§ 11. Mr. FlynnTo ask the Secretary of State for Social Security what is the total of incentive paid to those opting out of the state earnings-related pension scheme into personal pensions at the current date; and what he expects the total to be five years hence.
§ Mr. HagueThe cost to date of the 2 per cent. incentive paid to those opting out of SERPS into personal pensions for the period 1988–1993 is estimated at £3.1 billion. The 626 incentive is not payable for periods after April 1993 and the total cost five years hence is therefore expected to be unchanged.
§ Mr. FlynnIs not this the biggest financial deception since the South Sea Bubble—the equivalent of 100 Maxwell pension scandals? Some 3.2 million people have been bribed and conned by the Government to their financial detriment, and the Government have been aided and abetted by wickedly deceitful advertising and pressure salesmanship from the pension industry. What has the Minister to say that will help those 3.2 million future pensioners and protect others from the salesmen, the muggers in smart suits from the pension industry?
§ Mr. HagueThe introduction of personal pensions has given millions of people the opportunity, which they did not enjoy before, to build up a fund to add to the income available in their retirement. That is not a scandal. Personal pensions have given people greater flexibility and pension provision than ever before. If there has been mis-selling and people have taken decisions on bad advice, the Government expect the Securities and Investments Board to present acceptable, workable and effective remedies—and it is now working on them.
§ Mr. John GreenwayDoes my hon. Friend agree that if there is any deception or scandal to concern the country, it is that successive Governments have taken national insurance contributions and spent that money, but did not use it to make provision for people in their old age? Will my hon. Friend ensure that the Government give people every incentive to make their own pension provisions? Does he further agree that had that been done 40 or 50 years ago, there would be far fewer elderly poor today?
§ Mr. HagueI am not sure that the national insurance fund is a scandal either, but my hon. Friend is right to say that things would be better in future if people built up a fund of their own, rather than rely on a pay-as-you-go state system. The increased diversity and provision of occupational and personal provisions is about that, and the Government will continue to encourage them.