HC Deb 01 July 2002 vol 388 cc15-7
10. Bob Spink (Castle Point)

What recent assessment he has made of the viability of funded pension schemes. [63394]

The Minister for Pensions (Mr. Ian McCartney)

Funded provision is crucial to overall pension provision in the United Kingdom. If it is to remain viable, we need to ensure that we have an appropriate level of regulation and the right incentives to encourage employers and employees to contribute to pensions. That is why we have commissioned the Pickering and Sandler reviews, which will be published in the next few weeks.

Bob Spink

Now that the Government have admitted that, like Enron, they gave false figures, will they admit two specific points: first, that the number of people benefiting from occupational pensions is now 10 per cent. lower than when they took office in 1997 and, secondly, that the proportion of money saved by British households last year fell to the lowest level since records began? Will the Government try to correct that situation and help those on funded pension schemes by now withdrawing the £5 billion pensions tax that they imposed?

Mr. McCartney

The hon. Gentleman never ceases to amaze us. I and my colleagues gave information to the House on the basis of an independent analysis. When challenged about that analysis, we rightly said that, the analysis being independent, Ministers had given the House the information that was available. As the hon. Gentleman can confirm, when it became clear that there was a need for a review and as soon as Ministers knew that the answer that I had given in good faith to the House could be questioned, we informed the hon. Member concerned, and spoke to him personally. At 3.30 pm, we will put forward proposals to ensure that an effective response is made in respect of my answer.

More importantly, in this complex area, the last Government continued to give wrong information in a non-independent way. We have initiated a review by independent experts, and I hope that there will be an agreed settlement on how, in future, we publish statistics in this area. The hon. Gentleman's Government failed to inform people about their entitlement to SERPS, which cost widows about £1 billion a year. When Labour Ministers find that there is a problem, at least we report it to the House immediately and take action to rectify it.

John Robertson (Glasgow, Anniesland)

Does my right hon. Friend agree that one of the best incentives that could be given for pensions would be to establish a minimum amount of money that employers must contribute—9 per cent., for example—to ensure that workers would also put in their money?

Mr. McCartney

My hon. Friend is right that employers need to make contributions to pension schemes. In general, we would agree with that. I would like to wait, however, to see whether the Pickering review recommends further action on compulsion. I want to make it absolutely clear that Ministers want to ensure that the review gives an incentive to employers to contribute, and to continue to contribute, to the pensions of their employees. It is in everybody's interests, including employers, that they invest in their employees' future through pensions.