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Baroness Hollis of Heigham: My Lords, I do not have the breakdown for that. However, the important point is that something like well over 90 per cent of all occupational schemes are final salary schemes at present. In today's labour market where people move from job to job and are in and out of work, especially if they are women, it is not always clear that final salary schemes based on traditional models of middle-class professional male work, which show an income level for 40 years at a time, are the most appropriate way forward. Where people are in careers which are insecure, there is much to be said for having the benefit of a portable, funded money purchase scheme rather than a final salary scheme.
We set out many of the detailed proposals in an extensive programme of consultation over this summer, as my noble friend Lady Turner acknowledged. These will have given those in the industry important information about our thinking on many of the detailed issues that will affect the
The amendment seeks to provide that the stakeholder clauses should not come into effect until the Government's other pension proposals are set out in legislation. I accept that pension reforms need to be judged as a whole: that is why we published the Green Paper. However, my noble friend Lord Clarke is absolutely right, I do not believe that this means that we should not do anything until we can do everything. What my noble friend Lady Castle calls salami" I would call an incremental approach to delivering the policies and philosophies outlined in the Green Paper that noble Lords discussed at the time and, had they so wished, have had ample opportunity to discuss further.
As I said, it is important that we do this as quickly as possible. If this Bill is improved, we expect stakeholder pension schemes to be able to operate from April 2001. However, changes involving the new state second pension are not expected to come into force until April 2002 at the earliest. We do not see that this need cause problems; indeed, why should there be any? They are different forms of pensions for different groups of our citizens: one is a pay-as-you-go scheme, while the other is a funded scheme. I give way.
Lord Higgins: My Lords, none the less, one needs to look at the two side by side. If indeed the second state pension will not come into effect until 2002, is there any reason why the Government could not publish draft clauses, as has been done most successfully with a number of other pieces of legislation? In that way we could see the detail, which is the concern of the noble Baroness, Lady Castle.
Baroness Hollis of Heigham: My Lords, if that is the concern of my noble friend Lady Castle--I am not sure that it is--I should emphasise that these are two separate and different pensions: one is funded, one is a pay-as-you-go scheme. The funded scheme is the one that we are introducing in this Bill; that is the innovation. The pay-as-you-go scheme is a reform and an adaptation of what we already have--SERPS. Subject to approval being given for it to be included in the next Queen's Speech, we will then have the opportunity to discuss it in three or four months' time.
We have a perfectly reasonable timetable. The big, important and new innovatory changes fall under the stakeholder pension which we are discussing now. They were based on six consultation documents issued through the summer. The industry is expecting this timetable and I think that it would be appalled if we were now to turn that upside down. The proposals regarding the state second pension, which I hope will be included in the Queen's Speech next autumn, will be a reform, an adaptation and a development of SERPS. However, unlike SERPS, it will help the lower paid. In my view, therefore, it will be a much better scheme.
These are different types of scheme for different groups of the population: one is a pay-as-you-go scheme and the other is funded. One will be delivered by the private sector and the other by the state. Therefore, they do not need to be read alongside one another. They do not interact in some important way in that sense over and beyond the philosophy outlined in the Green Paper. I do not believe that my noble friend is right to say that it is reasonable not to go forward with the state second pension, which is the complicated, new funded scheme, until she has the details of the reform steps in her hands. She knows the broad philosophy. I shall certainly take up the point about the clauses because I think that it would be perfectly reasonable to try to get that in the public domain as quickly as we can. However, to hold up the entire stakeholder pension, which industry is counting on us to deliver in time, for the sake of not being able to discuss a totally different pay-as-you-go pension--a development of SERPS--seems to me to be deeply unreasonable.
I hope that I have provided your Lordships with some reassurance. We intend to bring forward legislation to implement the state second pension as soon as the parliamentary timetable allows. While I cannot give a guarantee about that, it is certainly our aim, as I said, that the new state second pension will have been introduced into Parliament by the time that the stakeholder pensions legislation comes into effect.
I hope that in the light of those remarks my noble friends Lady Castle and Lady Turner will feel able to withdraw their amendment. They are asking me for what they term a concession". However, it is not a concession. It would effectively constitute a wrecking amendment as regards this part of the Bill. Stakeholder pensions would be put into suspense for a year or more until the state second pension had been fully discussed. What does that mean?
If this House cares about providing a funded, portable, cheap, transparent and secure pension for those who most need it--that is, low earners, the self-employed, those moving from job to job and those who have fallen out of the labour market, perhaps to have a child--it will not support this amendment. If Members of your Lordships' House are concerned about the good will and the detailed consultation that has taken place with the private pension providers, they will not support this amendment. It would effectively delay the implementation of this Bill and an important move on the part of the Government to ensure that there is pension provision for those in need.
My noble friend seeks to delay the introduction of that measure. I do not believe that that is because she does not know what we are proposing. I think that it is because she does not like what we are proposing. That is a very different and, in my view, unacceptable reason. I hope that if my noble friend is minded to press the amendment to a Division your Lordships will not support her because the price of supporting her will not be paid by your Lordships but by the low paid, the self-employed and women who will be denied the
Baroness Castle of Blackburn: The Minister has given us one of her eloquent and rather long-winded justifications of government policy. But the more I listened, the more I thought she was proving the case that Lady Turner and I had made. To serious parliamentarians, ministerial eulogies are no substitute for hard legislative facts. She has not, for instance, explained why, although the Government set up a pensions review body way back in 1996 to examine pensions policy as a whole and only later produced a document on the stakeholder pension, the only thing we have is the stakeholder pension.
I am sorry, but we really are being asked to take too much on trust. I give one example. We know that the Government are trying to divide pensioners into two halves: those on means-tested benefits and those who privately finance themselves because they are able to. We are given a wonderful picture of the minimum income guarantee of £75. However, even then I would point out that that is less generous than the £90-odd that the basic state pension as of right would be today if Lady Thatcher's government had not cancelled the earnings link for its uprating. However, the minimum income guarantee ceases to be a guarantee and the term becomes a mockery unless the Government commit themselves by law to an annual uprating in line with earnings. Oh" says the Minister, in the longer term we are hoping that we might do that"; in other words, we are right, but we must wait and trust the Government. What does she mean by in the longer term"? Why should Parliament be fobbed off with language such as that?
I could go on, through all her long speech, pointing out items such as that. However, I shall not abuse the time of the House, as I am afraid she sometimes does in trying to lay low her adversaries. I am far from convinced and utterly dissatisfied by her reply. However, it is extraordinarily difficult in this complex field to get over to people who are not as soaked" in the matter as Lady Turner and I, for example, just what is happening. I shall discontentedly withdraw my amendment in the hope that perhaps we might rally our troops for Third Reading. One never knows! I beg leave to withdraw the amendment.