Mr. Peter Lilley (Hitchin and Harpenden): The Secretary of State?s predecessor acknowledged that he had inherited from the Conservatives the strongest system of occupational and private pensions in Europe. How is it that the Secretary of State has reduced the system to its biggest ever crisis? Is it because he has imposed a ?5 billion a year tax on pensioners? There is now a 40 per cent. penalty for the majority of pensioners who save extra for their pension and the reward for encouraging people to save more has disappeared because of the 1 per cent. cap on stakeholders.
Mr. Smith: This country has a strong position on occupational and private provision; it had that historically and it still does, with the largest private pension savings in Europe. The right hon. Gentleman knows very well why pension funds are under pressure: greater longevity and the fall in the stock market. He can see that the measures set out in the Green Paper will build confidence by renewing partnership through the right Government framework and commitment by employers and employees; by greatly simplifying the tax treatment of pensions?something that I should have thought that the right hon. Gentleman would welcome; and by making it easier for people to move more flexibly, and at their choice, towards retirement. I have yet to hear any alternatives from the Opposition Front Bench. Indeed, although the Conservatives bleat about the tax dividend credit, they never give a commitment to reinstate it. We shall take them seriously when they make some serious proposals.