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Mr. Duncan Smith: No, he is out running the ice-cream van.
Mr. Pickles: No doubt he is at least revving the engine. I hope he is sleeping pleasantly and that he will read what we have said in the morning.
The Secretary of State's argument that the money will go to those who most need it is redundant. The substantial point is that people paid in expecting that their widows would be taken care of if they died. The national insurance principle means that those who contribute get the benefit. Widows currently receive benefit because their husbands paid during a lifetime of work.
Mr. Webb:
I have agreed with almost all that the hon. Gentleman has said even if I am puzzled by where it is
Mr. Pickles:
It must be said that we gave 16 years notice of that--[Interruption.] Labour Members should not get so excited. As late as 12 January, the Government were still giving out duff information at the same time as they were sending out a memorandum to staff. Did they instruct the staff to correct the duff information?
11.45 pm
Mr. Pickles: My hon. Friend anticipates me precisely. The answer is no.
The hon. Member for Northavon (Mr. Webb) did not have the opportunity of joining me in that Committee, but his hon. Friend the Member for Newbury (Mr. Rendel) will tell him that I wore sackcloth and ashes: I accepted responsibility. Those on the Government Benches and Members who aspire to those Benches should accept responsibility for not ensuring that the correct information was given out. The decision was taken at administrative level, but ultimately those who stand at the Opposition and the Government Dispatch Boxes must accept responsibility. The whole matter has been a sorry mess.
Mr. Julian Brazier (Canterbury):
My hon. Friend is being his customary generous self. In pointing out the weakness in the analogy, surely one should also point out that we are talking about a measure that goes back to 1925, whereas SERPS had been in being for only a few years when we came to office and found that it was actuarially unsound.
Mr. Pickles:
My hon. Friend offers me a Savile row hair shirt, which I accept. He is absolutely right and the sums of money involved are also considerably different. However, one thing that I was taught by mother is that if one has to say sorry, do so and do not qualify it. The point was well made.
We have not been given sufficient time to allow people to change their affairs. I still think that people are blissfully unaware of the change that is about to take place. It will come in, not in 16 years, but almost immediately, after a very brief gap. People should have time to adjust their financial affairs and to increase provision for their wives because the state is going to renege on its promises.
Widows will be pushed on to means-tested benefit. At present, only 16 per cent. of widows are on any sort of income support. Age Concern says that because widows benefit is disappearing, many more widows will be forced on to some kind of contributory benefit. In a simple sentence, Age Concern says:
My hon. Friend the Member for Canterbury(Mr. Brazier) intervened to encourage me to have a better fitting hair shirt. In Committee, he said:
Mrs. Dunwoody:
Since the hon. Gentleman is so generously accepting the hair shirt, will he assure me that if he returns to government at any point, he will automatically reverse this legislation?
Mr. Pickles:
I like to think that the hon. Lady and I are old friends. She tempts me, but I have to give her the same reply that I gave in Committee. When we return to power, that is one of the measures that we will--[Hon. Members: "Oh!"] This must be part of the training at Millbank towers. One starts to jeer before hearing the answer. Certainly, we will consider the matter and we will look hard at the pros. We will have to take over a welfare state that has seen a considerable erosion of the contributory principle and a considerable growth in welfare higher up the economic scale, further away from people in need. We will have to address those problems. I can give no promises, but if the Conservatives were in government, we would not be robbing widows.
Mr. Bayley:
You've lost this one.
Mr. Pickles:
If we have lost this point, it is the only thing that we have lost tonight, except perhaps the votes. It is been a very poor show by Ministers, with junior Ministers having to defend an indefensible Bill. If I was one, I would be saying, "Where is my boss? Why can't he spend some time with us at the chalk face?"
We know that this is principally about savings. The Government want to save £600 million. That risks a further reduction in the savings ratio. They say that they want to encourage savings, particularly for retirement but they penalise those very people. In two years the savings ratio has dropped from 10.5 to 7.5 per cent.
New clause 1 is designed to mitigate the effects of the Budget, which was particularly damaging to widows, with the abolition of mortgage interest relief at source. The Government handout suggested that everyone would be compensated for abolition of the widows bereavement allowance and that no one would lose out. In Committee, we examined the Inland Revenue press release, but it turned out that the boast was wrong. An important group of widows aged between 60 and 64 will lose out because they will not be entitled to the bereavement payment. We thought that we could probably do something in Committee by tabling amendments to give the money back. After all, that is what the Chancellor intended. I was disappointed to find that it was not possible.
When we asked whether the Chancellor really wanted to ensure that all widows would be compensated, the answer was no. The Minister of State said that I was
The new clause has been introduced in the spirit of compromise. We wish to arrive at all-party consensus on widows. It should be recognised that the further a person is from her mid 40s, the harder it is to find well-paid work, especially after a break.
It is reasonable to ask why there has not been an outcry. Why are people not pounding on the doors of the Chamber demanding change? The answer is that the Government have been particularly cunning. No one currently resident in this country knows that he will be affected by the change that is set out in the Bill. There is not a victim now. Those who will be affected are going about their normal lives. They are blissfully unaware that in a few months disaster will affect them.
Mr. Brazier:
Surely my hon. Friend will agree that that is the story of the Government. There is the exact parallel of £5 billion taken out of pension funds when many of them were in surplus. Nobody noticed at the time. It is when disaster strikes that the markets turn down. That will be exactly the same in this instance.
Mr. Pickles:
My hon. Friend is right. When the Government see a soft target, they kick. They avoid all difficult decisions, which are put off to spin. If they can find a group who are defenceless, who cannot focus on attacking them, they will go in hard.
"After a lifetime of work, many pensioners find that they might have been better off if they had not saved."
What message are we sending out? On the one hand, we are encouraging people to save for their old age. If they do so, they should be rewarded.
"Are we now telling people, 'You should provide for your widow, in case you die early'? Or are we saying, 'Don't save small amounts, don't provide for a modest amount of support, because the state will be relatively generous towards your widow if you don't bother. However, if you do bother, after six months she will be on her own.'"--[Official Report, Standing Committee D, 30 March 1999; c. 554.]
Frankly, I cannot put it better than my hon. Friend.
"right to say that that is not the case because that payment is not available to those widows who are over retirement age. For that reason, the Inland Revenue has publicly acknowledged that it made a mistake in the press release."--[Official Report, Standing Committee D, 25 March 1999; c. 497.]
17 May 1999 : Column 775
Are we really to believe that when the Chancellor of the Exchequer sat in No. 11 Downing street in his sparse office drinking his cups of tea, he thought that through this Bill, he would compensate all widows except those aged between 60 and 64, who would be penalised? I do not think that that was his intention. I do not think that he knew the effect that the provision would have. When we give the Government an opportunity to try on their own version of the hair shirt, they refuse. They say that it was all a mistake, a printing error. They did not mean to say it; it belonged to another press release. The last debate showed how much Government commitments given in press releases are worth. They are worth only a few weeks before the Government change their mind. It is worth as much as the Prime Minister's promise that he would review the plight of war widows and their pensions. That promise was made a year ago and it would seem that the right hon. Gentleman has done nothing.
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