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Mr. Lilley: Is the hon. Member again denying the words of his leader, the right hon. Member for Sedgefield (Mr. Blair), who said in Singapore:
- "For Singapore the Central Provident Fund has worked well".
The hon. Member has just said that it worked badly.
Mr. Smith:
These days, the Government are very good at selective quotations from documents. In relation to the economy and infrastructure of Singapore, the central provident fund has been successful but for the individual savers of Singapore, the fund has not been a particularly good deal. Such a system would not be a particularly good deal for the people of Britain. If the Secretary of State or his researchers had been on the ball, four weeks ago they would have read a perceptive article, which appeared in The New Statesman and Society and was written by me. The article set out precisely what lessons we thought should be learnt from the Singaporean experience and clearly spelt out why we would not proceed along that road.
Sir Norman Fowler (Sutton Coldfield):
I give the hon. Gentleman an opportunity to deny another rumour that is going around--that the Labour party intends to abandon its pledge to uprate pensions in line with earnings.Will he confirm that that is not remotely the intention of the Labour party?
Mr. Smith:
If I spent my entire time responding to rumours put around by central office and others, I should be doing a better job at tilting at windmills than fictional characters have done in the past. If the right hon. Gentleman had read the comment that I made in response to that challenge in the Sunday Express, he would know that I said very clearly that we are in the process of looking at all our policies in relation to social security
The Government are peddling another rumour--which also needs to be countered--that somehow the Labour party is interested "in getting the state's hands on your pension funds". Well, we are not. The Government have got their grubby hands on people's pension funds--they have reduced the value of the state earnings-related pension scheme for those people who are in it by more than half over the last eight years. The Government made a deliberate decision in 1987-88 and last year to reduce the value of SERPS to the people who had been paying into it. If people are looking for those who are interested in getting the state's hands on their pension funds, it is the Government and not the Labour party.
We know from what the Lord Chancellor said in the other place a few weeks ago that the Government were prepared to look at an amendment to the Family Law Bill that would ensure that, at the time of divorce, a pension held by one of the parties could be split as a pension rather than frozen as a pension, with the benefits of it being split at a subsequent time. This is an important issue for many people, particularly for women.
The Labour party, many Members on the Cross Benches and many members of the Government in the House of Lords, were pleased when the Lord Chancellor told the other place that he was prepared to look at instituting an amendment to the Family Law Bill to ensure that pensions could be split. In the past few days, we have read in the press that the Lord Chancellor is drawing back from that proposal. Will the Secretary of State tell us what the position is during the course of this debate--as this issue has transcended partisan lines in the other place? Is the Lord Chancellor still actively and sympathetically considering instituting an amendment, or has he ruled it out? I hope that he has not ruled it out, because if he has, it will be a sad day for many people. In summary, we will not be opposing the general uprating proposals.
Mr. Lilley:
The hon. Gentleman has opposed every substantive reform and change in the benefits system that the Government announced in the Budget and in the social security uprating statement, and many that took place in the past. That is fair enough--if he wants to finance a more expensive system of social security, it is up to him to tell the House and the British people how much it will cost. Does he agree with the hon. Member for Birkenhead, who said that anyone who says that Labour's welfare objectives can be achieved without spending more has something wrong with him, and ought not to be trusted? Does the hon. Gentleman believe that it can be achieved without spending more money?
Mr. Smith:
Yes, and if the Secretary of State will contain himself for a few weeks, he will learn how we intend to go about it. I also take him up on his claim that somehow the substantive reforms in his package are ones that we oppose. The main substantive reform relates to additional measures to counter fraud, claiming that£120 million in the first year and £235 million in the second year. We are not opposing him on tackling fraud in the system--indeed, we want him to deal with it more effectively and efficiently than he appears to intend.
I referred to the other substantive measure when I asked precisely how the Government are going to make the changes in payment arrangements for housing benefits that will amount to £105 million in the first year. If the Secretary of State wants to claim that we oppose every single substantive measure that he is putting forward, he should look at the substantive measures in the package. We shall oppose the unsubstantive, but none the less harmful, change to minimum maintenance in child support.
Sir Norman Fowler (Sutton Coldfield):
I do not regard the speech of the hon. Member for Islington, South and Finsbury (Mr. Smith) as the most exemplary illustration of open opposition. When I intervened to ask him whether his party would uprate the basic pension by earnings or by prices, he ran away from my question, but when my right hon. Friend the Secretary of State intervened a few seconds later, the hon. Gentleman gave the game away entirely: if he used the same envelope of costs, there is no way in which he could honour the pledge given previously. I shall return to that point in a moment.If the hon. Gentleman wishes to intervene and correct my assumptions, I shall be glad to give way.
I welcome what the Government have done in this uprating. Although public spending is tight, it is right that substantial resources should be devoted to some of the most vulnerable groups in society. I welcome a number of the increases, particularly the increase in family credit. The aim of family credit was to help low-income families in work. It now helps more than half a million people and has proved to be an excellent innovation.
I also welcome what is being done for pensioners and my right hon. Friend's announcement of the price uprating. Let me dwell on pensions for a few seconds.As my right hon. Friend the Secretary of State said, a debate is taking place not only here, but in every country in western Europe. As people live longer, there will be a greater demand for taxpayers' resources to be devoted to health, social services and pensions. That is why Governments everywhere are examining ways of providing options for people to save for their own retirement. That is why, not last year but 10 years ago, the Government began the process of reform. As a result, Britain is better placed than virtually any other country in western Europe to meet the emerging costs of pensions and social services.
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