Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Lord Hain Excerpts

Tuesday 19th May 2020 Lords Chamber

[Lord Hain (Lab)]

My Lords, in 2007-08, as Secretary of State for Work and Pensions I introduced the original auto-enrolment legislation that made employee pensions membership virtually compulsory. At that time, many millions were staring at a pensions black hole, so I am pleased that since then over 10 million people are in auto-enrolment, as part of the three-quarters of workers now part of a workplace pension.

These statutory instruments are a welcome advance, especially for maritime workers and seafarers, but I appeal to the Minister to reconsider the issue of the 5 million self-employed, many of whom, as other noble Lords have said, are in low-paid or insecure work and have no pensions whatever. Can she explain how the Government intend to find a solution to this?

This is all against a background of defined benefit schemes—once the gold standard for occupational pension provision—closing at an alarming rate over the last decade as companies cut costs. The norm is now inadequate defined contribution schemes, which means that on current trends, and if the Government, with business, do nothing, the state will incur multibillion costs to save millions from abject destitution.

Notwithstanding auto-enrolment, the average pension pot of £50,000, which would give an annual income of just £2,500 a year, is nothing like enough to live on, even with a full state retirement pension. Experts estimate that we should each save at least 13% of our income from the age of 25. That is simply not happening, with auto-enrolment at a combined 8%.

The Government have kept kicking the can down the road on proper funding for elderly care, and we have witnessed the desperate predicaments of care homes in the Covid-19 crisis, but the same is true for decent pensions. We cannot and must not continue in this way. The blunt choice our society faces is between a future, which currently beckons, of poverty and misery in old age, or politicians today being honest about the need both to pay more into pensions and to raise extra taxation to finance decent elderly care.