David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

I beg to move, That the clause be read a Second time.

I am afraid it is me again. We are making good progress this afternoon, and I am delighted to have had the support of several hon. Members on the last new clause. The last time it was debated or discussed, the hon. Member for Runnymede and Weybridge (Mr. Hammond) said that it was a silly Liberal Democrat gimmick, so I think that I am making some progress in convincing other colleagues of the strength of my party’s policies.

We now come to new clause 26, and I shall start this brief debate, Mr. Gale, by asking how you would feel if in the near future you received through your letterbox an orange envelope with a Swedish postmark. You might be tempted to stick it under the newspaper on your breakfast table, unsure of what it might contain.

Roger Gale (North Thanet, Conservative)

Order. I might be terribly excited, but I am not prepared to be drawn into the debate.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

I shall not draw you into it any further, Mr. Gale, but I shall enlighten the Committee by informing you that that is the way that in Sweden you would be informed about your future state pension and, I believe, private pension entitlement. Indeed, the Secretary of State confirmed to the Select Committee on Work and Pensions that he recently visited Sweden, and saw for himself the orange envelope that is distributed to pensioners there.

Our Government are looking into the matter as a result of its having been raised in the Select Committee’s report. In their response to that report, they stated:

“The Government anticipates that DWP will continue to provide information about different types of pension saving, and this will include personal accounts. The Government will be working with external stakeholders to develop an evidence-based information strategy for communicating information about pensions and personal accounts over the next year.”

That is welcome, because the more people know about how much pension they are likely to end up with in retirement, the more likely it is that they will be energised into making pension provision—perhaps. At the moment, there is a great deal of uncertainty about how much people are going to receive in retirement, and that adds to individuals’ complacency and lack of interest in their own provision.

On the other hand, we know how difficult big Government IT projects can be. My hon. Friend the Member for Northavon (Steve Webb) tells me that he believes that the Government were looking into the matter a few years ago, but discovered that such was the complexity of the pensions system, with all its means-tested benefits, that it would be extremely difficult and dangerous for the Government to make forecasts about people’s entitlements. He said—I am sure that the Minister will confirm whether it is true—that the Department had cold feet for a little while about such forecasts.

Mr. Waterson rose—

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

Perhaps the hon. Member for Eastbourne, whose experience is longer than mine, can help the Committee.

Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)

I remember being shown a prototype of the online pension planner with the hon. Member for Northavon, who was doing the hon. Gentleman’s job at that time. Did he notice the Government’s recent announcement—I think it was in response to a question from me—that they were abandoning work on the online pension planner, having spent some £3 million or £4 million on a project that had gone nowhere?

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

The hon. Gentleman is right. He helps to clarify the point that my hon. Friend the Member for Northavon made. That shows some of the policy and IT dangers that there are in making such forecasts. This brief debate is an opportunity to hear from the Minister about how the work is progressing. It is also an opportunity to clarify whether the Government’s ultimate objective is to ensure that in future people get an indication of both their state pension entitlement and their personal entitlement, including personal accounts. Alternatively, do the Government feel that at some stage they might pursue the obligation in relation to the state pension forecasts, and impose obligations on those who provide occupational and personal pensions to provide separate forecasts for those? This is a probing new clause, and we look forward to hearing from the Minister.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

As the hon. Member for Yeovil said, we have been providing state pension forecasts for many years. In 2003, we started targeting those who had not received or requested a forecast. Providing people with a forecast is one way of making them aware of how much they will get in retirement, and we hope that it also stimulates extra saving by people who are not saving enough.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

I know that the Minister has barely got into his stride, but I am interested in those forecasts, and should like to take him back to the debates that we had on deficiency notices. Is any mention made in the forecasts that are sent to people of the fact that they could pay voluntary national insurance contributions where they have a number of jobs that do not individually bring them above the lower earnings limit?

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I am afraid that I do not know the answer, so I shall add to the hon. Gentleman’s voluminous correspondence—but not before the end of this Committee’s proceedings, unless a missive is passed to me.

The forecasts that I was talking about provide information, together with a projection of private pension entitlement. By the end of December 2006, more than 9.7 million combined pension forecasts had been issued, covering both state and private pension entitlement. I hope that that reassures the hon. Member for Yeovil that the Department takes seriously its obligation to provide people with information. We are of course looking at pension forecasts in the light of the Select Committee’s recommendations, and in the light of personal accounts and the need to ensure a co-ordinated approach to informing and educating individuals during the reform transition period and  beyond. We are currently looking at the role that pension forecasts play, both in assisting people to plan for their retirement and in the context of personal accounts. As has been mentioned, we are working with the Treasury on financial capability in general and generic financial advice in particular.

When personal accounts are up and running, scheme members will of course be provided with an annual statement of their rights. We shall consider proposals on combined pension forecasts as part of those wider considerations. I am about to sit down; if the hon. Member for Yeovil has a question, I should be very happy to take it. Otherwise, I urge him to withdraw the motion.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

I was tempted to intervene on the Minister, but given that new clause 26 is probing, I decided not to. There are lots of issues to do with how the Government will deliver the forecasts, how they will integrate them with personal accounts and how frequently the forecasts will be sent out. There might be other ways for the Minister to supply us with that information, so I hope that we can return to the issue at a later date. I beg to ask leave to withdraw the motion.