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Pensions Bill

My hon. and learned Friend and I are aware of my hon. Friend's point; I know that she has championed the interests of that group. We will keep the issue under review and continue to consider it. We are not unwilling to do anything about it, but finding a way to target the issue appropriately is the problem. We shall certainly keep it under review and will be happy to continue to discuss it with her. A guaranteed basic standard of living for pensioners forms the platform of our side of the renewed contract between the state and the individual, but we need to go further. We will restore the link to earnings, abandoned by a previous Conservative Government, by 2012. By 2050, the basic state pension will be worth more than twice as much as it would otherwise. That, in addition to the reforms to the state second pension, will ensure that people retiring in 2050 who have worked or cared for about 40 years will receive about £145 per week of state pension in today's earnings terms. We also want to strengthen provision to support existing occupational schemes by simplifying the rules governing them through a rolling deregulatory review. The decline in private sector occupational pension provision since the late 1960s is serious, and in the face of increasing costs employers have been abandoning their defined-benefit—that is, final salary—schemes, whose active membership numbers have fallen from 8 million in 1967, to 5 million in the 1980s and 1990s, to fewer than 3.5 million today. We want to reduce the burden on current pension schemes by reducing the revaluation cap on deferred pensions to 2.5 per cent. from 5 per cent., saving the industry, over time, an estimated average of £250 million a year, to encourage as many final salary pension schemes as possible to remain in existence. Importantly, that would apply only to rights accrued after the change; anyone who has already deferred a pension would be unaffected. Any rights built up by existing members until the point of any change would also be subject to revaluation under the current regime. That is a reasonable step to take. At the very least, it sends a strong signal of our intention to reduce burdens on current schemes, encouraging employers to keep existing defined-benefit schemes open while protecting the needs of employees. The deregulatory review will not, of course, end there. We will also work further with the industry on some of the more complex issues and continue to seek out and cut unnecessary burdens, encouraging employers to keep existing schemes open while balancing the needs of the employee.