Pensions Bill

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Malcolm Wicks: We have had a useful debate. In a way, there are two kinds of issues. The one that I will address second is the relevant one. The other is the broader context of working life and sensible pension age policy. I must not get too far into that wider debate, because there have been and will be other occasions for it. The Government's general position is that we need to create a society and an economy where people have opportunities to work longer than some are at present able to do. There is a range of issues about how we achieve that that are not relevant to the Bill.

We think that the idea that many civil servants and public servants should get their occupational pension at the age of 60 is outmoded. One should look at the history books to see when it might have come in, but it was in a much earlier era when life expectancy was different from what it is in the 21st century. We think it reasonable to say that, in the future, the notion that one should work up to the age of 65 in the public services should not be regarded as extraordinary in a society where people would, at that stage, have a life expectancy of about 20 years. That will increase as the century progresses. That will have to be done on a phased basis, because it is a matter for discussion with different public services and it will be phased in with regard to different cohorts.

I hope that hon. Members will not think that that is an extraordinary notion. Indeed, given that many in the private sector are not able to draw their occupational pension until 65, there is an issue about public versus private if we are to maintain public confidence in our public services.

Although the hon. Member for Eastbourne says that we expect people to work longer, I do not think

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that we are in a society and an economy where people will be working for more years than their parents or grandparents did. For perfectly good reasons, such as school-leaving age, further education and higher education, their entry into the labour market is altogether different from that experienced by their grandparents. Many people will not properly enter the labour market with their first major job until they are 20 years or a quarter of a century into their life. One has to be careful before jumping to the conclusion that people will be working longer. That is a subject for another debate, but it has been raised by the hon. Members for Eastbourne and for Northavon and I thought that I should address it briefly.

On the specifics of the amendments, we are talking about a much narrower, albeit important, subject. We are talking about when someone works in the public services—we have referred to firefighting and crime fighting—but leaves before the usual retirement age, presumably to pursue another career. If people are sick, different issues are involved, but if they leave to get another job, does it make sense for us to say of future rights that will be accrued—not past rights—''No, you should receive your pension at 55'' or at whatever age applies to the scheme? It is much more sensible to say, ''No, you will get that part of your pension when you are 65.''

The hon. Member for Northavon has properly raised the issue again with me. The rights of members are fully protected under current legislation. The amendment would not alter the level of protection in respect of raising the public service pension age; it will be in respect of future service only. The rights of a person who was a firefighter or a police officer earlier in his career will be protected. Obviously, we must be careful about making changes and thinking through the implications. The debate has been useful, but the provision is not that revolutionary and, in terms of future rights, it is a matter of common sense about how we have regard to our emerging demography in the 21st century and how we adjust public service pension rights to that new demography.

Mr. Webb: I am not sure what I was doing that was slowing down the Minister. I want to know about the transition. The new clauses applies straight away to future service. Let me get my head around the matter: I could be aged 55, and anticipate working for a further five years and drawing a pension at 60. The coming into force of the Bill means that I cannot draw the pension in respect of those final five years at 60, but only at the age of 65. How does a person divide the service accrued to date, with the service accrued in those final five years in a final salary scheme, when those final five years are the time in which his salary could increase quite a lot and affect the service that he has earned in his entire life? In one sense, that is a technical question, but we all know that those last few years of service could add a heck of a lot to a person's pension rights. Under the Bill, a person could find, with very little notice, that he could not draw a big slug of his pension rights for a further five years. It is all very well saying that the matter relates to future service, but a fairly short-term future service might

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have a big impact on a person's pension. Are we giving people fair warning of such matters?

Malcolm Wicks: I understand the question, but as the matter has excited more interest on a Thursday afternoon than I had anticipated, it would be helpful if I write to the hon. Gentleman and other hon. Members about the provision and explain where we are generally going in terms of public service pension ages. I shall try to address the specifics of how it would affect individuals in different circumstances. The hon. Gentleman asked a perfectly proper question and that is how I wish to deal with it.

Mr. Webb: I simply wish to advise you, Mr. Griffiths, that I want us to have a Division on the matter. I am not being churlish because I look forward to the Minister's explanation. However, until we receive it we are being asked to accept something about which the Committee has not received a full or adequate explanation. Such a provision could have a big impact on hundreds of thousands of constituents. We cannot nod it through in the expectation that a letter will satisfy us.

Question put, That the amendment be made:—

The Committee divided: Ayes 11, Noes 2.

Division No. 8]

Baird, Vera Cairns, David Cunningham, Mr. Jim Dean, Mrs. Janet Edwards, Mr. Huw Keeble, Ms Sally
Khabra, Mr. Piara S. Moran, Margaret Pond, Mr. Chris Robertson, John Wicks, Malcolm

Price, Adam
Webb, Steve

Question accordingly agreed to.

Amendments made: No. 544, in

    schedule 12, page 233, line 18, in column 2 at end insert—

    'In section 132, the words from ''or the voluntary'' to third ''requirements''.'.

    In section 181(1), the definition of ''voluntary contributions requirements''.

No. 546, in

    schedule 12, page 233, line 18, in column 2 at end insert—

    'Section 148(5)(ba) and (bb).

    Section 149(1), (1A) and (1B).

    In section 149(3)—

    (a) paragraph (ba), and

    (b) paragraph (d) and the word ''and'' immediately preceding it.

    Section 149(8).

    In section 151(1), paragraph (c) and the word ''and'' immediately preceding it.

    In section 151(3)—

    (a) paragraphs (ba) and (bb), and

    (b) in paragraph (c) the words ''any of paragraphs (a) to (bb).'.

No. 545, in

    schedule 12, page 233, line 21, in column 2 at end insert—

    'In Schedule 9, paragraphs 5 and 7(2).'.

No. 102, in

    schedule 12, page 233, leave out lines 23 and 24.

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No. 576, in

    schedule 12, page 233, line 33, in column 2 at end insert—

    'In section 22(1)(b), the word ''or'' at the end of sub-paragraph (i).

    In section 25(2), the words from ''but'' to the end.

    Sections 26A to 26C.'.

No. 570, in

    schedule 12, page 233, line 43, in column 2 at end insert—

    'Section 31.'.

No. 103, in

    schedule 12, page 233, line 53, column 2, at end insert—

    'In section 71A(4), paragraphs (f) and (g).'

No. 577, in

    schedule 12, page 234, line 16, in column 2 at end insert—

    'Section 118(3).'.

    —[Malcolm Wicks.]

Malcolm Wicks: I beg to move amendment No. 403, in

    schedule 12, page 234, line 27, after '21(3)''' insert 'and ''78, 79, 80(4)'''.

This is a minor, technical amendment that relates to the dissolution of the Pensions Compensation Board.

Amendment agreed to.

Amendments made: No. 578, in

    schedule 12, page 234, line 47, in column 2 at end insert—

    'Section 47(1), (2) and (4).'.

No. 547, in

    schedule 12, page 234, line 47, in column 2 at end insert—

    'Section 54.'.

No. 548, in

    schedule 12, page 234, line 53, at end insert—

    'The repeals in sections 148, 149 and 151 of the Pension Schemes Act 1993 (c.48) relate to those provisions as amended by section 54 of the of the Child Support, Pensions and Social Security Act 2000 (c.19) to the extent that those amendments have been brought into force for the purpose of making regulations and rules.'.—[Malcolm Wicks.]

Schedule 12, as amended, agreed to.

Clause 244

Pre-consolidation amendments

Question proposed, That the clause stand part of the Bill.

Malcolm Wicks: The clause allows the Secretary of State to modify provisions of the pensions legislation for the purposes of consolidation of that legislation; that is set out in subsection (1). The Green Paper made clear our commitment to consolidate the pensions legislation as soon as practicable. It is our intention that, after the Bill is enacted, the Law Commission should prepare a consolidation of the pensions legislation, consisting principally of the primary legislation mentioned in subsection (1). Where the draftsmen—or women—find provisions of that legislation that require amendment in order to assist the process of consolidation, we shall be able to give effect to those changes by order for that limited purpose.

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Question put and agreed to.

Clause 244 ordered to stand part of the Bill.

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