Previous SectionIndexHome Page


Mr. Collins: My hon. Friend is developing a very powerful argument. Is not another stark contrast the fact that, on matters that the Government thought were important--such as a windfall tax, an emergency Budget and giving the Bank of England independence--they rushed into taking action as soon as they got into office, whereas they took no such action on pensions, because they did not think that pensions were important? In 18 years in opposition, the Government were able to work out plans on some matters, whereas pensions did not seem to be sufficiently important for them to think about.

Mrs. May: I am grateful to my hon. Friend for that intervention, and he was absolutely right. Furthermore, the contrast that he drew--especially on the windfall tax--was even starker than that drawn by my hon. Friend the shadow Secretary of State. Ministers knew before they were elected to government that they would hit pension funds by changing the treatment of advance corporation tax. They are now taking £5 billion out of pension funds--

Mr. Flight: Per annum.

Mrs. May: Yes; I am grateful to my hon. Friend--who said earlier that, as a consequence of that change, occupational pension schemes will either cost individuals 10 per cent. more or benefit individuals 10 per cent. less.

Although the Government had worked out that they would immediately hit pension funds and take money out of pensioners' pockets, they had not worked out their welfare reform proposals, although welfare reform was one of the key points mentioned in their general election manifesto.

Before the general election, the Labour party consistently said that welfare reform was the one thing that it would do. Two years down the line, where are we--what have the Government done about welfare reform? They have produced muddled proposals on pension provision. Moreover, the only way in which they are reducing the welfare budget is to cut widows and disability benefits. Widows and disabled people are under attack by the Government. I suggest that the Government's pension proposals will put women under attack, too.

6.16 pm

Mr. Tim Collins (Westmorland and Lonsdale): It is a particular pleasure to speak in this debate, as the most cursory examination of the Chamber will reveal that Labour Members have fled the field on the issue. [Interruption.] Ministers are getting terribly excited about that, but, if they care to look behind them, they will note that precisely two Labour Back Benchers are in the Chamber. One of those is a Parliamentary Private Secretary, and the other--who is very welcome in the Chamber--has not sought to contribute to the debate.

I am, conversely, making the third consecutive speech by a Conservative Member--on a subject that the Government themselves said was absolutely at the heart

11 May 1999 : Column 158

of their legislative programme. The Prime Minister said that the issue was of paramount importance. In the general election campaign, Labour Members told the electorate that pensions and welfare reform was their number one priority. Famously, the Prime Minister even launched a programme of social security road shows, which concluded after only one event. It all goes to show--as my right hon. and hon. Friends have consistently said in the debate--how embarrassed the Government have become on the subject of pensions and welfare reform. Although they have talked a great game, they have delivered remarkably little.

The Government have not been reluctant to rush into action in other spheres. Indeed, in many other spheres--whether it is the working time directive or, as hon. Members have said, the measures on advance corporation tax introduced in the Chancellor's first Budget--critics may well lay at the Government's door a charge of rushing into premature action. However, on pensions and welfare reform, which the Government have themselves named as their top priority, we have had precious little action--although we have had consultation upon consultation, Minister succeeding Minister, and White Papers and Green Papers.

As my hon. Friend the Member for Arundel and South Downs (Mr. Flight) said very eloquently, the only way in which the Government have changed the system's effects on savings has been to replace the successful tax-exempt special savings account and personal equity plan schemes with their extremely ill-thought-through, unsuccessful, confusing and--to put it most generously--yet-to-be-proven individual savings account scheme. As my hon. Friend said, 300,000 people who had been saving in PEPs are currently not saving in ISAs, which does not bode well for the future--when those people will become pensioners, and when we had hoped that dependence on the basic state pension would be reduced by savings in such schemes.

The Government's amendment to today's Opposition motion shows a little brass neck, even by the standards of this Government. That amendment seeks praise for delivering "economic stability" for pensioners. Well, that is one interpretation of what they inherited: the fastest-growing economy in Europe. Now they preside over the slowest growing economyin Europe; and whereas they inherited falling unemployment, they have delivered rising unemployment.

One could call that economic stability or, more likely, one could call it frittering away a golden economic legacy, which has consistently been the tale of this Government and which, sadly, will result in many people--not least pensioners--paying a high price.

My hon. Friend the Member for Maidenhead(Mrs. May) spoke eloquently about the impact on pensions provision of some of the Government's changes to other forms of taxation and benefit. The overwhelming majority of people in their late 40s or 50s, or just coming up to their 60s, are likely to be married couples, so they will lose out from the abolition of the married couples allowance. People coming up to the time when they have to calculate the pensionable income on which they will have to depend in retirement are losing out.

The Government may say that they have made provision for older couples, but the provision is to keep the married couples allowance only if one member of the

11 May 1999 : Column 159

couple was born before 1935. You do not need to be a master of mental arithmetic--although I know that you are, Mr. Deputy Speaker--to work out that people born before 1935 will turn at least 64 some time this year, so people on the verge of retirement, in their 50s, are not helped at all by the concession for which the Government have so eloquently called for thanks.

The Government also task us with the idea that we should be grateful, on behalf of pensioners, for the concessionary travel scheme. I would have thought that travel and transport would be the last issue that the Government wanted to raise in a debate on the situation facing pensioners.

Ms Keeble: Does not the hon. Gentleman accept that in London, for example, the concessionary travel fares provided by Labour local authorities have made it possible for many pensioners to have a reasonable life style, with some mobility? Several pensioners whom I know in London say that they are able to stay only because of the generous transport schemes.

Mr. Collins: I am most grateful to the hon. Lady, because she has made precisely the point that I was about to make. My constituents, who live nearly 300 miles from London, are fed up with policies devised by people who think that everyone can get on a bus or a tube. Tubes do not run in south lakeland. Rural pensioners are suffering because of the Government's reckless pursuit of ever higher petrol and diesel duties and their ever more effulgent denunciation of the use of the car. Many pensioners have no choice.

Mr. Deputy Speaker: Order. The amendment may have mentioned transportation in passing, but we must now get on to pensions.

Mr. Collins: Indeed, as I pointed out, it was the Government who rather unwisely raised the subject, but of course I accept your ruling, Mr. Deputy Speaker.

We have not had any clarification from the Government of the measures that they intend to introduce to assist pensioners. The Secretary of State restated the fact that the Government believe that the minimum income guarantee is the answer to all pensioners' problems. It has been widely pointed out--by Conservatives, Liberals and, although not this afternoon, also by the right hon. Member for Birkenhead (Mr. Field)--that the minimum income guarantee, far from being a solution, will make pensioners' problems far worse.

The minimum income guarantee will increase means-testing and provide an active disincentive for future pensioners to save. The message will be that people without a very sizeable income would be mad to save for a rainy day because they would be far better off expecting the minimum income guarantee to pick up all their bills.

The subject that comes up most frequently on the doorstep in my constituency--I am sure that other hon. Members find the same--is why pensioners who have saved a little and perhaps bought a house should have to pay all their bills, while people just down the road who

11 May 1999 : Column 160

have never lifted a finger have every single bill paid for them. With the minimum income guarantee, that problem will increase.

Ms Keeble: Will the hon. Gentleman give way?

Mr. Collins: I am sorry, but I have given way to the hon. Lady already, and I am keen to hear what will no doubt be a powerful speech from my hon. Friend the Member for Grantham and Stamford (Mr. Davies); I do not want to delay it other than to say that it has been very clear this afternoon that Conservative Members stand for support for those who save, for families and for pensioners who seek to make provision for themselves and their families, whereas Labour Members--those few who have spoken--have simply parroted the usual belief that the Government are doing the right thing for pensioners.

Pensioners in my constituency and throughout the country believe that the Government are doing anything but serving their interests. The Government have run the economy into the sand. They are penalising those who are trying to save and not helping pensioners. They started by imposing a £5 billion a year stealth tax on pensioners' income and they will carry on harming pensioners until the day that they are slung out of office. That is why we condemn them.


Next Section

IndexHome Page