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Andrew Selous: Are not the Government correctly righting a wrong through considering the underpayment of women who worked in colliery canteens in the 1950s? I know from one of my constituents that that is happening. That is absolutely just, but does not that mean that the Government have already established the principle of righting past wrongs?

Mr. McCartney: The hon. Gentleman is not technically correct. The issue not only involves the former National Coal Board, but applies to employers in the public and private sectors who took contributions for women but treated them in a discriminatory way within the rules of their pension funds. A European ruling has been made, and the tribunal system is now considering its implementation so that it can make good that discrimination. It is an entirely different proposition from new clause 1.

I understand the hon. Gentleman's point, but we are acknowledging that discrimination occurred by introducing the minimum income guarantee and modernising the pension credit through the Bill. We are already ensuring that women against whom the state system discriminated benefit significantly. We are therefore able to go back in an effective, honest and transparent way to establish incomes for those women. Without those arrangements, they would fall foul of their backgrounds and languish below the basic state pension line. The Bill will bring their incomes up to it, and in many cases, above it.

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Those who are not in that position will continue to be entitled to the guaranteed credit. Our investment in MIG and other measures such as winter fuel payments mean that all MIG households are at least £20 a week or £1,000 a year better off than in 1997. That is a real terms increase in living standards of 23 per cent. Pensioners who have, until now, been the most disadvantaged can depend on a decent income in retirement.

We do not know about the whereabouts of the hon. Member for Northavon since 1984. The Sunday Mirror article finishes by stating:

I accept the hon. Gentleman's flattery; he is obviously trying to imitate what the Government are already doing in the Bill, which reflects our achievements with MIG. Since coming to power in 1997, we have gone out of our way to right the wrongs of the past and to ensure that those pensioners in poverty are taken out of it, not only now but in the future through the pension credit. I therefore ask the hon. Gentleman to withdraw the new clause.

Mr. Webb: I am grateful to the hon. Members for Daventry (Mr. Boswell) and for South-West Bedfordshire (Andrew Selous) for their support for the principle of the new clause and disappointed with the Government's response. It was argued that there are drafting problems, and although I do not understand them, I would happily withdraw the new clause if the Government accepted its substance. We can argue about the drafting and if there is a problem, I am happy not to pursue the new clause as long as the Government accept the principle.

The Minister rightly said that we have not tried to recreate the rules for people who care for the long-term sick and disabled. Trying to do that for 20 or 30 years ago would probably be unworkable. However, trying to establish whether someone had a child and would, under current rules, be entitled to something akin to child benefit is straightforward.

I am sure that the Minister was not implying that those who apply for pension credit would wilfully mislead. There would be no penalty in those few cases in which people did not want to reveal that they had had a child. It is not like missing something off a benefit form, for which people are penalised; it is an option. If it is embarrassing for a woman to reveal that she has had a child because, for example, the husband does not know about it, there is no obligation to do that. However, most mothers would like the opportunity that the new clause would provide.

The Minister said that we could be considering events in the 1920s. He also said that when husbands die, many women move on to the full basic pension through widows' pensions rules. However, most of the women whom we are considering have yet to retire or have recently retired. In most cases, their husbands have not reached 65 or died. Although I do not regard myself as gnarled or middle aged, the period that we are discussing—the 1960s and 1970s—is in living memory. It is not therefore implausible to ask people whether they were looking after children in the 1960s and 1970s. I believe that we could take their word for it. That is not an unreasonable basis on which to proceed.

In the benefits system, we impute all sorts of things that are not so. If people blow all their money to reduce their income to get more benefit, the benefits system treats

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them as though they still had the money. If people defer a pension and do not draw it when they are 65, the system means-tests them as if they had drawn it because they should not be rewarded for not drawing it. The benefits system uses the "as if" principle all the time. All we want is for people to be treated as if current values attached to bringing up children applied before 1977.

The Minister kindly drew attention to the press coverage for our campaign for justice in women's pensions. Every time I open my mail, more women throughout the country are joining the campaign because of their sense of injustice about issues such as the subject of our debate. Nothing that the Minister said this afternoon implies that the Government will respond to that. He said that not many people were affected, but the £58 figure is a Government figure. It is the average for newly retired women. We are not considering 90-year-old women who lived and worked in a previous generation, but those who are approaching pension age. If they only have private savings on top of the £58, they do not get rewarded up to £75. We can argue about the number of people who are affected, but we support the principle that they should not be penalised a second time.

We are not simply considering rules that will apply next year. When the system is up and running, it will apply to a 60-year-old woman for the rest of her life. In other words, we are talking about the rate that she will get not only next year but in 2020, and perhaps 2030. Would it not be extraordinary if, in 2030, we were still paying a lower rate to someone because of caring that they did in the 1960s? It seems extraordinary to perpetuate this discrimination against women.

I have one more response to the points that the Minister made. If we were to use the imputation system for the guaranteed credit, there would be an issue about reducing entitlement, because we would be imputing a higher basic pension. A better version of new clause 1 might remove references to the guaranteed credit altogether. I take that point, because we are primarily concerned about the savings credit.

For the avoidance of doubt on the drafting, and because new clause 1 is primarily concerned with the savings credit, as the Minister understood, while observing that I do not feel that the principle of this matter has been addressed by the Government, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 5

Report on incentives etc.

'( ) The Secretary of State shall as soon as practicable after the end of the financial year 2004–05 and annually thereafter lay before Parliament a report containing an assessment of the effect of the savings credit on the propensity of individuals of working age to save for their retirement; and may invite the Social Security Advisory Committee to comment thereon and make recommendations for any change to structures or benefits which seem to them to be appropriate.'.—[Mr. Clappison.]

Brought up, and read the First time.

Mr. James Clappison (Hertsmere): I beg to move, That the clause be read a Second time.

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Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss the following amendments: No. 6, in clause 1, page 1, line 5, after "credit", insert—

'calculated in accordance with section 2'.

No. 7, in page 1, line 9, leave out from "2" to end of line 10.

No. 8, in page 1, line 11, leave out subsection (3).

No. 9, in page 1, line 18, leave out "and (3) are" and insert "is".

No. 10, in clause 2, page 2, line 10, leave out "a guarantee" and insert "state pension".

No. 11, in page 2, line 11, leave out "guarantee" and insert "state pension".

No. 12, in page 2, line 13, leave out "guarantee" and insert "state pension".

No. 4, in page 2, line 36, at end insert—

'(8A) For the purposes of this section, where the client has attained the age of 65 or is a member of a married or unmarried couple the other member of which has attained that age, there shall be disregarded in the calculation of the claimant's income a prescribed percentage of the amount, if any, by which his qualifying income (after deducting such part of his income, if any, as lies between the standard minimum guarantee and the appropriate minimum guarantee) exceeds a prescribed amount (the savings disregard threshold).

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