Pensions Bill

Thank you, Madam Deputy Speaker. I am not surprised that the Secretary of State is spending so much time reflecting on our plans, because he is so sensitive about the weakness of his own. That weakness is being discussed out there in the country, as he will discover when he goes out and talks to consumer groups, businesses and pension providers. These are their concerns. The hon. Member for Runnymede and Weybridge said earlier that people acknowledge that there is a risk of averaging down attached to the Government’s proposal to set a benchmark for personal accounts in terms of the employer’s contribution. There has to be some risk for the more marginal employers in those circumstances. Whether the Secretary of State likes it or not, however, what people out there really fear is not only some averaging down in existing provision, but that the personal accounts will not work. The Government could give generic financial advice on the matter, although the Secretary of State seemed unable to do so today, even in broad terms. The key factor, however, is that people’s economic interest in investing in the personal accounts must be clear, but at present it is not. I heard some Labour Members expressing concern about that earlier and I hope that the issue will be addressed in the debate. I want to touch on a number of other key issues before I return to the question of affordability, on which I know that the Secretary of State will be desperate to intervene on me again. The first issue of concern is the earnings link. The Secretary of State expressed concern earlier when he was questioned about the frustration of people over the delay in restoring the link. Either he has not been getting out and about enough in his constituency or he was being somewhat optimistic about the perception of the Bill across the country. Hon. Members on the Back Benches, who can speak fairly candidly, know that members of the existing pensioner generation are immensely disappointed that the restoration of the earnings link is to be delayed until 2012 or even 2015. I am sure that if the Secretary of State and his Front-Bench colleagues were being perfectly straightforward, they would admit that they were deeply unhappy and embarrassed about the fact that the Chancellor has refused to allow them to make that commitment sooner. The Secretary of State must know that millions of those in the existing generation of pensioners could be dead by the time the earnings link is restored. It could take until 2020 to get back to the level of state pension in relation to earnings that existed when these decisions were made in 2006, because until 2012 or 2015 the basic pension will continue to shrivel away in relation to average earnings. I cannot understand why the Government are not more embarrassed about that. It was intriguing to hear the Secretary of State’s response to an intervention from a Conservative Member about the ambiguity in introducing the earnings link in 2012. He said that the Government could not introduce it earlier than 2012 because of the timing of the increase in the basic state pension age, which implies a link or coupling between the two. However, the Government are dealing with those two things in a completely disconnected way. They have made it absolutely clear that the basic state pension age will be increased in 2024 come what may, even though no commitment whatever has been made to a firm date for the earnings link restoration. If the Government want to delay restoring the earnings link until beyond 2012, surely it is logical for them to consider delaying the introduction of a higher state pension age, too. I hope that the Minister for Pensions Reform will comment on the discretion that the Bill allows the Secretary of State to exercise in fixing the average earnings measure that will be used. Perhaps that should not greatly worry us and he will put our minds at rest. As the Bill makes such specific provision, however, and as so many different measures of average earnings could be used, I hope that some clarification will be made.