Pensions Bill

We are clearly saying that the amount of means-testing that appears to be built into the Bill is in danger of causing mass Government-sponsored mis-selling or deterring people from saving in the personal accounts. I ask the hon. Lady to reflect on the sense of a position whereby as many as 50 per cent. of the target audience for personal accounts may lose money and have low investment returns. The report that I cited earlier, ““Financial incentives to save for retirement”” has several omissions, not only the hidden bit about £1 for £1, which make it clear how dubious the benefits will be for many people. There is also an admission in the Department for Work and Pensions report that"““people may see a lower expected payback due to complex circumstances such as entitlement to housing benefit and council tax benefit, as well as pension credit.””" Most people would not regard the entitlement to housing benefit and council tax benefit as involving complex circumstances. Many of the people in the target audience for personal accounts are on housing benefit and council tax benefit. The report goes on to show that the difficulties involved in the means-testing will be even more significant—[Interruption.] I am delighted that the Secretary of State is heckling me. I suspect that I am hitting a sore nerve. The report states:"““However, a level of payback cannot be guaranteed, and the choices and characteristics which may leave a small number of people at higher risk of low payback may not be apparent to either individuals or Government during working life.””" Not only will many people lose money under this scheme but, because of the degree of means-testing, many of the people who start personal accounts will not know at the time whether they will get a decent return. I would be happy to give way to the Secretary of State if he wishes to comment on that. Those are not my facts—they are the facts in the Secretary of State’s own report, which he does not appear to have read. They make it increasingly clear that the rather sensitive and self-conscious statement that he made on personal accounts on 12 December to the effect that:"““We have already acted to make sure that the state pension provides a solid platform on which people can save.””—[Official Report, 12 December 2006; Vol. 454, c. 739.]" is not true. When the Secretary of State—[Interruption.] I am coming on to how we will vote on pension legislation. I assume that he wants to encourage the process of consensus, but it does not sound like it, given the nature of his sedentary contributions. I urge the Secretary of State to reflect on the report from the Pensions Policy Institute entitled, ““Are Personal Accounts suitable for all?”” I have no doubt that he will have read it, and he will therefore know that it contains examples of some of the at-risk groups ending up, in extreme circumstances, getting only 5p or 15p on £1 back for £1 of saving. The extent of the means-testing that is embedded in the proposed system and the inability of the Government to say whether the vast majority of people will get a two-for-one return pose a serious risk to the consensus on pensions. Our position is that, although we support the principles behind the Bill, we want to see serious efforts being made to deal with this problem before the Bill to introduce personal accounts comes before the House this autumn. I thought that I detected that view being expressed by the hon. Member for Runnymede and Weybridge as well. We could not, in all honesty, warmly support that Bill if we had serious concerns that there was going to be mis-selling or that many people—particularly those on low incomes—were going to lose a large amount of their savings in personal accounts.