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The Bill is a comprehensive, integrated package of reform, but it has involved difficult decisions for the Government, business, individuals and the pensions industry. Its progress shows that our reforms have been broadly endorsed by all those groups, which is a real credit to the work of the Pensions Commission and, once again, I congratulate the commission on a report that is a model of its kind. It internalised the trade-offs involved and produced a package that put political parties and stakeholders in a situation where they had
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to decide not whether to cherry-pick this or that proposal but whether to back the measure as a whole. I congratulate the stakeholders and the other political parties on their approach to the debate.

In pensions, consensus is not just nice to have; it is necessary as an essential component of an effective policy. People do not want to put their money away for 20, 30 or 40 years on the basis either of uncertainty about what the system will be or of constant changes. That will make them less likely to save. Through the consensus that we have developed as part of the Bill we will provide them with greater certainty, and it is a real achievement that the Bill is placed to deliver that. That is why consensus is so important. We cannot remove risk from pensions saving entirely, nor can we halt demographic shift, but we can and should remove the risk of political instability.

We welcome Conservative support and we shall continue our discussions over the next few years. I look forward to the speech of the hon. Member for Eastbourne (Mr. Waterson) because I am still not quite clear what Conservative policy is on the earnings link, although we had some discussion of it in Committee. His colleague the hon. Member for Runnymede and Weybridge (Mr. Hammond)—in fact, his boss—said on Second Reading that he thought

However, when that point was put to the hon. Member for Eastbourne in Committee, he replied:

Having complimented the hon. Gentleman on his assiduousness in attending seminars, I ask only that he tell us whether the Conservatives think they can restore the earnings link, whether they want to do it on the same timetable as us and, if so, given their third fiscal rule and the fact that restoring the link will mean increased public spending, what else will they cut to fund it? I look forward to the answers, because it is important that we have not just consensus in theory but fully costed consensus in practice.

I finish by paying tribute to my hon. Friends the Members for Northampton, North (Ms Keeble) and for Burton (Mrs. Dean) who pushed us to make further changes to the Bill to recognise the crucial role of carers. I am sure that all Members share the fundamental belief that pensioners are entitled to security and dignity in retirement. The Bill provides a solid platform so that people can save; it will give them the ability to build up a pension of £135 a week, which is well above means-tested level, either by caring or working throughout their lives. It puts in place the first stepping stones for the delivery authority and—perhaps most important—it introduces real equality in the state pension system and I commend it to the House.

6.13 pm

Mr. Waterson: I am always on tenterhooks when the Minister talks about consensus, because I never know whether the bouquet of flowers he is proffering conceals a water pistol. He cannot resist those little political digs, but we will deal with them later on.

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I join the Minister in thanking all the members of the Committee, in particular the two Chairmen who served us so well, the officials, the police, the Hansard reporters and everybody involved—some of the Bill team have become old friends. No doubt we shall all meet again in a few months’ time, unless I am sacked or reshuffled—[Hon. Members: “Never.”] I thank my hon. Friends for that. We are always pleased to know that another pensions Bill is just around the corner, but as we bid farewell, for the time being anyway, to this Bill, I think that it is a pity that owing to pressure of time today some important issues have not been debated fully or indeed at all. No doubt their lordships will help to remedy that.

I shall not be inviting my right hon. and hon. Friends to vote against Third Reading. I hope that that does not produce an exodus from the Chamber on the Government Benches. We did not vote against Second Reading either. From the start of the Bill—and even before it was introduced—we in the official Opposition have taken a thoroughly responsible attitude and worked hard to try to forge a long-term cross-party consensus on pensions reform. At times it has been tough, but we have continued to try. I am still entirely unclear whether the Liberal Democrats are part of that consensus, or part of a parallel consensus that is going on somewhere else and that neither we nor the Government seem to be involved in.

It is right to say again that, as the Minister indicated, we support the basic direction of travel that the Government are setting out. In our last election manifesto, we promised to restore the link between the basic state pension and earnings and set out how that would be paid for. We also promised to tackle the gross unfairness—as the Minister has said—of a situation in which less than a third of women receive the full state pension. It would be the height of churlishness to oppose the measures simply because they have been proposed by another party, but we do have concerns.

As Joe Harris of the National Pensioners Convention said,

It still puzzles me why something that might not be affordable in 2012 will definitely be affordable by 2015. The Minister tried to explain that to me on a number of occasions in Committee, but either I am even more obtuse than I thought or there simply is not an answer to that conundrum. I wonder whether the Minister would mind trying his luck again if he gets another chance in this debate.

The Minister returned to the canard that we heard in Committee about what my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) said. I think that I made it clear in Committee, but for the sake of complete clarity, I repeat that my hon. Friend was saying that the decision about affordability could be made now. He was wondering why the Government could not make that decision. We also remain concerned about the cliff edge for some women pensioners and we remain concerned that many women already retired or soon to retire will see little or no benefit. The issues surrounding carers have been eloquently argued both here and in Committee by my hon. Friend the Member for South-West Bedfordshire
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(Andrew Selous). It is perhaps a shame that he did not have the opportunity this evening to develop those arguments more fully.

James Purnell: I want to draw the hon. Gentleman’s attention to Hansard. His colleague did not say that he thought that the decision could be taken now. He said:

That could not be clearer. I know that the hon. Gentleman has tried to correct that. All I am trying to do is point out that, when it comes to policy, every now and then the Conservatives are not quite clear about how they would fund their proposals.

Mr. Waterson: The Minister has referred to “Groundhog Day” at least once this evening. We could go on having this discussion till kingdom come, but it is not going to change anything. I have made clear more than once what my hon. Friend intended by those words and I cannot add or subtract anything to or from that.

I was talking about carers and the excellent work done on the Bill by my hon. Friend the Member for South-West Bedfordshire. We also broadly support the gradual increase in the state pension age, but we recognise that there is much more to be done in relation to flexible working and retraining for older workers. We have given our broad support to the proposals for personal accounts, but, again, as I explained to some extent in relation to one of the groups of amendments earlier today, we still have serious concerns about the design of the new system and the extent to which we should include in this Bill, rather than the next Bill, the basic parameters of success or failure for the system for personal accounts.

On Second Reading, I flagged up four major concerns about personal accounts: means testing, the risk of levelling down, the potential for mis-selling, and the issue of confidence. Those concerns still exist. I do not want to develop in any more detail than I have already today the issue of means testing. The Minister and the Pensions Policy Institute will just have to agree to disagree—without being disagreeable about it. They are never going to reach a consensus, and the more the Minister tried to explain his way out of that problem, the more he seemed to say that nobody can ever really know, so we are boldly taking a step into utter darkness with no way of knowing what will happen. The only thing we can say with certainty is that by 2040 or 2050, none of us will still be developing these arguments. Having said that, one of my constituents is 110, so perhaps there is hope for all of us.

Michael Fabricant (Lichfield) (Con): It is because of his excellent MP!

Mr. Waterson: I hear my hon. Friend’s sedentary comment, but I take no credit for my constituent being 110, apart from the fact that he is claiming the benefits to which he is entitled—or not, as the case may be!

I would like to spend a few minutes talking about levelling down, which is still a major concern. The law of unintended consequences is, like the word “Blackpool” through a stick of rock—very much part
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of pensions legislation. We certainly saw it at work with the Pensions Act 2004. There are real concerns in the industry that the advent of personal accounts will bring about a levelling down and that finance directors will, as I said earlier, take a quick, sharp look at the extra cost caused by the extra participation introduced by auto-enrolment and suggest to their employees that they might be better served by going through the personal accounts system.

As the deputy director general of the Association of British Insurers, Mr. Stephen Sklaroff, said a little while ago:

He then spoke about raising the contribution cap, which he said was

I developed arguments about the contribution cap earlier today and I am afraid to say that I did not find the Minister’s remarks about it particularly reassuring, so we shall watch what develops.

There is some potential for mis-selling. Ministers love to go on about previous mis-selling scandals, but the issue very much remains in respect of people auto-enrolled into personal accounts who would actually be well advised to opt out. I am thinking of people on low incomes with high credit card debts. In my intervention on the hon. Member for Northampton, North (Ms Keeble), I referred to the excellent work of the PPI on risk categories. It looked at two distinct ages—people aged 40 and 25 in 2012—and examined categories where people are “at risk”, meaning that they are unlikely to receive back the value of their individual contributions to personal accounts. That is a real concern that needs to be looked at further, not only as part of the Thoresen review, but more generally.

I conclude by talking about confidence. When the Government are proposing to launch a brand new pensions system designed to appeal to 7 million, 8 million, 9 million or perhaps 10 million people who are currently not saving for their retirement, it really beggars belief that Ministers are so blind to the danger to confidence posed by existing problems in the system. How can we expect younger workers to save for their retirement when almost every week they see bad news stories about people who have lost their pensions? How can the Minister talk about sending a signal from this House based on consensus when the actual signal we have sent today is that we are not prepared to give proper help to the 125,000 people who have lost their pensions? The Minister should be in no doubt that that is indeed the signal that we have sent out.

Yesterday, the Chancellor was finally cornered in this Chamber over his raid on pension funds. Was he embarrassed, abashed, apologetic? Not a bit of it. He said:

and he went on to say:

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Tell that to the 125,000 people who have lost their pensions. They are the most salient issue today. We must not forget that everyone in the country with a pension scheme has lost out to some extent, because of the £100 billion that the Chancellor has sucked out of the retirement savings system. It is a cause for genuine regret that Labour Members were whipped to vote down a package of help for those people that was sensible, deliverable and fair—one based on the sort of cross-party consensus that the Minister liked to talk about in his speech. Having created the problem, the Chancellor is happy to leave them without help or to the tender mercies of the failed financial assistance scheme.

I shall interrupt the Minister’s private conversation for a moment by reminding him that he suggested earlier in our debates—or, indeed, it might have been the Secretary of State—that the Government came forward initially with plans to produce the financial assistance scheme and that the Government were the ones on the front foot in trying to improve these matters. The fact is that, on 14 May 2004, the Government were forced to produce in a hurry their proposals for the FAS, with a price tag of £400 million that had no basis in fact or research at the time, because they were facing defeat in the House—a defeat based on our opposition and that of the Liberal Democrats, other parties and a large number of Labour rebels.

The hon. Member for Yeovil (Mr. Laws) pointed out earlier in our debates that, at every point, the Government have been dragged here kicking and screaming to put in a bit of extra money or to make some concessions. How long will it take before they make the final concessions that justice demands? They have been told on no fewer than four separate occasions—by the ombudsman, by the European Court, by the Select Committee and by the High Court—that there has been maladministration, but their reaction is that everybody else is wrong and that they are right, and they are even appealing the High Court decision. They are still ignoring the legitimate demands of the pension victims, but even this Government should not have ignored the voice of the House. Those Labour Members with constituents facing penury who failed to support the cross-party package this evening must answer to their own consciences and to their own constituents.

As I have said, the Chancellor claims that he would do the same again, but the circumstances that surround the decision in 1997 throw a penetrating shaft of light on to the Chancellor’s real thoughts on the matter. Courtesy of the former Paymaster General, we now know that this policy was created in conditions of the utmost secrecy. It was hidden from the British public during the 1997 election campaign, when the Labour party had the effrontery to make a centrepiece of its campaign our pensions policy, while its policy was firmly locked in a safe at the Grosvenor House hotel. It was then acted on in the teeth of advice to the contrary from civil servants and the CBI, among others. But most telling of all, the Chancellor fought for two long, bitter years to resist the freedom of information request from The Times. Finally, the information was
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slipped out on a Friday, when the House had risen for the Easter recess. Is it not incredible that, yesterday, when questioned by my hon. Friend the Member for Bromsgrove (Miss Kirkbride)—

Madam Deputy Speaker: Order. The hon. Gentleman is now going rather wide of the Bill that is under discussion today.

Mr. Waterson: I am coming to the end of my remarks, Madam Deputy Speaker, but it is important that the whole House is aware of the umbilical connection between the decision to raid pension funds to the tune of £100 billion over the past 10 years and the fact that so many people are now looking at a pension that is a fraction of what they expected. Perhaps the most grotesque sight in yesterday’s debate was that of the Secretary of State trying to—

Madam Deputy Speaker: Order. I remind the hon. Gentleman again that we are not having a rerun of yesterday’s debate; we have a Bill currently under discussion.

Mr. Waterson: The bottom line is this: the official Opposition support the direction of travel of these reforms, although we have worries about some of the technical details and aspects of the personal accounts on which I have touched. However, fundamentally, we need to restore confidence in the pensions system as a whole. The man in the saloon bar who is not saving for his retirement, yet should be, needs to have confidence that when he locks his money away for 40 years, it will still be there at the end of that time to provide him with a decent pension. Ministers need to go back to the drawing board and address the way in which the problems that I have touched on are dealt with so that we can clear the ground and the personal accounts system can have the best possible start in life, instead of being encumbered by the baggage of recent history. Having said that, we wish the Bill a safe passage to the Lords and look forward to it coming back in due course in an improved form.

6.31 pm

Lynne Jones: It is understandable that the financial assistance scheme and the way in which we might help those who have been cheated of their pensions have dominated today’s proceedings. I certainly hope that the Government will come back with proposals that are more generous than those on offer. However, the Bill should be setting a solid foundation for the next 50 or so years, so it is most unfortunate that there has been such little time to debate some of its fundamental aspects. I was disappointed that all the concerns that I raised on Second Reading were not addressed in Committee and that they were not even discussed, let alone voted on, on Report. Although there are many welcome provisions in the Bill, especially those relating to pensions for women, I cannot see how the Bill, as it stands, will be a firm foundation for the future.

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