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Mr. Webb: No. I will not give way. I did not intervene.—[Hon. Members: "Go on."] No.
Mr. Webb: Baroness Hollis said that when the new system came in, one person in three who were entitled to it would fail to take up their entitlement. If the system is so good, so different and so simple, and if it requires just one phone call, why will one person in three not take it up?
Mr. Webb: No. I will not give way. I did not intervene on the Minister.
We were told in Committee that the Government would allow a year from October 2003 for people to claim their entitlement and backdate it to 2003. That is entirely welcome, but why must they leave a year for people to claim it? The Minister said that the Government had done away with complexity. The Government must leave a year for people to claim the pension credit because it is so complicated they do not believe that they can get the money to people. The system is not simple; it is still extremely complicated, as the Bill clearly shows.
In his earlier remarks, the Minister said that pensioners would no longer lose, pound for pound, as though he had not been listening to what we have been saying this afternoon. Which pensioners will no longer lose, pound for pound? Women aged 60 to 64 will lose, pound for pound. Women with poor contribution records will lose, pound for pound. In the propaganda that we got on Third Reading, that is all brushed under the carpet.
The prejudice against women in aspects of the Bill explains why our campaign for justice in women's pensions is sorely needed. The fact that the Government sweep all these things under the carpet and deal in generalisations does a disservice to people's understanding of how the system will work. It is fiendishly complicated. That is why the Government assume that one in three will not take up their entitlement.
The Minister of State rightly says that the Bill is historic. It is. It will be seen as an historic turning point at which Government policy was set in the direction of
mass—I am not to call it means-testing, apparently—targeting and mass attempts to identify the poorer half or the poorer two thirds. In our old age, we will not want to have to report our changes in circumstances or know—or, more to the point, care—about tapers, thresholds and credits. We will want to know that we have state pension and some sort of second pension, and that we can budget on the basis of that income for the rest of our lives. That is what we will want in our old age. None of us would prefer to depend on a pension credit, but that is what we will have imposed on two thirds of our fellow citizens by the time people of my age reach pension age.It is correct to say that when the Government came to power, they could not achieve all their social policy objectives in one go and it was important to tackle pensioner poverty, but who were the poorest pensioners in the land when they took office? It was not the people getting income support and so on who were poorest, but those who were entitled to that support but not receiving it. The Government's figures tell us that there were 500,000 such people. I have a feeling that the Labour party manifesto referred to a much bigger number; it may even have said that there were 1 million such people. None the less, the Government's figures tell us that 500,000 pensioners were not getting income support, and they did not get a penny from the MIG.
Labour Members who talk about their compassion for the poorest pensioners should be aware that the statistics that Ministers cite are based on simulation models from the Department that assume that everybody gets their money—but they do not. As long as the Government continue arguing about the effects of their policies on the assumption that everyone gets their money, they will continue to give a misleading impression, as one of the fatal flaws of their strategy is that a lot of people do not get it. The trade-off is not between a system that gives money only to the poor—let us call it targeting for shorthand—and our proposal of giving to the old, some of whom are not poor; it is between giving to some of the poor and completely ignoring the poorest, although most of the poorest, such as the elderly who miss out on their benefits, get their income through the basic pension.
The Government did have an alternative. The Bill could be called the culmination of their failure to think laterally. Some of the policies mentioned by the Minister, such as relaxation of the capital rules, are not dealt with in the Bill. We did not need the Bill to relax the capital rules. The suggestion that the pension credit is the only way in which such proposals could have been implemented is therefore wrong. It could have been done on day one or at any time.
Mr. Webb: I shall not give way, as other hon. Members still want to contribute in the short time that remains.
All that work could have been done without the Bill. The only thing that the Bill adds, while introducing some streamlining of the means-testing process, with which I have no problem, is the savings credit, which partly undoes the saving disincentive that the Government have created. If we are to applaud them for partly undoing the damage that they have done, the applause will be pretty limited.
I think that our goal should be bigger. The Minister tried to sound visionary and put some passion into his contribution, but my vision is much bigger than that of ensuring that two thirds of pensioners have to report their circumstances and receive top-ups. My vision is to ensure that as many people as possible are independent of the state. That is the sort of goal for which we should be striving and it is a bigger vision than that contained in the Bill.
6.48 pm
Bob Spink: British pensioners are right to feel betrayed by this Labour Government. They do not want yet more gimmicks or means-testing, whether it is old-fashioned means-testing or the new fangled type that Labour is currently trying to spin. They simply want a decent, universal and honest basic state pension so that they can live with the dignity that they deserve. They want decent Members of Parliament who can stand up in this House and represent their interests.
I should like to give the House a quote:
- "The concept of the Pensions Credit is . . . far too complex and over-elaborate . . . It inevitably draws more pensioners into means testing, which many will resent . . . We need a system which is simple, understandable, and which accords a proper dignity to pensioners."
I will give the Bill some credit. The Government claim that it will help more than 5 million pensioners, which is greatly to be welcomed, and it is right to target the poorest pensioners. But I challenge their estimate that the Bill will increase benefit expenditure by £2 billion in a full year of operation, because if take-up is only 70 per cent. or 75 per cent.—around the same level as MIG take-up—there would be little or no increase in overall expenditure. That is why I say that low take-up owing to high complexity will not worry the Government.
Mr. McCartney: Will the hon. Gentleman give way?
Bob Spink: No, I will not. Other Members wish to speak, and the right hon. Gentleman has spent an inordinate length of time at the Dispatch Box today.
The 1997 manifesto on which the Government were elected, "New Labour because Britain deserves better", said:
- "We believe that all pensioners should share fairly in the increasing prosperity of the nation . . . Everyone is entitled to dignity in retirement."
Quite simply, the Government have failed pensioners. As always, the Prime Minister was long on aspiration and warm words and short on delivery. Pensioners made this country what it is. They created its wealth and established its infrastructure and enterprise base. They gave their blood, sweat and tears—some gave their lives—so that we could be a free nation enjoying prosperity and improved standards of living, yet they are denied a fair share of the very prosperity that they created through their efforts.
Let me be perfectly balanced and fair in what I say. On balance, during the 1980s and 1990s, Conservative Governments improved the lot of pensioners—although, to be honest, we did not do enough—but under this Labour Administration many pensioners have become worse off. Just as they are worse off under Labour as regards health, transport and street crime, they are worse off financially. So what is the Government's response to current levels of pensioner poverty? First, to introduce more, not less, complexity; secondly, to introduce more, not less, means-testing; and, thirdly, to create a long-term disincentive to saving. That will lead to lower pensioner take-up of their hard-earned entitlements and more, not less, pensioner poverty. In short, Labour has failed pensioners, and the Bill may compound the Government's failure by leading to an increased dependency culture. As the Minister said, socialism still lives on those Benches.
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