Pensions Reform

It is test inflation. These are the six tests. Do the reforms deliver pensioner dignity, rolling back means-testing? Are they fair as between different groups in society, between generations, between the sexes and between public and private sectors? A number of Members, including my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), dwelt on the issue of public sector pensions. Are the reforms affordable? Are they transparent? Do they encourage personal responsibility? Are they simple and easy to understand? If they pass those tests, they will have our support. Let it be clear, however, that we do have concerns. The Government accept that a third of all pensioners will still be subject to means-testing, with all that that implies for the discouraging of saving. The Pensions Policy Institute puts the figure at 45 per cent. The Government are also working on the basis that between 20 and 50 per cent. of workers will opt out of the NPSS. A recent workplace attitude survey by AXA showed that nearly a fifth of employers would encourage staff to opt out, a point made by several Members today. According to the PPI, the pensions system will hardly be any less complex after the reforms than it is now. As we have heard, the proposals create a cliff edge that will generate unfairness for some women. Raising the state pension age is all very well, but where will the jobs come from for the notional increase in the work force? What retraining opportunities will be available? What about the millions of people who are below even the current state pension age and who want to work but cannot get a job? That point was made by the hon. Member for Bradford, North. Organisations such as the Association of British Insurers and the National Association of Pension Funds have expressed concern about employers’ levelling down their pension provision in line with the contribution levels of the NPSS. As the NAPF put it:"““The danger is that, while reducing the number of people not saving at all, the White Paper could turn some adequate savers into under-savers.””" Given the Government’s inauspicious record when it comes to large IT projects, we have concerns about the architecture of the NPSS. What advice should be available to employees and what regulatory framework should apply? We do not want to run the risk that, when the dust has settled and the smoke has cleared, we are no better off and still have a high level of opting-out, low persistency, a levelling down by employers and existing savings simply moved from one part of the system to another. However, we intend at all times to be constructive, pragmatic and sensible. If we disagree with Ministers, we will try not to be disagreeable. Those are the ground rules under which we intend to operate as the official Opposition. On that basis, we look forward to working closely with Ministers, officials, other political parties and all other interested organisations. We owe no less to future generations of pensioners.