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Lord Higgins: My Lords, I thank the Minister for that reply and declare an interest as a former chairman of a company pension scheme. Are the Government not incredibly complacent on the issue of pensions and savings? There is a crisis, which is in danger of turning into a disaster. As a result of the Chancellor's ACT raid on pension funds, many companies have abandoned final salary schemes and are having to top up their funds instead of investing.
Lack of confidence and the Chancellor's obsession with multiple tax credits and means testing is deterring saving. Is it not true that the savings ratio has almost halved under the Government? The Green Paper, to which the Minister refers, is almost universally regarded as a damp squib; so the Government certainly have not provided time to debate it. Can the Minister say what else will be done to solve these problems?
Lord McIntosh of Haringey: My Lords, I suppose that I should have declared an interest as a former chairman of a company pension scheme, but one cannot do so all the time.
The noble Lord, Lord Higgins, is just wrong about the savings ratio. First, the normal definition of a savings ratio is household savings and not national
domestic savings, which is a much more useful figure. But, secondly, the current annual savings rate is 6.1 per cent, which must be set against the long-term average of 8.1 per cent. The rate has gone down, but it is still close enough to the long-term average not to be what the noble Lord calls a crisis or a disaster. Of course there are savings problems, but they are not a crisis and they are not a disaster.
Lord Oakeshott of Seagrove Bay: My Lords, as we are all declaring interests this afternoon, I declare mine as a pension fund manager. Has the Minister seen the devastating analysis by Credit Suisse First Boston this week, which calculates that 91 out of the top FTSE 100 companies have an accumulated pension fund deficit of £77 billion? That is 93 per cent of their total operating profits last year.
Does the Minister agree with CSFB that the situation looks very bleak and that many companies will have to make additional payments into their pension funds? Will the Department for Work and Pensions and the Treasury now urgently estimate and tell us in the Budget how big a hole those extra payments into pension funds will blow in the corporation tax receipts for the Exchequer?
Lord McIntosh of Haringey: My Lords, like my noble friend Lord Rooker, I shall not forecast what the Chancellor will say in his Budget. I have read the report by Mercer Human Resource Consulting, which I think is part of CSFB. If I am wrong, I apologise. But it does not make any difference to the fundamental point: we are not in the business of predicting the future of the stock market and how it affects pension funds. The fundamental drivers of a successful economy, which are high employment, low inflation and low interest rates, are in place. They are delivering a secure environment that is conducive to investment and to long-term saving.
Lord Jenkin of Roding: My Lords, does the noble Lord recognise that one of the measures to which the Government have attached great importance is the stakeholder pension? Do the Government further recognise that almost universally those who have tried to sell stakeholder pensions have discovered that the cost limit allowed by the scheme simply does not enable them to remain solvent? Will the Government urgently look at the matter?
Lord McIntosh of Haringey: My Lords, I have reason to doubt the figures of the noble Lord, Lord Jenkin. There are 335,000 employers involved with stakeholder pensions; 1.5 million stakeholder pensions have been sold; and, rather than cutting down on the benefits of low-cost schemes such as the stakeholder scheme, it is our intention, following the Sandler report to bring the stakeholder pension scheme into
what is called the "Sandler suite"; in other words, to extend the range of low-cost products which are to the benefit of savers and investors.
Lord Haskel: My Lords, is not one of the main reasons why so many final salary schemes and company schemes have gone wrong that the actuaries and the fund managers have got it wrong?
Lord McIntosh of Haringey: My Lords, there are many reasons why some employers are moving from final salary—defined benefit—and towards defined contribution. Some reasons are good and some are bad. I ran a final salary scheme that was fine for me and my fellow directors but not so good for young people who left the company after a few years. The critical point is that employers should be putting money into their employees' pensions schemes, whether DB or DC. It is in their interests as employers to provide a decent package of employment in a period of high employment.
Baroness O'Cathain: My Lords, I bear in mind the Minister's statement that he is not in the business of forecasting the mind of the Treasury. He really shrugged off the £77 billion hole in the FTSE 100 companies. To what extent will the pension situation affect the take on corporation tax? There is no question, as the noble Lord, Lord Oakeshott, said, that it will not affect it: it must.
Secondly, the Minister also said that the savings ratio was not really too far adrift. It has only dropped from 8.1 per cent to 6.1 per cent. That is a 25 per cent reduction. I am afraid—and I should like the noble Lord to deny this—that that reeks of complacency.
Lord McIntosh of Haringey: My Lords, I still shall not forecast what the Chancellor will say in his Budget. In view of the renewed interest in the savings ratio, I say look at the economics. The savings ratio is normally counter-cyclical with consumption. It is not necessarily true that a high savings ratio is the best of all possible outcomes from all possible points of view.
Corporate Liability: Manslaughter
3.16 p.m.
Lord Faulkner of Worcester: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as president of the Royal Society for the Prevention of Accidents.
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To ask Her Majesty's Government whether it remains their intention to introduce legislation on corporate killing.
Lord Faulkner of Worcester: My Lords, I thank my noble friend for that welcome reply. He will know that in the past 10 years, 3,000 workers and 1,000 members of the public have died in work-related accidents, but that only 11 companies have been prosecuted for corporate manslaughter, and that only four of those prosecutions have been successful. Is he aware how much support there is for the introduction of a new law in this area, which includes not just the national safety organisations, such as the one with which I am associated, but also the TUC, the Law Commission and the Institute of Directors? Can he give an assurance that the regulatory impact assessment will be published when it is complete and, if so, can he indicate when that will be?
Lord Bassam of Brighton: My Lords, I am aware of the widespread support to which the noble Lord refers. I can give him an assurance that the regulatory impact assessment will be made public if, when legislation is brought forward, there is evidence of more than negligible costs to businesses, charities or voluntary sector employers. The RIA will accompany the legislation when it is presented to Parliament. Of course it will be placed in the Library of both Houses and it will, reassuringly, be available on the Home Office website.
Lord Hardy of Wath: My Lords, I ask for the law to be changed urgently. It is 10 years since a former constituent of mine was driving along the M1. He was beside a lorry in the adjoining lane, the engine of which disintegrated. Part of it came through the windscreen of my constituent's car and instantly killed him. His wife was able to steer the car into the hard shoulder. At that time, 10 years ago, as the driver was not responsible for the appalling state of maintenance of that vehicle, there was no significant penalty. The law was an ass then. Can it soon be made sensible?
Lord Bassam of Brighton: My Lords, the Government's intention is to bring forward legislation, as I have made plain. One of our manifesto commitments was to legislate on this matter. It is a very complex area of law. The whole concept of "controlling mind" behind those kinds of incidents and accidents is a very difficult one to resolve. That is why we have been very careful to consult and to ensure that we get the matter absolutely right. We recognise the benefits of continuing to improve levels of health and safety and reducing the number of accidents. This legislation can contribute towards that.
Lord Bradshaw: My Lords, while accepting the tragic case to which the noble Lord opposite referred, does the Minister share my concern that we may be entering into a field of extremely expensive and time-consuming litigation involving a great many safety interests whereas the Government's money would be
much better spent in making some modest improvements to the road safety regime, which would save far more lives than this legislation might?
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