National Insurance Contributions Bill

Part of Orders of the Day – in the House of Commons at 6:43 pm on 17 December 2007.

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Photo of Oliver Heald Oliver Heald Conservative, North East Hertfordshire 6:43, 17 December 2007

May I start in a Christmassy and benevolent way by paying tribute to the civil servants in the National Insurance Contributions Office who do such scrupulous and careful work maintaining complex records, especially those involved in the difficult work concerning pensions? The work concerning the winding-up of pension schemes needs to be particularly carefully dealt with.

When we consider pensioner poverty, it is important, as Paul Rowen said, to look at the reality on the ground. As he mentioned, a lot of people entitled to pension credit do not claim it. When pension credit was introduced, Members in all parts of the House were concerned about that issue. Take-up has never been satisfactorily dealt with, and that issue should be continually raised. The Government have signally failed to tackle an important issue for some of our poorest pensioners.

The Bill is part of the story of broken promises that is the history of the state second pension. Anyone who bought into the vision of Barbara Castle and contracted into the state earnings-related pension scheme would feel that they had been cheated over the years. They have seen reduction after reduction in their legitimate expectations of benefits: the loss of half the widow's benefit; the loss of the 20 best years rule; and now the fact that above a certain level of income, they will pay national insurance contributions and get absolutely nothing for it.

I would be the first to agree that it was possible to form a consensus a couple of years ago about the way forward with pensions. There was the idea of having a more solid block of flat rate state pension at the bottom, better inducements to individuals to save, and some sort of personal account, which is undoubtedly needed to encourage low and medium earners to save. Far too many people—7 million or so—do not save enough for the sort of pension that they want in retirement.

We would all accept that there is a case for a simpler system that is more robust and has trust in it. That is why the Bill is a disappointment. Those in the pensions world are beginning to use terms such as "sleight of hand" and "conjuring" to describe the way in which the Government behave. The sort of dressed-up proposal in the Bill, which is really about trousering money for the Treasury, is not the way forward, and does not respect the agreement reached in all parts of the House.