Pensions Reform

I agree that it is sensible to honour contracts entered into, but we are talking about the agreement negotiated by the Government extending over the next 20 to 40 years. A change suggested in the White Paper is being phased in and I see no reason why we should not consider phasing in a different retirement age in some of the public sector schemes. To return to the point I made at the beginning of my speech, the Treasury pulling in more money because of the changes to ACT and corporation tax has had an impact, particularly on local government pension schemes. We all know that our local authorities are having to deal with shortfalls, the burden of which inevitably falls on council tax payers. There is an issue—I put it no higher than that, and I have no magic solution. There is a perception of unfairness, and on behalf of the Conservative party my hon. Friend the Member for Runnymede and Weybridge has set out certain tests that we wish to be applied to the White Paper. Those tests are pension dignity, fairness, affordability, personal responsibility, simplicity and transparency. We shall scrutinise the Government’s proposals and test them against those yardsticks. It is important that we restore confidence in the industry and that will not be possible unless we deal with some of the perceptions of what has gone wrong in the past which have been brought to our attention via our postbag and e-mail. We have all had vast amounts of correspondence with people who have suffered because of the Equitable Life affair, and we are all aware of how aggrieved people feel following the parliamentary ombudsman’s report on occupational pensions. We are now starting to get more hard facts, and I hope that the Government will take up our suggestion of using unclaimed assets. We have figures of £2.9 billion to £3.7 billion and annual costs of perhaps £100 million to £150 million to deal with the problem. Many people who have been severely affected are in no position to repair the damage done to their occupational pension. If a person who is still working, with many years to go before retirement, gets a knock, they might be able to put it right, but someone who is in the last few years of work whose expectation of a particular deal has been lost is in a very different position. Some of these schemes included rights for widows or husbands. It is important to note that some people may go home having lost a pension and some of the security, for example that a husband would have left his wife. One of my constituents, David Cull, e-mailed me the other day. He has possibly lost £15,000 in pension. It was to be index linked and included decent provisions for his wife in the event of his death. He feels aggrieved about that. I hope that the Government will revisit this issue because Members on both sides of the House will feel that there is a degree of unfairness. We have heard about the financial assistance scheme. Its scope has been widened. I suspect, as is the nature of things, with pressures from parliamentarians, that its scope will be widened still further. There is a legitimate issue of how quickly it will address some of those who accept redress from it. I hope that the Government will examine that carefully. I am glad that the Government have produced the White Paper. There are some good things in it. I hope that there is a consensus. I hope that we can set up a scheme that this country can be proud of in the future. However, there is some unfinished business for those who feel that they have been misled, particularly those who had an expectation of different things. If we leave such issues to fester, we will end up with a lack of confidence in the pension system and people will still be putting their money into second homes or into investments because they do not trust the pension system.