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Pensions Bill

My hon. Friend is right. If we carried on as we are until 2050, on the Government’s own figures, by the middle of the century 75 per cent. of pensioners would be subject to means-testing. I was explaining that the PPI and the DWP have been unable to narrow their differences. The PPI told me today:"““We are unlikely to change our projections, because they still seem reasonable to us.””" I have a suggestion to make. Perhaps the Minister can take it up in his winding-up speech. As he knows, there is a new procedure to allow a Standing Committee to hold an evidence session or sessions. Why do we not factor into the Committee stage of the Bill an evidence session, bring along the boffins from the DWP and the other boffins from the PPI and get them to argue the case and their differing assumptions in front of the Committee? The issue is central and crucial. The second major concern across the industry is levelling down. The National Association of Pension Funds and the Association of British Insurers, among others, have expressed concerns. In a recent report the NAPF suggested that if there is severe levelling down, pension savings could be cut by as much as £9 billion overall. Potentially, the Government have made matters worse by moving to a cap of £5,000—not what was recommended by Turner, but a figure which in theory could draw in almost all existing pension savers—a point touched on in his speech by my hon. Friend the Member for Grantham and Stamford (Mr. Davies). That, combined with the lack of a level playing field when competing with existing provision and the costs and red tape heaped on existing schemes by this Government—I am delighted to see the former Pensions Minister, the hon. Member for Croydon, North (Malcolm Wicks), in his place—highlights the real danger of employers switching to personal accounts. It must also be said that the levels of contribution built into personal accounts will not deliver a particularly comfortable retirement. True, it may, if it works properly, bring people into the system who are not saving at all, but equally it could reduce the standard of living in retirement for many people; it should be seen as a minimum, not the norm. Thirdly, there is the potential for mis-selling to people who should be advised to opt out of the system. That was touched on by my hon. Friend the Member for Ludlow (Mr. Dunne). Fourthly, there is the issue of confidence. The continuing plight of the 125,000 people who have lost pensions remains a stain on the Government’s record, and their unwillingness to follow the ombudsman’s recommendations is a disgrace, as well as a constitutional outrage. I am delighted that my hon. Friend the Member for Hemel Hempstead (Mike Penning) was able to make his usual stirring case for the Dexion pensioners. If these reforms are to work, the Government have to restore confidence in pensions generally. That means tackling the ombudsman’s report in a constructive fashion, scrapping the financial assistance scheme, and sorting out finances to deal with the shortfalls in the FAS so that proper help can be given to the people whose claims predate the Pension Protection Fund. While they are about it, perhaps the Government could drop their visceral opposition to the scrapping of compulsory annuitisation. We have heard much today about consensus, but what does that mean in reality? I think that the hon. Member for Yeovil (Mr. Laws) was talking about a consensus different from the one that we have been engaged in. He is still peddling the unaffordable and unworkable citizen’s pension. I am sure that the Minister was keeping a score card of the spending commitments that popped up in his speech. Yes, we are engaged in a consensus-building exercise, for all the right reasons. Pensions reform will have effects for decades. We need to achieve the right results, and they must be robust and capable of passing the test of time and surviving changes in Government. Even if we agree with the Government’s direction of travel, we have serious concerns that are shared by lobby groups and large sections of the pensions industry. Consensus must be transparent: it cannot be an excuse for shallow analysis, argument by assertion or dodgy data. There must be no cosy deals, smoke-filled rooms or blank cheques. We will press Ministers hard, especially in Committee, to spell out the effects that the reforms will have on future and existing pensioners and on pension savings in the years to come. As I have outlined, we wish to see fairness between different groups and generations. We want to be sure that personal accounts will generate more savings as well as more savers. Even in this Bill, we wish to put down some important markers about how personal accounts will develop. I fear that Ministers are all too keen to shuffle off some of the difficult questions to the delivery authority. As usual, my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) spoke with great authority on those matters. We will therefore seek to place in the Bill some clear criteria for the development of the authority and yardsticks for judging the success or failure of personal accounts in due course. My party remains committed, as we always have been, to boosting saving through the workplace and introducing auto-enrolment, but we wish to be sure that these reforms do not have perverse effects whereby millions will save to no purpose because of means-testing, or more generous existing pension provision will be eroded. We want the reforms to work, and we will work hard to ensure that they do. We will seek to persuade the Government when we think that they are going wrong. I am always infected by the optimism of the Secretary of State on the likely success of his reforms. I was interested to see his optimism on display in relation to another subject in The Mail on Sunday, where he is quoted as saying:"““I could emerge from nowhere to win, just like John Major.””" We wish him well in that endeavour too. However, we broadly support the reforms. Why would we do otherwise? We have every hope and expectation of being in government when the reforms are implemented. For all the reasons that I have outlined, I shall not invite my hon. Friends to oppose Second Reading.