§ 17. Mr. Mark Hoban (Fareham)What assessment his Department has made of the estimated cost to businesses of implementing stakeholder pensions.[19158]
§ The Minister for Pensions (Mr. Ian McCartney)A regulatory impact assessment was published last year setting out the likely costs to business of the stakeholder pension schemes regulatory framework. A copy will be placed in the Library.
§ Mr. HobanIs it not disgraceful that a Minister does not know how much businesses have spent on 592 implementing a policy that the Financial Times described as unsustainable and as unlikely to survive? What would the right hon. Gentleman do to resolve the crisis of this flagship policy with its appallingly low take-up rate among the target group of moderate to low income earners?
§ Mr. McCartneyThe hon. Gentleman is certainly a weary Willy. It is quite clear that both Front-Bench and Back-Bench Conservatives are totally opposed to providing pension provision to that group of workers who currently do not have such provision.
Far from being a failure, from a standing start and in a matter of months, just over 500,000 stakeholder pensions have been sold, and 285,000 employers have been designated. When I last stood at the Dispatch Box at Question Time, I said that it was likely that only two thirds of employees would have designated schemes by 8 October, but three quarters of them have done that. We are working with employers to maximise the numbers involved.
The overall level of pension provision this year shows that the value of new pension sales rose by 9 per cent. and regular premium business rose by 50 per cent. The Government are supporting the pension market and supporting the large proportion of workers who, if it had been left to the Tory party, would not have had a pension at all.
§ Mr. Nigel Beard (Bexleyheath and Crayford)Is my right hon. Friend aware of the recent report produced by the National Association of Pension Funds which shows that new entrants to pensions are increasingly offered money purchase schemes rather than final salary schemes? Moreover, it shows that employers' contributions to money purchase schemes are only just over half the contributions to final salary schemes. The implication is that people now in their 20s or 30s will have substantially less pension when they retire than their counterparts who retire now. Is that not inconsistent with Government pension policy?
§ Mr. McCartneyThe policy that my hon. Friend mentions has been going on for 30 years, but it is interesting to note the sustained growth in the amounts contributed to state pensions. The figure has risen from £37 billion in 1994 to £69 billion last year. As I said in my reply to the hon. Member for Fareham (Mr. Hoban), there has been a sustained increase in pension sales and in the investment going into pensions. The issue is to make sure that we have pension products that provide for all aspects of people's pensions, and that is why the second state pension has been introduced. Some 14 million low-paid workers benefit by an average of £32 a week and 2 million people with disabilities are also helped. Women carers are benefiting for the first time. A large proportion of workers who were outside the stakeholder pension are now inside the pension marketplace. The Government have a sustained programme in place, and it is important that my hon. Friend supports the Bill to introduce a second state pension because that will help many pensioners who would have lost out under the Tories.