Pensions and Welfare Reform

Part of the debate – in the House of Commons at 1:59 pm on 13 October 2004.

Alert me about debates like this

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 1:59, 13 October 2004

I have huge respect for the right hon. and learned Gentleman, but he has criticised me for spending too long on his party and I want to make one further observation.

The hon. Member for Havant makes the proper point that as well concentrating on state systems, we have to think about incentives for private savings. He proposes the lease of a lifetime savings account. As I understand it, he is saying that the answer to the problem of people not saving enough for pensions is an instant access savings account. In other words, the Conservatives would establish an account that people can use in any way they like—to put money in or to take money out—and that that will solve the pensions crisis.

As someone who is just under 40, the idea that folk in my age group would put money into such an account and leave it in the hope that it will one day become a pension is implausible because without a tie-in we could take the money out at any time. The hon. Gentleman says that the carrot is that the Government will put money in if we leave the account untouched, but where would that money come from? Are the Conservatives going to touch pension tax relief? No. Are they going to touch rebates in the short term, because this is a short-term policy? Not as far as we know. So where would the money come from for the incentive to save? The hon. Gentleman stands up and says, "Buy one, get one free" and tells us to bog off—he said that to me mainly—but he has never said where the Government money would come from. It is another uncosted implausible Tory pension proposal.

The hon. Gentleman is an expert in these matters. We share many platforms and agree on many things. He carries great credibility with him. However, when one examines what he says, it is full of holes. The House and the country deserve a better alternative, which I shall set out, to the Government's policies.