§ 6. Mr. John Wilkinson (Ruislip-Northwood)
What discussions his Department has held with representatives of pension funds about the Government's proposed stakeholder pensions. 
§ The Minister of State, Department of Social Security (Mr. Stephen Timms)
Ministers and officials have benefited from numerous meetings with representatives of the pensions industry, including those from personal pension and occupational pension funds. Pension fund representatives are receiving our consultation documents on stakeholder pension schemes and will help us to get the detail right.
§ Mr. Wilkinson
Would it not have been wiser to wait until the Green Paper consultation period had ended before initiating legislation? Is it not clear that both the Government's required top limit of 1 per cent. on annual fees and the low level of contributions—down to 10 per cent. a month—will squeeze life offices and pension funds that are already suffering severely under the Labour Government? Is not the axing of 4,000 jobs by the Pru a foretaste of things to come unless the Government listen and change their mind?
§ Mr. Timms
We consulted widely on the framework for stakeholder pensions contained in the Welfare Reform and Pensions Bill before the Green Paper was published. I listen with interest to the hon. Gentleman's appeals on behalf of the insurance industry. It is our ambition that every employee in Britain should, for the first time, have access to a good-value, dependable funded pension.
We are driving a hard bargain on behalf of scheme members, and we are absolutely right to do so. The Government and the industry need to pull out all the stops to persuade millions of people that it is worth their while to save for their retirement. We shall not do that if charges are excessive, as they have too often been for personal pensions. The financial services industry is perfectly capable of producing the good value that we need. Our job is to ensure that good value is delivered for stakeholder pensions.
§ Mr. Frank Field (Birkenhead)
I congratulate the Government on the extensive consultation on their welfare reform programme, and I welcome the extension to the consultation announced yesterday. However, there appears to be a contradiction between a stakeholder pension policy that relies on voluntary saving, and the introduction of a minimum earnings guarantee, which will make it impossible for many workers to save enough to be better off than they would be under the guarantee. Will the review announced yesterday consider that matter?
§ Mr. Timms
I do not believe that there is any contradiction. As formulated, the state second pension will take people above the minimum income guarantee if they have saved and contributed throughout their lives. If, instead, they are in a stakeholder pension, it, too, will contribute.
On the point about compulsion, the problem is that many people cannot afford to save. Already, 4.6 per cent. of national insurance goes towards their pension, and for low-paid people extra compulsion is simply not on. That is why the state second pension is being designed to provide a real incentive for voluntary extra saving, and that is what I believe our scheme will achieve.
§ Mr. Michael Trend (Windsor)
Following the Minister's reply to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), let me say that 628 surely a basic premise of the stakeholder pension scheme is that it will be popular because there will be a set 1 per cent. annual charge. Will the Minister confirm that the Government are sticking to, and will continue to stick to, that 1 per cent. figure?
§ Mr. Timms
I can confirm that we shall drive a hard bargain on behalf of scheme members. We are in consultation, and we shall take account of everything that we hear in response to the proposal. I am grateful to the hon. Gentleman for giving me the opportunity to correct a misapprehension under which the shadow Secretary of State, the hon. Member for Havant (Mr. Willetts), is labouring with regard to the consultation process. I welcome the hon. Member for Havant to his new position, and I accept that it is a tough brief to get on top of, but I informed the hon. Gentleman and the House last Wednesday that we published two consultation documents last month and we plan to publish four more this month. The hon. Gentleman issued a rather bizarre press release under the heading "Conservative Party News", in which he said:That brings the total number of such documents to a staggering 10".We shall have published six documents, not 10—two plus four equals six, not 10. That remains the position.
§ Mr. Terry Rooney (Bradford, North)
Has any pension fund provider or any life assurance company opposed the principles of stakeholder pensions?
§ Mr. Timms
No, they have not. They have warmly welcomed them. As my right hon. Friend said, there has been an almost universal welcome for the principles which we have laid down and which are contained in the Welfare Reform and Pensions Bill. It is important that we now work with the industry and everyone else with an interest in this matter to get the details right.