Previous SectionIndexHome Page

Mr. Rooker: Will the hon. Gentleman give way?

Mr. Nicholls: I shall give way to the Minister who is marvellous and reminds me of the late Brian London. Boxing fans will know that that was not meant to be a compliment.

Mr. Rooker: I would like more information, as the hon. Gentleman has just quoted the figures for a tax refund for a gross income of £5,000. The basic pension for a couple is £107 a week and the minimum income guarantee is £121 so, because of the tax allowances, other income must be involved. In that situation, there would not be a tax liability. The hon. Gentleman should not kid the House that the couple's gross income is their only income. He cannot be giving the House the full information.

Mr. Nicholls: I am giving the House the full information, and it says something about the right hon. Gentleman, whom I respect, that he is embarrassed by what he has heard. I will send the right hon. Gentleman the information, which is news to no one on this side of the House. I accept that the matter is not entirely within his brief, as it is more of a Treasury brief. However, if he understood the effect of advance corporation tax on

6 Nov 2000 : Column 72

pensioner income, he would not be in the least surprised by the outcome. I shall send him the papers without any difficulty at all.

Mr. Bercow: As my hon. Friend is helpfully providing the House with a list, perhaps he would be so kind and generous as to add to it one of my own constituents, Mrs. Jones-Williams of Seven Gables, Buckingham Road, Winslow, whose husband is registered blind and who is trying to maintain a car. Mrs. Jones-Williams has suffered from the Government's ACT policy and assures me that she has been impoverished by this benighted Administration and wants them out of office yesterday.

Mr. Nicholls: There are dozens of examples of the way in which ACT has worked. The two examples that I mentioned simply made the point that the hon. Member for Hastings and Rye was wrong.

A moment or two ago, I said that, to some extent, given the figures we were discussing, we were almost swapping offers. We need to go much further than that, and a different approach should be considered by all the main political parties.

There is now a third age, and people live immeasurably longer than ever before. In 1909, which, give or take, was the time when Lloyd George introduced the first state retirement pension, average life expectancy was 45 years for men and 49 years for women. In other words, the state pension was paid 15 years after the actuarial calculation of one's death. Give or take a few years for the time that I was born, the figures for 1951 show that men's life expectancy was 66 years and women's life expectancy was 71 years. For a male born today, life expectancy is 75 years and, for a woman, 80 years. I have checked with the Library the proposition that once one takes out of those figures the fact that mortality in the early years is still relatively high, it is true that someone born today has every expectation of living well into his or her nineties. When the state retirement pension was introduced, it came into effect 15 years after one was expected to die. With a bit of luck, one will now live for a good 25 years after first receiving one's pension.

Mr. Butterfill: Will my hon. Friend give way?

Mr. Nicholls: If my hon. Friend will allow me, I shall continue as time is short.

We must draw the conclusion that we have the opportunity of a third age. We need a bigger idea, and Her Majesty's Government--it does not matter of which political party--should accept that we have moved on so much that we need a Ministry of the third age. We need an overriding, all-embracing Ministry that considers pensions policy, employment policy and health policy. It should also think about recreation policy, taxation and health care. Old age need not be undignified.

The Secretary of State for Northern Ireland wants pensioners to be branded because he thinks that being old is uncool. The hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Soley), who is chairman of the parliamentary Labour party, said that there is no point in trying to appeal to pensioners, as they are either racist or Conservative. The first notion is a slur and the second is not necessarily always true. However, we all aspire to a dignified old age and to have time during the third age

6 Nov 2000 : Column 73

for opportunities that people of our parents' and grandparents' generation would scarcely have believed. If there was a Secretary of State in the Cabinet who was charged with considering the entirety of what it is like in the third age, we really could make progress. Until then, progress must be relatively slight.

6.37 pm

Mr. Bill Rammell (Harlow): In the three minutes available to me, I shall attempt to do justice to the proposition on the Order Paper. I shall make three short points, the first of which concerns the consistency of Liberal Democrat Members. If we go back to their 1997 manifesto, they were in favour of raising pensions only in line with prices. In the vote in the House in April, they committed themselves to restoring the link between pensions and earnings. Liberal Democrats campaigned on that issue in the local elections and, in my constituency of Harlow, put leaflets through the doors that made it clear that their policy was to restore the link between pensions and earnings. In the vote at the Liberal Democrat conference in September, the link between pensions and earnings was explicitly rejected.

That is a bewildering set of somersaults on policy, the end result of which, certainly in my constituency, is that Liberal Democrats refuse to admit that originally they were in favour of restoring the link between pensions and earnings. People expect from politicians a degree of consistency on the issue which, sadly, the Liberal Democrats lack.

I shall pick up on two other points made by Liberal Democrat Members this afternoon, the first of which concerns long-term care. I shall reiterate the fact that the Liberal Democrats' alternative set of proposals for the 2000 Budget did not include a costed commitment to paying for personal long-term care. Their explicit costed commitment was to pay for nursing care, not personal care. Frankly, that is symptomatic of what we often get from Liberal Democrat Members. They spray promises around like confetti and hope that, in the meantime, nobody will look at the detail or the fine print and find out that there is no costed commitment to implement their proposals. I am committed to progressive taxation to fund decent public services, but the case for that is not bolstered by not being straight with people about where the money will come from.

Finally, in the short time available, I shall refer to the specific pension proposals that the hon. Member for Northavon (Mr. Webb) spoke about this afternoon. If I heard him correctly, he said that he would fund those proposals by raising the top rate of taxation to 50p in the pound. Only six months ago, the Liberal Democrats' alternative Budget for 2000 proposed raising the top rate of taxation to pay for cutting the 10p starting rate to zero. Therefore, in six months, the specific proposal from the Liberal Democrats has been changed for a different purpose. There is no consistency whatever from them on those issues. That is why, in my constituency and elsewhere, no one will believe them.

6.40 pm

Mr. Matthew Taylor (Truro and St. Austell): The hon. Member for Harlow (Mr. Rammell) talks about consistency and about Liberal Democrat policy changing. I suspect that, on Wednesday, we shall see one of the

6 Nov 2000 : Column 74

Government's biggest U-turns. They have spent some three years arguing against the principle of above-inflation pension increases. I believe that, because of a campaign by the Liberal Democrats--with the support of many Labour Back Benchers--but, above all, by pensioners, despite having no support from Ministers or from the Conservative party, which did not accept the argument, the case for above-inflation increases, resulting in a substantial pension increase, will prove to have been won.

That is a measure of the mistake that the Chancellor made at the start of the Parliament in taking pensioners for granted and in forcing them into increased means-testing. It is a measure of the effectiveness of a public revolt that has had nothing like the attention of the fuel tax protests, but will prove to have been more effective.

In constituency after constituency throughout the country, pensioners have taken up the case for a decent income, on which they can survive, as of right. That was the basis of the speech by my hon. Friend the Member for Northavon (Mr. Webb), probably the most expert person in the House on the issue; he is certainly one of the most expert.

In those terms, I regret the tone of the Minister's response. Many years ago, I served with him on the Committee that dealt with the poll tax. He did an effective job; I think that we did quite an effective opposition job between us. The poll tax certainly did not last long. I have always had great admiration for him, but he misjudged his response and he was wrong in his criticisms.

The figures that the Minister gave were, to say the least, misleading. He did not let me intervene at the time. Had he done so, I could have put him right, so it is sad that he did not. The fact is that the Government will call a general election--we will see whether they get back--and leave office spending less on pensions as a proportion of national wealth than when they came in. They will be doing worse on the state pension than the Conservatives.

The figures that the Minister sought to give related to overall expenditure on pensioners. That is a different issue, but, even there, the Government's record is nothing to be proud of because the simple fact is that, at this moment, they are still spending less than the Conservatives.

We know that the Government have jacked up spending for the general election and that they will just, in the Minister's terms--not by much--reach the level that the Conservatives were at when they left office. In the meantime, however, pensioners will have lost out on money that they will never get back.

The Conservative official spokesperson, the hon. Member for Beckenham (Mrs. Lait), made up a series of figures. The hon. Member for Bournemouth, West (Mr. Butterfill) resorted to saying that he preferred those to ours. She simply got her figures wrong. Perhaps she should call the House of Commons Library. It is very good and it will sort her out on that. She failed to take account of the fact that the costs of our policy are net, not gross. She also underestimated the gross costs of the policy, but her maths are clearly not too good. Broadly speaking, the net costs are equivalent to the income that we raise from the 50 per cent. rate of tax on earnings over £100,000 a year. Some years will bring in more income than we need and others fractionally less, but the figures are almost identical. There is a tie-up there.

6 Nov 2000 : Column 75

We are clear about why it is necessary to put that tax on: we want to guarantee pensioners our big increases. We could simply hope that the economy delivers continued growth. The evidence is that the Chancellor has more than a big enough pot into which he can dip to make substantial pension increases. I hope that he will take a step towards that on Wednesday, but to guarantee, after a general election, to deliver substantial pension increases, we have to say that that might mean an increase in tax. We believe that it would be right to have a 50 per cent. tax rate on earnings over £100,000 a year, if necessary.

There are several reasons for that. First, we believe that it is important that pensioners should receive the benefit of the pension increases. Secondly, our tax system is regressive. People on high incomes pay less tax overall as a proportion of their income than those on low incomes. We do not believe that that is right. In tackling what was a real problem--taxation of very high incomes under Labour prior to 1979--previous Conservative Chancellors went too far. That is why very wealthy people now pay less, as a proportion of income, than people on very low incomes--the pensioners on whom we are concentrating. We believe that, if we have to make a tax increase, that is where it should be made. It will still leave this country's high-rate tax one of the lowest in Europe and lower than for most of the period that Margaret Thatcher was Prime Minister.

Next Section

IndexHome Page