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Raising of the Pension Age

We are in the middle of putting into effect the biggest landmark pension changes for probably 60 or 70 years, which involve automatic enrolment. That is the nearest step short of creating a compulsion to save, in that it tries to work with the idea of inertia to encourage people to save. In other words, people will have to opt out of automatic enrolment if they are active in the workplace. The most sensible approach is to put the Pensions Commission's proposal in place, establish a national employment savings trust, and have automatic enrolment. The hon. Gentleman will know that there will be re-enrolment every three years. We have to see how that works. We always have to keep these things under review, but we have not yet seen this landmark pension reform working, so it is far too early to consider what levels of opt-out there might be, how we can encourage people to stay in the scheme and to value pension saving on top of the basic state pension, and how to remind people that they might be living 20 or 30 years after their retirement ages, even following the rise in retirement age that we are discussing thanks to the debate initiated by my hon. Friend the Member for Leyton and Wanstead. We must keep such matters under review. Part of the difficulty with pensions policy is that it is very long term but, in our Parliament, we love to do new things and to change and switch about. We have to get the new system bedded in, see how it works and identify the levels of opt-out before we consider the idea of compulsion again. We must make it as easy as possible for people to save. We must encourage and reward them for doing so, particularly when they have medium or lower earnings. The hon. Member for Hammersmith and Fulham also talked about pensions apartheid, which I thought was very telling. He said that 85 per cent. of people in the public sector have access to an extra workplace pension when the proportion in the private sector has gone down because of employers' lack of willingness to offer extra pension saving. What he did not say when he used those alarmist words and talked darkly about another review—he would not say this before an election—is that that review will no doubt consider what his party could do to destroy public sector pension provision. I suggest that everyone who works in the public sector takes close account of what the hon. Gentleman has been saying about their pensions. He did not mention that the average public sector pension payment is between £4,000 and £5,000. We are talking about part-time women workers, porters, cleaners, people who work in schools and those who do not have huge earnings. It has always struck me as odd to say that we should try to make pension savings in the private sector by destroying pensions in the public sector. I congratulate my hon. Friend the Member for Leyton and Wanstead on securing the debate. The Government's view is that the increases in the state retirement age that have been legislated for are appropriate at the moment. The state retirement age has to be kept under review, but clearly we do not wish to make sudden and dramatic changes that will destabilise people's confidence and mean that they will approach retirement age only to have that arbitrarily shifted away from them with minimum notice—we will not do that.