Pensions (Hansard, 20 February 1995)

§ 2. Mr. Whittingdale
To ask the Secretary of State for Social Security what steps he is taking to increase choice in pensions.

§ 10. Mr. David Evans
To ask the Secretary of State for Social Security what measures he is planning to increase choice in pensions.

§ The Minister for Social Security and Disabled People (Mr. William Hague)
Government policies aim to provide a range of pensions provision from which 3 individuals can choose with confidence. We propose to strengthen occupational pensions law, introduce age-related rebates for contracted-out personal and occupational money purchase schemes and give personal pension holders more flexibility in the use of their savings on retirement.

§ Mr. Whittingdale
Does my hon. Friend agree that public confidence in choosing an occupational pension will be considerably increased by the news that the Maxwell scheme trustees have accepted a settlement in principle? Does he agree that much of the credit for that lies with Sir John Cuckney, and will he convey to Sir John the congratulations of the House?

§ Mr. Hague
Yes, my hon. Friend is right to draw attention to the good news of the agreement in principle for Maxwell pensioners, which is welcome. Details remain to be finalised, but Sir John and others involved have done a tremendous job. I hope that they will now be able to bring their work to a successful conclusion.

§ Mr. David Evans
What plans does my hon. Friend have for pensioners and people on fixed incomes if the lot opposite ever come to power? Is he aware that under the last Labour Government, pensioners and people on fixed incomes had their incomes savaged by 27 per cent. inflation, and that the lot opposite did not even pay a Christmas bonus two years out of the last four when they were in power?

§ Mr. Hague
My hon. Friend is absolutely right. Pensioners on fixed incomes suffered greatly under the previous Labour Government when electricity prices rose by 2 per cent. every six weeks. Under this Government, the proportion of pensioners in the lower income groups of the population has fallen dramatically and that is testimony to the success of our policies.

§ Mr. Corbyn
Will the Minister confirm that when the previous Labour Government left office, the state pension was about 24 per cent. of average earnings? What is it now? Will he tell us by how much each year he is subsidising the national insurance fund to promote private personal pension schemes at the expense of the state earnings-related pension scheme?

§ Mr. Hague
That is the sort of hostility to the private provision of pensions that could be deeply damaging to the future of this country. People who have taken out personal pensions are paying, from their own incomes, more than £2.5 billion a year. They are putting that money aside for pension provision in the future under the arrangements that the hon. Gentleman spends his time attacking. It is vital that there is additional provision on top of entitlement to the state pension, with the state pension being indexed in line with prices.

§ Mr. Enright
Does the Minister agree that many miners who, legally but criminally, were persuaded to change their pensions from the miners' pension scheme to private pension schemes have been done out of huge sums, which they cannot now get back under any of the new mechanisms put in place by the Government? Is not it about time that the Government did something urgently about this because it is at least as scandalous as the Maxwell case?

§ Mr. Hague
Where there has been mis-selling of personal pensions, the Government are anxious to see that 4 there is a remedy. The Government very much welcome the action that the Securities and Investments Board has now set in train to provide a remedy in precisely the circumstances that the hon. Gentleman describes.