The Social Security Act 1986 will open up new opportunities for employees to take out personal pensions and for employers to set up new sorts of pension schemes. These choices are explained in leaflets and will be advertised on television and in the press later in the year, but it is not for the Government to offer pensions advice to individual scheme members.
I am grateful for my hon. Friend's reply. The changes in choices in pension provision are to be welcomed and should ensure that future generations of elderly people will benefit considerably from the new choice. Is my hon. Friend aware that there is widespread concern among trustees and managers of pensions funds that if members of occupational schemes opt out of them they may inadvertently lose entitlement to important fringe benefits, such as death-in-service cover and widows' pensions? When publicising the Government's plans, will he take every opportunity to warn the public of those dangers?
I recognise my hon. Friend's expertise in this matter. The Financial Services Act 1986 contains conduct of business rules that require suppliers to give the best advice to their potential customers. That will include discovering the client's present position and whether the client has an occupational pension. If the client has such a pension, the supplier should advise him or her about what benefits might be lost from the occupational pension and what benefits may be gained. As a spin-off from our reforms, occupational pension scheme suppliers will have to explain the benefits more carefully to members.
Is not the spin-off from the so-called reforms, which are really highly regressive, an increased cost on local authorities such as the West Yorkshire fire authority? That authority has made representations to me, claiming that the costs of posing alternative, inferior schemes to the present fire authority scheme are not provided for by the Home Office. That means an extra cost on a fire authority that is desperate to maintain the standards imposed by the Home Office. In some areas it cannot meet the Home Office requirements. Will the Minister get together with the Home Office and ensure that all costs imposed by the Government's rotten schemes are provided for?
I should be happy to explore that point, but I do not recognise it. I believe that the reforms provide a much wider range of pensions choice, which will offer people opportunities in future without shackling them to a particular employer.
Is my hon. Friend aware that the flow of funds into public sector provision for retirement is on an altogether much more generous scale than for the bulk of people in the private sector? Will he take steps to encourage employers to put far more funds into the provision of retirement benefit for employees in the private sector so that the vast bulk of our population are freed from the risk that they may be obliged to go through the humiliation in retirement of applying for means-tested benefit?
One of the effects of our reforms is that they will raise the public's consciousness and awareness about pensions choices. That will oblige occupational pension scheme suppliers to explain the benefits more carefully to their members. It will probably encourage members to be more demanding of their occupational pension schemes.