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Mr. Burstow: My hon. Friend is right about such discrimination. Their policies are also another form of age discrimination. It means that many people, who rightly expect that their nursing and personal care costs would be covered if they suffered from a chronic condition such as dementia, know that nothing will change as a result of the NHS plan. The Government's announcement will leave in place the postcode lottery of care that existed under the Conservatives for years. It will create new anomalies when the new definition of nursing care is interpreted.
The NHS plan leaves in place the perverse incentives that encourage local authorities to utilise residential care rather than help older people who remain in their homes. It leaves unanswered a fundamental question: where does the balance lie between an individual's personal responsibility and that of the state for meeting care costs? The Government have not provided a clear answer to that. They have put the matter into a siding, but they will have to return to it, and answer that question clearly and definitively.
As the hon. Member for Beckenham (Mrs. Lait) said, reports in The Sunday Times at the weekend, and in the Daily Mail today, describe the way in which the Scottish Executive will view long-term care. If those reports are correct, the Government will be put under a spotlight to explain why they have followed one road while the Scottish Executive have gone down another. The Scottish Executive appear set to go further than the Government. The new First Minister, the hon. Member for Central Fife (Mr. McLeish), is reported as saying that not only nursing care, but personal care should be free.
There has been no action on the matter during the whole Parliament. Plenty of debate has taken place, and the Government have often refused to set out their clear policy intent. They set up a royal commission within six months of the general election and we had to wait a year for it to report. That is unusually quick for a royal commission, and we welcomed that. Another 18 months passed before the Secretary of State told us at the Dispatch Box that he had to consider the report for another six months. In June or July, smuggled out under cover of the NHS plan, we received the extremely bad news that nothing would be done in this Parliament.
As my hon. Friend the Member for Northavon (Mr. Webb) spelled out, pensioners feel betrayed not only in the case of long-term care. There is genuine anger about the pension. I have met many of my older constituents, who feel insulted by the 75p increase in the basic state pension this year. Labour has presided over an increase in pensioner poverty--400,000 more pensioners live in poverty today than when the Government took office. The Government spend less of the national income on pensions now than when they took office--they have spent less in the first four years of the Parliament. The Minister may have wriggled at the Dispatch Box, but relying on future figures is not helpful and does not bear close scrutiny. When we consider the true figures for Government spending in their first four years in office, we realise that the prosperity of the nation is not being shared.
If Labour has made matters worse, the Conservatives are not the solution. Let us consider how much their pensions policy will cost. The hon. Member for Beckenham did an exercise to try to cost our policy. She needed only to read Hansard, which makes it clear that our policy will cost considerably less than the figures that she chose to peddle to the House. The Conservatives would scrap the winter allowance and the free television licence for the over-75s, and they would end the Christmas bonus.
What extra money would pensioners receive through Conservative pensions policy? My hon. Friend the Member for Northavon was generous; he said that they would receive 42p extra. However, the inflation increase of £2.25 would mean that pensioners would receive only 17p extra.
Mrs. Lait: Will the hon. Gentleman deny that, last Tuesday, he said that he wanted the basic state pension to be £90 for a single person and £135 for a couple? Will he also deny that the net cost of that could be 2.3p on the basic rate of income tax?
Mr. Burstow: I have the relevant copy of Hansard, and I urge the hon. Lady to read my speech, her speech and the interventions before she pursues that line of argument. The construction that she placed on my words--although I am happy to accept it--does not entirely reflect what I said. I was referring to the family budget unit's work on low cost, affordable pensions. The unit suggested two figures: £90 for a single person and £135 for couples. I said that we wanted to establish a commission to review the way in which pensions are increased year on year, and that the family budget unit's methodology should be considered as part of the commission's work.
As my hon. Friend the Member for Northavon rightly said, the Conservatives' proposal is the first case on record of robbing Peter to pay Peter. They would be taking money from pensioners and giving it back to them. We shall hear a great deal about pensions this week because of the pre-Budget statement, and those who consider the debate and the issues should carefully
That is hardly surprising when we consider the record of the Conservatives over the 18 years they were in office. It is undoubtedly true that the richest of our pensioners, who are a small minority of pensioners, enjoyed significant increases in their pensions. The poorest pensioners saw their incomes rise by only £10 a week. After 18 years of Tory rule, pensioners had only £10 to show for it. That was the consequence of a Conservative policy which was all about targeting extra help on the rich rather than doing something to help the poorest pensioners.
Mr. Bercow: Yes. Given that the Liberal Democrats June 2000 policy document proposed a restoration of the earnings link, that their party conference took a different view and that the hon. Gentleman and his right hon. and hon. Friends were veritably at sixes and sevens on the subject, with no coherent overall position, will he now remove the fog of confusion that is descending?
Mr. Burstow: The hon. Gentleman intervened on a specific point and then moved on to another. He should draw out the document from the Library and read it. It does not state anything to do with the earnings link. An amendment to that effect was moved from the floor of the conference.
The most effective way of getting extra help to pensioners is through the basic pension. Administrative costs are about 6 per cent. of expenditure if there is targeting through a means test. They are about 0.9 per cent. if we proceed through the basic state pension. The Minister has accepted that it is far more costly to use a means test to get extra help to the poorest. As my hon. Friend the Member for Northavon rightly said, the poorest pensioners do not get the help because they are the ones who do not claim the minimum income guarantee.
As there is such a strong and clear link between poverty and old age, targeting extra help to pensioners aged 75 and 80 is the right way forward. We all know that at the age of 80 pensioners receive an extra 25p. That is not enough to buy a first-class stamp to send it back. When the increase was introduced in 1971, it was worth something.
Liberal Democrats want to increase the extra payment to £15 for a single pensioner and to £28 for a pensioner couple. The hon. Member for Bournemouth, West (Mr. Butterfill) says that our proposals cannot be afforded and cannot be implemented. We say that they can be afforded and delivered. There is clear evidence of a willingness outside the House to ensure that the basic state pension is increased. Even the evidence from the Department of Social Security bears that out. It is clear from social security research report 83 that the Department found from its research work that even people in work were prepared to pay enough to enable an extra £10, £20 or £30 a week to be paid through the basic state pension.
My hon. Friend the Member for Northavon has been chastised for not sticking to some of the commitments set out in the Liberal Democrat manifesto in 1997. I find it odd to be chastised for doing not less but wanting to be more ambitious and wanting to do more for our pensioners. It is rather novel to be challenged and chastised by the Government for taking such an approach.
The Prime Minister says that he has got the message about the 75p increase. On Wednesday, the Chancellor of the Exchequer should say clearly and effectively whether he understood the message. We believe, along with people outside the House, that a decent pension increase is long overdue. Too many years have passed during which we have seen the basic state pension wither away. It is time that we reversed that long-term decline and invested for a decent basic pension.