Pensions Bill

My Lords, I start by declaring an interest as president of the Pensions Policy Institute and congratulating the Government on their intentions in introducing the Bill. I also add my thanks to the noble Lord, Lord Turner, and his colleagues who have done so much to get us here today through their work on the Pensions Commission. It is essential that the Bill gives us an integrated approach. The aim is to create a new pensions culture, so the disparate parts—working longer, saving more and getting a better pension at the end—must mesh together. The idea must be to balance the incentives with a fair amount of individual responsibility. The Government need to be bolder. There is a great deal of support for meaningful change in our culture and for the way that we achieve the aims of the Bill. That means public investment. We should ask whether sticking to the current percentage of GDP is realistic in the circumstances. I agree with the noble Lord, Lord Oakeshott, that, above all, we must tackle pensioner poverty and the low uptake of benefits. That remains a priority. The Government should look again at how reducing the qualifying working time to 30 years will be introduced in order to avoid the cliff edge in 2010 that is of particular concern to women. We must always remind ourselves that only 17 per cent of people receiving the full basic state pension are women and that 66 per cent of pensioners living in poverty today are women. If the Bill fails to address poverty in the present generation of pensioners—women pensioners in particular—it will be a lost opportunity. I hope that the Government will do something to address that now. Again, I have a lot of sympathy with the points made by the noble Lord, Lord Oakeshott. We must remember other inequalities; for example, regional variations in life expectancy. If people living in the south-east are compared with those living in Glasgow, there is a 10-year difference in male life expectancy. As a fair society, we cannot tolerate that situation. The Government have done a lot to recognise carers’ rights, and their commitment is very welcome. However, they need to be even more flexible in their interpretation. It is not just full-time caring that erodes a person’s access to paid work. Part-time carers, who are part-time workers in reality, must also be recognised. I was pleased with the recent announcement by the Minister, James Purnell. I hope that the carer’s credit will be extended to all caring people who are not currently in receipt of benefits if they are validated as being eligible by their GP or another authorised professional. I also hope that the Government will move forward with this aim in the national carer’s strategy and will look at how quickly they can introduce it in practice. The personal accounts system is a cornerstone of reform. It has to work and address undersaving by low-paid, self-employed and part-time people, which are groups that are overrepresented in the older workforce. We must avoid certain groups losing out as a result of potential loss of benefits. This is particularly worrying in the case of people who are in work but who are on less than average wages and are vulnerable. I declare another interest as a trustee of the Resolution Foundation, which has done a lot of work with the Government on issues relating to these groups, especially with regard to giving people advice and information that is generic, easy to understand, comprehensive and crucial to the target group of people who have not saved before and who need to do so now. The data that such people and everyone else receive must be reliable, there must be advice on benefits and we must ensure that people do not lose out. As we know, saving in the personal account will mean less eligibility for means-tested benefits, especially the pension credit. Many people would agree with me that the state second pension should be linked to earnings and be credited over30 years. Otherwise, the anomaly between that and the basic state pension will be very confusing. The Government should and, I hope, will, set a definite date for the restoration of the earnings link as soon as possible. The end of a Parliament is not definite enough for people who need to find out what will happen and to make plans. However, in line with my opening remarks about creating a new work culture, we need to do much more to enable older workers to remain in work, to return to work and to be retrained and supported, if necessary. At the moment, lifelong learning and training for work tends to be for people under 40. The demographic change means that that is not adequate. We need an annual report or review on the over-60s in the workforce and on background demographics to ensure that we remain headed in the right direction. Only if we get this right will we be able to celebrate the demographic revolution caused by the huge change in life expectancy in our society. That change means, among other things, that over half the children in this country will reach the age of 100 or more. As a society, we must rethink all our policies and practices in the light of that new longevity, and getting the pensions system right is the cornerstone of those policies—the one on which all the others can build.