Lord Dodds of Duncairn
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BMI Pension Fund Compensation
Lord Dodds of Duncairn Excerpts(10 years ago)
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Mark Lazarowicz
Absolutely. I have made that point already and I will touch on it briefly again. Certainly, this raises much wider issues.
Just as the payments quite rightly made to the Equitable Life pension scheme members were compensation—they were not a direct benefit arising from the scheme—similarly, the BMI pension fund members have lost out through no fault of their own, and I believe they require better treatment. The Equitable Life experience shows that where the Government decide that they want, for political reasons, to compensate those who have suffered adversely through circumstances beyond their control, they can find a way to do so. I believe that they should do so for the BMI pension scheme members.
Mr Nigel Dodds (Belfast North) (DUP)
I, too, congratulate the hon. Gentleman. He is making a relevant and important point about the difference in how Equitable Life payments and these payments are treated for tax purposes. When I wrote on behalf of some people in my part of the world, in Northern Ireland, who are affected by this, the Financial Secretary to the Treasury wrote back:
“As I am sure you will appreciate, HM Revenue & Customs has to apply legislation consistently, and does not have discretion to waive rules passed by Parliament.”
We accept that entirely, but the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) is right to say that the rules are what the Government and Parliament decide. In this case there is inequity and it needs to be addressed.
Mark Lazarowicz
I agree. That is precisely my point.
I ask the Minister to take a number of steps and, if she is not prepared to agree to them today, perhaps she will at least consider them and come back to hon. Members at a later stage.
First, it is right for the Government to ask HMRC to review the application of the tax rules in this case. The trustees of the BMI pension fund did lobby for the rules applying to the then annual allowance limits and the lifetime allowance rules to be disapplied in the case of the BMI scheme, because of the special circumstances of the scheme. I should not have thought that it was impossible for it to review the rules, given the special circumstances, notwithstanding the legislation that applies to pensions more generally.
Secondly, if HMRC will not review the position, I ask the Government to consider legislating to make a change for this particular case. Again, the Equitable Life scheme is a model that can be followed.