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Mr. Bercow: Obviously, if the top tax rate is cut, those who pay that rate thenceforward will pay a lower proportion of their income to the Exchequer, but does the hon. Gentleman not accept that, as a consequence of the Lawson tax changes, the proportion of the overall tax-take contributed by the highest earners was higher? I hope that even a Liberal Democrat would acknowledge that point.

Mr. Taylor: The hon. Gentleman is trying to argue that, if we tax very high earners a little more, we will get less income. I challenge him to find an academic report that backs him. Even the last Conservative Administration--let alone any academic group--undertook their own report on that and failed to find the evidence.

The hon. Member for Knowsley, South (Mr. O'Hara) made a far more measured speech than the Minister. Not only Liberal Democrat Members, but other Members on both sides of the House would agree with much of what he said. He sought to reflect some of the general concerns, which were echoed by the hon. Member for Newport, West (Mr. Flynn), who has an exceptional record on this issue. He highlighted something that the Minister sought to deny: the Government are holding back key information on their ability to afford increases prior to their announcement.

The Minister says that we will be given the information after the announcement. That will help us to look at what the Government have done, but it does not help anyone to argue, before the announcement, for a better, more generous decision. Once that announcement has been made, there is no chance of any of us--whether the hon. Member for Newport, West or Liberal Democrat Members--winning the argument this year that the Government have the funds to do more. The decision will already have been made.

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My hon. Friend the Member for Sutton and Cheam (Mr. Burstow) addressed the issue of long-term care. It was not the centre of attention in the debate, but it is an important matter. I have already touched on the accusation of inconsistency by the hon. Member for Harlow. It will be interesting to see whether he says the same of his Chancellor. In both cases, I hope that he will do more than he has previously argued for.

Let us be clear about long-term care. We made an absolute guarantee to fund nursing care, which the Government would not guarantee. We committed ourselves to work towards funding long-term care, too. That is a difference between Labour and us: it is not that the proposal is not budgeted; it is that Ministers oppose it and we shall work for it. People who are concerned about their elderly relatives selling their houses and having to pay for care should understand where the Liberal Democrats stand and where the Labour party stands.

Mr. Lembit Öpik (Montgomeryshire): Does my hon. Friend agree that there should also be a rurality consideration? Provision for the elderly sometimes costs more in rural areas, such as mid-Wales, and the Government should take that into consideration in their planning.

Mr. Taylor: My hon. Friend tempts me, as the hon. Member for Truro and St. Austell, down the route of special offers for rural constituents. There are key issues for rural constituencies, and I hope that Ministers will address them soon in the long-promised but still-not-delivered review of local government expenditure. I have made that argument directly to Ministers.

Today's debate has very clearly set out three options available to pensioners. Conservative Members are so embarrassed by their true position on pensions that they dare not spell it out. The truth, of course, is that they are committed to the continued whittling away of the state pension as the basis for people's long-term support. The hon. Member for Teignbridge (Mr. Nicholls), to be fair to him, countered by calling for restoration of the earnings link, which he believes would cost £8 billion. I notice that that is the very same sum that Conservative Members have committed themselves not to adding, but to cutting.

The hon. Member for Bournemouth, West spoke rather more in favour of the position advocated by Conservative Front Benchers--although they will not spell out their position. The truth is that, on the pensions issue, Conservative Members want to have their cake and to eat it. They want to talk about tax cuts, but not about the fact that those can be delivered only by cutting expenditure on pensions and forcing more people into private pension schemes. Nevertheless, they pretend to pensioners that they want a real increase in the state pension.

One Conservative leaflet after another promises that pensioners would receive a pension increase of more than £5. One has to read the fine-print--as many pensioners do--to discover that the Conservatives would take away pensioners' Christmas bonus, heating allowance and even the 25p age addition that people start receiving at 80. The promise is an insult.

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

Mr. Taylor: I cannot give way to the hon. Gentleman; I have to get on. People will be able to read his comments for themselves.

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As my hon. Friend the Member for Northavon said, Labour Members are all over the place on the pensions issue. Year after year in this Parliament, Liberal Democrat Members have campaigned for real increases in the state pension. Ministers, however, have said that they cannot agree to those increases, but must target assistance more accurately on those who need it, yet the Government have chosen to provide the heating allowance, which is not only indiscriminate, but not taxed. Pensioners who perhaps could have afforded to do without the allowance are beneficiaries of it. Therefore, Ministers' comments on targeting are absolute nonsense.

The Government do not want to increase the basic state pension, but are willing to allow it to wither away in the long run. Their long-term plan is to ensure ever more means-tested support and to withdraw support from those who they think can afford to be without it. Although that is a distinct policy, which is not dissimilar from that of the Conservatives, they do not want to talk about it.

The Government also believe that the arrival, just before Christmas, of a £150 cheque for the heating allowance is more effective politically than adding a few pounds a week to the basic state pension. The 75p increase, however, proved that they misunderstood the situation and got the spin wrong. It led to a revolt, and proved that pensioners care most about being able to feed themselves and to live in dignity week by week.

Tomorrow, there will be a pensioners' rally at Westminster, attended by pensioners who have supported all of the political parties. They are rising in protest at the way in which the Government have treated them in this Parliament. The Chancellor's attempt on Wednesday to retrieve the situation will be seen for what it is: a response to that campaign as the general election approaches, rather than a genuine commitment to long-term improvement in the basic state pension.

The Liberal Democrat proposals would ensure substantial increases in the state pension, targeted on those who most need it. If we were making Wednesday's announcement, single pensioners would receive an additional £7.25. Older pensioners and pensioner couples would receive even more, so that pensioner couples over 80 would receive an increase of more than £30 a week. However, we go even further than that.

Labour Members have asked about our long-term policy. Because we have underwritten our pensions policy with a tax policy to fund it, we can guarantee that we will be able to deliver those increases in addition to those made in the Chancellor's announcement on Wednesday. The difference is that our policies are underwritten and funded by a tax policy that is more progressive than that which the Government are willing to offer. We can fund a pension increase that will take pensioners out of means-testing, rather than forcing them into it, as the Chancellor will do on Wednesday.

Our policies give pensioners independence and dignity, rather than force them to ask for hand-outs from the state. They also guarantee that pensioners receive the increase, regardless of whether they can find their way through the means-testing jungle that the Government have imposed.

6.56 pm

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): The hon. Member for Truro and St. Austell (Mr. Taylor) was complaining that

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Conservative and Labour Members had been caught electioneering--as if that were a crime--but then went on to do a little electioneering of his own. Much to my surprise, however, he produced figures different from those given earlier by the hon. Member for Northavon (Mr. Webb).

Undoubtedly, both hon. Members' expenditure will be financed by the same 10p increase in the top tax rate that they announced, and which my hon. Friend the Member for Hastings and Rye (Mr. Foster) pointed out has already been committed elsewhere. Liberal Democrat Members really have to learn that they cannot keep spending the same tax increase over and over again. One may not be able to perceive that fact when in opposition, but one perceives it rather quickly when one gets into government.

We have had an interesting debate. All the major parties--I include the Liberal Democrats--fought the previous general election on the same basis: that there would be a link between pensions and prices, and that other action would be taken subsequently. I should quote the Liberal Democrats' 1997 manifesto, on which the hon. Member for Northavon was elected to the House. It stated:

It went on to say a little more about what they might have managed to do had they entered government in 1997. It stated:

Does not such provision indexed to earnings describe the minimum income guarantee that the Government have introduced? I am not very sophisticated, but is not tapering that provision as outside income rises another way of describing a means test? I might have it wrong, but I think that that is how the Liberal Democrats' manifesto--on which every Liberal Democrat Member stood--would have been interpreted by those who read the manifestos in the previous general election.

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