Lord Fuller (Con)

My Lords, it is a pleasure to lead this group and to present my own amendments, Amendments 2, 3, 18 and 19, and the associated report requirement in Amendment 30. I will also speak to Amendments 6 and 22 in the name of my noble friend Lord Mackinlay. My amendments are superficially similar, but they contain important differences, as identified in the explanatory statements. They are designed to make these proposals consistent with the wider canon of the existing tax system, reducing confusion and improving long-term confidence in the whole idea of doing the right thing, saving for your future and reducing your reliance on the state in later life. Amendment 2 and the reflecting one, Amendment 18, as the mirror for Northern Ireland, address the ability of employees to carry forward unused entitlements. This is entirely consistent with the three-year rule that already applies to pension contributions, of which more later. Amendment 3, for Great Britain, and the associated Amendment 19, for Northern Ireland, seek to protect those with variable incomes, perhaps in seasonal or weather-dependent professions. They would allow an employee with an irregular income to enjoy averaging over three years to ensure they are not disadvantaged compared with those on salaried payrolls. This is not new news. The principle of averaging is already established as part of the tax system: just look at farmers and market gardeners. So, once more, my amendments seek to apply consistency across the entirety of this tax system, and within Great Britain and Northern Ireland. Let me focus on Amendments 2 and 18, on the carry-forward and the three-year rule. I should say that, if push comes to shove and the opportunity to divide the House arises, I will seek to press Amendment 2 to a vote. So far as carry-forward is concerned, I am thinking of an employee engaged in seasonal work with variable pay but who wants to save a regular amount each month on salary sacrifice. How does he set his regular monthly contribution at the beginning of the year, not knowing whether he will bust his allowance at the end? The three-year rule for pensions is helpfully explained on the GOV.UK website, which says: “You can carry forward unused allowance from the 3 previous tax years. This … allowance only applies to pension savings made to your UK registered … schemes”, and so forth. That exists because the Government know that people have irregular incomes and, especially for the self-employed, it can take months after the tax year to get your accounts done. So, to be consistent—and this is a pensions Bill—my proposals would allow any salary sacrifice allowance to be carried forward for three years, subject to the proviso that you cannot sacrifice more than you can earn, self-evidently. Frankly, it is as simple as that.