Pension Provision Group

Oral Answers to Questions — Social Security – in the House of Commons at 12:00 am on 17th November 1997.

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Photo of Vernon Coaker Vernon Coaker Labour, Gedling 12:00 am, 17th November 1997

If she will make a statement on the role of the pension provision group. [14635]

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

As part of our wide-ranging review of pensions, my right hon. Friend the Secretary of State has appointed the pension provision group to provide her with an independent analysis of the current state of pension provision in the United Kingdom and of likely future trends.

The group is chaired by Tom Ross, vice-president of the National Association of Pension Funds. Its members are pensions experts from outside the Government who come from a wide range of backgrounds and interests. The group's report will advance our review by providing a valuable and independent analysis, on the basis of which we will shape our plans for a modern and fair pensions system for the future.

Photo of Vernon Coaker Vernon Coaker Labour, Gedling

Does my hon. Friend agree that the appointment of the pension provision group provides an opportunity to deal with the mess that we are in, with today's pensioners having inadequate resources and tomorrow's pensioners not saving adequately to meet their needs? Does he agree that we have the opportunity to provide for today's and tomorrow's pensioners in a way that will make real progress, rather than merely grab cheap headlines?

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

My hon. Friend is right. One of the critical roles of the pension provision group will be to identify the groups that face retirement on low incomes because they are unable to build up an adequate pension. That is also why we hope that it will provide the essential background to take forward our case for value-for-money stakeholder pensions, to bring better value-for-money, flexible pensions to those who cannot join an employer's occupational scheme at present.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

In the new spirit of openness and contrition that affects the Government, will the Minister make it clear whether any members of the pension provision group have bought their place in it by donations to the Labour party?

Photo of Patricia Hewitt Patricia Hewitt Labour, Leicester West

Does my hon. Friend agree that it is important, when considering the work of the pension provision group, to ensure that future pensions policy takes account of the rapid changes taking place in employment and family structures? Will he take this opportunity to condemn the providers of personal pension schemes who, while claiming greater flexibility for their product, are penalising their contributors who are subsequently offered the opportunity to join an occupational pension scheme?

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

My hon. Friend raises a number of important points. The world in which pensions have to be delivered for the future is changing rapidly. For example, the number of large employers offering final salary occupational schemes is declining and there is a need for better pension provision for those in the more modern and flexible work force. Pension mis-selling was a scandal, and I am extremely grateful for the measures being taken by my hon. Friend the Economic Secretary to clear up that matter. It is also clear that, in the future, people must have access to value-for-money, flexible pensions that do not penalise them if, for example, they change employment or must alter their pension provision after a relatively short time in a pension scheme.

Photo of Steve Webb Steve Webb Shadow Spokesperson (Work and Pensions)

Does the Minister accept that, while the pension provision group is conducting its deliberations, many pensioners will be suffering from cold and inadequate heating this winter? Does he accept that it is perfectly obvious why most elderly pensioners do not claim benefit and that we do not need lengthy research to discover the reasons? Does he agree that immediate action, such as an increase in the addition to pensions for the over-80s, would be an immediate and constructive response that is guaranteed to reach pensioners in need?

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

It is essential that we establish why a million pensioners do not claim the income support to which they are entitled: we must have that information if we are to move forward. A series of measures—including the cut in VAT on fuel, the reduction in the gas levy and falling fuel prices—will enable vulnerable groups, including pensioners, to heat their homes this winter.

Photo of John Swinney John Swinney Scottish National Party, North Tayside

In his earlier answers, the Minister quite understandably attacked pension mis-selling and reiterated the importance of pension funds being sufficiently strong to guarantee the payment of earnings to retired people. Will the Minister send a message to Scottish local authorities which estimate that, in the next financial year, they will have to find £36 million in additional contributions to pension funds in order to compensate for the cut in tax credit on advance corporation tax introduced in the Budget in July?

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

The tax change introduced in July was part of a series of measures designed to promote long-term investment in the British economy that will improve the future of British firms and, most important, generate the wealth from which future pensions can be paid. We shall consider the situation of local authorities at the appropriate time.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister (Trade and Industry)

I am sure that the Minister agrees that the operation of the pension provision group is of great concern to the women of this country. Therefore, can the Minister tell me what input into the workings of that group will be made by the Minister for women who, since her belated appointment, has been conspicuous by her absence from the Dispatch Box—and is conspicuous by her absence again today? Is she part of the Department of Social Security team? Will she have any input into the pension provision group or any other policy area, or is she the invisible woman?

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

I make it clear that three women serve on the pension provision group—Ruth Hancock, Joanne Segers and Anne Wood—and represent the wide range of experience and knowledge that will be brought to bear on the group. Women's pension rights are a central concern of the pensions review, as my right hon. Friend the Secretary of State made clear when she launched the review in July. We have made it perfectly clear that closing the pensions gap between men and women is one of the fundamental challenges of the pensions review.