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Pensions Bill [Lords]

We often hear in pensions debates about the UK having very poor pension provision, but I suggest that one reason for that is that there has been a lack of consensus and consistency over the years. We have heard a great deal about the failure to tackle problems, but I would like to take Members back to the state earnings-related pension scheme, introduced by Barbara Castle in 1978. It meant that everyone who was paying national insurance contributions and was not already in an occupational pension scheme would be in a compulsory earnings-related scheme. The pension reached maturity in 20 years, so it was particularly attractive to women and to anyone with an interrupted career pattern. The problem was known about as long ago as then, so people who think that they have discovered it recently are wrong. By the late 1990s there should have been many more people benefiting from that pension provision. To my mind it was one of the best things done by the Callaghan Government. They have been much maligned, but not only did they introduce that pension provision, but income inequality was at its lowest in the whole post-war period during their years. Government Members who say that they are keen to reduce income inequalities might do well to take a history lesson from that Government. What happened to SERPS? It was torn up by the Thatcher Government in the name of giving people choice. I appreciate that it is argued that SERPS would have proved increasingly expensive and that we would have had to amend it, but how much better to be in a position to amend something than to have to start again from scratch. That is what happened at the end of the previous Conservative Government's time in office. When the Thatcher Government decided to tear up SERPS, the possibility of its proving too expensive was not given as a reason. They advanced the ideological reason of giving people the choice to opt out of state provision and take up some form of personal pension. Anyone who took up one of those personal pensions knows that the level of provision was extremely poor. We have heard a great deal about the mis-selling of pensions, but even if they were not mis-sold, the quality of those personal pensions was not good. I speak as someone who knows, not because I chose to opt out but because, as a partner in a legal firm, I was treated as self-employed and therefore could no longer be part of SERPS—I wish I could have been. Consequently, I took out a couple of personal pensions, and I can tell hon. Members that the provision is poor—almost to the point where I might as well have put the money under the bed. Certainly, I might as well have put it into a savings account. Giving people that freedom of choice had other disadvantages. I well remember that my secretary at the time the change was made was of an age when she could opt out, and she did. I know that she did not opt into a personal pension scheme. Her rationale was, ““I don't have a very high income. I've got two children in the early teenage years, who are becoming increasingly expensive. Extra money in my pocket now is valuable to me.”” I can understand her making that choice, but I am sure that, 20 years on, she now regrets it. I am therefore extremely supportive of enabling people to be included in pension schemes. It may be directive, bossy and even what the previous Conservative Government called the nanny state, but it ensures that people make provision for their retirement. I am particularly disappointed that the Government have decided to change the income level at which auto-enrolment comes into force. They have increased it from the amount that was agreed through consensus to the level at which people begin to pay income tax. Ministers seemed to say during the debate that it is not inevitable that the level will continue to rise in line with whatever happens to income tax and income tax allowances. However, if that is the case, why tie it to income tax in the first place? It creates a suspicion that that will continue to happen. If that is not the case, we need to be clear about it. We have heard a great deal in the debate about the long term. I started by talking about consensus and what went wrong when it was previously torn up. It is regrettable that the Bill risks tearing up another consensus—on the previous Government's work on the back of the Turner report and the pensions legislation that was then introduced—by including an extremely contentious provision, which did not need to be in the measure were it not for a desire to make savings as part of the comprehensive spending review. Government Members have asked us not to oppose Second Reading because we are dealing with generalities. If the provision on women's pension age had not been in the Bill, we would not have debated the measure for so long. Despite what some Members have suggested, the Bill does not completely recast the pension system and provide for a solid and sustainable future. In many ways, it is a relatively minor amending measure, which alters some provisions from previous pensions legislation. Without the specific provision about women, we would largely be in agreement. I have already said why I am not entirely happy about the provisions on auto-enrolment, which change previous legislation, but nevertheless the particular provision on women's pension age has caused the difficulties about which we have heard. The Bill is objectionable not just because the pension age is increasing, but because a double change over a short period affects the same cohort of women. The proposals have been under discussion and the subject of campaigning over at least the past six months—we are not debating recent proposals. Ministers have hinted today that they might be prepared to make changes in due course to take account of people's concerns, but those concerns have been raised ever since the proposals were made. The Bill has been through the House of Lords, when there was an opportunity to make the adjustments that Ministers have appeared to suggest today. Did that happen? No, it did not. There was no suggestion at that stage that the Government were willing to make any such changes. We could have held today's debate knowing what changes the Government are considering. Perhaps in his closing speech the Minister will say what changes he is prepared to make to the part of the Bill dealing with pension age. He should show not just that the Government are making another attempt to ensure that the coalition partners go through the Division Lobby together, but that he has been listening, not only to his coalition partners and the Opposition, but more importantly to the many women who have campaigned and given clear reasons why they want the Government to change their mind. If the Minister is thinking of changing the proposals, he owes it to those women to tell them how. He has the opportunity to do so in his closing speech.