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Rob Marris (Wolverhampton, South-West): Much of the debate has focused on the word "crisis". I dispute that there is a crisis in pensions in the United Kingdomand that is partly because of the steps taken by the Government in the past five years.
We have heard much in this debateI will not go into detailabout the state second pension, which is being introduced to give better provision to the 18 million people who have been unable to build up pension rights, particularly those who have been unable to work because they are caring for others or have disabilities. The state second pension is skewed towards the low-paid.
The pension credit will also assist pensioners of modest means. We have the minimum income guarantee, which has vastly raised the living standards of a certain section of our poorest pensioners. We have the winter fuel allowance and free television licences for the over-75s. The Government have restored free eye tests for pensioners, too.
There has also been a massive increase in national health service funding. I have been present for almost all the debate, but I do not recall hearing the pointit is often overlookedthat two thirds of NHS spending is on pensioners. The more money that the Government put into the NHS, the more they help pensioners.
Stakeholder pensions have been introduced. I do not accept the Opposition's suggestion that they have been a complete failure. These things take time to build. More than 800,000 people who did not have a pension vehicle a year ago now have one. More than 90 per cent. of employers who did not provide access to a pension scheme now do so.
Mr. Butterfill: Does the hon. Gentleman accept that an awful lot of those 800,000 people have transferred money from other schemes? The investment is not new money. An awful lot of them were buying stakeholder pensions for their grandchildren. The number of those in the target audience that the Government want to reach is very small.
Mr. Brazier: I said that there were more savings in the rest of the EU put together when the Government took office. According to the unreliable figures available, the position has since deteriorated substantially.
Rob Marris: I do not accept that the position has deteriorated, although it may have a changed a bit. My understanding is that the UK still has more provision than the rest combined because of the way in which pensions are structured in this country.
On the Conservatives' record, past performance is not always a good indication of future performance, but in this case it just may be. The Conservatives want to get rid of state provision. The Leader of the Opposition said:
The hon. Member for East Devon (Mr. Swire) talked about a crisis of the Government's making. I do not accept that there is a crisis and I certainly do not accept that it is of the Government's making. Someone who entered the labour force, as many did, aged 14 in 1951, and retired at 60 in 1997, when the Government came to office, would have had only 11 years under a Labour Government but about 35 years under a Conservative one. In many cases, their pension provision came from the Conservatives or, sadly, did not come from them. In the mid-1980s, the Conservative Government removed the requirement that employees should join an employer's occupational pension scheme if they had one, and there was a free-for-all. Ironically, some Conservative Members are now asking for compulsion in pension provision.
In the mid-1980s, as has been said, the scandal of pensions mis-selling was building up. The bottom line is that it cost billions of pounds to put that affair right, but we have not seen the end of its confidence-destroying aspects. Many people, especially the young, are reluctant to save for old age because their parents, aunts and uncles were ripped off. Many of the 2 million who were reimbursed had to go through hell and high water to get compensation and only got it after pressure from the Labour Government.
A national bus company was ripping off its workers by taking their surplusthat problem was only sorted out under the Labour Government. Conservative Members have spoken about people working longer and retirement
I shall turn to an issue that has featured in our debatethe stock marketand the remarks of the right hon. Member for Wokingham (Mr. Redwood). He said that he had been a pension fund manager in the City, so his economics may be better than mine, but I am not so sure. He seemed to suggest that the decline in the sale values of stocks had adversely affected people's pensions. It does not. What affects people's pensions from stocks is the dividends that they get from those stocks. The key issue is whether the dividends have gone down. He was speaking about the absolute value of those stocks, not simply about the taxing of them. I do not accept that the stock market has gone down because of Government policies.
The other issue is much more important in terms of the regulation of the pension industry. FRS 17 has been mentioned repeatedly in the debate. Many, many companies took pensions holidays, particularly with the 105 per cent. rule about which we have heard. They took the money in the good times, but they do not want to pay it up now that the bad times are here.
It is clear from the way in which those companies have operated that their propaganda has been extremely successful. The propaganda machine of those large, greedy corporations suggests that FRS 17 was already compulsory, but it will not be compulsory until 2003 or 2004. The companies suggest that the reason for the difficulties with their pensions was that crazy Government regulation, but the regulation was not crazy, and it was not in force as a compulsory measure.
I accept the need to simplify the regulation of pensions, but I do not accept the flavour of the Conservative Opposition's argument about lessening the burden of those regulations. That leads us back to the Maxwell saga. Also, lessening the burden of regulation would mean, to the Conservative Opposition, that we are out of step with our friends in America, who are going the opposite way.
A Standard and Poor's report released recently shows that for many years many big corporations in America have not had transparency at all. They have been fudging the figures and some, like WorldCom and Enron, have been lying. They have been boosting their profit figures by including income from their pension funds, ironically, by adding back charges when they are buying companies, and by not allowing for the cost of share option plans. Some of those big companies are household names now, such as Enron and WorldCom, but they also include Microsoft, General Electric, The Gap, Apple, Yahoo! and IBM.
If General Electric's profits are correctly reported, for example, they come down by $1.93 billion from $2.23 billion in 2000. That is a huge drop. Cisco Corporation is another example. We must be careful with funded pension schemes and with the transparency of their figures. That requires tight Government regulation. I hope that Ministers will assure me that we will continue to have tight Government regulation of pension funds, in spite of the exhortations from the Opposition.
Finally, I hope that Ministers can reassure me that the intersection of pensions and the Transfer of Undertakings (Protection of Employment) Regulations will be looked at. Pensions are excluded from the acquired rights directive, but that does not mean that the United Kingdom must exclude them. I hope that we can consider that issue again.
Mr. Tim Boswell (Daventry): We have had an interesting debate characterised by 24 Back-Bench speeches, on my count. The great majority of them were thoughtful, though not demonstrative. In their totality they show a degree of concern about the growing problems in relation to pensions that is eloquent in itself.
There are basically two reasons why Government policies, and ultimately Governments, can fail. The first is when they are caught out in malice. Under new Labour, markets are supposed to be accepted. The euthanasia of the rentier is out of fashion, and we have not heard too much about it today. Under the surface, however, in some of the contributions made by Labour Membersfor the avoidance of doubt, I stress that they came from the Back Benchesthere was a certain return to the mean and a distrust of the capitalist system that far exceeded any of its measurable excesses.
Nevertheless, much more common than that especially pathological characteristic of left-wing Governments is the reluctance of Governments of all colours and times to face reality, arising from a mixture of what may be complacency and may well be arrogance. The proposition of Her Majesty's Opposition in our motion is not about Government malice. Indeed, we open the motion with a generous and specific endorsement of the Government's own aim, as stated in their 1998 Green Paper and repeated thereafter,