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Pensions Bill

I will press on, because I want Ministers to tackle the substance of the issues. When the Minister for Pensions Reform intervened on my hon. Friend the Member for Epsom and Ewell, he sounded angry and indignant that anyone would suggest that there is an issue with low-paid people paying in for long periods of their lives when they cannot afford it and ending up with no benefit at the end of their lives. Surely Labour Members have some care and some concern—the old Labour party would have done so. Perhaps Labour Members of 20 years ago would have shown more social conscience. Few current Labour Members have worked in the private sector. It is outside their safe, cosy work environments, which are normally very close to the Labour party, so they have no idea about the harsh realities for the people whom the Labour party traditionally sought to represent. The abnegation of responsibility for those people and the failure to tackle means-testing are the central problems. Let us consider the reality in small firms. Again, I understand that Ministers have no understanding of what it is like to run or work in a small firm, because so few Labour Members are involved in private business. The 3 per cent. contribution by small businesses may have a serious short-term impact, as the final Pensions Commission report stated, but ultimately it will come out of what would have gone in pay to the employee. The money will not magically appear from the employer's secret pot. Employees of small businesses are often on low earnings and might have student debt or credit card debt, which has been promoted in the past few years. The employer will have a conversation with an employee who earns £16,000 a year about whether that employee should take out one of the pension schemes. Can any hon. Member on either side of the House say that they would advise someone who earns £16,000 a year and whose career trajectory does not suggest that they will ever earn vastly larger sums that they would be better off contributing towards the scheme, when we have no vision of a future picture of means-testing? The Secretary of State lashed out angrily, but he gave us no light. We need certainty and a consensus on what will happen with means-testing over the next decade so that people can make a rational decision about whether they should proceed. The truth is that many people who should be saving for their pension will not do so, because it will become known that it is not a wise thing to do. Ministers have singularly failed to tackle that issue. Turning to the powerful and devastating speech by the right hon. Member for Birkenhead (Mr. Field), we are at risk of a double whammy. Ministers are laughing, because they are so out of touch with ordinary people that people making contributions and losing out is of no matter to them. They say, ““The consensus is all. We must be seen to take action.”” We face levelling down, because the minority who currently have decent pension provision in the private sector will see it decrease and the contribution by employers reduce in tough times. At the same time, those who should not be contributing to such a pension will be doing so out of very low earnings, when they have high levels of personal debt and their personal situation does not suggest any long-term benefit to them. They will do so, and will lose out. If Ministers do not take some of the issues raised across the House seriously, we could end up with a Bill that causes double damage to the British pension system. Another topic that we have not heard anything about—I will be interested to hear from the Minister about it later—is protection. It is easy for us in this House to say, as the hon. Member for Aberdeen, South (Miss Begg) and other hon. Members did, that pensioners must be protected. Quite right. We all want them to be protected, but how will they be protected? What is there in the legislation that gives them protection? We have heard the rosy views of Ministers about what the return will be on the investment of the moneys put into this fund, or some aspects of it, but what if those returns prove to be disastrously poor? What guarantees are there? We could end up with a triple whammy, where people on low earnings who have made a contribution receive very little back, and who end up finding that the money they have invested has also done extremely badly, so that they lose out yet again. It is a serious issue, and I hope that the Minister will return to the question of what we can do to guarantee the benefits for people who invest in such a way. I have to disagree with my hon. Friend the Member for Castle Point (Bob Spink), who suggested that it should be easy for us to support the idea of people being able to contribute lump sums—although he did say, to be fair, that they should do so with the right advice. Having read the Bill, and on the basis of the provisions we have seen so far, we can have no certainty about such advice being properly available for those who are most vulnerable and likely to take a bad decision. Without that certainty, and reassurance on that point, we should not support a measure involving lump sums. The Secretary of State talked about auto-enrolment. He said that it would be extremely difficult for someone to opt out. We have just talked about the many people who could find that it is not in their financial interests to opt in finding it extremely difficult to opt out. I would like the Minister of State to expand on what is meant by that, and on what the mechanics will be to prevent it from happening. I expect that there will be a form. Many employers of people on low earnings, or of part-time workers, women workers or people with broken careers, would be quite likely to have such a form available in a filing cabinet. They will pull it out, put it on the table and say, ““What do you want to do about this reduction of 4 per cent. from your earnings, then?”” The answer will be, ““I'd rather not have that loss of 4 per cent. when I've got credit card debts, Christmas coming up and I'm in serious financial difficulties trying to look after my family.”” The truth is that such a form will be on the table. It will not be extremely difficult; people will just sign it. We then have the prospect of Ministers of this Government—it would be sad if they were still in power—desperately going round trying to prosecute employers for their irresponsible encouragement of people opting out of a scheme, which, as far as their employees are concerned, is highly unlikely to be of benefit. I will be interested to hear the Minister respond on that point. It is in the detail that we will find out whether more people will benefit from the scheme than lose out because of it. Much of that detail is left to regulation, and we could do with hearing from the Minister—we did not hear from the Secretary of State—about whether regulations will be subject to affirmative resolution, or whether the Government will be able to push such measures through. This matter will be of enormous importance for millions of people for a long time, and it is important that the House scrutinises any regulations made by Ministers. The right hon. Member for Birkenhead described this Bill as dangerous. He suggested that there was a chance of a serious mis-selling scandal, but there would be no one to take to court over it, apart from a discredited Government who would be long gone. That is no position from which to move forward on the basis of consensus for the long-term benefit of people in this country, not least those who have least, whom we should be concerned about the most. One would have thought that a Labour Government would be concerned, but, as my hon. Friend the Member for Castle Point pointed out in his powerful speech, the amount spent on the elderly by the Government as a percentage of GDP has reduced over time. This Government need to take seriously all the contributions made, and the criticisms of the current situation, if we are to have a proper set-up for the future.