Pensions Bill

My Lords, is not that exactly the point? The facts are what we do not know and the reason why the Government set up the Turner commission; so that it could establish them and make recommendations thereon. Without the facts, we are rather lost. We pretty much know the facts to which paragraphs (b) and (c) in the noble Lord’s amendment relate, but we do not know the terms, benefits and affordability of public sector pensions, to which paragraph (a) refers. That is why I tabled my Amendment No. 34. As the noble Lord, Lord Turnbull, just said, public sector pensions are facing the same problems as the private sector. They are both experiencing the same demographic effect. The Bill shows that the Government are quite capable of taking the necessary steps to address the problems, once they have established what the problems are. The pension age needs to be raised, and people need to be encouraged to save more during their working life. At the same time, painful but unavoidable changes are being forced on private sector schemes. Defined contribution schemes are now the norm, with two-thirds of final salary schemes closed to new members. We therefore need no new ideas about how to address the public sector pension crisis. What is very necessary, however, is getting the Government to admit that there is a crisis at all. My amendment is a practical alternative to that of the noble Lord, Lord Oakeshott, and—Members all around the House expect me to say this—is a much, much cheaper way in which to achieve this. A Parliamentary Question on the liability of public sector pensions, which my honourable friend Phillip Hammond laid in another place on 15 May, was answered two weeks ago with a blind optimism that completely disregarded independent warnings on the rising costs. The figures finally given by the then Chief Secretary to the Treasury in response are also a year out of date. Exactly the same reply was given on 2 March 2006, 9 January 2006 and, more importantly, 6 December 2005. Talk about obscuration; that just about takes the biscuit. The Government claim that the public sector pension liability as at 31 March 2005 was £530 billion. This year’s estimation is likely to be £110 billion more, taking the total liability to an enormous £640 billion. If the Minister thinks that that is a high projection, perhaps he would like to give the House a more up to date figure. In fact, independent actuaries think that the total liability is more than £1,000 billion. We simply do not know. The size of the liability is unsurprising. While the Prime Minister as Chancellor of the Exchequer consented to raising the state pension age to 68, as this Bill does, and is continuing his measly financial assistance scheme for private sector workers who have seen their pensions fail thanks to his mismanagement, he has continually failed to impose the same pressures on public sector pension schemes and their contributors. Public sector workers continue to enjoy defined benefit schemes, early retirement ages, generous ill health and death benefits, indexation and lump-sum allowances. There is a reason for this, and I accept exactly what the noble Baroness, Lady Turner, has said: pensions are deferred wages. But until this is pointed out properly, very few people are going to believe it. This is another reason why we should have a report. These promises all have cast-iron guarantees via the taxpayer, of course, unlike in the private sector where 60,000 occupational pension schemes have wound up or are in the process of doing so. The same people whose pension schemes have already been raided to the tune of £5 billion a year are being forced to pay yet again. Our amendment would prevent the new Chancellor continuing to fudge the figures and bury the bad news as the old one did. It would mean that no longer would we have to prise out the Government’s estimates by means of Parliamentary Questions and that we would not have to wait until it is convenient for the Government to publish the most up to date figures. As I mentioned earlier, we still have not heard what the Government estimation of the liability is this year. The figures for this year have been buried, no doubt until their publication and the unfavourable press coverage that they cannot help but spark, and no doubt until they can no longer threaten to take the gloss off the new Prime Minister’s coronation. I believe that my amendment would force the Government to face up to the problem that they have played such a large part in creating, and best of all it would happen immediately, unlike the amendment of the noble Lord, Lord Oakeshott, which by definition would take time to accomplish anything.