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Mr. Charles Clarke: On a point of order, Mr. Deputy Speaker. In the light of the House's decisions this evening, I think it appropriate to inform the House—if that is acceptable to you—of how we see the position at the moment. [Interruption.] The Bill will now proceed to Royal Assent as it stands. That means that the debate between the House of Commons and the House of Lords will be about threatening behaviour, but will not include insulting and abusive behaviour; it will concern intent only, not recklessness; and it will deal with a wide-ranging freedom of expression clause.

Despite this evening's defeat for the Government, I am delighted that we are introducing legislation to deal with the issues that we must address. There have been substantial arguments in both the House of Commons and the other place—[Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The Home Secretary is trying to address the House and the Chair on a point of order, which I must hear fully. I do not think that this barracking helps.

Mr. Clarke: Is it in order, Mr. Deputy Speaker, to say clearly that the Government accept the House's decision this evening, that we are delighted that the Bill is proceeding to its Royal Assent, and that we are delighted to have a Bill that deals with incitement to religious hatred? We regret that the agreements and discussions in the other place did not happen, but I hope, Mr. Deputy Speaker, that you will accept our determination to carry the Bill through.

Mr. Deputy Speaker: I must tell the Home Secretary that that developed into rather more than a point of order, but it is on the record. The House has made its decision tonight, and people will reflect on that.

 
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Pensions

[Relevant documents: The Minutes of Evidence taken before the Work and Pensions Committee on 14 December, Session 2005–06, HC 618 on the Pensions Commission report.]

Motion made, and Question proposed, That this House do now adjourn.—[Joan Ryan.]

8.25 pm

The Secretary of State for Work and Pensions (Mr. John Hutton): I shall try to keep my remarks to a minimum, so that Back Benchers on both sides of the House can contribute fully to what will unfortunately be a much shorter debate than many of us would have liked.

The publication of the second report of the Pensions Commission in November marked the beginning of a major new phase in the ongoing national debate about the long-term future of our pensions system. I believe that its analysis is comprehensive and thorough, and that its recommendations are radical and far-reaching. That is why I believe that its proposals have given us an opportunity to build a consensus on the long-term direction that we should take.

Mr. Quentin Davies (Grantham and Stamford) (Con): Does the Secretary of State not agree—at least in retrospect, following the drama of the earlier part of the evening—that it would be wrong to suggest that the Turner report, given its potentially momentous conclusions for the whole population, can be dealt with adequately by Parliament in the hour and a half between now and 10 pm? Will he have a word with his right hon. Friend the Leader of the House to find out whether we can have a second session?

Mr. Hutton: We have three hours for the debate, not an hour and a half. Perhaps the hon. Gentleman will make his own speech during that time. However—I mean no disrespect to Opposition Members or, indeed, my hon. Friends—I do not intend to accept many interventions. I hoped that the hon. Gentleman was going to make a point about pensions, but, sadly, he did not.

Given the importance of the issues, I think it is absolutely right for Members to have an opportunity to participate in, and lead, the debate. In all parts of the House, there is a depth of knowledge and expertise that may be enormously helpful as we prepare our response to Lord Turner's proposals. We are therefore keen to hear the views of every Member. In response to what was said by the hon. Member for Grantham and Stamford (Mr. Davies), let me express the hope that we shall have another opportunity to debate the issues before we produce our White Paper in the spring.

I am glad that the Pensions Commission acknowledged the progress that we have made in reducing pensioner poverty since 1997. It was our first priority when we came to office, and rightly so. By targeting resources through the minimum income guarantee and then through pension credit we have ensured that there is help for the poorest pensioners, tackling the shameful legacy of pensioner poverty that we inherited in 1997. We now spend nearly £11 billion extra each year on pensioners, and almost half that
 
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additional spending goes to the poorest third. We have succeeded in helping nearly 2 million pensioners to escape from the poverty line. As is shown by figures from the Institute for Fiscal Studies, we are now in an almost unprecedented position in which pensioners are no more likely to be poor than any other group in society.

Mr. Peter Bone (Wellingborough) (Con): I am not going to sit here and listen to that. The Government have been in power for 10 years. To try to say that the pensions crisis is to do with the previous Tory Government is ridiculous.

Mr. Hutton: No one is keeping the hon. Gentleman here. He does not have to stay to listen to anything that he does not find comfortable or worth listening to, but I point out the reality of pensioner poverty that we inherited in 1997. He can go on disputing that. He just needs to check the historical record.

We have taken measures in the Pensions Act 2004 to tackle the loss of confidence in the private pensions market, including addressing the pensions mis-selling scandal, and the impact of a falling stock market and rising longevity on occupational pension schemes. The introduction of the Sandler suite and stakeholder pensions have been important steps in facilitating low-cost private savings.

All those were critical and necessary measures, dealing with the most immediate and serious challenges that we faced when we came into office, but now we must go further to build a system that will enable us to meet two significant challenges. The first is the unprecedented demographic changes that are taking place in our society. Soon, for the first time in our country's history, there will be more people over the age of 80 than under the age of five. The second challenge is the extent of under-saving, which the Pensions Commission calculated as leaving nearly 10 million people not saving enough for their own retirement.

It was to meet those challenges that we established the commission. We must now build on the progress that we have made in tackling poverty and in promoting equality and security, reduce the complexity of the current system and ensure that people can plan and save with confidence. We are looking for the widest possible cross-party consensus on those reforms.

In my statement to the House on the publication of Lord Turner's report, I said that our response would be based on five key tests. The first is personal responsibility. As my predecessors have made clear, the primary responsibility for security in old age must rest with the individual and their family. An active welfare state must provide a floor below which no one should be allowed to fall, but its primary role must be to enable people to provide for themselves, giving everyone the opportunity to build a decent retirement income that will meet their personal needs and expectations.

Of course, to achieve that, we need to achieve two of Lord Turner's central objectives: first, strongly to encourage individuals and their employers to provide for a pension that will deliver at least a minimum base load of earnings replacement; and secondly, to enable all people to have the opportunity to save for a decent pension at the lowest possible cost.
 
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Lord Turner saw a major expansion of workplace savings as being fundamental to achieving both those objectives, recommending that all employees should be automatically enrolled into either a high-quality employer pension scheme or a newly created national pensions savings scheme. The principle of personal accounts has been widely welcomed, rightly, because I believe that that is the right way forward. Not unreasonably, the pensions industry is keen to explore alternative ways of achieving Lord Turner's objectives. That is why my hon. Friend the Minister for Pensions Reform has invited all those in the industry who believe that they can produce a better model for personal accounts to work up the details of their alternative approach.

There are three priorities for all of us here. First, any model must be able to achieve a radical extension of pension coverage, including lower and moderate earners, the self-employed and those working for small employers. Secondly, it must achieve a radical reduction in cost in terms of both low management charges and reduced administration costs for business, boosting in the process the value of any pension that will be paid out. Finally, it must be portable and reliable, adaptable to lifestyle choices and tailored to the personal needs of consumers.

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