John Penrose

Conservative Party | Weston-super-Mare

Rights of Savers Bill

John Penrose (Weston-super-Mare) (Con): I support the Bill even though I accept that it does not do everything for everybody, and that there is a much larger issue at stake. It is wrong to oppose it because it fails to do the complete job all in one go. After all, it is a private Member's Bill and is necessarily limited in scope.

I think that the Bill will help three groups in society, which all deserve help, if we can manage it. The first of these groups are people who are trying to buy their first home. I am sure that we all have examples in our constituencies of people who are finding it hard to put together the money to put down a deposit on their first home. My constituency, for example, is within commuting distance of Bristol. The price of houses is rising rapidly and local people, particularly those on lower incomes, are finding it extremely hard to make that all-important and vital first step on to the housing ladder.

Ms Angela C. Smith: I return to my earlier intervention when I made the point that it will be precisely those people on lower incomes who will not be able to benefit from the provisions of the Bill, because they will not have the money in the first place to put into the plan. Deposits are too high and affordable housing has to be the answer for the sort of constituencies that the hon. Gentleman is talking about.

John Penrose: I accept that affordable housing will be part of the solution. However, I do not accept that it is the only answer. I think that the Bill sets out a useful and valuable contribution to helping people get on the housing ladder. It may not be the complete answer, but that does not mean that it is entirely a bad thing to do.

The second group of people who will be helped by this measure are those who have had forced upon them a career break of some sort. This is mainly to do with the opportunity to draw down part of the fund that has been created.

Anne Snelgrove (South Swindon) (Lab): Does the hon. Gentleman not accept that there are huge risks in drawing down a pension, which have been identified in the USA? Only a fifth of those in the USA who opt to unlock their pension fund on changing jobs plan to put their pensions into a new pension. They use the money, as the hon. Gentleman has identified, for housing or for a career break. Tax relief on pension savings is there to provide pensions, not tax release on house buying and adult education. These are areas that need different solutions, solutions that the Government are providing, which Opposition Members always vote against.

John Penrose: I draw the hon. Lady's attention to two points. First, the analogy with the USA is perhaps not an apposite one. The scheme that we are discussing is based on the Canadian model, which does not have the same parameters within which the USA currently exists.

Secondly—this point relates particularly to adult further education—last night I attended a governors' meeting of my local FE college. There is great concern in the FE sector about the proposals that are being put about by the Learning and Skills Council and the effect that they will have on people who want to take up adult FE courses, particularly at level 3 and above, and the effective cuts in the funding of those courses. If those cuts are to take effect, it is vital that we find other ways of assisting people who are out of work for one reason or another. They may have been made redundant and need to change careers. They may have been forced into leaving their job through sickness and be on incapacity benefit. There are young mothers who are seeking to return to the work force after a period away. All these three groups need some help in returning to the work force. They also need some help in reskilling. Given the Government's current plans, with the Learning and Skills Council, they will not be helped. They need some additional provision. The Bill will help to provide it.

The third group, which is crucial, is that of pensioners. As an MP who represents a constituency with one of the highest proportions of pensioners, I have lost count of the number of pensioners who have complained about the requirement to buy an annuity at 75. In some cases that is the right thing to do, but they think that the lack of choice at that age takes away their dignity and the flexibility to make decisions for themselves. They accept the need for financial stability and, wherever possible, they wish to avoid becoming a burden on the state by drawing down state benefits. However, they want the respect to which their years entitle them, and wish to be allowed to make their own decisions rather than being told what they have to do. The Bill is a valuable and flexible measure that will restore a great deal of that dignity.

Finally, while those important groups in society need help, the Bill will have an economic benefit, as it should help to improve the savings ratio by reducing the number of pension schemes. Last night, I added up my pension schemes—perhaps this is a declaration of interest—and found that I have eight. I would be willing and able to save much more, and I suspect that many other people would too, if our pension schemes could be rolled into one. I therefore support the Bill.

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