Pensions Bill

I am delighted to tell the Minister that I shall deal with those very points in a moment. He will probably already have guessed, however, that this is a probing new clause, albeit an important one that is designed to squeeze out of him a commitment to reducing means-testing to those kinds of levels. I shall develop the point that he has raised in a moment. The Pensions Policy Institute is looking at a range of the possible extent of pension credit of one third to two thirds in 2050, with what it calls"““a base case of no change from today’s level of 45 to 50 per cent.?." This could mean, to quote its document,"““between 4 million and 6 million households eligible for pension credit?." This is precisely why we urged the Government to agree to an evidence session under the new procedures during the Committee stage of the Bill, in order to hammer out these differences and the reasons for them. The Government’s own projections show means-testing at about one third, post-reform. I can see that that represents progress from the current levels, but it still remains historically high. Apart from anything else, how will people near the beginning of their careers know whether they will be one of the third, or one of the two thirds? Will not the knowledge that they have a one-in-three chance of being means-tested in retirement have an effect on their behaviour? We learned with great sadness, however, that the Minister had declined our invitation to hold an evidence session. Instead, he invited us to a seminar on the subject, which is his default position at the moment. There is a real danger of those of us who follow the Bill becoming seminar junkies. Anyway, we all duly turned up and listened to the views of the DWP and the PPI. By the end of the seminar, I was—as F. E. Smith might have put it—none the wiser but much better informed. It was clear that different methodologies were being used by the two contenders. For example, the PPI included the effects of housing benefit, but the DWP did not. Where the PPI failed to score was that, unlike the DWP, it did not have an amazing machine whirring away in the basement to produce its projections. The nearest that we came to consensus on means-testing levels was the conclusion that there was"““a range of plausible outcomes?," which I hardly think was worth the trouble and expense of laying on the seminar in the first place. But there we are; I do not want to seem churlish—how would I fill my days otherwise? But there remains a big gap, and little prospect of closing it. In fairness, apart from the obvious difficulty of projecting figures so far ahead, one of the imponderables is how successful personal accounts will turn out to be. On the face of it, new clause 29 looks somewhat draconian, as the Minister said earlier. It proposes that if more than 29 per cent. of pensioners are subject to means testing by the time of the introduction of personal accounts, the delivery authority should be wound up. The 29 per cent. figure is a Government figure; they project that the proportion of means-testing will fall from about 45 per cent. to about 29 per cent. by 2050, following the reforms. We take the view—I would be interested to hear whether the Minister agrees—that any higher level than that would seriously jeopardise the future of personal accounts. As I have said, however, this is a probing new clause—unlike the previous one—designed to draw out the Government’s thinking. Does the Minister share our concerns and those of the industry about means-testing? How committed are the Government to rolling back means-testing? How has their thinking developed since the Committee stage and the seminar? I ask those questions not just as a member of the official Opposition and not just in a spirit of consensus on long-term pension reform, although that is important. I ask them also because we do not wish to inherit a system that has clearly been set up to fail. These are issues that need to be addressed now.