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Vera Baird: For all the reasons set out by my hon. Friends, I welcome the Bill. At this time of night, I am not going to repeat what has already been said, especially when the Secretary of State is buying the drinks. At least I hope that he is, but he is frowning now.
The Bill takes another step in the Government's march to improve pensions. The Committee stage was pleasant and a good learning experience for many of us, very much including me. The Minister for Pensions
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was knowledgeable and well briefed—a bipartisan compliment, because one cannot be well briefed without an excellent team of advisers, which we clearly had.
The hon. Member for Eastbourne (Mr. Waterson) got it in the neck many times for reading other people's briefings, but to be fair, he always admitted that he was doing so and never pretended otherwise. His contributions were most welcome. Unfortunately, the hon. Member for Northavon (Mr. Webb) missed the references to him made by my hon. Friend the Member for Cardiff, West (Kevin Brennan). He will read them with interest in Hansard tomorrow. He is a bit of a worrier, but he is undoubtedly extremely knowledgeable. His contributions were also super.
I was pleased to raise, within the ambit of debating the Bill, the real problems that women still face in connection with pensions. Women's organisations such as Fawcett, as well as bodies like the Equal Opportunities Commission and many others, were very pleased when my hon. Friend the Minister for Pensions agreed to produce a report on women and pensions. His offer did not have to be wrenched out of him, because he made it very willingly.
Indeed, the result is rather better than I had tried to achieve with my new clause. I had hoped only to get a report every year after the Bill had been introduced. If my new clause had been accepted, it would have been placed in a part of the Bill that need not have been brought into force by any particular date. By contrast, my hon. Friend the Minister for Pensions has made a clear undertaking to produce a report on women and pensions next year.
That is an essential minimum. The Bill's enhanced security and regulation with respect to pensions will benefit everybody, but it contains nothing that directly addresses the pension problems faced by women.
I readily accept that the Bill is not like Santa Claus' sack, containing a present for everyone. However, 64 per cent. of pensioners are women, who receive on average only 57 per cent. of the income enjoyed by the average male pensioner. It is imperative that we put an end to that situation soon, and that we ensure that presents—if that is the right word—are given to women pensioners.
I and others will therefore continue to press every week for progress in respect of women's pensions. In that way, I hope to ensure that the first report from my right hon. Friend the Secretary of State is a good one. However, I have got used to the team with whom I served in Standing Committee, and I expect that I will serve with them again. When I do, I hope that it will be to consider the women's pensions Bill.
5.26 pm
Miss Anne Begg (Aberdeen, South) (Lab):
I welcomed the Bill on Second Reading, when I pointed out that it had one glaring omission. I tried to speak in yesterday's debate on new clause 34, but my hon. Friend the Member for Hamilton, South (Mr. Tynan) and I were the only two hon. Members not to be called before the debate ended. I was therefore keen to contribute today, as I want to thank the Government for listening to the argument put forward on Second Reading by me and many others—that the Bill offered nothing for people who would not be covered by the new pension protection provisions.
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That omission was a clear injustice, as people would not be covered when the company for which they worked or the pension scheme to which they belonged had been declared insolvent. I accepted the Government's argument that the PPF could not be made retrospective, but I said on Second Reading that I hoped that the Government would come up with something to put matters right. I was not quite sure what that something would be, but I am delighted that the assistance scheme that the Government came up with is to be put in place.
Having constituents who are faced with a problem really helps to concentrate one's mind. The problem with pensions makes it clear why Members of Parliament should represent a distinct constituency. The phrase "restored the link" has a different resonance for my hon. Friends the Members for Hamilton, South and for Glasgow, Anniesland (John Robertson). They think that it refers to restoring the link for MSPs in the Scottish Parliament, for which they have argued very forcefully throughout the passage through the House of the Scottish Parliament (Constituencies) Bill.
The changes that have been made to the Bill show that constituents can exert political pressure on their Member of Parliament to take up their case with Ministers. As many hon. Members have noted, that process works. In my case, pressure was brought to bear by members of the pension scheme run by the Richards textile company which, before it went into insolvency, used to be based in the constituency of my hon. Friend the Member for Aberdeen, Central (Mr. Doran).
Those pension scheme members live all over Aberdeen and the north-east of Scotland. It was their plight that alerted me to the problem that the Bill addresses by setting up the PPF.
Much of what is in the Bill, especially the PPF, would not have been necessary if it had not been for the failures of the Pensions Act 1995. The hon. Member for Eastbourne (Mr. Waterson) praised the work of Dr. Ros Altmann, and she did a lot of work in persuading the Government that the pensioners in question should be looked after, but she also laid the blame for the problems that we now face with insolvent pension funds at the door of the 1995 Act. I was open-mouthed with amazement at the audacity of the Leader of the Opposition in taking credit for the solution to a problem caused by legislation passed by the Government of whom he was a member.
This Government have made a habit of picking up the pieces of the failed legislation of the previous Government or setting right problems that they failed to address. We all know about the compensation scheme for miners, but there is another scheme, which has not had the same airing in the House but is very important for my constituents, and it provides compensation for those who were made redundant as a result of the cod wars. Many of my constituents who lost their jobs as fishermen at the time of the cod war have received compensation. Indeed, the total is some 500 across the north-east of Scotland; that is another example of the Government making right something that the previous Government refused to do.
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Several hon. Members have mentioned restoring the link. I would not wish the hon. Member for Eastbourne to be accused of misleading the House, but in a reply to a query by my hon. Friend the Member for Hamilton, South (Mr. Tynan) as to whether any of the hon. Gentleman's constituents would lose out as a result of the Opposition's policy on restoring the link and the freezing of pension credit, he replied that they would not. Well, perhaps they would not, in strict terms, because under the Opposition's policy the pension credit would be frozen. However, what is often forgotten in the argument about restoring the link is that not all pensioners qualify for the national state pension. Some 1.5 million pensioners have only a partial contributions record and therefore receive a part of the pension or do not qualify at all. Restoring the link would do nothing for those poorest of pensioners. If the Opposition froze the pension credit, it would mean that that group of people—and those who receive only the basic state pension and nothing else—would have their income frozen for many years into the future. In other words, they would have no increases in income, whether the pension was linked to inflation or earnings. For those who made no contributions and therefore had no state pension, their income would never go up beyond the present level of the pension credit, if the hon. Gentleman had his way and the pension credit was left to wither on the vine. It is disingenuous to argue that restoring the link will help the poorest pensioners, because it would not.
The Bill is to be welcomed. It has many good aspects that have been well debated this afternoon. I add my congratulations to the Government on filling the glaring hole in the original Bill, and I hope that it comes out of the other place an even stronger Bill.
5.34 pm
Mr. George Osborne: I thought that the hon. Member for Aberdeen, South (Miss Begg) was a little ungenerous. To say that it was all the fault of the 1995 Act when that Act was introduced to deal with the fraud of a Labour MP, Robert Maxwell, and had the support—led by the previous Member for Glasgow, Anniesland—of the then Labour Opposition, is for the hon. Lady to forget her history.
In general, the debate has been good. My job is to wind it up, so I have to utter the usual pleasantries—as everyone else has done. As the person in the parliamentary Conservative party who is, I hope, furthest from my pension, I am not sure why I was put on the Bill's Committee, but I have enjoyed being understudy to my hon. Friend the Member for Eastbourne (Mr. Waterson) who, with my hon. Friend the Member for Havant (Mr. Willetts), knows a hell of a lot more than I do about pensions—I hope you will excuse my language, Mr. Deputy Speaker. My hon. Friend the Member for Eastbourne conducted proceedings in a relaxed and informal style, only occasionally rising to the sedentary interventions of the hon. Member for Greenock and Inverclyde (David Cairns).
I have lost count of the number of Ministers I currently shadow—about five or six—but the Minister for Pensions and the Under-Secretary of State for Work and Pensions, the hon. Member for Gravesham (Mr. Pond), are among my favourites. I congratulate
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the Under-Secretary as I think this is his first Bill as a Minister. He did extremely well. The Minister for Pensions managed to get a large number of song titles into his speeches in Committee. If he was doing it for a bet, he must have won.
I pay tribute to the hon. and learned Member for Redcar (Vera Baird) and the hon. Members for Glasgow, Anniesland (John Robertson) and for Hamilton, South (Mr. Tynan) who played an active role in Committee. Normally, it is traditional for Government Back Benchers to sit in Committees without taking part, but those three certainly participated and I congratulate them.
I also congratulate my hon. Friend, or rather the hon. Member for Cardiff, West (Kevin Brennan)—he was a friend during some of our Committee tactics. It is not generally known that the hon. Gentleman, the hon. Member for Greenock and Inverclyde and I share a woman. Her name is Linda Sanchez and she is a Congresswoman. The Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle), may be interested to learn that she was the first sister of a Congresswoman to be elected to Congress. The hon. Gentlemen and I met her in Boston and, through sitting around the bar talking to her about American politics, got to know each other, so it has been a pleasure to serve on the Committee with them.
Someone should write a book about what the hon. Member for Cardiff, West has done over the past year or two. He ran a textbook Government Back Bencher campaign, and did not wholly destroy his prospects of ministerial promotion in the process, which is quite a feat.
At the beginning of the debate, the Secretary of State said that the Bill would transform pension security. That is certainly needed, given the halving of the savings ratio and the kind of things that the chairman of Aviva said earlier this week. In The Financial Times, he said:
"We will have a generation of elderly people coming soon who will have a hard time to live above the poverty line. No one should be proud or pleased with that scenario."
Aviva is the largest insurer in this country and is seeing faster rates of savings growth in many continental European markets than in the UK. A report from JP Morgan Fleming found that the number of defined benefit schemes that had closed or been restricted to new staff had doubled over two years.
Will the Bill transform pension security? It would be churlish not to concede that the PPF is an important step forward in providing that security. My hon. Friend the Member for Eastbourne asked important questions in Committee and also—as did my hon. Friend the Member for Sevenoaks (Mr. Fallon)—in the debate about how the risk-based levy is to work and how moral hazard will be dealt with. Those questions need answers. The Government—whichever Government are in power—will have to play catch-up to close loopholes in the legislation as they emerge.
There were also questions about what kind of guarantee is behind the PPF. The Minister for Pensions was careful not to give an answer—as indeed was my hon. Friend the Member for Eastbourne. I suspect that there is a political guarantee: if the whole PPF goes bust, the Government in power at the time will be in a difficult position if they do not support it.
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Throughout our deliberations, the elephant in the room was the 60,000 pensioners who had lost all or part of their pension. The elephant emerged at the last moment on Report. It was extraordinary that the Secretary of State gave over half his speech to that great thing, which was only introduced at the very last moment.
Perhaps if such compensation had been proposed earlier, we could have properly gone through some of the detailed issues raised, not just by Opposition Members such as my hon. Friends the Members for Bexhill and Battle (Gregory Barker) and for Sevenoaks, but by the right hon. Member for Birkenhead (Mr. Field) and, indeed, the hon. Member for Hamilton, South, who raised legitimate questions about the scope of the compensation and whether a group of very aggrieved people will receive no assistance having been given, if they watched the news during the past few days, some hope and an impression that they would do so. Time will tell.
I welcome a couple of other things in the Bill. Of course, I welcome the acceptance of new clause 23. Unfortunately, I was not in the Chamber to debate that yesterday, but it was kindly called the Tatton amendment, although it was proposed by an outside organisation and accepted by the Government. I also welcome the assurances that the Minister for Pensions gave yesterday about the amendments that we moved on the involvement of pensioner members in respect of member-nominated trustees. He said that the Government would take a close look at that issue and possibly table an amendment in another place. That would be good news to the Occupational Pensioners Alliance, and I hope that the Minister can live up to his promise.
I should note in passing that the hon. Member for Bradford, North (Mr. Rooney) made an important contribution to the debate when he referred to the need for trustees to have sufficient knowledge and training to discharge the important responsibilities that we place on them.
Pension provision has been undermined not only by the security issue, but by the regulatory burden and costs on schemes that have accumulated under successive pensions legislation. I fear that the Bill will add to that burden, rather than reduce it, despite what the Government's rather optimistic regulatory impact assessment says. The new pensions regulator will cost 25 per cent. more than the previous one, and preparing the statement of funding principles will cost more than £16 million more than producing the minimum funding requirement, even according to the Government's estimates.
We will find out whether the statement of funding principles turns out to be the benchmark. There is certainly a view in the pensions industry that the basis for setting the PPF risk-based premium will, in effect, become the new minimum funding requirement because a well-run pension scheme will not want to pay a risk-based levy. Over time, we will discover whether that is the case. Of course, there is the cost of the PPF levy itself.
Additional costs will be placed on the industry, so despite what the Government say in their regulatory impact assessment, it is perhaps not surprising that the
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Association of Consulting Actuaries found, after conducting a survey in advance of the debate on Third Reading, that
"a majority of firms feel that"
"will decrease occupational pension scheme coverage. Fewer than 1 in 10 firms feel that the measures will improve pension coverage. Close to 9 out of 10 firms say that the Bill's measures will either add to costs . . . or make no difference . . . as against the Government's claims that there will be £130 million savings."
That is what the industry says; it has certainly been our fear, and we have tried to make that clear as the Bill has been considered in Committee, on Report and now on Third Reading. The proof of the pudding will be in the eating, and the test will be whether more people save for their retirement. Will the closure of occupational schemes slow down, halt and perhaps even reverse? As my hon. Friend the Member for Eastbourne said, will confidence in pensions be restored? We will see.
5.44 pm
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