HC Deb 26 April 2004 vol 420 cc619-21
3. Mr. Desmond Swayne (New Forest, West) (Con)

What progress he is making towards his target on funded pension provision. [167677]

The Minister for Pensions (Malcolm Wicks)

Our objective is to bolster security and confidence in private pensions so that in the long-term an increasing proportion of retirement incomes derive from private provision. We are doing much to achieve that. There is the Pensions Bill with a pension protection fund and pro-active regulator, which will significantly increase the protection offered to pension scheme members. We also have a strategy of informed choice that empowers individuals to take control of their retirement planning.

Mr. Swayne

What assessment has the Minister made of the proposals of the Adam Smith Institute and others to reduce the unfunded liabilities of the state's own employee occupational schemes?

Malcolm Wicks

We consider a whole range of ideas. Rather to my surprise, I was invited to speak at a seminar at the Adam Smith Institute some months ago—not bad for a Fabian. We consider all those ideas, but we are convinced that the proposals in the Pensions Bill will bring much greater security back into occupational pensions, which remains a major priority for the Government.

Mr. Frank Field (Birkenhead) (Lab)

Does the Minister accept that one of the best ways of boosting his goal of increasing funding provision would be to ensure that all those who have saved towards their retirement get the pension to which they are entitled? The House has effectively provided a guarantee that when the Pensions Bill returns, an amendment will be tabled to provide compensation to those who have already lost their pensions, reclaiming the moneys through unclaimed assets. To what extent has that strengthened the Minister's hand in his crucial negotiations with the Treasury?

Malcolm Wicks

I thank my right hon. Friend for his helpful question, but I am not in a position today to add to the statements already made by my right hon. Friend the Secretary of State and the Prime Minister last week. They both made it clear that the Government are very concerned about the hardship and injustice faced by this particular group. We are examining the position very carefully and we hope to present any conclusions as soon as possible. It is important, however, even at this stage, not to raise expectations that might prove beyond what it is possible to meet.

Sir Peter Tapsell (Louth and Horncastle) (Con)

Is it not a fact that the Prime Minister did raise expectations considerably when he spoke in the House last week? Can the Minister confirm that the Prime Minister clearly said that serious consideration was being given to making the compensation arrangements in the Pensions Bill retrospective?

Malcolm Wicks

Let us remind ourselves of the context. The Government are legislating to protect the future through a protection fund, which will protect the pension rights of at least 10 million scheme members. That is hugely important. The official Opposition declined to give the Bill a Second Reading, so we should pay attention not so much to what they say, but to what they do about the security of pensions.

In terms of the group that we are talking about, I cannot add to what I said a few moments ago or to what the Prime Minister has said, but our intentions for the future are clear with the protection fund.

Kevin Brennan (Cardiff, West) (Lab)

Does my hon. Friend acknowledge that if assistance is to be forthcoming, it will have to extend beyond those who were technically compelled to join occupational pension schemes and to all who have suffered as a result of the crisis?

Malcolm Wicks

We need to look carefully at the facts. We are doing that and are collaborating with industry to see just how many people have been affected in the terrible way described, and we need to examine the different groups. I must say again, however, that we do not want to do anything to raise expectations beyond what is realisable. We understand the importance of the matter to the House and will bring forward our conclusions as soon as possible.

Mr. Nigel Waterson (Eastbourne) (Con)

Does the Minister accept that a new employee now has only a one in five chance of joining a company that has a final salary scheme still open? Does he accept that the Bill will not encourage a single employer to open a new scheme or to keep one open that is already in existence? Is not the Bill just an elaborate memorial service following the demise of final salary schemes in this country?

Malcolm Wicks

We have a wide-ranging strategy including tax simplification, simplifying pension schemes wherever possible, the informed choice strategy, the new regulator to stop things going wrong in the first place, and the pension protection fund. The hon. Gentleman and I have discussed all that in Committee for rather too long, and for him to dismiss as a fig leaf a Bill that will give security to at least 10 million scheme members in future is a piece of social policy illiteracy.