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Pensions Bill

I want to make just two points, and in doing so to come back to the praise that has rightly been given to the Secretary of State, the Minister and the many people in the Department who must have worked with them to achieve the successful settlement for people who thought that they were paying into an occupational pension, and were cruelly robbed. Through the actions of the Secretary of State and his team, the lives of those people and their families, although not put back together exactly as they were, have been massively changed. Many people will now go into retirement without having heart attacks and various other terrible illnesses brought down upon them through the feeling of injustice that they were suffering in not getting the due deserts of their pension savings. In no way do I want to divert attention from that achievement, but in fact the achievement is even greater than the House has said so far, in that it ricocheted into the wider debate on pensions. Although we might say that only 140,000 families were affected, every one of those families were affected 100 per cent. All those families had children, grandchildren, neighbours and friends, and they all went about their business cursing the day that they saved, either voluntarily or because they were told to, for their retirement pension. Newspapers were putting forward the message throughout the country that it is not sensible to save for old age through any pension scheme. We could not have had a serious debate on pension reform until we brought justice and closure to that group of people. Although those wounds will take some time to heal, those people are not now instructing their children and grandchildren not to behave like their parents and grandparents, who foolishly saved for their retirement income. They now know that although they had to wait—as we, in a lesser sense, had to wait—for justice to be done, it has been done. Not only has justice been done for the individual; a different atmosphere has been established for people who are thinking about planning long-term savings for their retirement. Although, in turning to my second point, I am critical of the Government, I do not in any way want to withdraw my endorsement of the positive comments made by others in the House. However, I do want to sound a genuine note of caution about the consensus that even the Opposition share on this measure, because I do not share even their sense that the Bill is going in the right direction. Whenever we discuss pensions, we wind ourselves up into a moral fervour because we are desperately anxious to get them right, and to do well by our constituents and our country. Not that long ago, we were debating stakeholder schemes and being told that they were the great solution that would solve everything. I disagreed with my party on that, because I did not think that they would do anything like the claims that were being made for them. I did not think them dangerous; I just did not think that people would buy the damn silly schemes, and, to a large extent, they have not done so. The Bill moves us into new territory by establishing a body to run the scheme and providing for automatic enrolment. If we are to be responsible to our constituents, we must address two dangers. First, we do not know where we will be in the business cycle when the new scheme comes into force. The Government have been extraordinarily well judged in running the economy. The 10 years of growth, which follow growth from 1992, are a remarkable achievement of governance and the benefits to our constituents have been enormous, but we might be foolish to think that we have abolished what used to be called the trade cycle and has more recently been called recession. If this measure is introduced when the economy is in a much more difficult situation than it is today, employers will look around to find ways by which they can cut costs, not because they are evil people, although some of them may be, but because they will want to keep their firms going and to keep people in employment. An official Government-sponsored scheme that lays down a modest contribution from employers towards the pension coverage of their employees will be coming on stream, and I fear that many employers, who at the moment would not think of cutting their contribution to their occupational pension scheme, or even to personal pensions, may think that they need to do so in order for their firms to survive. They would, in a sense, feel justified, in that this is the new state scheme and they would still be fulfilling what is required. What the Government rightly judge to be a minimum floor on which to build may become a horrendous ceiling over which contributions do not rise. Thus, the big issue that the Government are genuinely grappling with and have put a huge effort into—I admire the way that they have gone about their task—might result in even less saving being undertaken than happens now. My second point is that I want the House to consider what would happen if instead of establishing our own delivery authority, we gave those powers to the private sector—to Legal and General and the Pru—and they, with minimum advice, could automatically enrol employees into a scheme that might not leave them a penny better off. Labour Members would all be jumping up and down saying that this is the beginning of the next horrendous mis-selling scandal. It will be different from the previous one in that it will be Government inspired, and our poor constituents will not be able to take the Government to court in the way that they have tried to do over previous mis-selling. I ask the Government to try to separate out what they think are the petty party points that the Conservatives might be making, and address the genuine issue for many of our low-paid constituents. They may have high hopes that they will one day climb the occupational ladder and make returns for their labour that ensure that they get a fantastic pension in retirement, but we know that many who start out at the bottom sadly too often end there. Tonight, we might be beginning to introduce legislation that will require compulsory savings by groups of people who would not see things in such terms. They want to look after themselves, to save and to be independent—they have all those noble aspirations—but at the end of the day they will not be able to save anything like enough to take them free of means tests and make themselves one penny better off. Before the Bill passes this House and receives its Third Reading, we owe it to those people, the most vulnerable in our community, to address that issue and that group of workers seriously.