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8.23 pm

Miss Anne Begg (Aberdeen, South): I am delighted to be called in this debate and I am aware that many Members still wish to speak.

I was interested in the comment of the hon. Member for Wycombe (Mr. Goodman) that the pension credit had been introduced with such high speed. Four years is hardly very quick. I say four years because I spent the summer recess of 1999 not swanning off on some foreign holiday, as the popular press seem often to paint Members of Parliament doing, but going round most of the sheltered housing complexes in my constituency, holding a large number of pensioner meetings—I held about 20 in total—and speaking to pensioners about how they felt about the Government's pensions policy.

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The summer of 1999 saw the height of pensioners' unhappiness about this Government's pensions policy. The 75p rise had just been announced, but pensioners had not yet received it. Going to speak to large groups of pensioners—they turned out in some force—was like entering the lion's den. However, there were some things about the Government's pension policy that they liked. The first was, of course, the introduction of the minimum income guarantee.

It was important that the new Labour Government, having come to power in 1997, tackled pensioner poverty, especially poverty among women pensioners, who were losing out because the pension system was based predominantly on a contributory principle. These women had not paid any contributions, or only very few, or had broken work records. Many working women had paid only the small stamp and therefore did not have full pension contributions.

The MIG was crucial. The Government should not make any apology for dealing with pensioner poverty by introducing it. It was a good measure that was extremely well liked. People still come up to me to thank the Government for what they have managed to do, although they often do that on the quiet. It is rare at a large meeting of pensioners to find pensioners who have benefited to the tune of sometimes £20 or £30 a week as a result of the MIG. That is not admitted at such gatherings, but pensioners will come up quietly afterwards to admit that they have benefited greatly from the measure.

There is also the winter fuel allowance, a free television licence for the over-75s and increases in the basic state pension. Obviously pensioners are slightly happier now than they were during the summer when I was talking to so many of them.

One major problem was identified. There was huge resentment among pensioners whose income was just over the MIG, those who had worked very hard all their lives and perhaps had a small occupational pension or a small income from some savings. They felt—resentment is not too strong a word—aggrieved that their hard work and thrift was not getting any reward.

In some instances, these pensioners did not understand why the Government should give money to people who had not saved and who had not invested in the future. I was keen to emphasise that that was the right thing for a Labour Government to do and that it was right that we should tackle pensioner poverty. The fact that they felt that somehow they were losing out was not a reason why the Government should not act, and the MIG was absolutely the right approach.

Obviously there was a problem that needed to be addressed. It was interesting that the hon. Member for Arundel and South Downs (Mr. Flight) talked constantly about the problem caused by the MIG. I think that all Labour Members accept that there are problems caused by it, namely the resentment that many pensioners have felt. I am not quite sure what the hon. Gentleman's solution is. He said that he would tell the House what it is, but I do not think that he did, or else it was so confused that I could not follow it.

Perhaps the hon. Gentleman's solution was that we should still give means-tested benefit to some people, but I am not sure whether it was to the level of the MIG. He suggested that the Conservatives would give lots of

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money to the over-75s. That is not an answer. It is not a reply to those pensioners who felt that they were being let down and left out because their income was just above the basic MIG levels.

The Bill is the solution to the problems caused by the MIG. It answers the questions that many pensioners in my constituency were putting to me. Like my hon. Friend the Member for Hendon (Mr. Dismore), I feel that it passes the doorstep test. An Opposition Member claimed that it failed to do so, but it is easy to explain on the doorstep to those who have saved a little and who feel that they are being let down because they are not getting anything back that, with the pension credit, there will be some reward for their saving.

The real challenge and the big problem with the Bill will be whether there is proper take-up of the pension credit once the Bill is enacted. It will be an incredible challenge to the Government to persuade people that the credit is something for which they qualify and not something of which they should be ashamed, and is something that they will get as of right. It will be doubly difficult if the Opposition continue to harp on, as they have tonight, about how complex it is. If pensioners are told, "This is such a complex measure", of course, they are not going to apply.

David Cairns: My hon. Friend is being harsh on the Opposition. At least they have turned up and made a contribution. When she is on the doorstep in Aberdeen talking to voters in her constituency, will she undertake to point out to them that not one member of the Scottish National party bothered to turn up to take part in this incredibly important debate, or even sought to intervene

Miss Begg: I will be interested not only in how the Scottish National party votes tonight, but in how the Liberals vote, because the Liberals are the main opposition in my constituency. Liberals who fight elections for a Scottish Government in Aberdeen next year will have a hard job on the doorstep explaining exactly why their party has voted against the pension credit. I have no doubt that that in itself will undermine their case. If they continue to support the Tories in saying that this is a means test, and it is demeaning to claim the credit, obviously it will be harder and harder to persuade people that they should be claiming it and that it is not like the 1930s means test.

I support many of the things that my hon. Friend the Member for Hendon has already said. The credit can be sold on the doorstep. It can be sold to today's pensioners on the basis of the fact that it is their reward for saving. That is easy to understand. It is also easy for them to understand that they are getting something back. That is where the resentment came in: they felt that other people were getting something for nothing. They will feel that they are getting something back from the Government, but not in the form of a handout or of a demeaning means test. They will qualify because of their thrift.

If, as is projected, 70 per cent. of pensioners qualify for the pension credit, the stigma that the Liberals say will be attached to it will not exist. They have said, however, that there must still be some means-tested benefit. If a very small number receive means-tested benefit, there is a huge stigma attached to that—only the very poor get the means-tested benefit. However, if 70 per cent. of pensioners qualify for the credit, that stigma will not exist.

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Another thing that will, I hope, help take-up of the pension credit—again, it is a challenge for the Government—is the new pension service, an agency dedicated to looking after pensioners and their needs, and ensuring that those who reach pension age are properly catered for and have their needs looked into. The hon. Member for Northavon (Mr. Webb) said that the pension is the easy option because everyone gets it, and the means test is difficult because not everyone is subject to it. I do not know what he would say to my constituent who told me that she had found that she did not get a pension because she had not realised that she had to fill in forms that were sent to her—she thought the pension came automatically. It is simply not true that people get the basic state pension as an automatic right. They do not if they have not made contributions or filled in forms as they approach their 60th birthday. Therefore, I believe that the pension credit can be sold to today's pensioners.

There has been much talk about whether the measure will give pensioners of the future an incentive to save. People I know do not behave in the way described by the hon. Member for Northavon. I do not know of anyone aged 40 who sits down and calculates to the nearest penny how much they will get in 20 years' time. Most people do not make those kinds of complicated calculations. They work on the principle that they hope—as did today's pensioners when they were younger—that it always pays to save. The introduction of the minimum income guarantee provided an incentive to save, but the introduction of the pension credit means that it will always pay to do so. It will pay to save a little, because people will qualify for the pension credit; it will pay to save a lot, because people will be so much better off than if they had not done so at all.

We cannot know at age 40, 18 or 22, when I started work, what wages we will have for the rest of our lives—or, indeed, whether we will work for the rest of our lives. A person may be hit by a bus and end up paraplegic or have a broken work record owing to continual ill-health or family commitments. We should remember that the pension credit is not the only thing—

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