Previous SectionIndexHome Page

Kevin Brennan: As we near the end of the debate, will the hon. Gentleman finally tell us whether he and his fellow Front Benchers believe there is a moral case for compensation or assistance for these workers?

Mr. Waterson: The hon. Gentleman has been the intervention king today. What we have not heard from him are his ideas about what should happen. Let me remind him that the official Opposition have taken this first opportunity since the publication of the Pensions Bill to call a debate in our Opposition time.

Although the country faces an unprecedented crisis in savings and pensions, there is nothing in the Bill to encourage saving for retirement. Although final salary schemes continue to close at an alarming rate—I have just given one example—there is nothing in the Bill to encourage an employer to keep a scheme open, let alone open a new scheme. Although some 60,000 people have lost all or most of their pension entitlement in the last few years, there is nothing in the Bill to compensate them or even give them the hope of compensation. Meanwhile the Government, who for the moment are in charge of the issue, stand by impotent while the pensions crisis rages. As my hon. Friend the Member for Havant pointed out, it is as if there had been a household fire and, rather than offering to call the fire brigade, the Government merely offered insurance to cover the next fire.

Our motion rightly accuses the Government of inaction in the face of the pensions crisis, and I commend it to the House.

6.48 pm

The Minister for Pensions (Malcolm Wicks): I agree that this has been a wide-ranging debate, and I think that it has been an important one. The pensions question is rising on all the agendas that count in our society, and rightly so. In fact, it is really a series of

24 Feb 2004 : Column 245

questions. When I reflect on the issues that have been discussed, I conclude that part of the pensions question has been determined by the past, that we need to address the present, and that we must also have a strong regard to the future.

The incomes of today's pensioners, many of them very poor and in their 80s and 90s, are largely determined by their social circumstances, education and family and employment histories dating from the 1920s and 1930s. The position of today's elderly women, in particular, needs to be seen in that context.

I shall say something about the pension credit later, but in looking to the future we are talking about incomes that today's young people will retire on in the middle decades of this century. They will experience an economy, educational opportunities, careers and family patterns that are radically different from those experienced by their grandparents or great-grandparents. So in some respects, the task of the Government and of Parliament is to understand and respond to a social and economic history that stretches over some 120 to 130 years.

We have had some notable contributions and interventions during today's debate: from my Front-Bench colleagues; from my hon. Friends the Members for Coventry, South (Mr. Cunningham) and for Wolverhampton, South-West (Rob Marris); and from the hon. Members for Bournemouth, West (Sir John Butterfill) and for Grantham and Stamford (Mr. Davies). All were noteworthy in their own way. I always enjoy—I had better not say in particular—the contributions of the hon. Member for Bournemouth, West, who, as has been acknowledged, is a great expert on these issues. As he pointed out, he largely welcomes the Pensions Bill, contrary to what one of his Front-Bench colleagues said. That colleague may want to take note of his hon. Friend in that respect. Indeed, many others have also welcomed the Bill.

In a slightly more self-interested way, we took note of the fact that the hon. Member for Bournemouth, West, who is chairman of the parliamentary pension fund trustees, said that he and his fellow trustees are sitting a learned institute's pensions exam. We were all very impressed by that. I noticed that from a sedentary position, my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) said that he hopes that they pass it.

I shall not discuss in detail our strategy for the future because there is not sufficient time, but let us remind ourselves of some salient points. Although the concern of Members on both sides of the House has understandably concentrated on groups of existing workers who are in difficulties, we need to look at the future and at the pension protection fund. To dismiss this as insurance tomorrow is a trivial comment, if I may say so. I have drawn on the experience of a visit to Washington. I learned from the Pension Benefit Guaranty Corporation, which has widespread political and other support in the United States—from industry and from unions—and a track record of more than 25 years. I believe that if we can establish the fund, subject to the will of this House, it will become a permanent part of our pension and social security architecture, and will be seen one day as a major social policy innovation

24 Feb 2004 : Column 246

introduced by my right hon. Friend the Secretary of State. It will offer real guarantees for the future. When company schemes go bust, existing company pensioners will have 100 per cent. of their pension guaranteed, and scheme members of working age will have 90 per cent. guaranteed.

I put it to the House that this is a policy worth supporting and worth getting right. Our deliberations in Committee will be very important in this respect, and we will consider all useful contributions. The hon. Member for Northavon (Mr. Webb) said that he will enter into such discussions in a spirit of consensus, and I welcome that. We will not have a monopoly of wisdom on the details; we need to get things right.

The policy will be funded by an annual levy and from the income of the assets that the fund takes over from company pension schemes. Although in the first year there will be flat-rate levy of only 50 per cent. of the eventual levy, within a year we will roll out the risk-based levy, which will be at least 50 per cent.—I repeat: at least 50 per cent.—of the whole levy. We are very determined to have a risk-based element, contrary to what was said in a knee-jerk press release from the Liberal Democrats, which was published the day before the Bill's publication. I was about to say that the Liberal Democrat in question was either foolish or prescient, but he cannot have been the latter because he got it wrong.

I cannot add to what my right hon. Friend said about any assistance that may or may not be forthcoming to those groups of workers who are currently affected. It is not sensible for the Opposition to mock the phrase "not holding out false hope", because I believe that it would be foolish to do so. We are in a very difficult position, in which only the most unwise voices somehow think that the state can nationalise all risk. It cannot, but we are examining sensible suggestions and much work is going on.

In common with other Members who have met groups of workers, the ministerial team, which has met a large number, cannot fail to be moved by their plight when these honest and decent people speak about the contributions that they have made, sometimes for 40 years. They often speak in a dignified and quiet way about the effect on their marriages and their health. No one can fail to be moved and the House will have welcomed our debate on those important points.

Mr. Waterson: I take the Minister's point about the "false hopes" argument— I thought that I had already dealt with it—but when he says that much work is going on, can he give the House some idea, in the dying minutes of the debate, what sort of work is going on and to what it is directed?

Malcolm Wicks: Now is not the time to go into the detail, but we are examining the problems very carefully. As my right hon. Friend said, when we reach a conclusion one way or another, we will come before the House.

I was asked about Equitable Life and the Penrose inquiry. All I can say is that Treasury Ministers have made it clear that they intend to publish the report in full as soon as possible. They will keep the House fully informed.

24 Feb 2004 : Column 247

Although the pension protection fund has gathered much interest around it, in some respects of equal importance in the Bill are proposals for a pensions regulator. By targeting the badly run and highest risk schemes, the regulator will enable well-administered and secure schemes to continue without unnecessary regulatory burden. The hon. Member for Northavon spoke about the importance of having clear requirements on information, and we can deal further with that important matter in Committee. We have also set out proposals for full buy-out and will have an employer taskforce to set out ideas about good practice in occupational pension schemes.

One or two Members referred to another aspect of the pension question—pensioner poverty. When we came into power in 1997, the state pension system was lacking in investment and was in a state of disrepair. Many people were poor, particularly older elderly people and often women. Indeed, single pensioner women were expected in 1997 to exist on £68.80 a week. By introducing the minimum income guarantee and now the pension credit, we have increased that income in real terms by one third, which is important. We have also reduced pensioner poverty by about 60 per cent. since 1997.

The Conservative proposals to place all the emphasis on raising the basic state pension—the Conservatives are now born-again earnings linkers, rather too late in our history—represent a hole that they are digging for themselves. It will mean that the poorest pensioners on pension credit will receive less—or little more—than the better-off half of pensioners. That is the logic of their proposals. Indeed, that was admitted a year ago by no less than the then shadow Chancellor, now the leader of Her Majesty's Opposition. It was an honest remark and the current shadow Secretary of State needs to heed his leader's wise words when he said:

under the Tory proposals. That is the logic of the scheme.

Next Section

IndexHome Page