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Pensions Bill

I wonder whether I, as the first man to speak in this important debate, can join the usual suspects. We have been talking about the poor old insurance industry. I had a charming letter today from the Association of British Insurers thanking me for my contributions on previous days of debate. I appreciated that, but I do not think that I will be getting another letter from it on what I am about to say. We on these Benches oppose the Conservative amendments. The noble Baroness talked about the fears of the Association of British Insurers and the industry about what I think she called a vortex, sucking in all manner of pension contributions. Frankly, if only anything could suck in more contributions from all around. Saving in this country has collapsed in the first quarter to 1 per cent of income. We should be very careful about restricting any vehicle that is efficient, low-cost and targeted to lower income people. As my noble friend Lady Thomas said, we do not really support limits as restrictive as they are here. It is a pretty open question whether there should be any limits at all on contributions into personal accounts, because we are desperately keen to encourage saving and we favour maximum consumer choice. The noble Baroness, Lady Noakes, asked the noble Baroness, Lady Turner, why people would want to put extra money into personal accounts when they could do an ISA. As we have heard, there is the extra complication for people of doing so, but part of the argument is that personal accounts are low-cost and efficient. ISAs are quite expensive. The whole point of personal accounts is that it is a low-cost, straightforward scheme. Also, people, perhaps particularly women, might not want something that is too easily accessible. There is a certain feeling that people might want to tuck something away for their old age. Why are we restricting consumer choice here? I do not believe that the insurance companies should worry, except in so far as they are not behaving very well. The Daily Mail last Wednesday pointed out that: "““Tens of thousands of savers with money in old work pensions are being hammered with higher charges””," and that two of the main companies have put up the charges from 0.4 per cent a year to 0.75 per cent and from 0.37 per cent to 0.67 per cent respectively. This is where people have moved on, have small pots left in old schemes and are in a sense trapped in those schemes. It is perfectly reasonable and it is a good competitive position that if they are being squeezed in that way and if they want to do so, they should be able to take the money out and put it into personal accounts. The insurance industry should not worry so much. Personal accounts are here to help. They maximise consumer choice and they will particularly help low-paid people and women with broken records who are not saving for a pension. We should be much more positive about them. We have heard already, and I will not repeat, the very good points made by the members of the People’s Pension Coalition, which we support. I remind noble Lords of the report on personal accounts by the Work and Pensions Select Committee in another place, which was very much encouraging last year a more open and less restrictive attitude. I will not read them out, but there were responses from the Government at that stage looking at additional contributions and additional flexibility, and I would be interested to know where the Government’s thoughts have got to on that. We are very much in favour of opening things up and de-restricting. Heaven knows any form of pension saving in this country must be made as easy as possible.