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Mr. Quentin Davies: This is a debatable motion and we do not intend to let the Government get away with this without giving a thorough explanation to the House. The Government are evidently on the run. They have lost the support of their Members. We were debating the bereavement proposals a moment ago and it is obvious that they do not want to face the House with theeven more unacceptable proposals for means-testing incapacity benefit.

The Government came forward arrogantly with a set of proposals, mostly badly thought through and some pernicious, particularly those intended to wind down the national insurance system. They ran into much more resistance than they expected. They have been exposed already in several fields for not having done their homework properly. They were about to be exposed again. The next group of amendments related to re-rating the state retirement pension for pensioners who earned their entitlement by paying national insurance contributions, often through a lifetime, only to face a lottery if they live abroad. Depending on where they live, they may be entitled to continue to have their pensions uprated. If they live in the Philippines they will get full uprating, but in Canada they will not. The Government did not want to go into that and saw a possible trap or source of embarrassment. Defending that set of anomalies would not have been easy. The Government are already feeling pretty bruised--especially the hon. Members for East Ham (Mr. Timms) and for York (Mr. Bayley).

What was coming up after that? We all know that it was to be stakeholder pensions, which represent a colossal Government shambles. It is an issue on which the Government are in full retreat. They got a bloody nose last week when we had the pensions debate, and they do not want another one. They are running away from that. As they have the effrontery to suggest that we should interrupt our proceedings just as we are about to embark on the important matter of stakeholder pensions, I shall remind them of some of the issues that were exposed during the Opposition day debate on pensions.

The Labour party put an interesting sounding promise in its election manifesto to have a stakeholder pension. It all sounded splendid and Labour candidates appeared to be goodies before the electorate. The usual public relations merchants were roped in to package the scheme to give the impression that it was something for nothing and that everything would be very good if people voted for a Labour Government. However, Labour did not have the faintest idea what to do with the scheme when it was elected. We then had 18 months during which the Government were asked regularly what they were doing about the stakeholder proposals that they had promised to introduce, and answer came there none.

The Government became more and more embarrassed. A Secretary of State and a Minister of State--the right hon. Member for Birkenhead (Mr. Field), who has been

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playing a distinguished part in our proceedings--had to be got rid of. Another Secretary of State and another pensions Minister were brought in. After a few months that Minister had to be got rid of as well because nothing was happening. The Secretary of State--no doubt so as not to lose face entirely, and shivering in his shoes because he was in line to get the sack as well unless he did something--thought that he should do something extremely quickly.

The Green Paper on stakeholder pensions was originally promised for last summer. It was then formally promised for the autumn. In December, the Government were under great pressure. So they lifted the Australian superannuation system, which was based on compulsion. It was a funded scheme administered by trustees. Everything is set out in the Green Paper, with which we have become extremely familiar. However, at the last minute the Prime Minister vetoed the compulsion element, knowing perfectly well, and correctly, that we would say that the scheme amounted to an unjustified additional new Labour tax. It would have been exactly that, and extremely damaging, particularly for the self-employed who found that cash flow was being sucked out of their businesses. They would have ended up a great deal less well off in their retirement. Many more businesses would have gone to the wall, with corresponding damage to the economy. The Government were right to veto the element of compulsion.

The trouble was that the Government in their great hurry did not think things through. They did not realise that the rest of the structure, as invented by the Australians--the Government are rarely original in their thinking--was premised on the assumption of compulsion. When compulsion was removed, the rest of the edifice fell down. It was the equivalent of launching a new model of motor car and taking the wheels off at the moment of the launch.

The result was a spectacular collapse. Very amusing it was for Opposition Members but it was a bad day's work for pension saving, and we much regret it on that basis.

Mr. Burns: Does my hon. Friend agree that the Government, by trying to pull up the stumps now, are revealing yet another stage in the catalogue of confusion and disaster attendant on drawing up the Bill?

Mr. Davies: My hon. Friend is absolutely right. It has been a discreditable story. Incompetence has been the hallmark of the Government's handling of the pensions issue, including the stakeholder scheme. However, on top of incompetence there is something far worse.

Miss McIntosh: I am grateful to my hon. Friend for giving way. Either the Government are continuing their policy of holding the House in contempt, as we have seen on a number of occasions, or the point that I made to the Minister earlier is worrying the Government so much that they want to adjourn. They are seeking to dismantle the Beveridge system of welfare as we have known it. The Minister quoted Beveridge out of context. Which is it, in my hon. Friend's view--are the Government holding the House in contempt, or are they on the run because they are dismantling the Beveridge system?

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4 am

Mr. Davies: It is a three-part story, which begins with incompetence. I shall return to that shortly in connection with the stakeholder pension and the other pension proposals.

In addition to their incompetence, the Government have made a cowardly attack on the most vulnerable people in our society, with a view to clawing back from them a large sum of money, and claiming that that was a great success because the money could be used for some more electorally alluring purpose. That is a thoroughly discreditable course to adopt.

It is no accident that the Government are trying to interrupt proceedings just a few hours before we would have got on to the vital matter of incapacity benefit. When their proposals come into effect, they intend to claw back more than £700 million in a full year, plus another£100 million from the abolition of severe disablement allowance. That is a total of £800 million in round terms, which the Government propose to get from the most vulnerable--the disabled. They would have to cough up. The Government thought that the disabled were limited in number and would be a soft target--

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman cannot legitimately discuss on the motion everything that has yet to be discussed in the Bill. Presumably there will be opportunity for that. It is not in order to go through a catalogue of those matters on the present motion.

Mr. Davies: I accept that, Mr. Deputy Speaker, but I hope you agree that it is in order for me to draw out the Government's motives, so that we can see them exposed in Parliament, and so that the public should be under no illusion about what is happening. It is an extraordinary state of affairs when the Government decide to interrupt proceedings on a range of their own legislative proposals, in the middle of our debate.

Mr. Garnier rose--

Mr. Davies: I hope that my hon. and learned Friend will bear with me. I must first deal with the intervention of my hon. Friend the Member for Vale of York (Miss McIntosh).

The third aspect of what has happened is the most discreditable of all--the arrogance with which the Government have responded to the representations from the disabled, from my right hon. and hon. Friends, and from sensitive people on the Labour Benches who are concerned about the disabled and about safeguarding the traditions of the Labour party, and the traditional adherence of the Labour party to the principle of national insurance.

The Government responded incredibly arrogantly to that. As we all know, the Secretary of State has been going round the Lobby saying, "I will get tough with them. I will see them off. We are going to defeat them--don't you worry about it." That is the principle that he has adopted in the past couple of days. We saw that this evening with the Minister's deputy, who is not an arrogant person by inclination, but who has been dealing in an extraordinary manner with interventions from senior Back Benchers on his own side. I have seen nothing like it in my time in the House.

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It is regrettable that this mood should have come over the Government. They have an enormous majority, and we realise that that holds great temptations for them, but they have fallen for those temptations and are not listening to anybody at all. We are witnessing arrogance followed by nemesis, because the arrogance has not worked. The Government's bullying tactics and the dismissal of honest representations from Members in all parts of the House, including their own supporters, have not worked. Precisely because the Government cannot face up to the consequence of their arrogance, or to the revolt that is brewing on their own side, they are attempting to interrupt our proceedings.

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