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Lynne Jones (Birmingham, Selly Oak): The hon. Gentleman seems to share the aspiration to increase the proportion of private pension provision, and I am surprised by that. Nobody has yet said how that is to be achieved. Does he agree that the only way to achieve it would be to make pension provision compulsory? If so, does that not raise the question of which provides better value for money, a compulsory private pension or increased spending by the state?

Mr. Webb: The hon. Lady raises a series of important and relevant points. I shall come to the compulsion issue in a second. I would like good-quality occupational provision to be expanded rather than cut as part of the process. For example, the Government should look at why people who would previously have had a final salary scheme are now no longer allowed entry to such schemes, and they should try to reverse that trend so that more people for whom it is appropriate can get good-quality occupational provision.

The hon. Lady is right to suggest that there will be people who do not have access to such provision. In that case, in old age there needs to be a good foundation of both state and private provision for as many people as possible—because both have risks. State provision, as history has shown us, is liable to be ripped up by successive Governments and does not provide any real guarantee, while private provision is subject to the vagaries of the capital market and various other uncertainties. Both are uncertain; neither provides a guarantee, and that is why we want a foundation for both for as many people as possible.

The first of the three groups that have been let down by the Government on pension provision has to be women. Women have historically had a very bad deal from

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pension provision and are likely to lose out in future. One reason—it relates to the point that the hon. Lady mentioned—is the 60 per cent. private target. One danger is that private pension provision in old age very much reflects the working experience of people. If there is to be an emphasis on private provision, how will the Government stop the inequalities from which women suffered in the work place filtering through into old age?

One group of women have done quite well out of the Government's pension policy: the wives of rich men. I have nothing against the wives of rich men. I have no problem with husbands buying them pensions, given that they may not still be married when they retire. However, if that is the main group that has benefited from the Government's policies, something is missing.

Mr. Tim Boswell (Daventry): Targeting.

Mr. Webb: Indeed. Clearly, there is a danger that with enhanced reliance on the private sector and without a clear strategy, women will lose out.

Let us consider the stakeholder pension. When people take out a stakeholder pension, they have to buy an annuity with it. Although some small part of the pension buys a unisex annuity, most of that pension will be smaller for women. So, although women are living longer and therefore receiving a comparable amount over their lives, the amount that they have to live on each week will be smaller.

We have heard nothing from the Government on how or whether they intend to address that. The stakeholder pension is intended particularly for people on modest incomes, so not a lot will be going into it in the first place. If it is then lower for women, they will lose out. Do the Government have any strategy for women's pensions in that respect?

Mr. Butterfill: Has the hon. Gentleman seen the recent report by the Association of Consulting Actuaries on the position of women in occupational pension schemes? It says that whereas 21 per cent. of full-time working women did not have occupational schemes in 1989, the figure is now 26 per cent. So, 5 per cent. more women do not have an occupational scheme now compared with 1989.

Mr. Webb: I am grateful for that intervention. The hon. Gentleman is very knowledgeable about these matters and highlights the problem. The Government say that reliance on the private sector is a key part of their strategy, but they do not seem to know or care about what is going on, even if things are going backwards for women and other groups.

Women are vulnerable not just in private sector provision. The Government have trumpeted their measures on state provision. Increases in the minimum income guarantee will go predominantly to poorer pensioners, many of whom are women, and that is to be welcomed, but what about those who do not take up their entitlement, who are also predominantly women? The Government's obsessive emphasis on the means-tested strand, at the great expense of the universal strand, is prejudiced against women, because they will take up their pension but will not necessarily take up their minimum income guarantee. That is why our party remains

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committed to the basic state pension, particularly for older pensioners, many of whom are women and all of whom take up their entitlement.

I am surprised that the Government have not mentioned much about the state second pension, which is another element of their strategy. Again, it is claimed as a great thing for women, with credits and all the rest of it. In 40 or 50 years' time, if the policy survives that long, it might be such a great thing. However, for anybody already at pension age, it is irrelevant, and for those who are 10 or 20 years below pension age, it will make precious little difference. Therefore, we are talking really only about 30 or 40 years down the track. Such changes are likely to be ripped up and restructured many times during that period. So, women cannot be sure of an enhanced pension through that scheme. It is too complicated and bound to be revised again and again. I should like to give one example in that regard.

When the state second pension was introduced, we said that it was not enough and that it would not bring pensioners, together with the basic pension, above the means test. The Government said, "Nonsense; it is adequate," yet they have now introduced a pension credit. Therefore, someone who has made no voluntary saving and has only the basic state pension and the state second pension will receive a top-up through the pension credit to bring their combined income to a better level because the scheme that the Government have introduced was not good enough. If the Government have to rewrite the rules just two years after they have introduced them, what hope is there that such a scheme will be in place in 40 years' time? Women are missing out because of the Government's pension strategy.

In "The House Magazine" this week, the Secretary of State wrote an article about pension provision and looked at the long-term future for the group to which I have just referred. He said:

"The key to people having a decent pension in retirement is getting today's twenty-somethings to start putting their money away as early as possible. To this end, we have introduced stakeholder pensions and are reforming SERPS with the State Second Pension."

Clearly, 20-year-olds are all down the Dog and Duck or wherever they go, discussing the state second pension and its reform. I wonder whether the Secretary of State, who I assume wrote the article, can tell us how many 20-year-olds have bought stakeholder pensions? I am happy to give way to the Secretary of State if he is able to provide that figure—but, of course, he has no idea. [Interruption.] He says that he told us earlier, but what he said earlier is that the Government do not know and will not know for some time. The article says that 20-year-olds will be okay because there are stakeholder pensions, but he does not have a clue whether any 20-year-olds have bought a stakeholder pension—such is the Government's complacency about pensions.

Women are not the only ones who lose out from the Government's proposals. Those who want to retire in a phased way, instead of going over the current cliff edge of retirement, also miss out because of the Government's policy. In the same article, the Secretary of State expresses all the usual platitudes about early retirement or flexible retirement. He writes:

"The UK's employment and early retirement culture urgently needs to change. That's why we have introduced a number of policies to help these changes along and start tackling ageism".

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Here is one of those crushing policies:

"We have . . . sent out 75,000 copies of the voluntary Code of Practice on Age Diversity in Employment, which points out the benefits of an age diverse workforce."

Let us imagine the scene in offices throughout the land as the Government leaflet drops on the mat and people say, "Oh, we hadn't thought of that. Employing older people will help us, so let's rush out and employ them." What nonsense. The Government are dragging their heels on legislating in respect of age discrimination. They are doing as little as possible and delaying until the last possible moment.

What can be done? Bizarrely, one can spend one's life working for one firm, Tesco, then retire from Tesco, draw a private occupational pension and go to work for Sainsbury—that is allowed; but one cannot retire from a life working for Tesco and then go to work part-time for Tesco, as that is not allowed. In the latter case, the Inland Revenue says that one has not really retired, so one cannot have one's pension with its tax privileges. That is absolutely barmy.

If, as the Secretary of State—or whoever wrote the article—claims, the Government want people to go on working longer, perhaps past state pension age, should not the Government be helping people to phase their retirement? Should not people be able to draw their pension while doing some part-time work? Should they not have flexibility and choice? No—the Inland Revenue rules the roost. On flexible retirement, the Government sound great, but there is no sign of action.

If anything, retirement is happening earlier, not later. Far too many people who would like to continue working and phase in their retirement are forced to stop work. Despite reports and reviews, the Government have nothing to say on the issue.

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