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Mr. Leigh: The hon. Gentleman agrees that only a courageous Government could insist, particularly given the decline in the value of annuities, that people should put by the requisite amount every month for an adequately funded scheme,
The hon. Gentleman may be surprised to hear that I agree with him on two points. We shall make progress only if there is some compulsion and only if there is some cross-party co-operation. Sadly, because of the way in which our politics is organised, I doubt whether the cross-party co-operation needed to create a new pension scheme along the lines that he suggested can be achieved. That is not how the House works. The adversarial system has stood us in good stead for many years and I doubt whether we can achieve some great cross-party consensus on a pension plan that will stand the test of time for 10, 15 or 20 Parliaments, but that is what we would need if the hon. Gentleman's scheme were to have any chance of success.
What can we do? I shall make a proposal in the hope that the next Conservative Government--whenever they come--will have the courage to pick up the ball and run with it. That Government must have the courage to try to create a proper funded scheme for all sections of the population.
I want to be fair to the Government. I understand what they are trying to achieve. The Government rightly hold the view that no pensioner, even a pensioner who has not
made adequate contributions, should live on less than £75 a week. That is why they have introduced the minimum income guarantee. I understand that.
It is easy to be critical of people, but there may be good reasons why people have not managed to put aside adequate savings for their old age. It may not be a matter of fault. I am philosophically sympathetic to the concept that every pensioner should have some minimum income guarantee. I understand why the Government propose it. The difficulty that immediately faces the House as it tries to grapple with pensions policy once it has agreed a minimum income guarantee is this: how on earth are we to encourage people on relatively modest incomes to put aside money for their old age?
One of the most telling points made by my hon. Friend the Member for Chingford and Woodford Green was that the number of people in receipt of means-tested benefits would rise from one in five of the population to one in three. I do not criticise the Government for trying to drag people out of poverty. That is a noble aim but, once they have made the decision to ensure that everyone receives a minimum income in their old age, how will they stop ever-larger numbers of people being reduced to reliance on means-tested benefits, which many people still view with a great deal of horror? The Government have no answer to that point.
One can forgive the Government for many things. One can forgive them for the disaster with the NIRS2 computer. One can forgive them for the SERPS disaster and the wrong letters that were sent out. We all know that we are entitled to criticise them, but that they can pass the blame back to previous Governments. Yet, when the Labour party was in opposition, articulate spokesmen such as the right hon. Member for Birkenhead (Mr. Field) tried to convince us that it had within its grasp the holy grail of pensions policy; that it could both take people out of poverty and take people out of means-tested benefits.
Mr. Bercow:
Can my hon. Friend reassure me that he has not gone soft and that he certainly does not forgive the Labour party for its calculated misrepresentation of the basic pension plus proposals made by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley)?
Mr. Leigh:
I was trying not to be too party political. I wanted to get some sort of sensible debate running, but of course my hon. Friend is right. The Labour party could not resist the opportunity, so intent was it on regaining power, to use any untruth--I must use the word "lie", Mr. Deputy Speaker, but I am not referring to any individual Member of the House, so I hope that you will not mind me doing so--against my right hon. Friend's proposals. That was a tragedy. It has soured the debate. What went on in the few days after my right hon. Friend proposed the scheme makes it difficult to achieve any rational or sensible debate.
I pay tribute to the hon. Member for Newbury, even though he has not costed his proposals. It is dangerous for any party that wishes to become a party of government to come to the House with uncosted proposals. It is not good enough for a potential party of government to deal in soundbites. It should present practical proposals. The hon. Gentleman failed to do so.
The only practical radical solution of which I can conceive--we have not had one from the Government--is some move towards compelling people to put a
proportion of their income into a privately funded scheme if they do not already have a satisfactory private or occupational pension. I see that the hon. Member for Newbury is nodding. Is he doing so because he agrees with the proposal that I am making? If so, although he may disagree with some aspects of the proposal advanced by my right hon. Friend the Member for Hitchin and Harpenden as Secretary of State for Social Security, does he accept my right hon. Friend's basic philosophical approach? If the hon. Gentleman accepts that, we have already achieved an element of cross-party consensus.
Mr. Rendel:
I am still not clear whether the hon. Gentleman understands my proposals. He mentioned costings. A compulsory second-tier pension, based on individuals' saving from their earnings from employment, has no cost to the Government; that is why it does not need to be costed. I am not sure whether the hon. Gentleman understood that point. That is one reason why there is no need to raise the issue of costings. However, if we are talking about credits for non-earners, there will be a cost; that is why such a scheme would have to be introduced slowly.
Mr. Leigh:
I am glad that the hon. Gentleman mentioned the problem for non-earners, which was also referred to by the hon. Member for Northampton, North (Ms Keeble). Anyone who takes a serious interest in pensions has to argue a way through that problem. Many people are quite incapable of making adequate provision for their old age--that may not be their fault. However, the hon. Gentleman makes my point. I did not misunderstand his proposals, because, under his proposals--and, indeed, under my proposals--people will be told that they are required to devote an increased proportion of their weekly or monthly income to their pension. That would have to go through Parliament.
The hon. Gentleman may argue that that would not be an increase in taxation, because the money would come out of people's incomes and be placed in a funded scheme, but people would consider it to be an increase in taxation. Every month, they would see that in the amount left available to them. That is what people care about; when people are in their 20s, 30s or 40s, they do not care about pensions, they care about paying the mortgage and looking after their children. If Parliament tells them that they must pay an increased amount, they will not worry whether it is listed in the coding for their monthly tax. They will blame us--or the hon. Gentleman if he is in government--for proposing it.
Mr. Rendel:
It is clear to most of us who already put money into an occupational pensions scheme that our wage slip shows a basic salary amount, and that amounts are taken off for tax, national insurance and pension. The only change would be that the amount taken off for pension would be rather higher.
Mr. Leigh:
In this House, we are fortunate because we are members of a most satisfactory occupational pension scheme. The first point that the hon. Gentleman must address is that not everyone works for the state or for large employers. Many people have only casual or low-paid work. Under his scheme--and, to be fair, my scheme too, because I am not ducking the problem--many people will not be paying money into an excellent
To be fair to the Government, that is why they have had to come up with a chaotic response. I do not blame them for that, because, above all, they are members of a party of power and they want to remain in power. They know, therefore, that they must try to hide their intentions by introducing a scheme that confuses even those Members of the House who take an interest in social security.
I wonder whether there is a single Member of Parliament, apart from those who sit on the Front Benches and on the relevant Select Committees, who has a detailed understanding of the nature of the Government's second pension scheme or their stakeholder pension scheme, or a detailed knowledge of their implications. I suspect that there are very few such Members. If the average Member of Parliament, who assiduously reads through a daily postbag and all the briefings from the Whips Office and other sources, does not understand all those schemes, how can the public be expected to understand them?
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