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Rob Marris (Wolverhampton, South-West): Today's Government response to the Select Committee report refers to the £13 billion that tax incentives are costing the Government in encouraging people to save for pensions. The amount of money saved for a pension and the vehicle through which it is saved are key to security in retirement, yet there is precious little evidence—including from my right hon. Friend's Department—that tax incentives encourage saving, rather than merely redistributing savings. What research is his Department undertaking into tax incentives for retirement saving and how they might be changed?

Mr. Smith: My hon. Friend makes a good point, and an important conclusion of Ron Sandler's report was that the main effect of incentives is to redistribute saving, rather than to add to the total level. We need to make people more aware of the benefits of long-term saving, and of the existing considerable incentive in the system—my hon. Friend mentioned the £13 billion—for saving through a pension. That is why informed choice, our information campaign and our work with the employers taskforce to identify and promote good practice in company pension provision are so important.

Mr. David Heath (Somerton and Frome): Scattered across the country, including my constituency, are Maxwell pensioners who suffered first the theft of their pensions and now further reductions in entitlements under the restructured scheme. Do today's proposals contain anything that will help in what is a clearly

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defined special case in which the Government have directly intervened? If not, can the right hon. Gentleman look into the matter and introduce some proposals?

Mr. Smith: As I said earlier, I have Maxwell pensioners in my area and I have met them in my constituency capacity. As I pointed out, today's proposals look to, and provide protection for, the future; I am not holding out the prospect of retrospective effect. Of course, the Maxwell pensioners' situation arises from an agreement made between the trustees and those who were providing funds, superintended by Lord Cuckney. The matter was dealt with explicitly on a scheme-by-scheme basis.

Mr. Neil Turner (Wigan): I congratulate my right hon. Friend on his statement, the contents of which I welcome, particularly the pension protection fund. He mentioned the problems that we inherited through mis-selling in respect of the state earnings-related pension scheme and private pensions, which hugely undermined public confidence in the pensions industry. Does he agree that the insurance scheme that he referred to will ensure that ordinary people can have full confidence that, when they put money into pension schemes, they will get it back in the form of a pension for the rest of their lives?

Mr. Smith: I thank my hon. Friend for his comments. He is right: when implemented, the proposals will ensure better protection, which is an important reassurance to working people and an important incentive to pension saving.

Mrs. Ann Cryer (Keighley): I welcome my right hon. Friend's statement, but I ask his Department regularly to remind women that it is in their interests, regardless of the reliability and generosity of their husband's pension, to build up their own occupational pensions. If widowed, they may have to choose between a lonely old age with a widow's pension, or remarriage and the loss of the widow's pension to which they indirectly contributed through child care.

Mr. Smith: My hon. Friend makes a very important point. Of course, in addition to what we have already done through the extension of the state second pension and the introduction of the pension credit—measures that themselves greatly advantage women—today's proposals offer further help. In summary, proposals for those who have been in jobs for a short time will disproportionately benefit women, and the simplification of the arrangements for pension splitting on divorce will enable more women to benefit, in pension terms, from their divorce settlement. Moreover, having listened to consultation, we have decided to retain survivors benefits—a decision that is of enormous consequence for women.

Miss Anne Begg (Aberdeen, South): I add my voice to those who have welcomed today's statement. The pension protection fund obviously applies to funds that got into trouble because the employer became insolvent,

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but will it also apply to funds that got into trouble because they were badly run and therefore could not meet their obligations?

Mr. Smith: Where questions of fraud are involved, our proposals will strengthen protection from 90 per cent. to 100 per cent. On cases that do not involve fraud, I shall write to my hon. Friend.

Julie Morgan (Cardiff, North): I welcome my right hon. Friend's proposals, but I express my deep disappointment that they do not appear to cover the steel workers from Allied Steel and Wire in Cardiff and Sheerness, many of whom are my constituents. Will he look at a possible way of helping those people, who invested their life savings in pensions and are now likely to get nothing? Is there any possibility that they might benefit from this legislation if, by the time that it is introduced, their pension fund has not been wound up?

Mr. Smith: I understand how my hon. Friend and her constituents feel about this issue but as I have said, nothing could be crueller than for me to say that this legislation will offer them help when I do not envisage at this stage that it will apply in the way that she advocates. Every hon. Member knows of the difficulties in introducing such proposals and then applying them retrospectively—not the least of which is the very difficult question of where we draw the line. I am afraid that we will always find tragic cases that fall the wrong side of any line that we draw.

Mr. Andrew Miller (Ellesmere Port and Neston): The Pensions Act 1995 failed to protect my constituents, who suffered through the scam undertaken by H. H. Robertson. Ministers promised that they would learn lessons from that, and everyone will undoubtedly welcome the fact that it is clear from today's statement that Ministers have indeed done so. However, I want to pursue a point made by my right hon. Friend the

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Member for Birkenhead (Mr. Field), who must have had H. H. Robertson in mind. If my right hon. Friend the Secretary of State is unable to levy orphan funds, he might be able to borrow from them. Doing so would be cheaper than the cost of the benefits that the state has to pay people as a result of fund failure.

Mr. Smith: I hear what my hon. Friend says, and I said that I would engage with sensible suggestions. The prospect of finding money at no cost without depriving people of their rights can be seductive, but such a prospect does not always stand scrutiny and further investigation. We have to be careful in this area.

Mr. Harry Barnes (North-East Derbyshire): The statement contains some welcome proposals, but they arise from a wave of recent and current problems. For people whose funds have been hit, are not the only avenues open to them an appeal to the Office of the Pensions Advisory Service or the pensions ombudsman, which have very limited powers to assist them? Members such as my right hon. Friend the Member for Birkenhead (Mr. Field) have suggested an additional avenue for tackling the problem of firms that have gone into administration, such as Coalite in Bolsover. Should not the pension fund itself be a first-line creditor, so that its funds are protected? My hon. Friend the Member for Bolsover (Mr. Skinner) would undoubtedly have been present for this statement if he had been around and about, and I assure the Secretary of State that he has been pursuing this issue with vigour through other means.

Mr. Smith: I thank my hon. Friend for welcoming the statement. His comments underline the importance of taking this opportunity to rebuild the pensions partnership, so that all parties—employees, the financial services industry and, yes, employers as well—meet their obligations. The proposals announced today include measures to strengthen as well as clarify the role of the pensions ombudsman, and plans to introduce a newly proactive regulator who could investigate the sort of problems that my hon. Friend describes.

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Point of Order

1.40 pm

Mr. Eric Forth (Bromley and Chislehurst): On a point of order, Mr. Speaker. You are the custodian of the rights of the Opposition parties as well as those of Back Benchers, and you will be aware that, on page 271, Erskine May says:

That raises a long-standing issue in the House: protection—so far as it is possible these days—for Opposition parties. You will also know that it is a convention beyond that Standing Order that Governments do not bring forward Government or ministerial statements on Opposition days. However, on at least two other recent occasions as well as today, the Government have done precisely that.

Mr. Speaker, you have generously and properly allotted considerable time to today's important statement to allow Members to express their concerns and those of their constituents. However, the Opposition's time has now been reduced as a result of the Government statement, which, by any reckoning, could have been given on any number of days before or after today. What can be done to protect the Opposition from that sort of casual action, which eats further into the time available to hold the Government to account? I hope that you will agree that that cannot be allowed to go on.

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