Tuesday, 17 June 2014

The Queen’s Speech

Last week saw the traditional State Opening of Parliament and the final Queens's speech for this current parliament. The immaculate ceremony is always a reminder that this country does such events better than any other. There is now just nine months of parliamentary time left before we begin the formal election so this year's Queen's speech was shorter than those earlier in the parliament. It is entirely normal for governments to have longer sessions earlier where they get the major pieces of legislation in place but shorter sessions later.

However, there were still some important reforms outlined last week. There was the Modern Slavery Bill to tackle the appalling crime of people trafficking and new measures to introduce some common sense when it comes to the health and safety culture. No one disagrees with the objective of health and safety legislation but we have all seen examples where it is cited in a completely disproportionate way, demoralising those trying to do a good turn for others.

The Government is also planning on bringing in two new Pensions Bills to help widen people’s choices and deliver greater financial security. As pensioners now live longer, we need to make sure savings go that extra mile. The first Bill will allow businesses greater choice in the private pensions they can offer and it will also encourage more collective pension schemes. These will allow employees to get together and pool their collective risk, having the potential to give much greater stability in their returns. Many pensioners today have found that the returns on their savings they put aside are not as high as they anticipated so encouraging a new model of pension that enables people to pool risk and have more predictable returns is a good option.

The second Bill will deliver the most fundamental reforms to pensions for almost a century, ending the system where people can be forced to buy an annuity. From April 2015 those retiring with a defined contribution pension will have total freedom over how they access their pension. I think this is important because a number of constituents highlight the problem that they feel unable to access the pension they put aside when they need it.

Some have said that it's wrong to introduce these freedoms because pensioners might go and spend all their money in one go but I think that's nonsense. Those who have been diligent and responsible enough to save for their old age should be trusted to manage their own finances. The real problem has been that a fear that their pension may not be worth what they expect or that they may not be able to access it prevents people from saving in the first place. There will also be free, independent advice to retirees to help them make their decision, with those wishing to purchase an annuity still able to do so.

George Eustice can be contacted at george.eustice.mp@parliament.uk or 1 Trevenson Street, Camborne, Cornwall TR14 8JD or by telephone on 020 72197032.