Lord Davies of Brixton (Lab)

It is a treat to be able to take part in this debate. I will talk about the Government’s programme on pensions, where the scale of what is being undertaken and what is potentially in prospect is far greater than people appreciate. We have already had one pensions Bill. I did not agree with everything in it, but it is leading to major changes in the way that pensions are provided. We have, in a sense, seen the end of a 30-year experiment in personal pensions. Pensions are becoming collective, and the emphasis on collective defined contribution schemes, the consolidation of existing arrangements, the removal of small pots and so on signifies a significant change in the way that pensions are being provided. We have also seen the Government introduce measures that could help members and employers with the release of so-called scheme surpluses. That is another debate, but the money is there and should be used productively to grow the economy and improve members’ benefits. We have issues specifically in relation to personal pensions, where existing arrangements can now be consolidated and provide more effective investment arrangements for individuals. We are also getting what are called default pathways for retirement. The biggest and hardest problem in pensions is what to do, if you are in a defined contribution arrangement, with the money at retirement. The Government are taking good action there to ensure that people have straightforward arrangements to achieve a decent income in retirement. That is all important, but we now have the Pensions Commission. Although the Government have made no formal commitment, we know that the commission’s timetable permits another pensions Bill, to which I look forward with some relish, not in the current Session but in the next one, and that will have to address the issue of adequacy. That is the missing part of the debate; it is what the commission has been set up to establish, and it is what we will have to confront. I think there will be big debates over that. At the same time, we will have to take decisions about the state retirement age. Governments of both sides have, in practice, dodged the decision there. I have strong views that are maybe not in line with those held by many. The challenge is to provide incomes for people who can no longer work as ably as younger people, so the retirement age is clearly an issue. The third and final leg of that debate will be state pension increases. What is going to follow the triple lock? Just saying “keep the triple lock” does not satisfy the need to get a stable financial system. We have to have that debate. I am afraid that, so far, people have sought to dodge that debate rather than address it.