Pensions Bill

My amendment in this group is intended to explore the extent of the analysis relating to the decision to improve the coverage of the full state pension. However, before I do that, like the noble Lord, Lord Oakeshott, I want to say a few words. First, as a former micro-member of the usual channels, I am well aware that it is necessary to have a balance between Committee stages taken in the Chamber of your Lordships’ House and those taken off the Floor of the House. The fact that previous pensions, welfare or national statistics Bills have been held in one or the other is of no consequence as regards precedence. Secondly, as I said at Second Reading, there is a large measure of consensus between us and the Government on the Bill. However, as usual, problems arise due to what is not, rather than what is, in the Bill. Most of the amendments in the Marshalled List for this Committee stage relate to the category of what is not in the Bill. In speaking to my amendment, I start by making a purely probing comment. The reform in the Bill relating to state pension age has been widely welcomed and we on these Benches fully support it. However, we should take care that the Bill does not promise what cannot be delivered. It is in everyone’s interests, especially those who hope to receive a full state pension, that the extra cost to the taxpayer of reducing the required amount of national insurance contributions is affordable and that phasing in the new requirements is done fairly, smoothly and with the least possible amount of confusion. As I understand it, the only information in the public domain, as the noble Baroness, Lady Greengross, mentioned, is in the regulatory impact assessment, which explains why the whole package of reforms that the Bill introduces will raise spending on pensions from 5.1 per cent to 7.3 per cent of gross domestic product. As we shall no doubt hear in Committee, that is still considerably less than is spent on state pension provision in other European countries. However, the increase will still have to come from somewhere and it will be necessary either to increase taxes or to reduce public expenditure in other areas. I would be interested to hear from the Minister which route the Government intend to take. If it is the latter, are there any particular savings that they have in mind already? My noble friend, Lord James, spent many months discovering many such savings whenhe produced his excellent report. However, the Government are hell-bent on increasing expenditure, not least in the areas of health and education, with little obvious benefit. There are also administration costs. A total of£192 million is expected to be spent on adjusting the pension systems to the new conditions. The Government have an unfortunate record in introducing large scale administrative reform, especially where complex computer systems are involved. The report that this amendment hopes to provide would highlight any unrealistically optimistic predictions and would also be extremely valuable should the estimates not prove to be accurate. Therefore, I look forward to hearing the Minister's response. I find the suggested timetable of 2008 in the amendment in the name of the noble Lord, Lord Oakeshott, rather optimistic. Although we on these Benches fully support the Government’s intention to reduce the required contributions to 30 years, I do not think it is feasible to introduce such change in so short a time.