On 19th October 2016 Peter spoke about the sale of annuities.
This is the latest of the many U-turns that the Government have made. I thank the hon. Member for Leeds North West (Greg Mulholland) for securing this urgent question. Labour Members want to know why the Government did not do proper market analysis prior to the announcement. They were warned at the time. If they had done that analysis at the outset, they may have realised the chaos and confusion that such an announcement would cause for up to 500,000 pensioners across the country, who are already worried about their long-term future.
This U-turn on pensions comes in the same week as the Government have pushed forward with their proposals for a lifetime ISA, despite widespread cross-party concern about the impact of future public finances on personal retirement plans. In the UK pension market the consumer is unable to make an informed choice because of a lack of cost and performance data. We believe that it should be the role of the Government to provide those data. What will the Government do to assist with that process?
Like the hon. Member for Leeds North West, we would like to know when the Government decided to abandon the policy. Who made the final decision? Was there another interference by the Prime Minister in the previous Chancellor’s decisions? Who was consulted? How extensive was that consultation? The Government were warned. What assessment has been made of the pension market in general and the knock-on effects of this decision? What influence, if any, has the recent vote for Britain to leave the European Union had on this decision?
There is an indication that because of this decision, £900 billion may be lost in the first two years in tax that would have come in as a result of people paying tax on the sale of their annuity. Where is that money going to come from? Is that not another black hole in the Government’s finances?