Pensions Bill

The noble Lord seems to be a little selective in his application of these principles. He asked the Committee this afternoon to believe that the lifeboat that the opposition partiesare proposing is a credible vessel, because it willbe freighted with unclaimed or orphan assets from pension funds. He even said today that the Conservatives would lay their hands on people’s premium bonds. Once upon a time, the Conservative Party had some respect for private property. The Government’s review will look realistically and I trust will report soon on what these orphan assets and unclaimed assets are and whether there is really scope to extract some more beneficial use from them. But in the mean time, I heard the noble Lord, Lord Skelmersdale, calling for immediate payments—so his contention that this lifeboat would not entail more public expenditure is simply incorrect. We should recall that if the Conservative Government had not rejected Labour proposals for a central discontinuance fund—a predecessor fund, equivalent to the Pension Protection Fund, in the mid-90s—today there would be no need for the financial assistance scheme. The arguments thatthe noble Lord put forward about the so-called raid on pensions are also bogus. If he meant to be fair,he should have reminded us that the context ofthat policy change in 1997 was a restructuring of corporation tax to encourage long-term investment, improve productivity and competitiveness and therefore to improve profitability and the capacity to pay pensions. He might have reminded us that the shift from defined benefit schemes was already well under way by 1997. There were other very important factors that dwarfed the impact of the ACT change: the maturing of pension schemes, growing longevity, forecasting errors by the actuaries, declining interest rates, bad management of schemes, and, above all and on an altogether different scale, the stock market collapse of 2000 which wiped £250 billion from pension fund assets. Set that beside the £5 billion cost per annum of the change to ACT. The case that the opposition parties have madeon this is disingenuous. It is a politically motivated tactic against the Chancellor. It is posturing and opportunism. It exposes the difference between this Government, who have chosen to be generous within the limits of fiscal responsibility, and the recklessness of the Conservative and Liberal Democrat parties.