Mr. Darling: The hon. Gentleman is being somewhat selective in what he quotes. The pensions provision group supports the introduction of the pension credit. It would like the credit to be more generous and we could argue about that, but it is not against the credit. Indeed, most pension providersmost independent observerswelcome the pension credit. The fundamental wrong in respect of the social security system that has been in place for the best part of 50 years is that it acts as a disincentive to saving. I would have thought the reform long overdue. My recollection is that one of my Conservative predecessors who is no longer a Member of the House welcomed the reform, because it is necessary for us to reward thrift and effort, not penalise them.
I look forward to hearing what the Conservatives have to say when the Bill comes before the House. I would have thought that any measure that encourages thrift and rewards effort ought to be supported, not criticised.
Over the past four years, we have recovered some of the damage that we inherited. We have tackled pensioner poverty. We have put in place long-term pension reform to ensure two things. The first is that people on low earnings, people with broken work records, the disabled and women who take time off to look after children have access to a good second pension through the state second pension. In some cases, that will double the amount of benefit that they get. Secondly, we have made reforms to long-term pension provision, by introducing stakeholder pensions, in order to provide more options. Stakeholder pensions are complementary to the existing provision of occupational and personal pensions. Finally, we shall shortly bring before Parliament proposals to implement the pension credit, which will ensure that we not only alleviate poverty but reward thrift.
It is a pity that, on an Opposition day on pensions, which is an important matter, we do not know the Opposition's position. We know that they still have a savings policy in which 85 per cent. of the gain goes to the richest 20 per cent. of pensioners. We know that they do not agree that 2 million pensioners are at least £15 a week better off. We know that they oppose the pension credit, which will benefit more than 5 million pensioners. It is a courageous decision to be against that. We know that they have nothing to say to people on low incomes who want to save.
We have no idea where the Opposition stand on stakeholder pensions. All that we know is that sitting opposite me is a man who wants to be remembered for giving free television licences to pensioners without televisions. The hon. Member for Havant, who now speaks for the Conservatives on this matter, wrote the last Conservative manifesto. On tonight's performance, I very much hope that he will write the next one as well.
Mr. Steve Webb (Northavon): It has rightly been pointed out that if a Government set themselves a target, it is appropriate to measure their performance against that target. Our difficulty is that when the Government realise that they are not hitting the target, they attempt to move it.
The Secretary of State read from the 1998 Green Paper, but he seems to forget that, subsequent to that Green Paper, his pensions Minister, now Lord Rooker, told this House in July 2000 that the target group was not the same as the market for stakeholder pensions; they were separate entities. He said:
Either the Secretary of State is saying that the pensions Minister did not know what the target group was or, more likely, written answers now talk about moderate and higher earners because the Government know that they are missing the target of only moderate earners.
Mr. Darling: The hon. Gentleman is a professor, and I thought that professors looked at all the evidence. Should not he look at the Green Paper that set out our policy, rather than take isolated quotes from Ministers? If he looks at the Green Paper, he will see what the target is.
Mr. Tim Boswell (Daventry): If the target were £10,000, which is a reasonable working assumption in view of what the hon. Gentleman has told us, it would be about half average earnings, so it would be a relatively low income by any standards.
The Secretary of State seems to imply that his policy is frozen in aspic from the time of the Green Paper in 1998. In February 2000, the same pensions Minister told the House that the Government would measure the success of the stakeholder pension scheme by the number of people on moderate earnings without a second pensionthose in the target group who take up a second pension. He could not have been more explicit. However, the Government know that they are not hitting the target, so they try to move it.
Surely, if a Government set themselves a target, they should make inquiries as to whether they are hitting it. I presume that the Secretary of State, being a responsible Minister, will have talked to those who know who buys stakeholder pensions. Who has that information? Those who sell them. I therefore presume that the Secretary of State has been in touch with the sellers and has asked them[Interruption.] The hon. Member for Stockport (Ms Coffey) prompts the Secretary of State to ignore my question. [Interruption.]
Either the Secretary of State has asked the industry, knows the answer and is covering up or, worse still, has not asked the industry. We have asked the industry and I shall tell the House what a major provider
Some 58 per cent. of policyholders fall into what is described as four of the wealthiest classes. I wonder whether Conservative Members recognise any of the categories. They are: wealthy equity holders; affluent mortgage holders; comfortable investors; and prosperous savers.
Mr. Webb: Indeed. None of those categories is the target market. As ever, I shall be more generous than Conservative Members and name those who fall into the categories who might be regarded as the Government's target market. This information comes from a provider that sells the product, so it should know. It says that 26 per cent., or one in four, of the products goes to the
The final category, 13 per cent., is the older classes: settled pensionersLord Rookerand older cash users. That 13 per cent. is important and I hope that the Minister will address this matter when he responds. There seems to be a good reason for thinking that some of the 13 per cent. are using the stakeholder pension as a tax dodge. Those people have some capital, they put it into a stakeholder pension one day and then, extremely quickly, they retire and take the money out of the stakeholder pension. They have benefited from tax relief when taking out the pension; they take a quarter of the pot as a lump sum and buy an investment product with the balance, and they have a fantastic return on a very short-term investment.
I hope that the Secretary of State will not tell us that that is what stakeholder pensions were for. Those people form a whole category. The final 3 per cent. form a category called "other", but I could not quite work out who those were.