§ 12. Hugh Robertson (Faversham and Mid-Kent)If he will make a statement about the rate of saving for retirement in the United Kingdom. [89711]
§ The Secretary of State for Work and Pensions (Mr. Andrew Smith)As set out in the pensions Green Paper, we believe that as people are living longer and want good standards of living in retirement, they need as a whole either to save more, to work longer, or a mix of both. That is why we are consulting on a range of measures to improve simplicity, security and choice in pension saving as well as making it easier for people to carry on working longer when they want to.
§ Hugh RobertsonI n view of the problems of last year's Office for National Statistic figures, is the Secretary of 404 State convinced that people are now saving enough for their retirement? If not, what is he doing to encourage people to save more?
§ Mr. SmithI already said in my initial answer that we recognise that if people want good standards of living in retirement, and as people are living longer, they will clearly need to save more, work longer or a mix of both. The ONS conducted a review of the statistics, and I think it wise to treat all pensions statistics with caution until that review has been fully implemented.
§ Alan Simpson (Nottingham, South)Is not the greatest sense of insecurity about people's pension contributions to be found in the 40 per cent. devaluation in the value of their pensions that is a result of frittering that away in a gamble on the stock exchange over the past year? If we are to encourage pension contributors to make larger contributions, should we not also consider allowing workers to have a greater choice about the direction in which their savings are going? I refer specifically the prospect of workers being able to choose to have their contributions paid into infrastructure investments, which would provide security of assets, certainty of return and a social dividend on top?
§ Mr. SmithThe Green Paper's proposals radically to simplify the framework for pensions saving, not least as far as tax treatment is concerned, will increase existing flexibility, which has already been enhanced, not least by the introduction of individual savings accounts.
§ Mr. David Willetts (Havant)The Secretary of State has just said that it is wise to treat pension statistics with caution. Why, then, having come to the House last month to claim that our pension contributions had increased by 40 per cent. since 1997, did he use that statistic as justification for the complacency of his Green Paper? I welcome the fact that he has not repeated that statistic today; has he seen sense and abandoned his claim that our pension savings are zooming upwards? If that figure really is so shaky, why did he rest his policy on it last month?
§ Mr. SmithThere is no complacency about pension savings or the way in which the statistics are assessed. That is why I announced the review on which the ONS has now embarked. That is also why, as I said, it is wise to treat all statistics with caution until the review has been fully implemented. The hon. Gentleman will have noticed that the pension commission that we are establishing as part of the Green Paper process will, as one of its first tasks, undertake a baseline audit of the adequacy of long-term savings for pensions, including the adequacy of the information available.
As for the figures cited by the hon. Gentleman, I and other Ministers are right, when asked, to report to the House the figures that we are given by the ONS. We should be criticised if we did not give those figures. The figure of 40 per cent. was cleared with the ONS, and I checked it again before Question Time today.
§ Mr. WillettsI t is always the fault of the Office for National Statistics. The fact is that Ministers used the statistics as the basis for their complacent policy. I do 405 not believe, and have set out my arguments for not doing so inThe Times today, that we are saving £46 billion a year, another statistic that the Secretary of State has repeated. The correct figure is £32 billion a year. The Secretary of State is able to claim that we are apparently putting more and more money into our pensions only by counting the extra money that companies must put in to offset the effects of the tax increase. If he were to put another £5 billion a year tax on pensions, and if companies had to put more money into their pensions funds to counteract it, he would claim that we were saving more for our pensions. Does he realise what an absurd position he has got himself into?
§ Mr. SmithThe hon. Gentleman has been very assiduous on this matter, and I have been happy to come to the House to acknowledge the service that he has provided in questioning the statistics. Indeed, that is the job of the Opposition.
That said, so far as the hon. Gentleman's claim to be specific about the level of pensions saving is concerned, I treat his statistics with at least as much scepticism as I regard those that come from the ONS.