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Mr. Paul Goodman (Wycombe): Will the Secretary of State explain why he has not yet mentioned the take-up of pension credit? Will he confirm that up to 750,000 pensioners did not receive the minimum income guarantee? What firm evidence does he have that the take-up of pension credit will be higher?

Mr. Darling: My speech has a beginning, a middle and an end, and I have not yet reached take-up. I shall do so shortly, when I will deal with the point. Suffice it to say that I have never regarded the figure of 750,000 pensioners as realistic. I note that the authors of these findings warn the reader to treat them with great caution. There is a huge variation in the findings on take-up. I shall deal with take-up and the important point that the hon. Gentleman has either deliberately or inadvertently stumbled upon.

I shall deal with the criticisms that are made in the reasoned amendment. [Interruption.] I thought that the hon. Member for Havant liked a debate. Did I not read in the newspapers last week his assertion that if he, the hon. Member for Northavon, who is the Liberal Democrat spokesman on these matters, and my right hon. Friend the Member for Birkenhead (Mr. Field) were the first three speakers in the debate, the intellectual argument would be won. That is rough on the rest of us. I am sure that the rest of us have something to say. The hon. Gentleman is being touchy if he gets upset when we engage in a robust debate.

James Purnell (Stalybridge and Hyde): My right hon. Friend mentioned events at Harrogate and the conversion of the hon. Member for Havant (Mr. Willetts) to the cause of poverty. Does he remember the hon. Gentleman saying only two years ago:

Does that not show that the real agenda for the Conservatives is to cut benefits for pensioners?

Mr. Darling: The Conservative spokesman is famous for having two brains. I think that the Conservative party speaks with two voices on pensions. It tells us that it wants to increase the basic state pension, yet we know that it is committed to privatising it. Look at what happened. [Interruption.] It always upsets Conservative Members when they are reminded of their true policy.

Andrew Selous (South-West Bedfordshire): Will the Secretary of State give way?

Mr. Darling: In one moment. I should like to make a wee bit more progress.

I shall explain why the criticisms made in the reasoned amendment are wrong and why I believe that our approach is better and fairer than the Opposition alternative.

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Let us remember that the pension credit gives the least well-off pensioners an average of £8.20 a week, whereas the amendment would give them about £5 less. The Conservatives and their new friends raise three main arguments. They say that the pension credit will extend means-testing, increase complexity and undermine saving. I shall deal with each of those matters briefly.

First, let us confront the argument about means-testing head on. If we are serious about tackling individual pensioner poverty, we must undertake some form of income assessment. That is how we help vulnerable people. I turn again to Lord Fowler. He said:

He went on to regret the fact that it was our Government rather than his who introduced the measure.

I think that Lord Fowler has a point. If we want to tackle pensioner poverty and ensure that people who need help get it, we must have an individual assessment of that person's income. There is nothing new about that. The tax system does it, as does the benefit system. I do not believe that the argument stands up that we can more effectively tackle poverty by targeting extra help on the over-75s or the over-80s.

It is true that on average pensioner incomes decline as people get older. However, as I have said, half of those who gain from the pension credit are older than 75, and a quarter are older than 80. It is a fact that there are poor 67-year-olds, just as there are better off 82-year-olds. The only way we can be sure that we help the people who need help is to have some form of assessment of somebody's income.

Mr. Andrew Dismore (Hendon): Half the population of the Burnt Oak ward of my constituency are on means-tested benefits already. Within a mile, there are wards where there are more millionaires than anywhere else in Britain. I have often heard people in Burnt Oak complain that they worked all their lives, put some money aside and have nothing to show for it, compared with those who were on benefit. I have yet to hear that complaint from people who live in millionaires' row. Does my right hon. Friend accept that the pension credit will provide extra assistance for people who live in Burnt Oak, who need it, and that there is little point in helping the millionaires in Mill Hill?

Mr. Darling: There is a fairly straightforward argument, and I expect that again my hon. Friend and I will part company. If there is a limited amount of money to spend, the question arises whether it is better to spread that money thinly regardless of whether people need help, or to do more to help people. This year, for example, the state pension will increase for everybody by £3 a week. It will increase by £6 a week for some pensioners on the lowest incomes. It is worth bearing it in mind that 80 per cent. of gains in pension credit will go to pensioners with incomes of less than £149 a week. These people are by no means well off.

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That illustrates what a progressive measure the pension credit is. It is doing more for people. Those who are concerned about whether we should assess people's incomes are not squeamish when it comes to the tax system, and they should not be squeamish when it comes to the benefits system.

Lynne Jones: Given what my right hon. Friend has said, have the Government abandoned their initial aim when they embarked on welfare reform, which was to reduce means-testing?

Mr. Darling: Our objective, throughout the time that I have been responsible for this policy, is to get help to those who need help most. I say in the nicest possible way to my hon. Friend that that is one of the reasons why I joined the Labour party.

Kevin Brennan (Cardiff, West): Does my right hon. Friend agree that it is absurd to use the emotive imagery of the means test of the 1930s and the National Assistance Board poking into families' and pensioners' business after the second world war? We are talking about the pension credit, for which a pensioner will be assessed every five years.

Mr. Darling: My hon. Friend is right.

When Conservatives say that they are against means-testing, we must understand that they are against giving money to poor pensioners. Despite everything that we heard at Harrogate this weekend—I dare say that compassionate Conservatives will be among us for some time to come until there is a move to the next phase—we must bear it in mind that if the House is serious about doing something for pensioners on low incomes, it is necessary to identify those people in the first place, and then, critically, to ensure that we have the resources and the means to help them. The Conservative party is still committed to reducing the share of public spending to about 35 per cent. of gross domestic product. The two approaches do not square.

Several hon. Members rose

Mr. Darling: I seem to have struck a raw nerve. I shall try to give way to as many hon. Members as possible without abusing my position. I give way to Lord Fowler's successor, the hon. Member for Sutton Coldfield (Mr. Mitchell), who I understand is working even as we speak on the half-baked policy to privatise the basic state pension.

Mr. Andrew Mitchell (Sutton Coldfield): Does the right hon. Gentleman recall saying in his 1998 Green Paper:

Does he think that the Bill takes him nearer or further from that goal?

Mr. Darling: The hon. Gentleman will know, if he read the rest of the paragraph, that that statement was in the context that I believed—I still believe—that not enough people were saving enough towards their retirement because they did not have the means to do so.

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That passage led to our doing two things—extending the basic state pension and introducing the state second pension.

I understand that the hon. Gentleman will be going along to the next Conservative party team meeting. These meetings are held on Tuesdays at 10.30 pm. If anyone wants to go along, I should say that no doubt the professor—the hon. Member for Northavon—will be there, and maybe others. They will find out more. [Interruption.] They are all flocking in. It will be an extremely crowded telephone box.

Surely it is the policy of all Governments to encourage people who can save for their retirement to do so. We should make sure that that happens. It should surely also be an objective of the Government to put in place incentives to encourage people to save. We do that through the tax system. The hon. Member for Sutton Coldfield will know that there is tax relief for saving towards pensions. The Bill introduces a further incentive. If someone goes that extra mile and saves money, he or she will get an extra incentive for having done so. As the hon. Gentleman has taken over the seat formerly represented by Lord Fowler, perhaps he should have a word with the noble Lord, unless he thinks that his views are completely misplaced and misconceived. I would be surprised if he did.

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