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5.2 pm
Mr. Frank Field (Birkenhead): Perhaps I should begin with a confession, Mr. Deputy Speaker, because before I came to the Chamber I received a message that my bleeper was awaiting me in the Whips Office. I am a non-possessor of a bleeper, but am soon to be a possessor. This will be the last social security debate in which I participate without one.
Mr. Deputy Speaker: Order. I hope that the right hon. Gentleman will remember the rules when he has the bleeper and will not bring it into the Chamber.
Mr. Field: I was about to say, Mr. Deputy Speaker, that, if you heard a bleeper earlier, it was not mine. Should I become off message during this debate, it will be unintentional, but I will not be able to plead that in future.
Clearly, there are two parts to our debate today. The hon. Member for Northavon (Mr. Webb) made that distinction. The first is our concern about what is happening to existing pensioners and the major future reforms that the Government are attempting. My only difference with the motion and the Government amendment is that they have both been less than generous about what the Government have achieved and what the Secretary of State intends to achieve by the end of this Parliament. The changes that the hon. Gentleman so quickly dismissed, such as value added tax on fuel, the winter fuel payments and the reintroduction of free eye tests as well as the commitment--if not yet the reality--to concessionary travel for pensioners, are very welcome to pensioners I meet in Birkenhead. I confess that those pensioners differ greatly from the hon. Gentleman's description of pensioners in Northavon. Birkenhead pensioners are pretty tough and cynical about what politicians say. They study carefully the difference between rhetoric and reality. I do not know whether that means that they should spend their holidays in the west country and pick up the trait that he described, but I would not concern myself with the worries that he had on that score.
Labour Members can be proud of the Government's record so far. Clearly, it would not be a record on which we would want to go into an election--my right hon. Friend the Secretary of State clearly would not want to do so either. In trying to improve on that record, he will have the support of Labour Back Benchers and a considerable amount of support from other parts of the House.
I shall touch on the longer-term reforms, which naturally centre on the Government's proposals outlined in the Green Paper. I shall set out my worries aboutthe reforms as they are beginning to take shape.
The Government say, rightly, that the document is a Green Paper, which shows that they are listening and willing to learn. In addition, it gives hon. Members the chance publicly--there are, thank goodness, many chances privately--to influence the debate.
My first concern is my major one: having read the Green Paper and listened to Ministers, I do not yet believe that they understand the people to whom they--or, they hope, somebody--will try to sell pensions. We are talking about those who comprise the third poorest group in our society. Life has not given them the opportunities and chances that would have enabled them to have portfolios or financial advisers or to become accustomed to practices with which some, if not all, Members of Parliament are acquainted. They will be asking, what is the Green Paper all about? Given the difficulty that we have with saying in a couple of sentences what it is about, question marks must hang over whether we have got the reform right. If we cannot explain it in terms simple enough to grip those who fall outside current pensions provision and enable them to understand what we are trying to do, it may be that the key objective of simplicity is still beyond our grasp.
My first worry about the proposals arises from all the talk about different sorts of pensions provision, for I do not believe that that should be our first step on what we hope will be the great journey of pensions reform. Linked to that is the statement made today by my right hon. Friend the Secretary of State, that everyone has different requirements; and the statement he made on the radio this morning, that all of us needed financial advice. I dispute that. We do not need advice about sending children to school; we think that such things should just happen. If we had a simple single pension provision for the first tier, there would be no need for financial advice, for the requirement would be that everyone should be a member of that scheme. The costs would certainly be different, for there would be no costs relating to financial advice; and there would be no reason for people saying that they could not understand why they should be members, so it would be a much easier scheme to enforce.
Linked to that are the two hands of the Government--the left hand and the right. My right hon. Friend the Secretary of State is right to say that he is proud to be introducing a minimum pension guarantee to help existing pensioners, but I worry about how that minimum pension guarantee will operate in the long term. I lack my right hon. Friend's confidence that, somehow, people will box that guarantee off in their mind, decide that it does not relate to them, and resolve to go ahead with saving in response to the Government's call to save more. I do not believe that they will ignore the fact that, if they are among the poorest third of members of our society, they might be only slightly, and certainly not much, better off if they save than if they do not. If they listen to today's debate or a recording of it, especially the speech made by the hon. Member for Northavon, they will begin to doubt whether, by saving, they can make themselves much better off.
We are at a watershed. Increasing numbers of pensioners must be telling their grandchildren their deep regret that they are decent people: that they saved, that they did not fiddle and that they became and remained members of their occupational pension scheme even though it would not make them much better off, only to find that they are substantially worse off than other people who did not save, whether or not they could have done so.
Without extending compulsion in the way that hon. Members on both sides of the House have argued we should, defending the minimum pension guarantee will become more difficult as the years go by. We are sending a powerful message to people whom we shall not compel, but whom we hope to persuade, or merely entice, to make provision for their pensions--we used to call it bribery when we were in opposition and the House discussed national insurance rebates to encourage people to take out private or stakeholder provision--when we know perfectly well that any financial adviser currently advising a third of the electorate should tell them that the worst thing for their financial health that they could possibly do is save. There is a deep sickness in our society when such a statement is true.
Mr. Patrick McLoughlin (West Derbyshire):
The right hon. Gentleman is talking a lot of sense, and many people outside the House will support what he says. Does he accept that people who have saved become increasingly resentful of those who get looked after, even though they have made no provision whatsoever? That resentment will cause some serious problems unless what the right hon. Gentleman says is taken on board.
Mr. Field:
I have heard that the Government will look at the disregards, and we know how cheaply that may be done--the sum mentioned is regularly lost in the accounts. If the accounts were out by only £25 million, the Comptroller and Auditor General would throw his hat in the air for the first time and say that he could sign them without qualifying them.
Mr. Malcolm Wicks (Croydon, North):
The other day, a constituent asked me two questions. Her first was, "How can anyone think that I can live on £80 a week?" Her second was, "Why did I bother to save for my pension, when all it has done is prevent me from getting income support?" I think that that is what my right hon. Friend is telling the House. Does he agree that no decent social policy has ever been built on the means test?
Mr. Howard Flight (Arundel and South Downs):
Hear, hear.
Mr. Field:
Indeed, and my hon. Friend used to make the same point in opposition. I do not want to disturb or upset his constituent, but all hon. Members will know that people--good neighbours--come to our surgeries to make sure that the frailer and more elderly person who lives next door gets all the help available. However, those good people are not themselves eligible for income support and the passports and discover--they are good enough thank goodness for it--that their neighbour is on a higher income than they are. That is a problem that the Government inherited, and I am sure that no Labour Member would want to defend the situation for much longer.
The other matters about which I wish to speak stem from the Green Paper. As they stand, the proposals present a real danger to occupational pensions. I was pleased with one of the sentences in the Green Paper, which said that occupational pensions were one of the greatest social security successes this century, if not the greatest. However, the proposal is to encourage employers
to set up stakeholder schemes. My worry is that employers will decide to do so and close entry into existing occupational schemes for new workers.
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