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David Cairns: I appreciate that the hon. Gentleman is making a narrow argument about new clause 5 merely adding the requirement to submit a report. However, he has made several comments about the need to encourage prudence. Can he outline exactly what his party's policy is on encouraging prudence and getting people to save for their old age?

Bob Spink: I should be delighted to do as the hon. Gentleman suggests, but I am sure that if I did so, you would immediately call me to order, Madam Deputy Speaker, because we are debating new clause 5. What do the Government have to be afraid of if more light is shed on the matter, which is all that new clause 5 seeks to do?

We should all be concerned about today's pensioners, because they have had a raw deal from the Government—[Hon. Members: "Oh!"] They certainly have. The proportion of national income taken by pensioners today is lower than it was under John Major's Government

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in 1997, and that is disgraceful. We should also be concerned for the well-being of tomorrow's pensioners. Only around half of people below state retirement age are currently saving for their retirement. That is a chilling and frightening statistic that we should do something to correct. We should increase the number of people who save for their pensions, but the Bill will not do that. The new clause would illuminate that point and I therefore commend my Opposition colleagues for tabling it. I urge the House to accept it because it would enable us to monitor what is happening to savings and to change the operation of benefits to encourage greater prudence.

3.45 pm

Mr. Paul Goodman (Wycombe): I, too, wish to speak in support of new clause 5. It is important to lay out clearly exactly what the new clause says. It falls into two parts. The first would invite the Secretary of State to lay before Parliament annually

The second would allow the Secretary of State to invite the Social Security Advisory Committee—a neutral and fair-minded body—to comment on the report and

I serve with my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) on the Work and Pensions Committee, and in the course of our inquiry into the pension credit we heard much evidence about what expert individuals and bodies believed would be its effect on future saving. The Norwich Union, for example, declared that the incentive to save is "insufficient". The Institute of Actuaries said that it would become

The IPPR—a body associated not with the Conservative party, but with the Labour party—[Interruption.] My hon. Friend the Member for Daventry (Mr. Boswell) says, "Not yet." We shall see. The IPPR said that the credit was

Andrew Dilnot of the Institute for Fiscal Studies said that in connection with the incentive to save, the Government were

That has given rise to the various cricket metaphors that have been thrown around the Chamber.

Kali Mountford (Colne Valley): I applaud the hon. Gentleman for returning the attention of the House to the work of the Work and Pensions Committee, but is he not ably demonstrating that the Committee had no trouble at all in taking evidence from the Social Security Advisory Committee? From his work on the Work and Pensions Committee, is he not aware of the annual report of the Department to the House that already exists? Would not the new clause simply duplicate matters?

Mr. Goodman: In a sense the hon. Lady is making my case for me, although I am sure that she will not agree. I see no reason why the Committee would not be able to supplement its work with a report of the kind envisaged by my Front-Bench colleagues. I shall cap the evidence

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to the Committee that I have quoted with what Age Concern has said about the pension credit, which has already been mentioned this afternoon. It said, baldly and clearly, that it believes

David Cairns: The hon. Gentleman cites many esteemed experts to support his case, but of course he omits the comments made by Lord Fowler in the other place. Lord Fowler, while welcoming the measure, said that his only regret was that his Government had not introduced it when they had the chance.

Mr. Goodman: I am glad that the hon. Gentleman mentioned the comments of Lord Fowler, because if there was an annual report of the type to which my hon. Friends have referred, we should be able to see whether all those who gave evidence to the Select Committee—and indeed Lord Fowler—were right or wrong. The hon. Gentleman, too, is helping my case.

Finally, I quote from the conclusion of the Select Committee itself. The Committee is made up of many more Labour than Conservative Members, but it is a fair-minded Committee. On incentives to save, the Committee stated:

I include that phrase because I want to be sure that I quote from the Committee's report in a way that is fair to the Government—

I return to my starting point. In essence, the new clause seeks only to test the claims that have been made by the Labour Members who intervened during my contribution: it would make an independent assessment of whether the Government are right or wrong to say that the pension credit will increase incentives to save.

All the expert advice of which I am aware is that the pension credit will decrease the incentive to save. The Government believe the opposite. If they believe that my hon. Friends on the Front Bench and I are wrong, they need only produce a report, as the new clause proposes, and let a fair-minded and independent body comment and arbitrate on it. I urge the House to accept the new clause.

Annabelle Ewing: I rise to support the basic premise of new clause 5. I do not understand why the Government are afraid of having to produce a report. They maintain that, inter alia, the Bill will act as an incentive to save. If that is their objective and if they are keen to ensure that the Bill is indeed an incentive to save, they should be willing to do everything that they can to achieve that objective. The preparation of a report—supplementary to other reports produced by the Department for Work and Pensions—would be a reasonable way of assisting the Government in securing their stated objective.

As we have already heard, various third-party bodies have expressed concern as to whether the measure will really act as an incentive to save. I do not want to go over the same ground by repeating those concerns. The key question is: how will the Bill act as an incentive to save when individuals do not have sufficient financial information early in their life to assess, or predict,

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the likely value of their savings many decades down the line? That is an important issue that could be discussed in a report. It should certainly be given further consideration.

Maria Eagle: The hon. Lady has made a good point. One of the best ways to ensure that people save more for their retirement is to give them information about what their retirement income would look like in the light of their current provision. In that respect, the Government are promoting joint pension forecasts, so that individuals receive a document annually that shows what they would be likely to receive from their private and state pensions. Does the hon. Lady not agree that such information would be much more useful than a general report to Parliament?

Annabelle Ewing: The two are not mutually exclusive. It is helpful to learn that there will be some Government-assisted prediction of the likely pension.

Mr. Clappison: May I interject a bipartisan, consensual note? Does the hon. Lady agree that it would be useful if those pension forecasts included details of how much the Government will take from people's pensions through the pensions tax that the Chancellor introduced in 1997?

Annabelle Ewing: The hon. Gentleman has made his point and I do not want to go down that road today; to do so might be to detain the House much longer than anticipated.

Let me return to the Minister's point. The prediction would be very general because the financial information would not be accurate enough; for example, we would not know the value of the guaranteed income 20 years down the line. It would thus be difficult to make a meaningful prediction of the value of someone's savings. In any event, the two elements are not mutually exclusive and I do not understand what it is the Government are so afraid of.

The hon. Member for Northavon (Mr. Webb) felt that the amendment was too restrictive and that we should consider the overall effect of the Government's policy on savings. I agree with him. I share many of his concerns about the situation faced by pensioners at present. I wonder whether the Bill will really make much difference as regards lifting pensioners out of poverty.

In Scotland, we face a disgraceful situation: one in four pensioners live in poverty. That is unacceptable and I am not convinced that the Bill would do much more than tinker at the edges. If it helped even one pensioner, I would certainly support it, but it represents a missed opportunity to deal with pensioner poverty.

I turn briefly to the amendments. I confess that I was a bit puzzled about amendments Nos. 6 to 12, especially Nos. 4 and 5. Could we have some further elucidation of them?

I support the position of the hon. Member for Northavon on amendments Nos. 1 and 2. As he said earlier, there is discrimination against women and the Government are doing nothing to end it. The amendments are a reasonable way of tackling that unacceptable discrimination. The point that there is a contradiction in the Bill was well made: although the Government accept

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that the problem can be dealt with vis-à-vis the income guarantee element, they seem to take a different view on the savings credit element. Perhaps that will be clarified. I look forward to the Minister's comments.

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