Pensions Bill

This has been an interesting debate. Perhaps I should start by wishing my noble friend Lord Howarth a very happy birthday—if my Guardian reading is correct. I hope that he will not mind if I do not wish him many happy returns on one particular of his amendment; but, subject only to that, I hope that he has a good day. The debate has given us the opportunity to debate an issue of some importance. It allows me once again to pay tribute to the noble Lord, Lord Turner, and his work on the Pensions Commission. We are indebted to him and his colleagues, whose authoritative analysis of the challenges confronting our pension system has provided the foundation for broad consensus on the way forward. In particular, it has paved the way for the difficult decision to increase the state pension age as the necessary trade-off for the restoration of the links to earnings. My noble friend Lady Hollis reminded us at Second Reading that several of my predecessors have promised enduring pension settlements, only to see their reforms overhauled a few years later. I do not claim that, once these two Bills have made it to the statute book, we can hang up our pension hatsfor good, but I believe that these proposals, which substantially implement the recommendations of the Pensions Commission, set a course that will stand the test of time. The Pensions Commission was set up to undertake a specific task. That job is now done. However, noble Lords seem to be proposing the setting-up of a permanent body to keep the settlement under perpetual review. The advocates of that proposal are, in essence, saying that that is needed because no one trusts the Government. My noble friend Lord Howarth made that point specifically. In my view, the creation of such a body at the very point when the first of these measures is implemented would undermine confidence in the reforms. I think that the noble Lord, Lord Skelmersdale, was edging towards that conclusion. What people want is clarity and certainty about the future, to plan and save for retirement. I can only restate our agreement with the rationale behind the amendments and repeat that any disagreement rests solely on the question of how best those shared aims can be achieved. First, there is the question of transparency. No one should doubt our commitment to full and open consultation and debate on the efficacy of our policy. We have demonstrated that during the passage of the Bill. The DWP and the Office for National Statistics already regularly publish a wide range of statistics on pensioner incomes, savings, life expectancy and demography. In addition, the DWP publishes a large number of research reports each year, so a wide range of data is available to external researchers who want to probe further. We agree that the evidence on which we based our reforms will need to be kept under review. We have already set in train a programme of work to develop an evidence base, in consultation with a range of stakeholders, which could underpin future evaluation of our reforms. The first of three workshops took place last week, involving academics and pensions experts. The second, planned for this week, will involve representatives from key stakeholder organisations. We have also invited opposition spokesmen and the chairman of the Work and Pensions Select Committee. The final workshop, also this week, will involve analysts from a number of government departments. Following that consultation, we will publish a strategy document later this year on how we propose to build and maintain a credible evidence base, which will support future policy considerations across a range of issues. That will ensure that policies are kept under review in the light of sound evidence. We are committed to keeping our pensions policies under review; let me be clear about that. I do not think it controversial to assume that any future Government would do the same. We are debating method, not principle. Let me say something about some of thespecific suggestions for the work of an independent commission. The amendment proposes the annual publication of gender, carer and state pension coverage impact assessments. The Government’s commitment to addressing gender issues has been integral to our development of pension reform. In November 2005, the DWP published a report on women and pensions that analysed women’s pension position and the major influences on women’s retirement incomes. This was part of the evidence used to develop proposals for pension reform, in which fair outcomes for women and carers were a key objective. More recently, as we discussed earlier, we published a detailed gender analysis of the measures in the Bill, and we plan to undertake gender analysis to accompany further legislation on personal accounts. The noble Lord, Lord Oakeshott, also proposes the production of information on possible withdrawal rates. This would not provide any meaningful information on which people can base their financial decisions. Individual circumstances will vary, and projections will depend on a number of variablesand assumptions. We already regularly produce comprehensive pension credit data, and will continue to do so for operational and planning purposes. I therefore conclude that the independent commission proposed in the amendments is not necessary to achieve transparency for the future review of pensions policy and the evidence that should inform it. On the need to maintain consensus, we decided not to institute a permanent pensions commission precisely to avoid destabilising the consensus that has so recently been achieved. As we have said, our preferred approach is to carry out periodic reviews of the impact of the reforms, drawing on independent advice and based on robust evidence. This approach has the added merit of leaving it to future Administrations to decide exactly what should be reviewed in the future and when it should be reviewed. So although I share the noble Lords’ concerns, the amendments are unnecessary for achieving the transparency that we all seek in these important matters, and I urge them not to press them.