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Occupational Pensions

That is certainly one of the issues of concern. The basic issue is that not enough people are saving. Confidence in savings is declining. Indeed, the Treasury Committee has undertaken several inquiries into that issue, to which I shall refer. Two of the big questions are how we can restore confidence and how do we get people on between £10,000 and £25,000 a year to save. It is those people who are not saving, and they constitute some 8 to 10 million people. David Robbins, a pension partner at Deloitte, has said:"““Around 90 per cent. of the British population aren’t saving enough to ensure a reasonable standard of living when they retire.?" The problem has come to a head because people are living longer. Pensions provision has become so expensive that large numbers of companies have scrapped final salary schemes or closed them to new members amid fears that they could be crushed by the weight of future liabilities. It is incumbent on us as responsible politicians to recognise that issue. Stock market volatility is another issue. In 2000, some £250 billion was taken off the value of the stock market. Other hon. Members have mentioned the issue of accounting standards and FRS17, which exposed the potential liabilities of companies. That also reduced confidence. The Secretary of State for Work and Pensions is in his place on the Front Bench and the Treasury Committee has worked with him on the pension issue. I make the point to him that the Cabinet needs to discuss today’s accounting environment. Many companies have told me that despite the good efforts of the Financial Reporting Council and others, one good measure is being built on another, so that the system becomes complex and difficult to apply, understand and compare. One company wrote to me this morning with an example in which the same transaction can be correctly accounted for in three different ways with quite different impacts. There is something wrong with such a system. That cannot be laid at the Government’s door, but it is a responsibility for them. We urgently need to simplify accounting and make it more transparent, and that should also be part of the debate.