House of Commons Hansard Debates for 30 Nov 1992

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when she was dependent on others to provide for her. We can then take six years of her life, for example, when she was looking after children and was not able to contribute to a pension. She will often be dependent on a husband with an occupational pension. When she retires, she will have a life expectancy of another 14 or 15 years. Out of a lifespan of 74 years, she would have been in a non-earning capacity for 38 years, so there were few years in which she could make provision for her retirement.

The Government are right to be flexible in the range of pension provision, especially for women. I want to emphasise the difficulty they face. Britain has a high divorce rate, with one in three marriages expected to end in divorce. Many women work only part-time or are dependent on their husbands' occupational private pensions for their quality of life in retirement. There is little opportunity for such women, especially if they divorce later in life, to accrue financial security. For many of them, SERPS is the one opportunity to accrue some independent financial provision during their working lives.

The Government's approach to pension provision has been flexible right through from SERPS--I welcome the additional bonus for those who contract out--to additional voluntary contributions for those who wish to top up a company or occupational pension scheme, to free-standing pension schemes, to portable personal pensions and to a whole range of pension provision under which people can, for example, invest a single lump sum.

That flexible approach is important, because people's working patterns have changed. Now, someone coming out of education can expect to be in employment for a few years, then perhaps to be self-employed ; then later, he may have to reduce the number of hours he works. All those factors now impinge on people's life patterns, so it is right that pension options should marry, meet and fulfil their expectations.

Previously, people in occupational pension schemes who changed their jobs had their contributions and those of their employers frozen. The effect was punitive, especially on those who changed jobs more than once. That is why the Government were right to free the pensions market and ensure that those who could make pension contributions during their working lives should have the flexibility and opportunity to do so. It can only enhance their quality of life in retirement.

I accept that currently a group of people are not in that happy position but depend on the state pension, plus any top-up benefits to which they are entitled. I am not saying that they are well off, but there is now a growing generation of pensioners who are beginning to reap the benefits of investing in a personal pension. It is easy to recognise the enhanced quality of life they enjoy.

That is why the Government, contrary to what the Opposition want, are right to act as an enabling body through the introduction of flexibility into pension provision--of which contracting out of SERPS is a good example--and through the tax discounts available to those who invest money in a pension. It is wise to give someone a tax break during his working life, so that the next generation will not have to pick up even higher bills to support him in retirement.

Labour Members have a rather wry expression on their faces-- [Interruption.] Perhaps not ; I do not want to misjudge them. It must be right to encourage investment in

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personal pensions for those who have the opportunity to do so, so that when they retire they can enjoy a good quality of life. Of course I fully accept that the state must always provide for those who are dependent on a state pension or on benefits and for those who are widowed or divorced and whose retirement expectations will not be fulfilled. However, that should not deter those who have the opportunity to do so from investing in a pension during their working lives. It is not simply a question of capitalism and personal wealth ; it is the quality of life for a whole generation of pensioners. We have to consider those, in whom I include myself, who will have to provide for that generation.

When a range of options is available, it is important that people receive professional advice. I recently wrote to my right hon. Friend the Secretary of State about that, not just in the context of pensions but about the way that the Financial Services Act 1986 has been implemented through the devolution of power to the Securities and Investments Board, LAUTRO, FIMBRA and others.

If self-regulation is to work, people must be able to trust the advice they receive from financial advisers. I am encouraged to learn that my right hon. Friend intends to produce a leaflet giving further guidance-- [Laughter.] Before Labour Members collapse with laughter, I must tell them that I have received a personal assurance, not just from my right hon. Friend but from the self-regulatory bodies and those who have to deal with them, about certain cases that should have been picked up earlier.

I am pleased to hear that my right hon. Friend is to tighten the way in which the self-regulatory bodies work because they need to be scrutinised. They must ensure that they properly exercise their devolved powers to ensure that the pensioner or other person receiving financial advice is protected. We can never stop the fraudsters and crooksters in, for example, the Maxwell case. It would have been difficult even for those with advance knowledge to have recognised what Maxwell was doing, even if it is easy with the benefit of hindsight.

There will always be villains. The regulations should work, provided that my right hon. Friend uses his powers. I have asked him to scrutinise more thoroughly what is happening within the regulatory bodies, and he has assured me that he will do so. If he does not, I shall be at the front of the queue wanting to know why. It is important that people receive the right advice.

The Government have put SERPS at the heart of the Bill. The Opposition have publicly criticised the provision to contract out, but they should realise that, if someone who has paid into SERPS dies before pension age, there is little provision for his next of kin, whereas, if he had contracted out of SERPS, there would be a lump sum. I think that is admirable, especially for widows whose retirement expectations would not otherwise be fulfilled. It is more beneficial to the individual, because he or she can monitor how the policy is growing.

I support the Government's most welcome move to expand and increase the provision of private pensions. They will definitely be much more meaningful to the next generation--in the same way that the present generation of pensioners enjoy a greater quality of life because their basic state pension is topped up by private provisions. There is nothing wrong with that.

If one asks people what they look forward to in retirement, they reply that they want time and leisure, to

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go out and do things that they previously never had the time to do. We all know that costs money, and pensioners will be unable to enjoy those pursuits without the wherewithal--unless they stay at home in their gardens seven days a week.

I support the Government's proposals in the Bill, and hope that they will continue to ensure that personal pensions are available and flexible, and that a wide choice will be available to the next generation.

8.40 pm

Mr. Stephen Day (Cheadle) : I apologise to the House for not being present for the first part of the debate. You knew, Mr. Deputy Speaker, of my intention to speak, but I was delayed in my constituency and then had the joys of a five-hour drive through the rain and traffic jams. I apologise also if I repeat any points that have already been made.

Whenever I speak as a member of the Social Security Select Committee, I make a point--and I do now--of declaring my indirect interest as a parliamentary adviser to the National Association of Local Government Officers.

Whenever Opposition Members speak on the topic of social security--this came across strongly this evening--they say that their key objective is to ensure that the level of pensions is addressed. The hon. Member for Coventry, South-East (Mr. Cunningham) also said that unemployment is rarely addressed and expressed a desire for the House to deal with that aspect, too. I have no quarrel with that, because surely right hon. and hon. Members in all parts of the House agree with both objectives. It would be a funny person who did not. However, the hon. Member for Coventry, South-East repeated the fundamental error made by many Opposition Members, in believing that just by making such a remark, the problem will be dealt with. There are harsh realities and choices confronting this country and, I readily admit, many individual pensioners. I will try to address that aspect in the debate.

Mr. Jim Cunningham : I touched on the point that the hon. Gentleman mentioned, but followed it up by saying that the key to the pensions problem is wealth creation--or, as my right hon. and hon. Friends would put it, putting people back to work. Whether or not one is talking about a private or state scheme, the key to an adequate pension must be wealth creation. I did not glibly make that point and leave it at that. I emphasised the fact that people must be put back to work, to create the resources necesary to pay adequate pensions.

Mr. Day : I am glad to have given the hon. Gentleman an opportunity to explain the position. No one on this side of the House would disagree that wealth creation is the key to the future of all benefits and to any modern society. That is the heart of Conservative philosophy. Wealth creation comes first--and then one decides how to allocate that wealth among the least well-off. That is a fundamental tenet of Conservative thinking, so I cannot disagree with the hon. Gentleman on that.

Conservatives make the same point as the hon. Gentleman, but that is not enough. Obviously we must get people back to work, but the political debate on that issue and on the Bill is how to achieve the necessary wealth.

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Mr. Jim Cunningham : That political divide is obvious, but I am also saying that your polices have led to a situation in which there has been a depreciation of state benefits and pensions, because your policies are not necessarily designed to get people back into wealth creation. They are designed more to put people on the dole--and that is the political divide.

Mr. Day : I do not think that the hon. Gentleman meant to blame me, Mr. Deputy Speaker. I presume that his comments were directed at the Government whom I support.

Mr. Deputy Speaker (Mr. Michael Morris) : Order. I believe that the hon. Member for Coventry, South-East (Mr. Cunningham) meant "your party'.

Mr. Day : I stand corrected, Mr. Deputy Speaker.

I strongly believe that whatever provision society makes for personal pensions in the foreseeable future, for the public to believe that they can rely on the state to provide a basic pension that will meet all their needs is, in the modern age, living in cloud cuckoo land. One may be able to make a theoretical moral case for making such a provision, but it comes down to the practicalities--and of not only the present but potential economic performance of this country and of the economies that surround it. I will expand on that point later.

That background makes it essential that personal provision is made and that choice is available to those who are able to make choices. Whatever provision the Government make, and whatever encouragement they give, I acknowledge that they cannot help everyone. Not everyone is able to make use of opportunities. I refer particularly to pensioners in the 75 to 80 age group and older. When they were youngsters, even if they could have afforded the luxury of a pension scheme, such a thing did not exist, while many others did not earn enough to exploit such an opportunity.

Those who rely totally on existing state benefits definitely struggle. That is why hon. Members on both sides of the House are right. The Opposition say that pensioners cannot manage. In the case of older pensioners who rely on state benefits, that is true. It is also true when the Government say that state pensions have risen far more under them than they did under the last Labour Government. The record of Conservative Governments in that regard surpasses anything achieved by Labour in terms of pensions, savings and retaining value.

At the heart of the issue is whether we can deliver. The pensioners who are aged 80 or more must be looked after by the state--and the state ought to do more in respect of those people. As to pensioners generally, while those who rely on state benefits are struggling--I know that from my own constituents--I am firmly convinced that the majority of pensioners in my constituency are doing comparitively well. They have, of course, struggled in recent years and experienced difficulties--especially with the significant fall in interest rates. That brought joy to mortgage holders but despair to many pensioners in my constituency who have savings.

In general, pensioners have savings. Many more find themselves in that situation than ever dreamed that they would at the end of the last war. There have been great advances and Conservative Members have nothing for which to apologise in that regard.

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However, the realities must be faced, and I should like the Government to do more for older pensioners who rely totally on the state. They cannot make use of the opportunities for private pension provision that are now available--but it is right that such provision should be offered to those who can make use of it. That is the only realistic course to take.

Social security, like health, creates massive problems for this country and other western societies. We all face the same demographic pressures. When we have addressed that key issue we may have to take some difficult decisions. Pensions have become a political football. That is unacceptable. The vast majority of people, who are not assisted by politicians who never tell the whole truth, believe that the provision of state benefits is theirs by right. That belief was fostered by years of socialism. The state is supposed to provide everything and people think that it will always be able to do so. The harsh reality is that that is not so.

We know that health and social security issues are at the heart of the problems that face the United States of America. They were the two great issues with which the electorate were faced during the presidential election. They are the two great issues which also face this country. New Zealand faces massive problems over its social security payments. The number of working people in the developed world with an income and the number of companies that make profits, the two things which alone create the funds for pension schemes and state benefits, has been reduced, while the number of people who want to benefit from pension schemes continues to increase. The problem is made even worse in a recession.

The western world--the so-called first world--is in danger. A fundamental shift of economic power is taking place in the world. It is time that politicians faced up to that reality and considered what could be a realistic objective. We should stop raising people's hopes that, somehow, the state will always be able to provide pensions. We can take some steps. To some extent, the Bill takes us forward, particularly over private pensions. The problem is greater, however, than any of us is prepared to admit.

In terms of the world's economy, the growth area is the Pacific basin. There are all sorts of reasons for that. They are newly industrialised countries. Expectations are low, so wages and costs are low and productivity is high, though workers in this country would not accept the working conditions in that part of the world. Nor should they have to accept such conditions. However, economic reality may force us to make changes.

The world does not owe this country a living. It is nonsense to assume that the standard of living that I enjoyed when I was a young man and that the wealth that created it will always be there. The debate on this issue never addresses that point. People are never told that the countries of the west face a major problem. No Opposition Member has ever addressed that fundamental shift of economic power. Whether we like it or not, the truth is--my perception of the truth is--that economic-- [Interruption.] It is the only valid perception of truth that anybody can have, is it not? It must be their own, certainly in this place.

The economic facts are that economic sovereignty no longer exists. When we deal, therefore, with issues such as this we have to face the reality that we are part of a world economy and suffer from its effects. If, therefore, we are to

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ensure that pensioners will be provided for by some means or other, we shall be unable to rely on the belief that private pensions are bad and that the state must provide them. It will be impossible for the state to do so. When Opposition Members say here and, by so doing, say to the people outside the Chamber that the provision of state pensions is morally correct, they mislead the House and they also mislead the nation about the fundamental problems that face any Government when trying to provide pensions for the people of this country.

To some extent, the Bill addresses these great difficulties, but I should like the Government to address other issues that we have not yet had the courage to deal with. Since we face great demographic pressures, we must not be afraid of targeting benefits. If only a shrinking pot of money is available, we must ensure that the money goes to those who most desperately need it. The so-called first world countries will have to think about that problem.

Let me take as an example family allowances. I supported uprating in the past. I supported, too, the principle that the allowance should be paid to the lady of the household, but the economic position is so grave that we must look again at that benefit and consider whether it is right that it should be paid to everyone, irrespective of need. We must ask ourselves whether that is the best way to use limited resources. It will be a difficult decision, but I believe that we should look at it.

Mr. Deputy Speaker : Order. Not under this Bill.

Mr. Day : You are absolutely correct, Mr. Deputy Speaker. The Bill's provisions take us in the right direction, in that they provide for private pensions, but my case is that the state can never again be the only provider and that people should not be led to believe that the state will be able to provide benefits to everyone. The point that I am trying to make by mentioning family allowances is that the benefit is provided generally and that we shall have to address that issue.

The Bill proves beyond doubt that the Government are committed to providing for those members of society who are least able to provide for themselves. The recent measure to protect social security payments was widely welcomed in my constituency not only by recipients of such benefits but by many people who receive no benefit but want fair play for those who do. The Government certainly achieved what the vast majority of my constituents wanted--fairness. Social Security Ministers fought hard in a difficult spending round and I add my congratulations to them on securing extra benefit for the least well-off members of society and on giving the firm message that the Government are committed to looking after their interests. There are other fundamental issues that the Bill does not address, but they must be addressed if we are to maintain the care and provision that every hon. Member wants to see.

9 pm

Mrs. Llin Golding (Newcastle-under-Lyme) : The Secretary of State's speech showed once again what chaos the Government are in and how badly they are managing our money. He confessed, four years after the Government said that there was no need for Treasury payments to the national insurance fund, that he will have to go cap in

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hand to the Treasury for money. At the same time, he had the nerve to ask us to support giving away unnecessarily the people's money in the fund.

What has happened since the 1988 autumn statement, when it was announced that the Treasury supplement to the national insurance fund would be abolished? Only four years ago, John Moore, now Lord Moore of Lower Marsh, speaking for the Government about the supplement, said :

"We consider that there is now no need for it at all. The £26 billion of expenditure from the fund is fully covered by contributory income, and the abolition of the supplement will have absolutely no effect on that expenditure." [ Official Report, 10 January 1989 ; Vol. 144, c. 719.]

What has happened since? Payments to the fund have increased from £29,825 million in 1988-89 to an estimated £35,000 million in 1991-92. That takes into account changes following the Social Security Act 1990. In the same period, payments out increased from £26,744 million to £37,802 million.

The Government have turned a surplus of £3,081 million into a deficit of £2,802 million, and things are getting worse. The Government Actuary report on the financial provisions of the Bill showed that the estimated deficit for 1992-93 has been revised from £2,850 million to £4,659 million. Paragraph 12 reads :

"Lower earnings and fewer contributors reduce the estimated contribution income in 1992-93 by some £360 million and £750 million respectively whilst other miscellaneous changes increase income by £8 million in aggregate."

Paragraph 13 says that estimated benefit expenditure is £991 million higher than in the uprating order for 1991 and that "Unemployment benefit is increased by £408 million due to an increase in the assumed average numbers employed."

Expenditure on invalidity benefit is estimated to be £460 million higher. Minor revisions to estimates for the other benefits increased expenditure by £43 million. This has come about because lower earnings and fewer contributors have reduced the estimated contribution income. This is an example of another fine mess that the Government have got us into.

What are the main reasons for the mess? First, there is the removal of the Treasury supplement. Secondly, there is the payment of personal pension incentives which rose from £289 million in 1988-89 to a colossal estimated £2.487 billion in 1991-92. I will deal with that later. Thirdly, there is the fact that benefit payments increased more rapidly than contributions. Who is responsible? Who was Chief Secretary to the Treasury in 1988 when the Treasury supplement was taken away? Who was the Chancellor who watched personal pension incentives grow to massive proportions? Who is the Prime Minister who has seen unemployment grow--and grow and grow? I will not name him because he will only say that it was somebody else.

Our people now know that the responsibility for our appalling unemployment rate and for the devastation of British industry lies with the Prime Minister, with the Chancellor of the Exchequer and with the Secretary of State for Social Security who, in his time at the Department of Trade and Industry, destroyed more of our factories than the Luftwaffe ever managed to do.

Let us look at the record since the third quarter of 1990. There are 1.25 million more unemployed, 110,000

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businesses have failed, 140,000 homes have been repossessed and there has been a 4 per cent. fall in output. I see it starkly in my constituency. There is the fight to survive and the battle against short-time working, there are redundancies, there is unemployment, there is the closure of factories, foundries and shops, there is the devastation of the building trade, there is the contraction of the pottery industry and now the threat of the closure of Silverdale colliery. Against that background, nobody should be surprised that the Government have had to ask for more money. As a result of lower earnings, people are paying less. Unemployed people, who should be paying into the fund, are having to be paid out of it, which is a great part of the problem.

The national insurance fund is receiving fewer contributions than was expected because more people are losing their jobs and more firms are closing. Every day seems to bring more job losses and yet another disaster for the British economy. People are insecure, fed up and depressed. They do not expect miracles, but they do expect the Government to be doing more to get the country back to work. They do not expect the Government to introduce a Bill that asks people in work to pay their hard-earned money into the nation's insurance fund so that the money can be given to people as an incentive to opt out of the state earnings-related scheme.

The Government have not explained what is wrong with SERPS which has led them to pay incentives to people to contract out. The Opposition have always opposed the payment of those incentives. Although we welcome the reduction in incentive payments from 2 per cent. to 1 per cent. of earnings, we believe that it is unfair that the new incentive will apply only to personal pension holders. Why should people with occupational pensions now be left out of the scheme? What is so good about private pension schemes that people should be encouraged to transfer to them? Private pension schemes are a lottery. Some may be well run, whereas others may be badly run. People who take out private pension schemes often do not have enough information. The Opposition believe that the incentive money could be better spent providing the regulation of personal pensions and giving better information to contributors. Why are occupational pension schemes excluded? Why should workers in factories see their money used to help pension companies to undermine the state scheme? Why should working people in the state scheme pay their hard-earned money to do the pension companies' recruitment job for them? Is not it iniquitous that money from workers in the state scheme should be paid out to private schemes? What kind of fairness is that? The Government should be strengthening the state scheme, not weakening it.

Why is it that only people aged over 30 may now apply? If 30 years is such a magic figure, why did it not occur to the Government when the scheme was first introduced? I suppose that the Government will say that the figure is ambiguous and that it is rough justice. Everything about the Government is more rough than justice. The Labour party is convinced that no incentive should be paid to opt out of the state scheme. We believe that it is in people's interest to stay in the scheme. The Bill is forced on the Government because of the complete collapse of the Government's economic policies. However, we will not ask Opposition Members to vote against Second Reading tonight because we know that it is not the Government who have suffered from their incompetence.

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The Prime Minister, the Chancellor of the Exchequer and the former Secretary of State for Trade and Industry have not suffered. It is the people who have lost their jobs, incomes, savings and homes who have suffered and they would suffer even more if we did not support the Bill.

Because of those people, we will not oppose the Bill tonight. However, we will examine the Bill in detail in Committee. We will urge the Government to abandon what seems to be their overwhelming desire to squander the money which belongs to the people and on the proper management of which so much of their standard of living depends.

The Parliamentary Under-Secretary of State for Social Security, the hon. Member for Maidstone (Miss Widdecombe), has many questions to answer. She must be aware that our concern is that the money be properly managed because the standard of living and quality of life of so many of our people depend on it.

9.11 pm

The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe) : This has been a well-informed and interestindebate with many detailed contributions. I begin by congratulating the hon. Member for Newcastle-under-Lyme (Mrs. Golding) on her first appearance, at least in respect of legislation, at the Dispatch Box. I look forward to more exchanges with her, perhaps even in Committee as she anticipated at the end of her speech.

Various themes have emerged from this wide-ranging debate. I think that I should be able to touch on them at least once in the time that remains to me. The first theme to emerge was the apparent conflict of views on the two sides of the House about whether it is better to encourage dependency on the state or to encourage individuals to make provision for themselves. I thought that I detected a difference of opinion on that issue not just between the Opposition Front Bench and the Government, but between the Opposition Front Bench and some Opposition Back-Bench Members.

It was a recurring theme in the debate that the SERPS burden was growing and Opposition Back Benchers offered various suggestions about how to reduce that burden. The main thrust of the opening and closing speeches from the Opposition Front Bench was that we should concentrate our efforts and resources on the greater promotion of SERPS, rather than on assisting people to make private provision. Another theme in the debate commanded great cross-party support. That was the shared concern that the personal pensions that we are determined to promote and encourage should be reliable and subject to regulatory safeguards to ensure that when people take out those pensions, what they are told they will get is what they get at the end of the day.

There were several interesting contributions in that respect and perhaps the most interesting was made by the hon. Member for Glasgow, Garscadden (Mr. Dewar), who opened the debate for the Opposition. He said that it is very difficult for people to give the best advice when they are financially dependent on the outcome, as is the case when they rely on commission. The hon. Gentleman was a solicitor before he was elected to the House. Of course, solicitors often give advice on going to law. Presumably, they must occasionally advise clients not to go to law, even

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though they know that that would deprive them of their fees. Provided that the profession is properly regulated and is honourably conducted, there is nothing unique about an insurance salesman having to distinguish between best advice and his own financial interests. That principle is applied to many occupations. I shall return to the main point about reliability and safeguards.

The third theme was the soundness of the state pension, the soundness of our general provision for pensioners and, in particular, a point that grew towards the latter part of the debate--how we best assure that soundness in the light of the growing number of pensioners and the number of pensioners who are living longer. I was even challenged by my hon. Friend the Member for Teignbridge (Mr. Nicholls) to state the number of centenarians. I am delighted to be able to tell my hon. Friend that I can produce the figure, but I shall do so when I refer to the issues that he raised. The hon. Member for Newcastle-under-Lyme referred--

Mr. Willetts : We are heading for an epic speech. It is helpful to have the structure laid out so clearly before we move to the substance of my hon. Friend's speech. Will she refer to European comparisons in respect of pensioners' incomes? Many of our figures on British pension provision are not properly compared with their continental counterparts.

Miss Widdecombe : For the benefit of those who did not read the Sunday Express, I shall be delighted to allude to the very favourable position of British pensioners.

As I was saying before I was so helpfully interrupted, the hon. Member for Newcastle-under-Lyme and other hon. Members made much of the present economic situation. The hon. Lady reeled off the standard and requisite gloom and doom statistics which the Opposition always churn out with relish. As we are on the subject of Euro-comparisons, let me point out that there is nothing unique about the British recession. We are in a world recession. In the spirit in which the hon. Member for Birkenhead (Mr. Field) congratulated my right hon. Friend the Secretary of State on his triumph in protecting benefits in the autumn statement, perhaps I may also congratulate my right hon. Friend on not following a large number of our European partners in having to reduce benefit. Although our recession is not unique, our ability to handle it brings great credit on the Government.

Mr. Dewar : My point might seem a little pedantic, but it is relevant. The Minister is talking about the excellence of the management of her Department. She knows that the national insurance fund has forecast unemployment of 2.8 million during 1993-94. Is she confident that that forecast will be held?

Miss Widdecombe : The hon. Gentleman has a fondness for repetition. He raised that point no fewer than three times in his speech. In setting out the themes that governed the debate, I have made it very clear that I shall deal with each point. He will be delighted to know that I shall deal with that matter and with all the others that he mentioned four, five or six times because he had no others. He will get an answer, but it will be in my good time and not at his request.

Mr. Dewar : What a gracious lady.

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Miss Widdecombe : Well, the hon. Member for Garscadden did not like it earlier when I smiled and nodded at him, so I thought that perhaps he wanted a change of approach.

Having discussed the general themes that were dealt with during the debate, it might be as well to remind the House of what the Bill is about. It contains three specific clauses. Towards the end of the debate, I thought that we were dealing with the wider question of pension provision, rather than the three small and modest clauses in the Bill.

Mr. Dewar : Ah.

Miss Widdecombe : The hon. Gentleman senses that I am getting nearer to answering his questions. The clauses cover the provision of a 1 per cent. rebate for holders of personal pensions over 30, the Treasury supplement, and the technical adjustment to enable administrative expenses to be paid from the fund.

The hon. Member for Garscadden mentioned the Treasury supplement, as did the hon. Member for Newcastle-under-Lyme. The thrust of both of their criticisms was that somehow we were wholly improvident when we abolished the Treasury supplement, that we did not expect that we might need it again, and that we took a risk that has not paid off. My right hon. Friend who is now the Minister for Social Security and Disabled People said, when dealing with the question in the Committee stage of the Social Security Act 1986 :

"If the position changed dramatically a future Government could have a single clause in a social security Bill and bring it back."--[ Official Report, Standing Committee F, 17 January 1989 ; c. 35.] What a prophet he turned out to be. As the position has changed dramatically, we have produced a single clause in a Social Security Bill to bring it back. So it was not improvidence. We have provided for the situation.

However, there is an enormous difference. Last time, the Treasury supplement was mandatory--it was there whether we needed it or not. We did not believe that that was a sensible use of public money. The difference this time is that the supplement will be flexible, and will be there for need rather than being mandatory.

The hon. Member for Garscadden said that it used to be a balancing act, but it was not, because the supplement arrived whether we needed to balance or not. We are creating a much more sensible arrangement, whereby we can call on the supplement, as we always said that we might have to do, as and when we need it, rather than being tied down to it.

Four times during the debate the hon. Member for Garscadden mentioned the 2.8 million figure for unemployment. Our job is not to second-guess the Government Actuary but to respond to him. That is why we have brought forward the Bill. The Government review the position each year. If, at the point of review, we decide that the projections are wrong, necessary adjustments can be made. We must make it clear--I was not even certain that the hon. Gentleman appreciated this in his opening speech--that the balance that we are seeking to maintain in the fund is simply the prudential minimum. Once that balance is restored--even if the outcome next year should be different from the forecasts--the fund will still be manageable.

Mr. Dewar : I am sorry to interrupt the hon. Lady. I appreciate the point that she made, to which I referred in

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my remarks, but I should like go back to my original question, although with some trepidation in view of her strictures. The hon. Lady says that it is not her job to second-guess the Government Actuary, but, as he made clear in his report :

"I have been instructed to use for the purpose of the above estimates"

the figure of 2.8 million unemployed. It is not up to the Government Actuary to second-guess. What I want to know is whether the Minister believes that the figure of 2.8 million will hold.

Miss Widdecombe : I have already taken care of that point. One of the reasons that those on the Opposition Front Bench get so muddled sometimes is that they do not listen to what is said. They spend so much time barracking from sedentary positions, in total contravention of the Standing Orders of the House, that they do not hear the things that are said to them. I have already said clearly--I will repeat it again, because, apparently, the fashion tonight is to repeat endless points--that the figures are reviewed every year and that adjustments can be made, as necessary.

The hon. Member for Garscadden also said that the Opposition would not oppose the Bill because it was necessary to keep the fund in balance and because they rejected the only other two options--to reduce benefits or to increase national insurance contributions. I think that the House will welcome the change of heart that has apparently swept through the Opposition, especially when one considers that they fought the last election on the issue that they would raise national insurance contributions. At long last they have seen the light--

Mr. Frank Field : We lost the election.

Miss Widdecombe : Yes, the Opposition did lose and they will go on losing because every time they have a policy that looks a bit inconvenient, they change it. They do not know from one day to the next what they stand for. Tonight those on the Opposition Front Bench have made it clear that they are against raising national insurance contributions.

Mr. Terry Rooney (Bradford, North) : Will the hon. Lady give way ?

Miss Widdecombe : Not at the moment, but I may do so later. We are delighted to note that the Opposition have now made it clear that they are against raising national insurance contributions and we are delighted to note that they have withdrawn a policy under which 3 million extra people would have paid increased national insurance contributions.

The Opposition also say that they are against cutting benefits--they speak one way but look the other. Let me reiterate what my right hon. Friend the Secretary of State said at Question Time about the attitude of the Opposition when he announced that there would be no benefit reductions. When they heard that, their faces were as glum as owls. They not only want people to be dependent upon the state, but, when there is a Conservative Government in power, they want such people to be consistently worse off so that they can make political capital out of that.

Mr. Field rose--

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