Pensions

My Lords, I also thank the Minister for reading the Statement. I declare my interest as a pension fund investment manager for the last 30 years. I share the welcome for the report of the noble Lord, Lord Turner, and for what I am bound to call, I am afraid, these rather mean and timid steps in the right direction. The White Paper,"““seeks to entrench a new pension savings culture””." Does the Minister accept that those words will ring hollow to well over 100,000 people robbed of their pensions when their schemes collapsed? We welcome the improvements announced today in the financial assistance scheme, but how much more money is being added to the present paltry £20 million a year? A new pension savings culture will also be hard to achieve when we are starting from such a high level of means testing. I searched the White Paper without success—speed-reading as fast as I could—for any admission of what the figure is today. In all the briefing and spinning that were going on last week, we were told that it was 40 per cent. Yet we know from an answer that the Minister gave me only two weeks ago that, in 2003–04, the figure was already 46 to 51 per cent. So, what is the department’s estimate of the number of pensioner households subject to means testing today? What confidence can we have that we will see means testing being run down as the forecast predicts? The forecasts in the bar charts in the White Paper, if I read them correctly, also seem rather lower than the forecast starting level in 2010 that I was given. Those are important points because the national pension savings scheme, which we support, cannot be really sustainable or strong unless means testing is quickly reduced. Otherwise—and I fear that this is still the projection on the White Paper figures—there is even the risk of suggestions of pension mis-selling when compulsion comes into effect. So, means testing is critical and we are concerned that the index-linking of the basic state pension is being put off as far as 2012, with no guarantee that it will happen even thereafter until 2015. Annuities were not mentioned. Another recommendation of the Turner Commission was that the starting level at which you have to buy an annuity should be raised in line with life expectancy. Noble Lords may recall that the then Minister, Mr Wicks, gave an assurance in the final stages of the Pensions Bill that that would be reviewed at the time of Turner. I see an answer in the White Paper which is breathtaking in its insolence. The Government seem to turn a blind eye to rising life expectancy only on the question of annuities. On women, why have the Government rejected the final recommendation of the noble Lord, Lord Turner, on the preferred way forward? Can the Minister confirm that giving a full basic state pension by right to people over 75, many of whom are women, would have benefited over three-quarters of a million women? The Government are trying to get Turner on the cheap. They have willed the end but not the means. Affordability of course is key, but they have completely ducked the question of the affordability of public sector pensions. We cannot continue with a divided Britain where so many people in the public sector enjoy pensions that are quite unaffordable and beyond the dreams of what people could afford in the private sector. The noble Lord, Lord Turnbull, who ought to know, put it well in a debate in your Lordships’ House on 4 May. I calculate that he has a pension pot that would cost £3.25 million to buy today in the private sector. The noble Lord said that the recent public sector pension bill was frankly indefensible. We should face up to that. I end with a note on consensus. I share the thoughts of the noble Lord, Lord Skelmersdale, that there has been no attempt to reach consensus in the run-up to this White Paper, but none the less we will do our best to build on it. What has happened to the independent pensions commission that Turner recommended? I give notice now that when the Bill reaches your Lordships’ House in the next Session, we will take the lead in amending the Bill if we possibly can to ensure that there is such an independent pensions commission along the lines of the Monetary Policy Committee of the Bank of England, particularly to look at setting the state pension age many years ahead. That would be a real and lasting way to entrench consensus on pensions.