economic and technological case is for continuing with Hinkley Point.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth)]

My Lords, Hinkley Point C is a good deal for consumers. The plant will provide reliable energy at an affordable cost, powering nearly 6 million homes for around 60 years and creating more than 25,000 jobs during construction.

[Lord Holmes of Richmond (Con)]

My Lords, there is no economic case for Hinkley Point and there is no technological case for it. The numbers do not work; neither does the EP reactor. We need nuclear plants but we do not need this nuclear plant. In the light of this, for the sake of the UK taxpayer and the UK energy consumer, is it not time that we pulled the plug on this power project?

[Lord Bourne of Aberystwyth]

My Lords, I hesitate to disagree with my noble friend but I do on just about all counts. We need Hinkley C and there is a very strong economic case, as I have indicated, in terms of jobs and the power that is necessary. I agree that we also need other nuclear plants. We are of course developing those as well to help us transition away from reliance on coal.

Pension Schemes Bill

Debate between Lord Holmes of Richmond and Lord Bourne of Aberystwyth

Wednesday 7th January 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, first, I thank my noble friend Lord Holmes for sharing his concerns with us. He is very much the Desert Orchid of the Government Back Benches. He steered us to removing some horsemeat from the food chain in a typically earthy metaphor, although he got mixed up later with “sunny uplands”. However, I will do what I can.

I confirm that the Government are aware of this issue, and we have some sympathy with the points that my noble friend made and the anomalies that he has highlighted. The requirement to index cash balance benefits was removed by the Pensions Act 2011, as he rightly stated, in response to representations from the pensions industry. It was pointed out that the requirement to index money purchase benefits was removed in 2005, and cash balance benefits are very similar in that entitlement is generally based on calculation of a lump sum rather than an income stream. Therefore it was a relatively easy decision to follow suit with cash balance benefits when the opportunity arose. However, the decision was made at that time that we would not disturb contracted-out schemes—they are subject to their own requirements. That was for very good and very technical reasons.

We now accept that in theory that means that there could be members with rights to cash balance benefits that still have to be indexed, and that might be because another totally unconnected member has some contracted-out pension rights somewhere in the same scheme. That does seem odd, but to be honest we have not received any specific representations and we do not know of any particular case of concern. If the noble Lord can bring forward any specific examples of schemes or individuals who have suffered detriment as a result of this issue, it would clearly support the case for change that he has eloquently set out.

We are aware that the Association of Pension Lawyers is also championing this issue but, as I say, until we know the size of the problem, or indeed if there is a problem in the sense of whether there are people suffering detriment, it is difficult to know how to deal with it and what form that action should take, whether it is through this legislation or elsewhere. We need to take account of the changes coming up in April because they will give members more say in how they spend their pension money, so some of the people caught in the situation at the moment could, arguably, decide to take a lump sum then reinvest that in an annuity without the indexation requirement, although admittedly, there will be problems with taxation at the highest level there, according to that particular taxpayer. As I said, if my noble friend Lord Holmes is able to come up with some specific examples of concern, I hope that we will be able to have a continuing dialogue with him and other noble Lords on this subject. However, in the mean time I respectfully ask him to withdraw his amendment.

[Lord Holmes of Richmond]

I am grateful to my noble friend for that response. I will be happy to provide some examples from my time in practice as a pensions lawyer—a number of examples immediately spring to mind. However, so as not to detain us this evening I will be happy to write to my noble friend with details of those.

This is not the greatest issue on the planet and will not make a huge difference to pensions as we know them, but there are a significant number of situations where it bites and impacts. I cannot envisage a downside to making this change, which is not that tricky to bring about. It needs to be done through primary legislation and this is an ideal, opportune moment to do it.

I accept the point on the changes this April, in that if members take pre-crystallised benefits there is a potential route around that. However, even taking that on board, there is still a significant enough issue that it is very much worth looking at this clause and what we might be able to do. I will be very happy to provide that information and to carry on the dialogue with my noble friend. At this stage, I beg leave to withdraw the amendment.