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Pensions Bill

I beg to move, That the Bill be now read a Second time. It is the duty of every Government to keep the contract between the state and the individual under constant review to ensure that the balance between rights and responsibilities is properly maintained. At the end of last year I set out how that contract will be renewed through welfare reform, as we move from a regime of passive benefits to one of active benefits. The Bill will enact the remainder of the landmark pensions reform package set out in May 2006 in the White Paper, ““Security in retirement: towards a new pension system””, the first part of which became legislation in the Pensions Act 2007. The Government have achieved a lot since 1997. We are spending £11 billion more on pensioners each year than would be spent if the policies of the last Conservative Government had been followed. This year we have spent £75 billion on provision for pensioners—around 13 per cent. of all public spending. Pension credit, winter fuel payments, free TV licences and above-inflation increases to the basic state pension have brought more than 1 million senior citizens out of relative poverty. Rolling out free bus travel right across Britain has also extended opportunities for pensioners. However, the challenges posed by our ageing society mean that we have to look ahead not a year at a time, but decades at a time. Our changing demographic profile opens up increasing opportunities for baby boomers—those of us born between 1945 and 1965—in the ““active ageing”” category. Looking around the Chamber, I see that we are well represented. However, those changes also present immense challenges, not least in preparing for the future. The reality, and perhaps the irony, is that as our society gets older, pensions increasingly becomes a young person's issue. In the next 50 years the number of people over pension age will increase by more than half, meaning that there will be only two people working for every one person in retirement, compared with four working people today, and 10 working people 100 years ago. The cost implications of that increasing longevity for our children and grandchildren are arrestingly stark. Many more people expect to be active longer in retirement and need the resources to fund that. Unless we act now, and act decisively for the long term, we will bequeath a nightmare for future pensioners plunged into poverty, and for future taxpayers, grappling with the consequences. We have already addressed some of the issues identified by Lord Turner's commission. We have legislated for a simpler, fairer and more generous state pension system. In addition, about 75 per cent. of women retiring in 2010 will receive a full basic state pension, and by 2025, over 95 per cent. of men and women will retire with a full basic state pension.