Pensions and Welfare Reform

Part of the debate – in the House of Commons at 1:22 pm on 13 October 2004.

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Photo of Alan Johnson Alan Johnson The Secretary of State for Work and Pensions 1:22, 13 October 2004

I will come to my hon. Friend's point in a second. It is crucial to what will be the major aspect of the second report from the commission, which is whether there should be compulsion. Informed choice is important to that.

We believe that there is real potential—in fact, I come to my hon. Friend's point straight away—in revitalising the voluntary private approach. The newspapers erroneously said last weekend that I had ruled out compulsion in respect of whether to contribute to private pensions. I did no such thing; I have an open mind on the issue. I will wait for the Turner commission report. However, it would be strange to move to compulsion without properly exploring the voluntary private approach. It must be right to consider that further.

To that end, we are already pursuing policies that seek to restore confidence in private pension saving, create greater incentives for people to save and activate people to take advantage of the provision that is already there, making decisions based on clear, tailored information. The informed choice agenda and trying to wipe away the complexity that Adair Turner rightly identified as inherent in our pension system are issues that we must approach.

I would like to finish by saying a few words about each of those three aims: restoring confidence, creating greater incentives for people to save and activating people to take advantage of the provision that is already there.