Finance Bill

My hon. Friend raises an extremely important point and I obviously look forward to the contribution that he will make to our debate in due course. If he looks at the amendment he will see that the point of it is to try to get more detail about what is in the Government's mind. The time scale for putting the provisions in place is extremely short in relation to the beginning of the new financial year—a point to which I shall return. The amendment would provide that an order that completely repealed all the paving legislation and all the work to put into effect the higher earnings charge would not be allowed until Parliament has more idea of at least the outline for the proposed replacement arrangements. There are some coy little hints in the Red Book but not much else to go on—certainly no detail—if we are to repeal an already organised charge that has been well consulted on. The amendment also provides for a distributional analysis to show"““the likely impact of the proposed replacement arrangement; and…the revenue implications of the proposed replacement arrangement.””" I accept that the Government have said that they want to replicate the yield, but as my hon. Friend correctly pointed out, the yield is not an insubstantial amount and it rises quickly. In the tax year 2012-13, a yield of fully £3.6 billion for the replacement measure is already on the Budget scorecard. The planned yield is a considerable sum and the Government need to reassure us that they are not putting it at risk by ripping up all the work that has been done to implement the original policy since it was announced in 2009. There are clear dangers in destroying all that work, wiping it off the statute book and starting again from scratch so close to when the change is meant to come in, not least because of the tight time scales as we approach the start of the financial year 2011-12, when collection of the revenue is meant to begin. The Red Book states:"““The Government wishes to engage employers, pension schemes, experts and other interested parties to determine the best design of a regime.””" That does not fill me with confidence that the Government have the first clue about how their policy intent can be changed into an actual tax change. It is a complex area and they have only a small period to get the measure right. I assume that the powers will have to be legislated for in the September Finance Bill; perhaps the Economic Secretary can tell me when she replies to the debate. There is not much time—probably only the summer—so I hope she will have a holiday, but I am not sure quite how that will turn out if she is put in charge of sorting out the proposals in an appropriate time. Her officials could get no break at all. To be honest, as they contemplate their second or third Finance Bill of the year, her officials will probably need a break as much as she does. While there is not a lot of time left, there is an awful lot of yield at stake if the Government get this wrong, and that is what we are exploring through amendment 60. Parliament deserves a much firmer idea of what is in the Government's mind before it jettisons a well-prepared and well-signalled change that has already involved a good deal of consultation, design, and stakeholder and legislative work. The tax regime to collect the suitably named high income excess relief charge is to be abolished although it has already been consulted on and legislated for. There have also been impact assessments, stakeholder engagement and consultation documents, so all people concerned have prepared for the regime. I am the first to admit that the charge was not universally welcomed or accepted, especially by those who would have to pay it. Many self-interested and somewhat bloodcurdling arguments were advanced about how trying to distribute the relief more fairly would destroy all pension provision in the UK because it was suggested that those who previously received a completely disproportionate amount of relief would close their employee pension provision out of spite if some of that relief was taken away. It was not surprising that there were howls of outrage from certain quarters when the policy was announced, but it is impossible to justify a system of tax relief that delivers a quarter of its £18.9 billion to just the 300,000 richest people by income in the country. Unfortunately, it seems that that lobbying effort has paid off under a new Government. The throwaway comment in the Red Book that the policy would"““damage UK business and competitiveness””" is quite worrying because that is usually code for ““would hit the very well-off the most””. The Government have obviously listened to those with well-oiled lobbying machines who, after all the years of largesse during which the vast majority of the pension tax relief came to them, did not want the party to end.