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Mr. Vernon Coaker (Gedling): It is remarkable to be attending the Committee stage of the Finance Bill and to
hear Conservative Members pretend to be the friends of pensioners. During the recent election campaign, we discovered that pensioners were concerned about their circumstances and their prospects.
The Conservative party is portraying itself as the friend not only of today's pensioners but of future pensioners. However, the previous Administration's record--Conservative Members want nothing to do with that--show exactly what Conservative Members did for tomorrow's pensioners. Since 1979, the number of active members in occupational pension schemes has fallen. Moreover, hundreds of thousands of people were encouraged to leave occupational pension schemes and to take out personal pension schemes, for which many of them are still awaiting compensation.
Mr. Shaun Woodward (Witney):
Here we go again.
Mr. Coaker:
The hon. Gentleman says that, but why should today's or tomorrow's pensioners trust Conservative Members, who failed so miserably in their obligation and responsibility to help pensioners when they had the power to do so? Conservative Members will have to answer that question.
Conservative Members have offered idle speculation on the consequences of the Budget's tax reforms and talked about Labour's scaremongers--but who are the scaremongers?
Lorna Fitzsimons (Rochdale):
Does my hon. Friend agree that Opposition Members would not be scaremongering if they genuinely cared--as they profess to do--about pensioners? Conservative Members had 18 years in which to prove in deed and in word that they cared about pensioners, whereas VAT on fuel is a testament to their hypocrisy. Do you therefore agree that Conservative Members are shedding crocodile tears and are more in favour of pension funds?
The Chairman of Ways and Means (Sir Alan Haselhurst):
Order. The hon. Lady is not conducting a conversation with one of her colleagues; she is addressing the Chair.
Mr. Coaker:
I thank my hon. Friend for her intervention, because she has made point that I was trying to make. When Conservative Members were in power, they did nothing to protect future pensioners. As she said, now that we have a Government who are determined to take action for the benefit of the entire community, Conservative Members disagree and offer idle speculation to frighten people and to undermine the Government's proposals.
Much of the basis of the argument offered by Conservative Members reminds me of my time at university, when I was studying economics. Our economics lecturer stood in front of the class and drew models, saying, "If you keep this, this and this the same, the outcome will be that." We asked what would happen if we changed one part of the formula, and he said, "You can't change one of the variables, because that would
spoil it." Conservative Members refuse to accept the Government's argument that the value of pension funds is determined not only by the amount of money paid into them but by many other variables.
My hon. Friend the Economic Secretary to the Treasury has said in this debate that pension fund values are determined not only by the income paid into them but by economic confidence and growth and generally by how people feel about the economy. All those factors will affect pension fund values and prospects.
If Conservative Members want to lower pension fund values, they should continue talking down pension funds and trying to undermine economic confidence. Future pension fund values, on which so many workers rely, will be affected by such activities.
Like all my hon. Friends, I support the Government's measures. They are designed to encourage investment and to do something to tackle the blight that we see all around us. We have a new Government, and it is incumbent on Conservative Members to remember that the new Government have different priorities and are determined to do things differently.
The tax changes outlined in the Budget, including the ACT proposals, are part of a package that aims to serve the whole community and put people back to work. It is about investment in the economy and about rewarding that investment rather than rewarding speculative gain.
Finally, I remind hon. Members that what the Labour party promised during the election campaign, and what the Labour Government are now delivering, is a fairer tax system which encourages and rewards investment and which, through that investment, generates a fairer society in which there are opportunities for all.
Mr. Woodward:
You may not be surprised to hear, Sir Alan, that I do not intend to take up the invitation issued by the hon. Member for Gedling (Mr. Coaker) to share his views.
I believe that clause 19 should be withdrawn. It goes hand in hand with a Budget which is, by and large, full of carelessness and broken promises, although I admit that in that respect this clause is something of a surprise. Throughout the election, and in the run-up to it, we were treated to a series of promises by the Prime Minister and the Chancellor of the Exchequer. They told us, quite fairly, that there would be windfall tax, and we can find it in their deliciously framed manifesto and prospectus. When pressed on whether there would be other tax increases, the answer was, "Absolutely not--we have declared all our taxes and you will find in our manifesto everything we will do."
In the Chamber on Tuesday, however, my hon. and learned Friend the Member for Harborough (Mr. Garnier) repeatedly pressed the Financial Secretary to assist him in his inquiries, trying to find a reference in the Labour party's prospectus to the abolition of the ACT credit for pension funds. The Financial Secretary seemed to be having some difficulty answering his question. I believe that the Financial Secretary did not answer his question. Indeed, I would go so far as to suggest that she probably could not answer his question, because there is no such proposal in the Labour party manifesto--if there is, I shall be more than happy to give way to the Economic Secretary so that she can tell me where I can find it.
Out of nowhere, the Labour party will produce a bonanza to fund its spending programme by abolishing the ACT credit. The aim is, of course, laudable. There cannot be one hon. Member who does not think that one of the most important tasks of anyone in politics is to create employment--[Interruption.] I am sorry to see the hon. Member for Dudley, South (Mr. Pearson) shaking his head as I suggest that our task should be to create employment. He could learn a few lessons by looking back at what the previous Government did to create employment.
Every other European country has rising unemployment but, just today, we have celebrated yet another fall in unemployment because of Conservative policies of the past few years. Those policies have created real jobs, not phoney or subsidised jobs that will disappear when the subsidy goes. If the hon. Gentleman wants to learn how to create real jobs, I suggest that he looks hard at the work of the past few years.
Mr. Geraint Davies:
Will the hon. Gentleman accept that only one in six of the new jobs created in the final year of his party's failed Government were full-time jobs and that the rest offered poorly paid, part-time or temporary work which was inherently insecure and in which, in many instances, people were stripped of their pension rights and other benefits? Those are not real jobs--they are bogus jobs.
Mr. Woodward:
The hon. Gentleman asked me simply whether I agree. No, I do not.
The aim of the clause--welfare to work--is laudable, but the means are crude.
Mr. Stringer:
Will the hon. Gentleman give way?
Mr. Woodward:
No, I shall not give way for the moment. At best, the clause is careless; worse than that, I believe that it will produce instability in the economy, depriving it of investment and creating uncertainty--not just for the pensions industry, where there is huge uncertainty as a result of the Budget, but for pensioners. I am sure that hon. Members on both sides agree that one of our most important tasks is to provide certainty for people in their old age and as they approach old age. I hope that Labour Members agree that the building up of more than £650 billion of pension funds in the United Kingdom--whomever we give the credit to--is a considerable achievement and reflects well on the country.
Mr. Davies:
The hon. Gentleman has just asserted that the best prize that we could give the British public is certainty. Is it not the case that the only certainty that the previous Government brought was uncertainty? All that we saw was a cycle of boom and bust: in the housing market, in recession and unemployment--the list goes on. The Budget will bring about stability, certainty, long-term investment, security, wealth, prosperity and fairness for the British people for the new millennium.
Mr. Woodward:
The hon. Gentleman will not be surprised that, yet again, I do not agree with him. I am sorry to disagree with him, but I am afraid that I have to.
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