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Dawn Primarolo: The hon. Gentleman attended the debate on the working families tax credit and knows full well that I gave the House a very full explanation of its design and intention. He led his party into the Lobby, on his recommendation, to vote against its introduction and he has to explain to the young families in his constituency why he wants to take that money away from them.
Mr. Webb: I shall be delighted to do so. It is a matter of record that we voted against the decision to pay tax
credits through the pay packet, and the Government have admitted that we were right. The new integrated child credit or whatever it is to be called will merge family premiums, family credit, child credits, the child care tax credits and all the rest of it. How will it be paid? Through the pay packet? No. It will revert to the parent with care. They have admitted that the central issue of principle on which we objected when they were reforming tax credits was correct.
Dawn Primarolo: The hon. Gentleman is a very active and respected hon. Member, but he seeks to rewrite history to get his party off the hook for the fundamental error that he made with regard to the working families tax credit, as he did when he voted against the child benefit increases for parents in his constituency.
Mr. Webb: The hon. Lady has performed a U-turn that she is graciously trying to cover up. She is right to say now that the child credits should be paid to the parent with care. She was wrong then to try to drive that measure through the House.
Pensioners are surely the group that feels most aggrieved at the Government. I refer to correspondence in my local newspaper, the Bristol Evening Post, from Bristol pensioners who are livid that their Labour Members have voted for the 75p increase.
One of our Bristol neighbours--the hon. Member for Bristol, South, I think--recently wrote what has proved to be a rather inflammatory letter to the newspaper, saying essentially that pensioners should stop complaining because they were £4.75 a week better off.
Mr. Webb:
Will the hon. Lady allow me to finish the point?
Dawn Primarolo:
It was not me.
Mr. Webb:
I am sorry. I meant the hon. Member for Bristol, East (Jean Corston), the Parliamentary Private Secretary. Perhaps the Minister wants to disown what the hon. Member for Bristol, East wrote. She said that pensioners were £4.75 a week better off and cited the winter fuel payment.
Obviously, no one is going to say no to £100, but what is the money for? We are in March. We are talking about the April uprating. The Government appear to be saying that pensioners can look forward to the winter fuel money. Unless I am mistaken, has it not just been spent on winter fuel? Is that not what the money has already gone on?
This April, that money has gone. All that the pensioners are receiving this April is 75p. Some of them in October will receive free television licences, but, this April, they will receive just 75p. I will reveal something even more dramatic than the fact that the 75p is an overstatement of what pensioners are getting.
Mr. David Taylor
: Is the hon. Gentleman not being a little disingenuous in relation to the income increases that pensioners will receive, because they and the Government are looking at the financial year that starts on 1 April 2000
Mr. Webb:
In the coming financial year, pensioners will get a winter fuel payment of £100. That is the same as they received this year, so it is not extra. They will get 75p extra. Some will get a free television licence so, next year, half the pensioners will get 75p more than this year. Some others will get the free television licence. That is what is happening.
I reveal a fact that has passed commentators by in all the discussion of the 75p rise. A quarter of the pensioners in the land will not get 75p. They will not even get 50p.
One million married women have such poor national insurance records that they get pensions not in their own right, but on their husband's contributions. They are category B pensions, which are worth the grand sum of £39.95 a week. When the Government trot along and say, "You can have 1.1 per cent. on that," a bit of mental arithmetic reveals that that is 45p, so 1 million married women will receive not 75p but 45p this April.
Mr. Paul Tyler (North Cornwall):
You cannot buy a pasty for that.
Mr. Webb:
My hon. Friend mentions the difficulty of buying a pasty for 45p. I am not sure about the Bristol equivalent.
Not only will 1 million married women receive only 45p, but another 1.5 million pensioners, mostly women--widows and single women--receive state pensions of less than £40 a week because of their poor contribution records. They will receive 1.1 per cent., and, since some get even less than £40--perhaps £30 or £25--they will not even see a 50p piece in April. A quarter of the pensioners in the land are affected by that.
Mr. Kevin Hughes (Doncaster, North):
What about the minimum income guarantee?
Mr. Webb:
It is good to hear a Government Whip going on the record to stand up for pensioners. The 1 million married women who will receive 45p are almost certainly ineligible for the minimum income guarantee because they are married. A husband and wife will almost certainly rise just above the reach of the means test. The hon. Gentleman appears to be saying that it is all right to give married women 45p because their husbands will look after them, but they can have a few pennies of pocket money. Perhaps they can blow their 45p on two first-class stamps, if they feel extravagant and want to dip into next week's money.
Mr. Malcolm Bruce:
The increase does not buy two first-class stamps.
Mr. Webb:
That is why I said they would have to dip into next week's money.
Those women will not be entitled to any more support from the Government, and that is why my postbag groans every day with letters from pensioners complaining that we keep saying the increase is 75p but their pension books show that it is 45p. A quarter of the country's pensioners--250,000 pensioners in the south-west,
which has a particular concentration of older pensioners--are receiving only 45p. Is it any wonder that there is genuine anger about what the Government are doing?
The question is whether the Government could have afforded to do more about the basic pension. The answer, patently, is that they could. The national insurance fund has a record balance of £16 billion, and the rather cautious Government Actuary says that only £8 billion is required. In a year in which the Government have the money, they have chosen not to use it. Pensioners know that a sentence of death hangs over the basic state pension. If the money is not being put into the pension when the Government have it, it certainly will not be when they do not have it.
The basic state pension should reflect the cost of living for pensioners, and 75p does not do that.
Mr. Kevin Hughes:
Absolute nonsense.
Mr. Webb:
Is the hon. Gentleman saying that it is absolute nonsense to suggest that the basic state pension should reflect the cost of living for pensioners? Which part of what I am saying is nonsense? Is it the idea that pensions should reflect the true cost of living? In fact, older pensioners, who are often the poorest and who are currently being forced through a means test, should receive substantial rises over and above the cost of living.
Mr. David Taylor:
To suggest that the basic state pension has gone into decline and become nugatory since 1 May 1997 is a simple mis-statement of fact. Does the hon. Gentleman agree that the process began when the pension was decoupled from increases in pay, which was the meanest act of the Thatcher era?
Mr. Webb:
I suspect that we could collect several hundred election addresses by Labour candidates berating the Conservative party for breaking the earnings link. Perhaps the hon. Gentleman's election address did so. Labour thereby raised pensioners' expectations that something better would come along. Specifically, the Labour manifesto pledged that pensioners should share in the rise in general prosperity, but 75p is not such a share. Pensioners are angry with the Government. They feel that they have been let down, and they are right.
Mrs. Anne Campbell (Cambridge):
I had not intended to speak tonight but was so overwhelmed by the hypocrisy of Liberal Democrat complaints about the Government's spending plans--the Liberal Democrat manifesto clearly stated that that party's spending plans involved far less than ours--that I felt compelled to say something.
In my constituency, the Liberal Democrats habitually send out leaflets berating the Labour party for not spending more on education. The Liberal Democrat promises of £9.5 billion over five years, as compared with our £19 billion for education over three years, make a mockery of those leaflets.
The people of Cambridge should realise that if we had had that fantasy-land Liberal Democrat Government, they would not have got the increases in education that we have been able to produce. Cambridgeshire has had an increase in standard spending assessment year on year at more than double the rate of inflation. From April, the SSA per pupil will be higher in real terms than it ever was under the Tories.
It is true that schools are still feeling the pinch and feel that they do not have enough to spend on education, but while the Government have increased their spend on education, the Tory county council has reduced its contribution. Cambridgeshire education has lost £3 million overall, which has not been passported from the Government's generous increase. In 1998-99, the county council did not passport the full increase to education but kept back £1.6 million. In 1999-2000 it kept back £3 million. Next year will be the first in which the full increase has been passported to the education budget. Schools will certainly begin to see the benefit of that.
In addition to the increase in SSA, schools in Cambridgeshire have benefited from many other resources. This year, for example, we had £1.8 million for the reduction of infant class sizes, which delivered 11 new classrooms and 69 teachers, so now only 7 per cent. of infants are being taught in classes of 30 or more, as compared with 37 per cent. the previous year.
Cambridgeshire has had a huge programme to remove asbestos and update classrooms and has received £2.3 million from the new deal for schools and a massive £11.2 million from the standards fund, which has gone into numeracy, literacy, school improvement, school leadership, ethnic minority teaching and many other investments that all lead to much higher standards.
My hon. Friend the Member for Reading, West (Mr. Salter) said that the Liberal Democrats are all things to all people. That is true: they say one thing in one place and take an entirely different line in another. They appear to be opposing a tax cut here, and on Cambridgeshire county council they have proposed a 9.5 per cent. increase in council tax, but on the city council they propose a reduction in council tax. There is not much consistency.
It must be difficult for the Liberal Democrats in places such as Cambridge, where there is an excellent city council that has managed to keep council tax steady for several years running. Not only did they con voters in Arbury ward at the recent by-election, but they sent round a newsletter promising:
Councillor David Howarth, economic policy adviser to the Liberal Front Bench and a great economic literate, was quoted in the Cambridge Evening News on 18 February as saying:
9.19 pm
All you have to do is tell us what you want to spend the money on.
What happened when the Liberal Democrat councillor was elected? At his very first council meeting he voted to axe the funding for much needed facilities--new basketball and BMX facilities and closed circuit television for improved security--amounting to £170,000 over the next two years. Residents had asked for all those things. All the proposals had been discussed with the residents and agreed, and then the Liberal Democrats, en bloc, voted against them.
We are only cutting the future investment, not the past.
What the Liberal Democrats will do once they get in a position to make decisions beggars belief.
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