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Mr. Darling: My hon. Friend's intervention is timely. The minimum income guarantee helps a large number of people who retired without a full contribution record and whose basic state pension is much lower than £67. The minimum income guarantee gives them help that was not available in the past, because the Conservative party was never that bothered about the matter.
Furthermore, we are putting in place pension reforms that will last in the longer term. When the basic state pension was introduced, it was always intended that people would have a second pension in addition--either from the state or an occupational or works pension. Indeed, one of the reasons that the average pensioner income is £132 at present--well above the basic state pension--is that many people are retiring on occupational pensions that they took out 20 or 30 years ago. That is why it has gone up. We want to add to that.
It has long been recognised that there never was a golden age in which the basic state pension was worth enough on its own. It has always been looked on as a foundation. One reason that the Labour Government of the 1970s introduced the state earnings-related pension scheme was that they recognised that both state and funded pensions had a role to play in increasing pensioner income.
The problem we have today is that, although many people have good occupational pensions, too many people have retired on the basic state pension alone or just above that.
Mr. Clifton-Brown: Will the Secretary of State give way?
Mr. Darling: No, because I want to make some progress
We have introduced the new stakeholder pension because it will give flexible low-cost pensions to nearly 5 million people who until now had nothing other than personal private pensions that were probably inappropriate for many of them. As has been said, we are reforming SERPS to give more security in retirement for 18 million people--carers and disabled people with broken work records--who did not receive enough help under SERPS.
I repeat the example yet again. Under SERPS, someone who earned less than £6,000 would get about £14 a week. Under the new state second pension, the sum rises to £54 a week. It is heavily redistributive--if I may use that term--towards those people who lost out in the past. We are helping pensioners today; we are tackling the appalling Tory legacy of pensioner poverty and we are also making sure that, for the future, people can retire on a decent income.
What we heard two weeks ago and what we have heard this afternoon--I notice that the hon. Member for Havant did not dwell too much on what exactly he was promising--have made the issue abundantly clear. As the right hon. Member for Kensington and Chelsea (Mr. Portillo), the shadow Chancellor, said the Conservatives' policy does not constitute a big announcement. Essentially, it amounts to 42p. The Conservatives seek to spend the same money that we are already spending. We are tackling pensioner poverty and ensuring that people can retire on a decent income. We are making sure that 18 million low-paid carers and disabled people receive more. We are rebuilding the NHS, not trying to shuffle pensioners into private care. We are spending far more than the Conservative party ever would or ever will. I urge the House to reject the main motion.
2.22 pm
Mr. Steve Webb (Northavon): I am delighted that the Conservative Opposition have chosen the subject of pensions. We have spent much of the past three years wondering what they would do if they were in office, and we have now heard the first instalment. We have heard what they would do on day one, but we are still hazy as to what would happen after that.
As the Secretary of State for Social Security rightly pointed out--I heartily agree with him--42p will be the net benefit of the Conservatives' proposal. Where the Government will be associated with being the party of 75p for pensioners, the Conservatives, when they go into the next election, will be known as the party of 42p for pensioners. Although we have not finalised the Liberal Democrats' manifesto, I assure the House that our pledge on the basic state pension will substantially exceed 42p and 75p.
Mr. Bob Russell (Colchester): That is why Ronnie is retiring.
Mr. Webb: Indeed, my hon. Friend the Member for Southport (Mr. Fearn) is looking forward to benefiting from our pledge.
The speech that we have just heard from the hon. Member for Havant (Mr. Willetts) and Conservative literature say different things to different people. [Hon. Members: "Oh!"] I find that shocking. The Conservatives have put in their leaflets that 75p is inadequate for pensioners and the hon. Gentleman described the sum as paltry. However, when I challenged him on 7 February and asked him what he would do if he were Secretary of State, he said:
- We would carry on increasing the basic pension in line with prices.--[Official Report, 7 February 2000; Vol. 344, c. 33.]
If pensioners vote Conservative, they will receive the money that they are getting already delivered in a more sensible way, and I have no problem with that. I have made that point in the House on several occasions. Long before the hon. Gentleman said that the Conservative party had no plans to remove the winter fuel payment, I asked whether it was an administratively sensible way to provide the money, given that it costs £10 million to £15 in administration costs.
My hon. Friend the Member for Kingston and Surbiton (Mr. Davey) received a letter from a constituent saying:
- Dear Ed . . . I have an Honours Degree from Cambridge and was an Under Secretary in DHSS. I find the page of "Winter Fuel Payment Notes" just about as dense a 600-700 word essay as one could imagine. And yet I am required to sign
I have no problem with the principle of delivering money to pensioners through the basic pension. We have been consistent on that point. Our amendment on the
Order Paper objects to the pretence that, by voting Conservative, pensioners will receive £5 of new money that will make them better off, and not just by 42p
Mr. Willetts: We are making a bit of progress. Faced with the choice simply between what is happening under this Government's proposals and our proposals for the consolidation of the money, which does the hon. Gentleman think is better?
Mr. Webb: The Conservative party's package contains several elements. The first is to pay the winter fuel payment through the pension, and I do not have a problem with that. However, we do not support the abolition of the free television licences for those aged over 75 or the abolition of an age addition.
Ms Keeble: I appreciate the hon. Gentleman's criticism that the Conservatives' policy means all sorts of different things. I looked up the Liberal Democrats' policy on their website and clicked on the word "policy". The page that flashed up said "No documents."
Mr. Webb: The hon. Lady is very welcome to check my personal website.
The critical point is that--to coin a phrase--pensioners were not born yesterday. They can see through the Conservative party's offer, which will mean that they would get back their own money.
Ms Ward: I appreciate the comment of my hon. Friend the Member for Northampton, North (Ms Keeble). However, let us consider traditional manifestos that are set out in writing. If I recall it correctly, the Liberal Democrats' policy at the last election was to retain the basic state pension's link with prices. Have they now changed their policy? The policies that they expound in the House are very different from the ones that they expound outside.
Mr. Webb: If the hon. Lady attended debates on pensions a little more often, she would know that, for some years, we have advocated a better deal for pensioners than that contained in our previous manifesto. Politicians are often criticised for failing to live up to their manifesto promises. I doubt that a single pensioner in my constituency will criticise me for doing more than I promised when they elected me. I suspect that they will welcome that.
Miss Julie Kirkbride (Bromsgrove): In the interests of his constituents in Northavon, will the hon. Gentleman spell out exactly how much better off they would be if, by some extraordinary fluke, the Liberal Democrats won the next election?
Mr. Webb: The Conservative party makes policy in an intriguing way.
Miss Kirkbride: I asked about the Liberal Democrats' policy.
Mr. Webb: I will explain our policy to the hon. Lady. However, when a new Conservative shadow Chancellor
took over, he reversed within a few days substantial tranches of party policy. That is not how the Liberal Democrats work. Our policy is determined at our conference by the delegates. We have just completed a policy document, "Policies for an Ageing Population", which contains proposals for substantial increases in the basic state pension across the board and particularly for older pensioners. We have advocated that for a long time, and the Conservatives will now have to vote for that to facilitate their proposal for an extra £2 for the over-75s. They were ambivalent about that move, but now have to support it to implement their policy. We shall vote on our proposals at our September conference and they will become party policy. That policy will be published in the coming few months, so the precise figures, together with a statement of where the money will come from, will be available.
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