Pensions Green Paper (Hansard, 8 February 1999)

§ 1. Mr. David Borrow (South Ribble)
What assessment he has made of the responses to the pensions Green Paper received to date. [68005]

§ 17. Mr. Tim Collins (Westmorland and Lonsdale)
How many responses to the Green Paper on pensions he has received to date. [68022]

§ 19. Mr. Edward Leigh (Gainsborough)
How many responses to the Green Paper on pensions he has received to date. [68024]

§ The Secretary of State for Social Security (Mr. Alistair Darling)
The pensions strategy set out in our Green Paper has received a great deal of support. We have received a number of written responses and expect to receive many more by the closing date, which is 31 March.

§ Mr. Borrow
Thousands of my constituents who rely on income support will be substantially better off from 2 1 April, with the Labour Government's minimum income guarantee. However, many thousands more of my constituents rely on a mixture of modest savings and small pensions, and they are little, if at all, better off—and, in some cases, worse off—than pensioners on income support. Can the Secretary of State assure me that, under the proposals in his Green Paper, pensioners will be substantially better off in the future?

§ Mr. Darling
My hon. Friend is right. From April, the minimum income guarantee will mean that a single pensioner will get at least £75 a week, and couples will get at least £116.60. He correctly identifies a problem that has existed in the social security system for many years, where pensioners may have a modest amount of savings and perhaps a small income. As I announced in December, the Government are studying that difficulty with a view to removing it, because we want to reward saving, and because saving should not be penalised.
My hon. Friend asked a general question. Of course, one of the main objectives of the pensions Green Paper was to ensure that people who work throughout their lives have the opportunity to save, to the extent that they get a pension that is above benefit level. We intend to achieve that objective.

§ Mr. Collins
Given that one of the Government's first actions, in their first Budget, was to take £5 billion a year from pensioners, will the White Paper give them that money back?

§ Mr. Darling
The hon. Gentleman will be aware that one of the best things that we can do to help pensioners now and in future is to create a climate of economic stability. Part of our objective in modernising the corporation tax regime was to ensure that companies were more profitable, which would benefit their shareholders, including pension funds and individual pensioners. We now have the lowest corporation tax ever, thanks to this 3 Labour Government; that is good for pensioners because it is good for the long-term profitability of the corporate sector.

§ Mr. Leigh
Was it entirely fair to the general public to launch the Green Paper on pensions in December and then, last week, just two or three months later, to launch the lifelong individual savings account—a new form of pension saving—without any mention having been made of LISAs in the original document in December? Was that fair?

§ Mr. Darling
I can only assume that the hon. Gentleman did not read the Green Paper because, had he read it, he would have seen that it was clearly set out there that we were going to make a further announcement, adding a further option to stakeholder pensions. The important thing is—

§ Mr. Leigh
indicated dissent.

§ Mr. Darling
The hon. Gentleman may shake his head, but it was written in the Green Paper. He should read it rather than criticise it.
The hon. Gentleman will also accept that the main thrust of our Green Paper was to give people as many choices as possible, to take account of changing labour market conditions and people's different requirements. As I said in reply to the question by my hon. Friend the Member for South Ribble (Mr. Borrow), our objective is to ensure that as many people as possible save, to enjoy a decent income in retirement.

§ Mr. Frank Field (Birkenhead)
Will the Government publish a detailed analysis of all the responses to each of the Green Papers?

§ Mr. Darling
As my right hon. Friend will know, yes we will. He knows that we have published all the responses to all the consultation exercises that we have carried out, including those to the two Green Papers that he had a hand in drafting. I believe that they are not in the Library because they are too bulky, but they are available, except when people have expressly said that they do not want their response to be made public. The analysis is, of course, taken into account when the Government develop their policy. Therefore, the answer to my right hon. Friend's question is that we are analysing the responses and publishing them in full.

§ Mr. David Rendel (Newbury)
Does the Secretary of State accept that there is a glaring gap in his proposals as far as the self-employed are concerned? Does he also accept that the self-employed are unlikely to invest sufficiently in second-tier pensions for themselves unless there is at least an element of compulsion?

§ Mr. Darling
I wonder whether the hon. Gentleman listened to my statement on 15 December and whether he has read the Green Paper, because I explicitly said that the case for compelling the self-employed was stronger than that for compelling everyone else. We know that many self-employed people are not making provision for themselves. Part of the logic of introducing the 4 stakeholder pension, and of last week's announcement, is to give self-employed people more options than before, so that they have no excuse for not saving.
If the hon. Gentleman reflects on what is said in the Green Paper and what I said in the statement, he will realise that the Government have been looking at everyone's pension needs because our objective is to end the current situation, whereby, as he knows, about one third of people now working would retire on benefit if we did nothing. That is not good enough.

§ Dr. George Turner (North-West Norfolk)
My right hon. Friend will know that, during last week's debate on pensions, a possible misinterpretation could have been put on the facts as to whether there was an element of robbing Peter to pay Paul in the state second pension. Can he confirm unequivocally that all those who will be on the state second pension will be better off—whether they are above or below the £9,000 divide—than they would have been on the state earnings-related pension scheme?

§ Mr. Darling
My hon. Friend is right because the new state second pension is not earnings related. Therefore, it disproportionately benefits those on low incomes as well as everybody on that part of his or her income below £9,000. The objective is to ensure that those on low pay will accumulate during their lifetime a decent pension on which to retire. Moderate earners will have the increased rebate, which they can take into their funded pension, which we believe will mean that they will be better off than otherwise.

§ Mr. Quentin Davies (Grantham and Stamford)
In answer to my hon. Friend the Member for Gainsborough (Mr. Leigh), the Secretary of State was trying, retrospectively, to pretend that his Green Paper, which came out in December, was consistent with the Treasury's proposals for lifelong individual savings accounts, which came out last week. If that were the case, why does page 55 of the Green Paper state: The legislation for stakeholder pension schemes will provide for schemes to be set up under trust law", whereas the Treasury's proposals last week explicitly excluded LISAs from being under trust law?

§ Mr. Darling
Let me explain to the hon. Gentleman. We are legislating to provide for stakeholder pensions to be set up under trust law because without that legislation they could not exist. That is why we are introducing the legislation.
The hon. Gentleman asked also about the proposals that were introduced last week. We are not legislating in that area because primary legislation is not needed to effect the proposals. That can be done by secondary legislation.
I suggest to the hon. Gentleman and to just about everyone else on the Conservative Benches that, if they read the papers before they spoke, they would be much better off.