Pensions Bill

If the hon. Gentleman had attended our debate earlier, he would have heard a discussion of that historic subject. I will, however, come on to consensus and its limits. We have serious concerns about the Bill. Linking the state pension with average earnings is the right thing to do—indeed, it was promised by my party at the last election, so we support the principle of the Bill. However, like many hon. Members, we are concerned that the measure could take a long time to implement and that implementation is still subject to the Chancellor’s escape clause. We should not be surprised by the Chancellor’s grudging attitude to the policy. After all, he built his now-tattered reputation for fiscal prudence by telling the Labour party that it could not restore the link with earnings. In her excellent speech, the hon. Member for Colne Valley (Kali Mountford) was good enough to concede that the decision to break the link was ““reasonable and rational””. We are concerned that current pensioners and people who are about to become pensioners will lose out—a view also expressed by the hon. Members for Angus (Mr. Weir), for Birmingham, Selly Oak (Lynne Jones), and for Glasgow, North (Ann McKechin). In its briefing, Help the Aged says that"““reducing the contribution record to 30 years for a full Basic State Pension will produce a cliff edge of differential entitlements for those retiring either side of April 2010, failing to lift many current pensioners out of poverty and creating problems for women retiring between now and 2010.””" We welcome the changes to provisions for carers, and particularly to women’s pensions, which are the last great unfairness of the pension system, and must be addressed. Again, that was dealt with in our last manifesto. The issue was touched on eloquently by the hon. Members for Northampton, North (Ms Keeble), for Aberdeen, South (Miss Begg), for Solihull (Lorely Burt) and for Amber Valley (Judy Mallaber). An excellent technical point was made by the hon. Member for Burton (Mrs. Dean) about paying credits to the right partner—a subject that we will want to consider in Committee. On the reactions of outside bodies, the general secretary of the National Pensioners Convention, Joe Harris, stated:"““The government has completely ignored the needs of today’s pensioners and the fact that over 2 million of them still live in poverty, the vast majority of which are women. 3 million older people will have died before ministers restore the link with earnings””." I have mentioned the cliff-edge problem for women pensioners, which will create some glaring unfairnesses in later years. We see the force of the argument for gradually increasing the state pension age, but we wish to hear much more from Ministers about flexible working practices and retraining for older workers. It is interesting that Ministers have downgraded their estimates of the saving from abolishing the contracted-out rebate. We wish to hold the Secretary of State to his promise that that saving will be reinvested in pension saving. On personal accounts, we agree with boosting workplace saving and with auto-enrolment. That also harks back to our last manifesto. However, for us there are not just one but four elephants in the room. The first is means-testing. That is the cancer that eats away at saving for retirement. Unless the growth of means-testing is put sharply into reverse, the Government’s reforms have little chance of success. Even after the reforms, the Government’s own figures suggest that means-testing will continue at about 30 per cent. That is bad enough. Apart from those who are among the 30 per cent., how are people to know early in their career whether they will be one of the 30 per cent.? A respected independent body, the Pensions Policy Institute, has reached a very different conclusion. It thinks the figure could be 45 or even 50 per cent. Attempts to narrow the gap between the PPI and the DWP have apparently not borne fruit.