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Pensions Bill

It is true; I first observed it then. Since then the issue has arisen from time to time, not least in last year’s Pensions Bill. Make no mistake about it: your Lordships’ campaigns have a habit of getting on to the statute book. One, in particular, is graven on my heart. Over 12 years the late Lord Rugby campaigned vigorously to break the opticians’ monopoly on the sale of reading spectacles. It came to a head when I was a very junior health and social security Minister and was able to put my limited weight behind it. A suitable amendment, moved by the late Lord Winstanley, came to a vote and your Lordships agreed to it—just. The Government in another place confirmed it, and now reading glasses—cheap ones at that—can be bought anywhere. No doubt some noble Lords use them. That simply would not have happened without the support of the Government of the day; so it is with my noble friend Lord Hunt’s amendments. The Official Opposition, here and in another place, stand four-square behind the abolition of compulsory annuities, which, incidentally, do not exist, so far as I can discover, in any G8 country. It should not be possible for anyone of any age to so run down their savings as to bring them into the benefits culture. In other areas, this is actually illegal. That is why my noble friend has coupled the abolition of compulsory annuities with a retirement income fund in Amendment No. 128, in which the thought I outlined is incorporated in proposed subsection (2)(4). It is noteworthy that the minimum retirement income which must remain in the fund is set by the Chancellor of the Exchequer. So the Government of the day remain in total control, as they do now with compulsory annuitisation. The Bill means that almost anyone working consistently from the age of 20 to state retirement age could end up with a pension pot of, I believe, around £240,000. Thus the Minister’s complaint last time we discussed this—that these amendments will only benefit 3 per cent of the very rich—just does not stand up. Another of his complaints is that a retirement income fund will be left with money in it and will form part of the owner’s estate when he dies, and that, unlike the rest of his estate, it should not be capable of being shared between his survivors and anyone else to whom he wills his residuary estate. We should not forget that pensions have two foundations: personal savings, which under this Bill are at least 3 per cent of the employee’s annual income, and the employer’s minimum 4 per cent, which is deferred wages. Both belong to the individual, just as much as his house or the value of his ISAs or other savings. Why should they not be passed on in his will to whomever he wishes? Is not this a basic human right? It is most certainly a basic human need. Lastly, the Government claim that, while they welcome, "““innovative ideas for retirement income products for all””.—[Official Report, 6/6/07; col. 1162.]" as the Minister said last year, there is no appetite among the insurance industry for a retirement income fund. I find that very surprising. If any industry is open to new ideas, it is the insurance industry—if, that is, the Government allow it to be. Indeed, I noticed the other day a new scheme which, while just within the existing law, seemed extremely similar to my noble friend’s retirement income fund. So just what gives the Government such confidence that there is no appetite for this among the industry? Who have they consulted? I welcome the debate to follow.