Private Pensions

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 12th November 2001.

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Photo of Peter Viggers Peter Viggers Conservative, Gosport 2:30 pm, 12th November 2001

What targets his Department has set to increase private pension provision.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

We are committed to encouraging private saving to meet the long-term demographic challenge of an ageing population. We will achieve this through a package of measures, rewarding saving through pension credit, with better information for current and future pensioners, through combined pension forecasting and a pensions marketing campaign. There will be better regulation of the pensions industry, notably reforms of the minimum funding requirement, adoption of the Myners report and a recently announced certification review. We are providing suitable vehicles for saving such as the stakeholder pension and the state second pension.

Photo of Peter Viggers Peter Viggers Conservative, Gosport

Does the Minister agree that extravagant claims have been made for the stakeholder pension system, which is a bad deal for many investors, especially in the light of the guaranteed minimum pension? This is an important and detailed subject, so will the Secretary of State, unlike most of his Cabinet colleagues, be present during the whole of tomorrow's important debate?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

I will be present for the whole debate, and I am looking forward to it. We will punch a hole in all the misinformation that the hon. Gentleman's party is issuing about stakeholder pensions. The Association of British Insurers estimates that as many as two thirds of employers required to do so will have designated a scheme by 8 October. From a standing start, we have established in the marketplace a pensions vehicle for many people who under the Conservatives had no access to personal pensions, group pensions or employer pensions, with or without contributions.

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston

I am delighted that my right hon. Friend has talked about the review of minimum funding requirements. He is fully aware of some of the details behind the disgraceful situation that affected some of my constituents employed by H. H. Robertson. I do not expect him to answer in detail, because some matters are still sub judice and covered by industrial tribunal proceedings, but when they are completed, will he undertake to examine the conduct of the case carefully and determine what lessons can be learned to protect other people in similar situations?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

I am aware of that case. Indeed, in opposition, and as a constituency Member in the north-west, I was part of the combination of Members of Parliament who sought the truth of what happened in that scandalous situation. My hon. Friend can rest assured that with all such scandals the Government review issues relating to pension protection. The whole point of Myners was to ensure that we had a transparent pensions system and a regulatory regime that fits the needs of not only the industry but its customers. We will have to await the outcome of the case before I can say anything specific, but I will be happy to meet him about it when it has been determined.

Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

What proportion of the £5 billion a year taken out of pension funds by the worst of all the Government's stealth taxes is handed back to pensioners in the benefits that the Minister has been claiming are so generous?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

My right hon. Friend the Chancellor reduced corporation tax and introduced many other measures, including, over some years, reducing taxation on pensioners' income. We have a comprehensive strategy on the stability of the economy, of pension funds and of the tax regime, to ensure that employers and employees alike will benefit.

Photo of David Willetts David Willetts Shadow Secretary of State for Work and Pensions

I just want to check what the Minister has said. He claimed as one of the Government's achievements the fact that two thirds of companies obliged to designate a stakeholder pension have done so, but will he confirm that the law obliges them to have designated a stakeholder pension by 5 October? He has claimed as a great Government achievement the fact that one third of employers have still not even complied with something obligatory. If a third have not complied, is not that evidence of how much the stakeholder pension scheme is failing?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

First, I said that it was the ABI that had stated the position. Secondly, it was 8 October, not 5 October.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

The hon. Gentleman might as well get his facts right.

If, from a standing start, we have got on board two thirds of employers who before the introduction of the stakeholder pension had no form of saving for their employees, that is a very good start indeed. Under the Tories, we had a 100 per cent. nil return, because they never provided an opportunity for a large proportion of people who will now benefit from stakeholder pensions to have any kind of pension. Instead, all we had was a mis-selling scandal.