Personal Pensions (Hansard, 15 October 1990)

§ 5. Mr. Donald Thompson
To ask the Secretary of State for Social Security what is the latest estimate of the numbers who have taken out personal pensions.

§ The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard)
A total of 4.1 million people have so far taken out a personal pension.

§ Mr. Thompson
I thank my hon. Friend for that satisfactory answer. Will she comment on the Labour party's policy? Having frightened pensioners—

§ Mr. Speaker
Order. That is a bad habit. In this Session can we stick to the Government's policies at Question Time?

§ Mr. Thompson
I am sure that it will not be the Government's policy to frighten potential pensioners as it is the policy of the Labour party.

§ Mrs. Shephard
My hon. Friend is right. The Government's policy is to encourage choice in pensions so that people can remain in SERPS, take out a personal pension or belong to an occupational pension scheme. It would not be the Government's intention to turn the pensions market on its head.

§ Mr. Frank Field
As the Government do not believe in bucking the market, will the Minister tell the House why she feels that the proposals need to be subsidised from the national insurance fund? Will she tell the House to what extent the national insurance fund has been raided in an attempt to make the scheme a success?

§ Mrs. Shephard
I am sure that the hon. Gentleman will agree that the Government of which he was a member also introduced incentives for changes in social security policy. He will also know that the major cost of personal pensions is not the 2 per cent. incentive but the cost of rebates, as it would be for occupational pensions. The incentive represents less than 2 per cent. of the total income of the national insurance fund.

§ Mr. Butler
If contracting out of the state system has proved so popular, does my hon. Friend have any plans to extend the principle?

§ Mrs. Shephard
I have already said that the Government are in favour of choice in pensions policy and no doubt we shall be looking for ways to extend the principle of choice.

§ Mr. Flynn
Will the Minister treat us to a rare moment of honesty on this matter—

Hon. Members
Oh.

§ Mr. Speaker
Order. That is a little harsh. Will the hon. Gentleman withdraw that phrase?

§ Mr. Flynn
I shall withdraw it. I did say "rare". I was not suggesting that the Minister is constantly dishonest.
Will the Minister admit that this has nothing to do with choice? The Government are trying to shuffle off their responsibility to 4.1 million people, who will find when their pensions are paid, as independent sources have 911 shown, that at least 1 million of them have been badly advised and bribed out of a good scheme that has been running for a long time. Will the Government give us an undertaking that all those who have been misled out of the pension scheme will be told when it is in their best interest financially to return to the national insurance scheme?

§ Mrs. Shephard
The matter was fully rehearsed during the passage of the Social Security Bill this year, so the hon. Gentleman will know that all those marketing personal pensions must belong to the Life Assurance and Unit Trust Regulatory Organisation or the Financial Intermediaries, Managers and Brokers Regulatory Organisation and have to observe a code of conduct about the best advice that has to be given to the customer. The hon. Gentleman and his party do not like the success of the extension of choice.