§ 2. Mrs. Browning
To ask the Secretary of State for Social Security what was the average value of an occupational pension in 1979 and in the latest year for which figures are available.
§ The Secretary of State for Social Security (Mr. Peter Lilley)
It is estimated that at 1991 prices, the average value of occupational pensions was £41.90 per week in 1979 and £63.30 per week in 1991—an increase of 51 per cent.
§ Mrs. Browning
Will my right hon. Friend confirm that occupational pensions will be made more secure by the proposals set out in his White Paper? Will he also confirm that he will implement in full all the major proposals in the Goode report and that Opposition Members who say otherwise—such as the hon. Member for Glasgow, Garscadden (Mr. Dewar)—are simply indulging in scaremongering?
§ Mr. Lilley
Yes, I can entirely confirm the points that my hon. Friend makes. The changes introduced in the White Paper, which have been widely accepted, will give the new regulator all the powers that the Goode committee recommended. We have implemented all the major recommendations of the Goode report. I believe that as a result, occupational pensioners can have their confidence in their occupational pension schemes fully restored after the problems caused by the Maxwell scandal. We want occupational pensions to go from strength to strength.
§ Mr. Flynn
Then why is the Secretary of State trying to tempt people from the safety and security of occupational pensions and the state earnings-related pensions scheme into the national lottery of personal pensions? Will he tell the House what his Under-Secretary has told the House—that those on money-purchase pensions who bought annuities in 1990 find that those annuities have dropped in 3 value by, on average, a quarter? For women, they have dropped in value by a third. If that has happened in four years, what will happen in 20, 30 or 40 years' time? Will the Secretary of State arrange for anyone whom he intends to bribe out of SERPS or occupational pensions to be told of the catastrophic drop in annuity values in the past four years?
§ Mr. Lilley
The hon. Gentleman would like everyone to retain nationalised pensions. On the question of people remaining in occupational pensions or moving out of them, we have recently made clear to employers the advice that they can give to their members, which they have found helpful. The advice will make clear the advantages of occupational pensions and the way in which they are, in many cases, superior to private pensions.
I propose in my White Paper to increase the flexibility of annuities so that if people want to draw out their tax-free capital lump sum, they will still be able to defer taking their annuity, while withdrawing a sum for their on-going income, until the time when they think that they can get the best terms for their future annuity provision.