The opening remarks of Mr. Willetts somewhat misjudged the mood of the House, because as I was speaking, I could see several Conservative Members nodding assent to my arguments and proposals.
The hon. Gentleman mentioned debates in the House. On how many Opposition days have the Conservatives chosen to debate pensions? We debated them last Thursday, thanks to the Liberal Democrats. The key matter is the remedy for the insecurity that people are experiencing about their occupational pensions. The hon. Gentleman presented no alternative remedy for that. Again, he dragged out dividend tax credits, yet whenever he is challenged about whether he would reinstate them, he will not make a commitment. What credibility can the public give a party whose members spend all their time attacking a policy but cannot make a pledge to reverse it?
The hon. Gentleman referred to incentives, but the most important incentive that we can currently offer is to rebuild security and confidence in the system. I am sure that he would throw that at me if we had not presented such proposals. We are, of course, addressing the questions that he asked about the technicalities of wind-up and insurance. As I said in the statement, we want to deal with perverse incentives and moral hazard with regard to risk-related premium and the operation of a cap on the eligible pensionable salary. Of course, we shall consult on the implementation of our new proposals on wind-up and the changed priority order.
Conservative Members will make a mistake if they do not seize the opportunity to respond to my challenge to build a consensus between employers, trade unions, individuals, the financial services industry and, as far as possible, between parties in the House. Pension policy and protection is for the long term, and the hon. Gentleman makes a big mistake in not welcoming the insurance proposals, which have been strongly urged upon us, by not only trade union representatives and individuals but the financial services industry and many employers.
The hon. Gentleman asked whether I had considered the overall balance of costs on employers. That is an important question. As I said in the statement, it would be self-defeating if the costs of loading on more protection led people to wind up schemes. We have therefore been careful to produce a balanced package. When the hon. Gentleman has the opportunity to examine the summary regulatory impact assessment, which forms part of the relevant document, he will realise that our best estimate of the overall impact is between zero—a balance of no additional cost—and some £150 million-worth of savings. That comes about because of the extent to which the reduced requirement on the mandatory indexation cap offsets the cost of pension protection. Of course, we must consider distribution issues. However, if we examine the matter in the round, and consider not only the savings from our changes to limited price indexation but those from tax simplification—our replacement of the minimum funding requirement with scheme-specific proposals and other simplification measures—our approach to a pressing problem is balanced and sensible.
The country will take from the hon. Gentleman's contribution the single point that the Conservatives have no alternative proposal. He goes around conferences pledging to end contracting-out, thereby denying some £11 billion in income to pension funds. I do not believe that that is the best way in which to secure pension protection. Hon. Members and all the interested parties should come together to forge consensus in order to offer pensioners the protection that they deserve.