---

Pensions Bill

I welcome the way in which the Front-Bench spokesmen for the Opposition parties, and, indeed, all hon. Members, have sought to deal with this issue. Some months ago, it was a matter of some controversy, but I think that we have found a way of at least examining what the hon. Member for Eastbourne (Mr. Waterson) rightly said is an enormously complex and difficult issue. Whether we are able to find ways of resolving it is another matter, but we envisage that the process we have set up will enable an examination of the issues. As he mentioned, we also envisage publishing later this year a report that examines the parameters of the debate and establishes ground rules and understandings about the nature and extent of the problem, the policy ways in which it might be examined and the implications of some of those, without coming to a recommendation. That would be a matter for debate between the parties and between various stakeholders afterwards. The debate was interesting not least for the various descriptions given. I believe that tents in high winds and seat belts were mentioned. I was reminded of the fact that, in evidence to the Committee, Lord Turner gave a further analogy, which is relevant to the discussion. He said that"““you cannot treat the fact that some people post facto will not have done well out of saving as proof that it is a bad idea to advise them to save. An analogy would be that if at the end of the year your house has not been burgled, it does not mean that it was bad advice to buy a household insurance””.––[Official Report, Pensions Public Bill Committee, 17 January 2008; c. 98.]" We are examining a difficult issue. It is clear that we all have constituents who are on pension credit, yet they have a second pension. How we are able to predict which people are likely to end up in that position, whether we are able to do so and what advice such people should be given if the circumstances that they will find themselves in are not always predictable are complex matters. Personal accounts will not create such a new circumstance that we are not already, in a sense, facing it. A large number of people are automatically enrolled into a pension scheme. Tesco has its own automatic enrolment scheme—I understand it to be a reasonably good defined benefit scheme—and it is therefore allowing people to build up pension pots. There is no guarantee that those people will be able to have an uninterrupted career at Tesco and that they will never fall on pension credit. We have said throughout—the point was made by the Liberal Democrats earlier today—that personal accounts should not provide advantages over and above those schemes with which they will compete. Therefore, we are trying to set up a basic scheme that people can use if no better scheme is available. It will complement, rather than compete with, other schemes. If we were to provide, solely for personal accounts, a guarantee that whatever happened anyone holding one would not lose out, it would give personal accounts a commercial advantage over and above any existing private sector schemes. Therefore, we would undermine the very principle of complementing what we currently have. If a low-paid employee can choose whether to enter their employer's scheme—it might be a good scheme with perhaps a higher contribution from the employer than personal accounts—or a personal account, and they get a guarantee from the latter that they do not get from the other scheme, personal accounts would have a commercial advantage. We need to be careful to bear in mind the basic principles behind the creation of personal accounts and ensure that, in dealing with one problem—and I accept that it is an issue—we do not undermine any of those principles.