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Mr. Frank Field (Birkenhead): If and when the Government establish such an insurance scheme—I hope that it will be soon—and if the scheme incorporates borrowing powers from the Treasury, there is no reason why it would go under. The unemployment insurance scheme of the 1930s never went under. Does the hon. Gentleman agree that one good use of the unclaimed, as opposed to the orphan, assets would be to support people who have already lost or partially lost their pensions? The sum of more than £13 billion could be used to make good their pension losses.

Mr. Webb: As ever, the right hon. Gentleman makes a creative contribution to the debate, which should help to put it at the top of the agenda. There was obviously a big "if" in his question—a scheme would work only if it had borrowing rights against the Treasury. However, the Treasury has hitherto said, in writing, that it will not stand behind such a scheme. Ministerial spokespersons have been quoted in the press recently as saying that that is central to their plans. I hope that instead of reading that in the press we will hear it from the Minister. Where has the Department got to, and will the Treasury stand behind such a scheme? If so, we would look at it constructively. If not, it could be a delusion.

Mr. John Bercow (Buckingham): Will the hon. Gentleman give way?

Mr. Webb: I hope that the hon. Gentleman will forgive me, but I am about to complete my remarks.

We have only scraped the surface of the vast array of pension problems today, but we wanted to put the issue on the agenda. In my absence, my hon. Friends demanded that we include it as one of our topics today, because it affects so many of our constituents. Some 10 million retired pensioners, and 20 million workers,

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feel increasingly insecure about their pensions. It is time that the issue was top not only of the Liberal Democrats' agenda, but of the Government's agenda.

5.30 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

I very much welcome the opportunity that today's debate gives the House to discuss pensions. We cannot discuss the issue too often—I agree with the hon. Member for Northavon (Mr. Webb) about that. It is an issue of vital concern to all our constituents of all ages.

Mr. Heald: So why have we not had a Government debate on pensions for three years?

Maria Eagle: We have had many statements, new legislation, Opposition debates and many debates in Committee on the issue. No doubt we will have more as this Parliament progresses.

I wish very gently to take issue with some of the language used by the hon. Member for Northavon. I understand that in some cases he was telling jokes, but I take issue with the tone of his remarks, of the motion and of his press release. The all-party Work and Pensions Committee recently had this to say in its serious report on the future of UK pensions:

I very much agree with that conclusion.

Mr. Paul Goodman (Wycombe): I am grateful to the Minister for giving way because it allows me to put on the record the fact that my hon. Friends the Members for Sutton Coldfield (Mr. Mitchell) and for South-West Bedfordshire (Andrew Selous) and I voted for an amendment to that report—which was not agreed—to conclude that there is a pension crisis.

Maria Eagle: That is an interesting point, and I am glad that the hon. Member for Sutton Coldfield

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(Mr. Mitchell) is in his place. He often takes an interest in such debates and I may refer to some of his previous activities later.

I do not assert that there are no challenges or problems facing pension provision in this country. That would be nonsense. Indeed, we would hardly have just conducted the biggest and most widespread consultation on the future of occupational pensions in 30 years if that were the case. But we work from the premise, as the Committee says, that the system is basically sound and must be made to work better and more effectively. So the Green Paper does not advocate starting with a blank sheet of paper and designing a system from scratch that is fundamentally different from the one we have now. Nor, to my knowledge, do Opposition parties suggest that we should do any such thing.

I make a plea to hon. Members to deal calmly and sensibly with the challenges that we face, so that we can get our pensions framework in a fit state to ensure stability in the future. That is what is needed above all. Pensions are a long-term business and the policy changes that we introduce now must be capable of lasting for years, not just satisfying the headline writers tomorrow, as the press releases from the hon. Member for Northavon are designed to do. Headlines only last for a day. The pension framework we choose must last for decades if it is to do its job.

When my right hon. Friend the Secretary of State for Work and Pensions made his statement to the House on the Green Paper, he identified three challenges that we have faced since coming to office in 1997: affordability, pensioner poverty and expectations. Rising longevity compounded by a trend towards early retirement has challenged the affordability of pension systems across the industrialised world.

However, the UK is in a stronger position to meet this demographic challenge than most other developed countries, not only because our dependency ratio is expected to increase by half as much as the European average, but because our system is much more affordable and we are concentrating on making it fairer.

Our commitment to alleviating pensioner poverty is vital, given the legacy that we inherited. The 18 Tory years that preceded this Government saw a vast widening in income disparity between the wealthiest and poorest of our pensioners. The income of the bottom fifth of pensioners in those years rose by 34 per cent., but that of the top fifth by 80 per cent. One in three of our pensioner population—that is, 3.5 million people—were living in poverty during those years.

That was not accidental, but the result of policy choices. The previous Tory Government cut the value of the basic state pension by £20 a week in real terms, slashed the value of SERPS not once but twice, and perpetrated the "horrors" of pension mis-selling—a phrase that is not mine but which was used by the hon. Member for Havant (Mr. Willetts) in a recent speech. It is an apt phrase for a fiasco that cost £13.5 billion, which still haunts the industry's reputation today. I therefore do not apologise for this Government targeting pensioner poverty. To accept the income distribution among pensioners left to us by the Opposition would have been absolutely wrong.

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The other challenge may be characterised as the rising expectations of our citizens, as they reach an ever longer and healthier retirement, to continue with the lifestyles that they have forged. The Green Paper highlighted that perhaps three million such people are not saving enough for their retirement, and that many millions more may not be saving enough to provide the pensions that they want. Additionally, it drew attention to the pressure facing occupational schemes and the much-publicised spate of closures and changes in provision in the private pension sector.

During our Green Paper consultation, we held 35 events. About 2,000 people took part in them, and we have received more than 800 written responses. We are grateful to all the many groups who have shown the interest and taken the time to contribute. They include unions, employers, members of the public, actuary and consultancy firms, voluntary and consumer groups, the occasional political party think-tanks, financial institutions and representatives of industry bodies. All have played their part in helping us to build the long-term solutions that will enable people to work longer and save more for a prosperous retirement.

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