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who currently pay into SERPS will receive much smaller benefits for their contributions than they had expected. Women especially will lose out as a result of those changes, as they will lose out as a result of many other aspects of the Bill.

It is an undisputed fact that women receive a raw deal in pensions, primarily as a result of their small and intermittent earnings and their child care and caring responsibilities. Only one woman in four receives income from SERPS; only one woman in five receives some occupational pension and only one woman in six receives a state old-age pension in her own right. That is why the state has to retain an active role in the provision of pensions at all levels. If the state does not do so, pensioner poverty will escalate because those at the bottom of the economic pile will suffer from the Government's intention as set out in the Bill, which will prove disastrous for them in their old age.

The debate has also dealt with the equalisation--

Sir Norman Fowler: Before the hon. Gentleman leaves the subject of state provision, will he answer the following question? Over the past decade, the Labour party's policy has been to uprate the basic pension by earnings--is that still the Labour party's policy?

Mr. Ingram: I know that my answer will not please the right hon. Gentleman, but he should wait for the general election. I am glad that he intervened, because I had intended in my introductory remarks to mention his contribution to the Bill. It is worth while bearing it in mind that he was Secretary of State when many of the changes relating to SERPS were laid down. They led to the mis-selling of private pensions. The right hon. Gentleman did not apologise to the House about the 4.5 million to 5 million people who have lost out as a result. I think that I have answered the question although the right hon. Gentleman may not like the answer. It is as good as the right hon. Gentleman is going to get.

Mr. Lilley: Would the hon. Gentleman advise anyone to buy a personal pension on the sort of information that he proposes to give the electorate?

Mr. Ingram: The Secretary of State should talk to the right hon. Member for Sutton Coldfield (Sir N. Fowler) and ask about his responsibility for the 4.5 million to 5 million people who are suffering as a result of the mis-selling of personal pensions. The guilt and responsibility lie on the shoulders of the Government. Many of their fellow citizens will be in poverty in their old age when they retire.

The debate has dealt with the equalisation of the state pension age at 65. There is strong evidence that this country is not facing a demographic time bomb or a financial time bomb in funding the state pension. This country's demographic trends show that over the next 20 years the number of people over 65 will rise by just 700,000 people. By the year 2040, three quarters of the population will be under 65 and we will have the best support ratio bar one in western Europe and within the Organisation for Economic Co- operation and Development. The financial cost of elderly people per person of working age will be the lowest bar one in the OECD by 2010, and thereafter it will be by far the lowest. It has been calculated that the additional cost of aging

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during the next 50 years will add less to the social security budget than the rising cost of unemployment during the past five years.

Mr. French: Would the hon. Gentleman care to tell the House the source of the information that he has just given?

Mr. Ingram: I shall certainly give the House the source of that information. It came from the Equal Opportunities Commission. I hope that the hon. Gentleman will not denigrate that body, which has set out that information in detail.

All that information needs to be properly analysed before we jump to the decision to equalise the pension age at 65. One of the litmus tests of any decent society is how it treats its elderly population. By pushing through the change for a common retirement age of 65 and, at the same time, reducing the level of financial support through changes to SERPS and in other ways, it is clear that the Government are prepared to fail that test, not just for the current generation but for elderly generations to come.

The complexity and scale of the Bill mean that it has not been possible in the time available to cover all its aspects.

Mr. Churchill: Will the hon. Gentleman give way?

Mr. Ingram: No, I shall not give way.

I have not mentioned the vexed question of divorce and pensions or the importance of retaining the guaranteed minimum pension or the treatment of part-time workers in relation to their pension entitlement. I have not mentioned, in relation to occupational schemes, the strong case that can be made for independent custodianship of funds. All those issues will receive the greatest scrutiny in Committee. No one should underestimate the importance of the measure, which has wide-ranging implications for each and every person in this country. If the Government are serious about their commitment to provide security, equality and choice in pension provision, they must respond positively to the many criticisms made of the Bill inside and outside the House.

The Committee stage will allow the Government every opportunity to address those criticisms. Only by taking them on board will the Government ensure that their pension promise of a choice of scheme--public, private or occupational--in return for an appropriate contribution is not broken and that people's pensions will be both secure and adequate enough to avoid poverty in old age. I ask the House to support the Opposition's reasoned amendment.

9.39 pm

The Minister for Social Security and Disabled People (Mr. William Hague): The debate has been a serious one, but it has had its pleasant and encouraging moments--not least being the number of hon. Members who have volunteered or been volunteered to serve on the Standing Committee which will consider the Pensions Bill. A number of hon. Members also made some very pleasant remarks about my right hon. and hon. Friends in the Department of Social Security.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that there could be no more reassuring spectacle than that of my hon. Friend the Parliamentary Under-Secretary of State, the Member for Wanstead and

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Woodford (Mr. Arbuthnot). Therefore, the hon. Gentleman must be reassured about the Bill, which is largely the work of my hon. Friend. The hon. Gentleman also paid tribute to our noble Friend Lord Mackay of Ardbrecknish in the other place, to whom he attributed a skilful retreat. Given that he supplied the information that our noble Friend was also once president of the university Liberal society, one must conclude that he knew how to accomplish a substantial advance. I think that that is a comfort to us all. More seriously, the hon. Member for Birkenhead (Mr. Field) echoed the remarks of my right hon. Friend the Secretary of State in paying tribute to the work of Sir John Cuckney. It is worth pausing for a moment to note what has happened to the pension funds which gave rise to much of the debate about scheme security.

The position of the Maxwell pension funds in 1992 created much controversy in the House and elsewhere, with a number of calls for the Government to commit very large sums of public money to rescue or underwrite the schemes. Three years on, thanks to the patient work of Sir John Cuckney and others and at a relatively small cost to public funds in securing pension payments in the interim, the position of the Maxwell pensioners has been secured. However, until today it was largely unremarked on in the House. It is important for us to recognise the successful outcome of that work. As the hon. Member for Birkenhead gracefully acknowledged, it totally vindicates the judgment and the actions of my right hon. Friend the Secretary of State in 1992. That fact should be respected across the House. It will be impossible in the time available to respond to every point that has been raised during the debate, but I will do my best to respond to the largest possible number of them. The hon. Member for Antrim, South (Mr. Forsythe) inquired about the position of Northern Ireland in relation to the Bill--a question with which I am becoming familiar from one Bill to another. I assure the hon. Gentleman that the Bill's provisions will be reflected in a corresponding Order in Council for Northern Ireland. The need to legislate for Northern Ireland in that way arises from the fact that the current legislative framework there is somewhat different. The hon. Gentleman also expressed the hope that some consideration would be given to early leavers from pension schemes. It is worth noting that the Government have done a lot for early leavers in recent years. Pension rights exist after only two years' service, deferred rights are protected against inflation and there are transfer rights--all of which my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) introduced in the Social Security Act 1986. The Bill goes further, notably by extending the statutory right to transfers to most pre-1986 early leavers and by speeding up the payment of transfer sums.

My hon. Friend the Member for Brighton, Kemptown (Sir A. Bowden) asked about clause 36 and the provision of particular documents to scheme members. I assure him that the Bill achieves the effect that he seeks. We intend to make regulations under clause 36 which will require schemes to make available to scheme members and to others the documents mentioned in the clause. The schemes will have to comply with those regulations; it will not be a discretionary matter.

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My hon. Friend also inquired, as did some other hon.

Friends--particularly my hon. Friend the Member for Gloucester (Mr. French) --about compulsory trustee training. I agree that trustees should receive appropriate training. The Bill will facilitate that by implementing the Pension Law Review Committee recommendation that trustees who are employees should be entitled to paid time off for training and for undertaking their trustee duties, but the Government are greatly concerned about the practicality of establishing and policing any compulsory training requirements. There would be no point in making a statutory requirement if there were no possibility of monitoring or enforcing compliance. To do that would require someone--presumably the regulator--to specify the level of competence a trustee should have and to find some way of determining the individual training requirements of each and every trustee. That would not be a simple matter and could mean statutory

responsibilities and complexities that would be disproportionately expensive. No doubt we will return to that aspect later in the Bill's progress.

I will refer briefly to three matters that sparked particular interest and controversy following debates in the other place. One is pensions and divorce. The hon. Member for Garscadden was worried that Government policy would require contact between a husband and ex-wife many years after their divorce, to divide a pension in payment. That would not be so under the spirit of the amendments made in another place, which we indicated that we intend to accept. Pension schemes could be required by the courts to make payments under deferred maintenance orders direct to the ex-wife. I make it clear that the Government intend to accept the spirit of that provision, so further contact between the parties would not be necessary in most cases. Some hon. Members argued for pension splitting--such as the hon. Member for Leyton (Mr. Cohen), who has a private Member's Bill on the subject. The Government are extremely concerned about the complexity involved in pension splitting, particularly in relation to SERPS, and the more favourable tax treatment thereby given to people who had divorced as opposed to couples who remain married. We would of course be concerned about the large amount of tax revenue thereby lost, particularly in view of the spending commitments urged on the Government in the debate.

The announcement by my right hon. Friend the Secretary of State regarding war widows was unanimously welcomed in all parts of the House. I noted the additional issues raised by my hon. Friends the Members for Davyhulme (Mr. Churchill) and for Dorset, West (Sir J. Spicer) and by the right hon. Member for Manchester, Wythenshawe (Mr. Morris), but general retrospective changes to occupational pension schemes raise questions of fairness and precedent not necessarily raised by changes to the DSS war widows scheme. They are distinct from questions of obligations to war pensioners, which many people would prefer to discuss.

Mr. Alfred Morris rose --

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Mr. Churchill rose --

Mr. Duncan rose --

Mr. Hague: I am spoilt for choice, but I will give way to my hon. Friend the Member for Davyhulme.

Mr. Churchill: My hon. Friend mistakes me if he imagines that I was particularly pressing any case other than that of expatriate state retirement pensioners. Evidently my hon. Friend misunderstood the point that I was trying to put before him. I was referring to people who, in a lifetime's work, contributed through national insurance contributions to a retirement pension, and who are being cheated by the Government of the entitlement for which they have paid. Will my hon. Friend explain the fairness of denying to people who live across the border in Canada--in Windsor, Ontario--the full pension that they would receive in Detroit?

Mr. Hague: I did not misunderstand my hon. Friend. I was referring to points made by my hon. Friend the Member for Dorset, West and by the right hon. Member for Wythenshawe, which I understood my hon. Friend the Member for Davyhulme to be supporting. He is talking about another matter, to which I was about to refer--the payment of state pensions overseas. He was worried that his eloquent and forceful pleas would fall on deaf ears. They do not fall on deaf ears, but they do fall on the ears of Ministers who have to manage a huge budget on which there are constant upward pressures. For now I shall just say that we will have to debate these issues later in more detail. When we come to debate them, I hope that the House will remember that any increase in spending commitments involving sending money to people overseas will of course mean corresponding reductions in our expenditure here at home. Hon. Members should bear that in mind.

My hon. Friend the Member for Ryedale (Mr. Greenway) was worried about the position of large, mature schemes in relation to the minimum funding requirement. As he acknowledged, I am well aware of the concerns. The position of such schemes will have been considerably eased by the decisions that we have made on the operation of the minimum funding requirements, announced on 8 December last year. In particular, my hon. Friend might like to reflect on the fact that if a scheme is found to be less than 90 per cent. funded on a particular day, the sponsoring employer will have a year in which to restore funding to that level, and could do so in part by using bank guarantees or subordinated loans of the kind that my hon. Friend mentioned. There must also be a funding plan to restore 100 per cent. funding within five years, but that could be changed if the fund recovered as a result of market changes during that period. So it seems most unlikely that a properly funded scheme could be seriously affected in the way my hon. Friend has described; but my hon. Friend the Under-Secretary and I will be happy to set out the Government's thinking in more detail in the Committee.

Mr. Alfred Morris: The Minister referred to my speech about war widows and service widows. With regard to the Secretary of State's announcement this afternoon of his acceptance of the Lords amendment, questions are being asked about whether the restored entitlement will be automatic and whether it will be subjected in any way to means testing. I raise those points

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immediately; there was no reference to them in the DSS press statement about the Minister's announcement this afternoon. Can the hon. Gentleman enlighten us now?

Mr. Hague: People will need to apply for the announced changes, but there is no question of their not taking place or of their being means- tested. I hope that that reassures the right hon. Gentleman. Listening to all today's speeches, I thought that the speech that did most to put things in perspective was that of my right hon. Friend the Member for Sutton Coldfield. He drew attention to the importance of the 1986 Act, which did so much to boost the prospects of occupational pension funds and to protect the accrued rights of people who had left schemes, thereby encouraging job mobility. Those changes permitted and encouraged the growth of occupational pension funds, to the extent that this country now has at least as much funded occupational pension provision as does the whole of the rest of the European Community. Indeed, my hon. Friend the Member for Dover (Mr. Shaw) reminded us of the huge unfunded pension liabilities that have built up across Europe. They mean that other European Governments are extremely puzzled as to how they will meet those liabilities, for which they have not provided.

The interesting thing to note is that if we had continued the policy bequeathed to us by the Labour Government, we would now be joining countries that have large unfunded state pension liabilities. The Opposition like to pose today as the friends of occupational pension provision, but they undertook none of the reforms that were undertaken by my right hon. Friend the Member for Sutton Coldfield and his colleagues. They saddled the future taxpayers of this country with the colossal and unsustainable burden of a state

earnings-related pension system which, in the next century, would have cost more than £30 billion a year--and which they had no idea how to pay for. They introduced a pay-as-you-go system which everyone is now willing to criticise, intending people of the future to pay for it long after they had left the scene. It was left to the Government to reform that, to ensure that it was an affordable system. Now, of course, it would be interesting to know whether the Opposition would plan to reintroduce such a scheme. We do not know, because they do not know.

My right hon. Friend the Member for Sutton Coldfield asked whether the Labour party now thought that earnings or prices were the right basis for uprating state pensions in the future. That question has been asked again of the hon. Member for East Kilbride (Mr. Ingram), in the closing moments of his speech. It was one of the Labour party's most important pledges in four general election campaigns. If it had won and implemented that policy, expenditure would now be nearly £9 billion a year higher than it is. We have heard rumours that the Labour party has changed its policy, but they remain rumours and the country remains in the dark because the Labour party has declined the opportunity to confirm it in the House.

If those are not big enough spending commitments on which the Labour party does not know what it is doing, we also find that, on the state pension age, where the arguments are obvious to the Governments of Australia, Austria, Canada, Denmark, Finland, Germany, Greece, Ireland, Iceland, the Netherlands, New Zealand,

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Portugal, Spain and the United States--all of whom have moved or are moving to a common retirement age of at least 65- -only the Labour party remains unaware of the arguments-- [Interruption.] And the Liberal Democrats. I beg the hon. Gentleman's pardon.

The amendment tabled by the hon. Member for Garscadden said that the Government's policy is rigid. It is not. There will be a 10 per cent. increment for every year in which the taking of the pension is postponed. I hand it to the hon. Gentleman. No one could accuse him of having a rigid policy. He would be lucky to be accused of having a policy at all. Two years ago, the Labour party conference voted that the retirement age for both men and women should be equalised at 60--a policy that sounds very nice but which would cost £12,000 million a year more than that of the Government. Seeing the danger, the Commission on Social Justice, in its report, said:

"It is quite reasonable to start phasing in a common pension age of 65 in the next century."

That is the policy of the Government. But then the Trades Union Congress announced last year that it had stepped up its campaign to achieve a state pension age for all at 60.

Mr. Kirkwood rose --

Mr. Hague: It is against that background that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who is trying so valiantly to attract my attention, said that major pension changes should take place only if there is a consensus. How long would we have to wait for a consensus if Labour Members cannot even arrive at a consensus with one another on the central question of pensions policy? Faced with the choice between stark reality on the one hand and the demands of the unions on the other, Opposition Front-Bench Members have opted for a fudge--a pivotal age of 63, which splits the difference between the groups but would bring the worst of every world. It would mean that people could claim a reduced pension at 60, topped up by other benefits, leading to an escalating bill for the taxpayer of billions, and a growing number of pensioners dependent for life on income-related benefits.

On these three questions: the right future for SERPS; the basis of pensions uprating; and the equalisation of the state pension age, each of which dwarfs almost every other public expenditure decision taken by the House, the Opposition do not know their policy. It ranges from the largely uncertain on the one hand to the completely unknown on the other. They have clutched at a flexible decade of retirement as a fig leaf form of words to cover the embarrassment of a flexible decade of not having a clue what to say.

That is no basis for government. Governments have to know what they are going to do. Governments have to calculate the costs and benefits of their policies. Governments have to arrive at the right balance, which means that we will have strong, funded occupational pension provision, in this country, thoroughly regulated without killing the goose that lays the golden eggs. That is what we are setting about in this major piece of legislation. It is the right legislation. It will bring security, equality and choice to pension provision. It deserves the support of the House.

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Question put, That the amendment be made:--

The House divided : Ayes 228, Noes 267.

Division No. 134] [9.59 pm

AYES

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Abbott, Ms Diane

Adams, Mrs Irene

Ainger, Nick

Allen, Graham

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashton, Joe

Austin-Walker, John

Barnes, Harry

Barron, Kevin

Battle, John

Bayley, Hugh

Beckett, Rt Hon Margaret

Beith, Rt Hon A J

Bell, Stuart

Benn, Rt Hon Tony

Benton, Joe

Bermingham, Gerald

Berry, Roger

Betts, Clive

Blunkett, David

Boateng, Paul

Bradley, Keith

Bray, Dr Jeremy

Brown, N (N'c'tle upon Tyne E)

Burden, Richard

Byers, Stephen

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D N

Cann, Jamie

Chisholm, Malcolm

Church, Judith

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Cohen, Harry

Connarty, Michael

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Corston, Jean

Cousins, Jim

Cunningham, Jim (Covy SE)

Cunningham, Rt Hon Dr John

Dafis, Cynog

Dalyell, Tam

Darling, Alistair

Davidson, Ian

Davies, Bryan (Oldham C'tral)

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Denham, John

Dewar, Donald

Dobson, Frank

Donohoe, Brian H

Dowd, Jim

Dunwoody, Mrs Gwyneth

Eagle, Ms Angela

Eastham, Ken

Etherington, Bill

Evans, John (St Helens N)

Fatchett, Derek

Fisher, Mark

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