11. Mr. Peter Lilley (Hitchin and Harpenden): What rebate will be payable into a stakeholder pension for an employee earning (a) ?9,000 and (b) ?10,000 per annum who opts out of the state second pension. 
The Secretary of State for Social Security (Mr. Alistair Darling): As the right hon. Gentleman will know, the amount of rebate payable into a stakeholder pension that is contracted out of the state second pension will vary according to the age of the person concerned.
Mr. Lilley: If the original purpose of the stakeholder pension was to enable those on low earnings to opt out of the state system into privately funded pensions, why does it discriminate in practice against those on low earnings? Will the right hon. Gentleman confirm that, whereas those with earnings of more than ?10,000 will receive a rebate sufficient to buy a pension equivalent to the state pension that they forgo, those with earnings of less than ?10,000 will receive only a partial rebate and, therefore, will be discriminated against? Is not that unfair, unnecessary and likely to lead to the sort of mis-selling that The Sunday Times said in an article was widespread as a direct result of the Government‘s policy?
Mr. Darling: I know that the right hon. Gentleman has been engaging in quite a lot of revisionism recently, but he really does have a brass neck to lecture us about the mis-selling of pensions. Let me answer his question on stakeholder pensions. First, he is wrong on a fundamental point: we have always said that people on low incomes earning about ?10,000 or less would do better to go into the state second pension, which doubles–and, in some cases, trebles–the amount of money that they would have received under the state earnings-related pension scheme, which we have now reformed. So low earners ought to be in the state second pension. The stakeholder pension is designed for middle and higher earners, and he is right to say that those earning approximately between ?10,000 and ?22,000 a year will benefit from an enhanced rebate. But it is not only on the mis-selling of pensions that he is a little forgetful, because on 21 February this year, he gave an interview to the Financial Adviser and said:
“Stakeholder pensions should give savers more ‘bang‘ for their buck.
Savers should see less of their contributions absorbed by costs and more being invested in assets which, other things being equal, will mean higher pensions when they retire.”
He also said:
“I would be more than surprised if a future Tory government even contemplated abolishing stakeholder pensions.”
Oral Questions: 2nd April 2001 (Ref: 366 c15)