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9.1 pm
Mr. David Rendel (Newbury): I want to speak mainly about pensioners, but first I shall make some general points.
Along with many of my hon. Friends, I find it depressing that the Government have finally decided to make wealth creation a more important objective than wealth redistribution. We believe that this Government were elected by the people of Britain to produce a fairer society, and to return justice and opportunity to all our people; we are sorry that they seem to have rejected that aim.
The Budget illustrates what has been happening. It is a Budget for tax cuts, while it should have been a Budget for investment in public services and to support the weakest and most vulnerable of our fellow citizens. I have lost track of how often I have heard the Prime Minister and the Secretary of State for Social Security rail against the social security system. They are, of course, right to blame the system for trapping people in poverty--that is what it does--but they are wrong to blame it for failing to alleviate poverty. Indeed, sometimes it seems that only our social security system stands between the poorest members of society and real penury--homelessness and starvation.
The Prime Minister can repeat the mantra "work for those who can, security for those who cannot" as often as he likes, but the real need is to create full-time jobs that pay a living wage. After all, the one thing for which the Department of Social Security cannot be blamed is unemployment. Part of the solution to the problem of poverty and inequality in Britain must lie in our economy. Welfare reform will come to very little if there is no work for people to do: we cannot tell them to go back to work, when no jobs are available.
In this Budget, there is, at last, something for pensioners, and we welcome that; but, although an increase in the winter fuel payment for all pensioner households may look good on the surface, there are various problems. Using the money to add £2 a week to the weekly state pension payment would have saved nearly £14 million in advertising and administration costs. As it is, the huge cost of organising an audit every year to establish which households are pensioner households is a terrible waste of money--money that could have been given directly to the pensioners involved.
The winter fuel payments are intended to help vulnerable elderly people to stay warm and therefore healthy, but a much more effective way of dealing with that aspect of fuel poverty would have been spending the
money on insulation and energy-efficient housing. The problem of fuel poverty involves much more than simple economics.
This is not a good way of targeting money at the poorest pensioners. Better-off pensioner households--some of whom, last year, gave their winter fuel payments to charity because they were so well off--will receive an extra £80 or £90, compared with just £50 for pensioner households on income support. The Secretary of State's claim that he was increasing fivefold the amount that pensioners were receiving may apply to the better-off, but it does not apply to the poorest, who should have been targeted.
The winter fuel payment increase is administratively expensive. It fails to target fuel poverty and the poorest pensioners properly. Although Liberal Democrat Members welcome more being spent on pensioners, we wish that the Government could have spent it more sensibly and effectively.
From April 2000, the minimum income guarantee--the Government's other great claim to be doing more for pensioners--will be linked to earnings, rather than prices. Although the measure is very welcome, it comes with a sting in its tail, just as the minimum income guarantee does. The widening of the gap between the basic state pension and the higher income support levels inherent in the income guarantee will bring ever more people on to means-tested benefits.
The Government know, from their own research, how the more elderly people in our society are often embarrassed by the idea of applying for income support. That is why the minimum income guarantee is a shameful deceit. It is not an increase in the basic state pension, but it is guaranteed that many of the poorest pensioners will never get extra. Earlier in the debate, when I made that point to the Secretary of State for Social Security, he could not deny it.
Currently, 700,000 pensioners are not claiming the benefits to which they are entitled. Some of them do not do so because they are too proud to claim what they think is state charity, and others do not because they find the forms simply too complex to fill in.
Moreover, 600,000 pensioners are disqualified from the minimum income guarantee because they have too much in savings. They are the ones who were brought up to think that it was a good thing to save money for their old age and for a rainy day, or to put aside a bit to pass on to their descendants. Now, they are penalised for doing just that. The Government really have to get their act together on that issue--to save or not to save. People are asking that question, but the Government have given them no answer.
Mr. Tony McNulty (Harrow, East):
Will the hon. Gentleman give way?
Mr. Rendel:
No. I should continue if I am to leave time for other hon. Members to speak.
I hope that, in replying to the debate, the Chief Secretary to the Treasury will deal with the anomaly of pensioners who rely on income from savings--some of whom will find themselves in the bizarre tax situation of being within the 10p rate for income tax, but still paying 20p tax on each pound of income from savings. It is a bizarre situation to be in, and I hope that the Minister will tell us what the Government will do about it.
I noticed that the Chancellor, in his speech, mentioned a chaotic, even counter-productive system of child support. Had I not been paying full attention, I might have thought that he was attacking the Child Support Agency once again, and that he was going to tell us that he would not continue with the pale imitation of the CSA with which the Government are trying to replace it. He was really, of course, talking about supporting families with children.
Extra money for families is always welcome, and Liberal Democrat Members strongly support such provision. However, as with winter fuel payments, there are problems with how that support is distributed. As a tax credit, it will go to the household's main earner, who is usually the man. However, it is vital that funds for the care of children should go to the person with the primary care responsibility, who is usually the woman.
The Government have fallen into the trap of directing those funds--like money from the working families tax credit--from the purse to the wallet. We all know that there is usually precious little hope of getting money back intact from the wallet to the purse. Although the Secretary of State for Social Security said earlier today that choice in the matter would be given to each family, we know that the only families in which there is real choice are those who do not need the choice, as the earner is prepared to give the money to the other partner regardless. The families in which there is no choice are those who really need choice, as the father is not prepared to give the money to the mother.
Therefore, as with pensioners' money, the measure adds a level of administrative complexity without helping the weakest in our society. It seems to be an attempt to tax the Government's support for the children of higher-rate taxpayers while pretending that that is not happening.
Mr. Lindsay Hoyle (Chorley):
I find it very strange that the hon. Member for Newbury (Mr. Rendel) thinks that it will be an administrative nightmare to pay pensioners £100 per household. If we can distinguish between £50 and £20 per household for pensioners, why will it be more difficult for all households to receive £100? I am mystified by his argument.
I welcome most of the Budget. It would be naive and wrong for anyone to say that they loved every part of it. There will always be some aspects that we like and questions about other aspects that we do not like, but we have to consider the Budget in its entirety. It is a quality Budget which has been welcomed throughout the country.
Education is important to all. Each school will benefit from £2,000 for new books. I do not remember much of that during the 18 years of the previous Government.
They were quiet on education. There is a lot of noise from the Conservatives now that they are in opposition, but they were not very positive towards education and schools when they were in government.
We are all concerned about pensioners, but, during the 18 years of the previous Government, pensioners were not top of the list. In fairness to the new Government, they have realised that pensioners count and are an important part of our society--a part that cannot be left and neglected as it has been. I am pleased to tell the pensioners of Chorley that the Government are listening and delivering and will continue to look after them. I have had very positive feedback from the pensioners of Chorley and a good response is coming through the mailbag.
The Conservatives are always saying that they were the party to cut taxation and that they are the party of businesses. It has been up to this Government to ensure a cut in tax and continued support for small business--not just talking about it, but delivering on election promises. That is why I am proud to be a Labour Member of Parliament. I am proud to be able to tell my constituents what the Government are doing for them and what the previous Government did not do for them.
My constituency has low unemployment. That will continue, thanks to my right hon. Friend the Chancellor, who will ensure that companies will benefit. The good-quality companies and the small and medium-sized enterprises to which this country will look for the future are being supported by positive actions. It is all well and good for the Conservatives to say what they would do, but, when they had 18 years to deliver, they failed. They must be embarrassed. Is their leader not now saying that they should stand up and say what was wrong and how they let the people down? After 18 years, he has realised that they failed. The leader of the Conservatives is now admitting that they were wrong. Yet, now that they are in opposition, they think that they are right. I do not understand their hypocrisy. That is a strange way to work.
The Chancellor has given to the good people of Chorley, ensuring that companies such as Scottish and Newcastle in my constituency will benefit, because there will be no further taxation on beer this year. That is good news not just for the employees of Scottish and Newcastle, but for all the public houses in Chorley and all the jobs related to the brewing industry. Those jobs will be secured, and that is a bonus. Before the Budget, Conservative Members were on the radio saying that my right hon. Friend would hit beer and whisky, and that those employed in the drinks industry would be affected. That did not happen, and I am pleased about that. Those jobs are now more secure than they have ever been.
I hope that my right hon. Friend takes on board the problem of drink smuggling, which is beginning to hit all parts of the country. We need to take further action because of the loss of duty and the knock-on effect on jobs. People are using artics to smuggle--we are not talking about people with loading up their cars--and criminals are flooding the country from Scotland to Cornwall. Nowhere is free from the effects of smuggling.
We have heard about tobacco smuggling, which is also affecting jobs--and tobacco will continue to be smuggled. My right hon. Friend must try to stop smuggling, as it is
crucial that we do not lose good jobs. My right hon. Friend has supported the brewing industry, and we must protect jobs in it.
If there was a downside to the Budget--it was hard to find one--it was in the provisions affecting the haulage industry. The industry is suffering, and is on the back foot. I will be writing to my right hon. Friend the Chancellor to address the plight of the haulage companies in my constituency, and to ask him to see what support we can give. Many jobs could be at risk.
The concern is not just about companies from France or Germany, but about companies from the former eastern bloc, which will be sending poorer-quality trucks into the UK and undercutting haulage companies here. That is why I ask for a special case to be made for the industry, and I know that my right hon. Friend the Chancellor will look at that.
Accelerated fuel duty was introduced by the Conservatives, but we did not hear a whisper from them at that time--then, they had no worries about the haulage industry at all. In fact, the industry was attacked year on year. I am pleased to say that this was a good Budget.
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