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Mr. Heathcoat-Amory: We have a proud record of reducing personal and direct allowances and, by the end
of our term of office, all sections of the tax-paying population were better off. We are now witnessing an assault, not only on the general tax-paying public, but especially on people who are less able to order their affairs to compensate for what the Government are doing. There is no better illustration of that than clause 28.
Dawn Primarolo: Will the right hon. Gentleman give way?
4 pm
Mr. Heathcoat-Amory: No. I have given the hon. Lady her chance. She may well have an opportunity to make a speech if she catches your eye, Sir Alan.
It is not only the married couples allowance that is being abolished. There is also the widows bereavement allowance. The Committee may need reminding that, attached to the married couples allowance, is the separate but linked widows bereavement allowance, which is paid to widows for up to two years after suffering that bereavement. A Government press release on Budget day made the following erroneous claim:
The Government made quite a seriously misleading statement. It is now clear that widows in retirement will be suffering from more than the withdrawal of the married couples allowance, because they will not be in receipt of either the widows bereavement allowance or the replacement bereavement payment. I quote from the relevant section in the Select Committee's report, which states:
Mr. Edward Davey (Kingston and Surbiton):
Talking of correcting misleading statements, I am not sure whether the right hon. Gentleman made a slip of the tongue, a Freudian slip or a confession. He said a few minutes ago that the Conservatives had a proud record of reducing allowances. That is certainly what they did, and many people are worse off because of that.
Mr. Heathcoat-Amory:
If I made that slip, I can correct it. We reduced the burden of taxation by reducing rates and preserving, and in some cases increasing, allowances. The effective burden of taxation borne by the groups that we are discussing was reduced during our period in office. I am grateful to the hon. Gentleman for giving me the opportunity to clarify that point.
The widows bereavement allowance is an important issue. It was not mentioned anywhere in either the Chancellor's statement or in the section in the Budget
report to which I have referred. Again, we have an example of stealth taxation. With this Government, we have always to peal away the obfuscation, and, in this instance, the downright untruth, to get at the reality of what is happening to taxpayers.
On the very date that I have been talking about, 6 April 2000, the value of state earnings-related pensions will be halved for spouses. That is to say that a widow, for example, will be able to inherit only 50 per cent. of the SERPS entitlement built up by her husband. That is a pre-existing decision; it was taken many years ago. However, I am grateful for an early-day motion, which has been signed by a number of Labour Members, which points out that the Government, until this year, were sending out, again, misleading information to those making inquiries about the value of the SERPS entitlement for spouses. It is yet another blow that, on the very day that a widow's SERPS entitlement is halved, the Government are removing the entitlement to the widows bereavement allowance. That will be the subject of other amendments when the Bill reaches another Committee. Those amendments will ensure that pensioner couples continue to receive married couples allowance, as I believe that they are entitled to do. Many of them rely on it, and Conservative Members believe that they should have it.
Mr. Julian Brazier (Canterbury):
Clause 28 is the worst clause in the Bill and I am delighted to speak to this pair of Opposition amendments relating to future pensioners. I must say, Sir Alan--if you will forgive me this anecdote--that I remember clause 28 of another Bill from some years ago causing huge demonstrations and attracting a vast amount of media attention for those who claimed to be defending an alternative life style. This clause 28 has attracted little media attention. There is little public interest, and certainly no demonstration to defend the interests of many millions of married people who will lose a benefit that has existed, in one form or another, since the end of the first world war.
Nobody in the Chamber could have failed to notice the certain amount of mischievous reporting, which has been filling some of the media, on an alleged debate in my party on the question of welfare and the balance between the free market and the state. The debate on these amendments offers me a particularly good opportunity to state my position, which is that welfare should never lie principally with either the state or the free market. By far the most important element of welfare is the family--historically and even today.
I look forward to the next debate, in which we shall discuss how the clause relates to people who are rearing children. I do not want to make the same points twice--you would rightly call me to order, Sir Alan--but the statistics I shall offer then concern the stability of the relationships of married and unmarried people. They point strongly to the efficacy of marriage as an institution in terms of keeping a man and a woman together.
Kali Mountford (Colne Valley):
Will the hon. Gentleman give way?
There are a range of reasons for believing in the importance of marriage. In the context of a Finance Bill, the state, as well as the people concerned, has an interest in that stability.
Before the hon. Member for Colne Valley (Kali Mountford) makes the point that was bound to be made--someone always leaps up to make it--I am obviously not suggesting that people will rush off to get divorced because of a change in legislation. However, before I reply to the point that I suspect she is about to make, we should hear her make it.
Kali Mountford:
I thank the hon. Gentleman for giving way. I had not thought of making a point about divorce, so I thank him for raising the issue in the Committee. I was going to ask him what evidence the Conservative Government gathered during their period in office that family stability had been affected by tax decisions. Are not there all sorts of demands on families? People do not base decisions about family stability on tax allowances.
Mr. Brazier:
I suggested that the hon. Lady might make exactly that point, and she has done so.
Unlike my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on the front row--[Hon. Members: "He was the hooker."] My right hon. Friend was a sportsman, but I will not make a point about that. I do not defend the cuts that we made in the married couples allowance, but the evidence on stability falls into two halves. For the second half, the hon. Lady will have to wait for a couple of hours because I shall deal with it under the next amendment as it relates to couples with children. It is very detailed and comes from statistics provided to me by the House of Commons Library.
Overwhelming evidence shows that marriage is the critical factor in stability of relationships between men and women. The second half of the hon. Lady's question lies--
The Chairman:
Order. I have allowed the hon. Gentleman to preface the introduction to his remarks, and he has done so in a fairly wide-ranging manner. I am duty bound to the Committee to nudge him back into the narrow area covered by the amendment, which deals with the age-related married couples allowance. We cannot have a general debate about the married couples allowance.
Mr. Brazier:
I well understand that, Sir Alan. I was responding to the generalised question that the hon. Member for Colne Valley asked me, which was what evidence I had that the tax system influences people's behaviour. I must reply briefly to that, if I may--
The Chairman:
Order. As a result of my generosity in the first place, the hon. Gentleman made remarks which attracted the attention of the hon. Member for Colne Valley (Kali Mountford). He must not go further down that track. I have now decided that he has gone far enough, so I suggest that he returns to the narrow terms of the amendment.
Mr. Brazier:
In that case, the hon. Lady will have to wait for the next debate.
"Widows will be more than compensated for the loss of this allowance by the proposed Bereavement Payment in the Welfare Reform and Pensions Bill."
The Chancellor has now admitted that that was incorrect. There is an opportunity for the Government to apologise to the House of Commons through the Committee rather than relying on a letter that was written to the Select Committee on the Treasury, in which it was admitted that the press release was incorrect.
"The Chancellor agreed to write to us, and in their note the Treasury stated that the bereavement payment 'will not generally be available to people over pension age'."
That contradicts the statement that was made on Budget day. I hope that the Minister has made a note of that. It would be at least a courtesy if she could correct the misleading and untruthful statement that was made on 9 March.
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