My Lords, I am extremely grateful to all Members of the Committee. I am sorry we did not hear from the Lib Dem Benches as we would then have had a full hand. I am grateful particularly to my noble friend Lady Dean, to my noble friend Lord Hutton for raising the debate in the way he did and to the right reverend Prelate for his persistent questioning. Both my noble friends continue to interrogate the Minister, which is really valuable. The right reverend Prelate said, “If it is not broken, why fix it?”. I have seen no evidence at all, apart from the Minister saying this is not such a good buy for individuals as taking it as income, that the system is broken. The Government
are relying on having the upfront savings rather than the longer-term costs. That is not, in my view, a prudent way of handling finance.
My noble friend Lord Hutton, along with the right reverend Prelate, stressed that it is no use saying that we have to go for simplicity and thereby remove choice, if choice would be part of the attraction for people to save and defer taking their state pension. We do not have hard evidence on this, but we know from everything that is coming through from auto-enrolment and the pilots—including under my noble friend—that the nudge theory of encouraging people to stay opted-in and having them opt out rather than choosing to opt in was transformative. I remember when we got the figures from the Newcastle brewery, where something like 43% of its staff opted in to a pension. When it went to opting out, that went up to over 90%, and the only people opting out were students working in the summer vac. It transformed the pension regime in that brewery. It relied on nudge and inertia and ensuring that people could save in the way that was least problematic for them. Unless the Minister can show noble Lords—certainly me—that denying people the right to turn a deferred state pension into a lump sum will not only not have a negative effect on their savings but actually increase their savings, he is storing up problems for himself in the future.
Research last month by the LSE found that 483,000 people—nearly half a million, almost all of them pensioners—had either lost their home care support or were no longer eligible to claim it, as compared with 2008. Now, that home care will need to be funded by savings; it will not come out of income. People are losing the capacity to pay for home care week in, week out, as the cuts bite. My noble friend Lord McKenzie—