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Volume 403: debated on Monday 14 April 2003

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If he will take steps to encourage optional later retirement. [108712]

Yes, our Green Paper sets out proposals to increase options for older people to stay in work longer, which include drawing a pension and working part-time, providing better increments for those who defer taking the state pension, legislating against age discrimination and building on the age positive campaign to raise awareness of the business benefits of older people staying in the work force.

We all realise that we need to encourage people to stay on after age 65 if they are able and willing to do so. For many people, however, the main issue is that they no longer want to work 100 per cent. of the time, and they would like to have a gradual, phased retirement. Does the Secretary of State agree that we need to introduce measures to encourage and facilitate that?

I very much agree, with one slight qualification. It is not for the Government to say that people ought to work longer. The key thing is that they have a choice that enables them to bring into correspondence their expectations of income in retirement and their other interests. Of course, whether they want to continue working also depends on how fit they feel. As part of that greater choice, people should be able to work part-time and draw down a pension. We make proposals for that in our Green Paper, in relation to both the tax treatment and the scheme design.

As the Secretary of State said, raising the age at which people cease to work was one of the proposals in the recent Green Paper. Has he seen the Institute of Directors response to that, which was released today? It describes the Government as

"barely scratching the surface of the pension problem."
Ruth Lea said:
"There is no doubt about it, there is a pensions crisis in this country…people are not saving enough…the rates of return on pension saving have suffered, partly reflecting…the current Government's removal of the tax credit on dividend payments…We doubt if [the Government] recognise that there is indeed a pensions crisis."
Will the Secretary of State now admit that it was the Chancellor's £5 billion a year smash-and-grab pensions tax raid that caused the crisis? Should not he now apologise to the millions of British people who will enter retirement as the victims of Labour's pensions crisis?

We could take more seriously the crocodile tears of the hon. Gentleman and those of his right hon. and hon. Friends who mouth this stuff if they came to the House with a commitment to reinstate the provision that they complain is being taken away. However, the hon. Member for Havant (Mr. Willetts) is on record as saying that the Conservatives are not making such a commitment.

The hon. Member for North-East Hertfordshire (Mr. Heald) referred to the Institute of Directors representations. We shall carefully consider those and the other 800 or more responses to the Green Paper. I am sure that the way to approach this challenge is through the mix of proposals that we have set out, combining informed choice, flexibility in retirement, radical simplification of the pensions landscape and opportunities such as those that I have just described, which will allow people to choose to draw down a pension and work part-time. We also want to provide protection for scheme members who feel vulnerable at the moment because of the schemes that have closed. All that and more will be in our response to the Green Paper.

I agree with my hon. Friend the Member for Broxtowe (Dr. Palmer) and the Secretary of State. Does my right hon. Friend agree that it would be helpful to have legislation on age discrimination? Has he considered the experience of B&Q, which has found that by employing older people it gets employees with greater experience and wisdom? Does not that also apply to the Government and the House of Commons?

The longer that my right hon. Friend can go on asking questions like that, the better. Like him, I commend firms such as B&Q and Asda, which have led the way not only in making the business case for employing older people but in showing that that has commercial and customer benefits. That extension of choice, together with a simpler occupational pensions system and greater security within that system, is the sensible way forward.