Pensions (Hansard, 18 October 1993)

§ 13. Mr. Dickens
To ask the Secretary of State for Social Security what measures his Department is planning to encourage personal choice in pensions.

§ Mr. Lilley
The Government are committed to encouraging wider choice in pension provision.

§ Mr. Dickens
Will my right hon. Friend confirm that it is a fact that, since 1988, when it was possible to contract out of the state earnings-related pension scheme, 5 million pensioners have chosen to contract out and have personal pensions? Does not that show and amplify the Government's commitment to personal choice and personal pension schemes and should not we encourage everybody to think more about their future and provide for their twilight years?

§ Mr. Lilley
My hon. Friend is right. The measures that we took to widen choice for private pension provision have been extremely successful—5 million, or 10 times as many as were initially forecast, have taken out personal pensions following that measure. That is on top of the 10 million or more people who have occupational pensions. We want to build on that success and enable people to build up pension provision for retirement, to give them additional resources over and above those provided by the basic state pension

§ Mr. Skinner
Is the Secretary of State aware that it is one thing for business executives who have had a 20 per cent. increase in their salaries in the past 13 months and for those who have had tax cuts during the past 14 years to be able to have a personal choice in pensions? But for the great majority of pensioners who will have to put up with a miserly £1 increase as a result of the measures taken by the Government, it will be a scandal. They have not got two ha'pennies to rub together, never mind talking about a personal pension scheme, while it cost £4,000 to bring the Secretary of State back from France to vote in the House of Commons.

§ Mr. Lilley
The hon. Member may want to see higher inflation so that, by money illusion, people appear to get more, but I remind him that most people do not have, in addition to their basic state pension, the index-linked pension to which he can look forward when he retires from the House. They are jolly glad that we have got inflation down because inflation undermines the value of their savings and robs them. He may be proud of being a supporter of the Government who robbed pensioners of a quarter of their savings in a single year, but we are determined that that should never recur.