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Mr. Levitt: I was fascinated by the hon. Gentleman's rather condescending reference to public involvement in pension policy. Is that distinct from public involvement in the provision of pensions—which is quite different—because that is not what he said?

Mr. Boswell: The hon. Gentleman should not judge me by the standards of spin that apply to his own Ministers.

Ministers are already preparing to put more than half the pensioner population on to the pension credit. If, however, the recent experience highlighted in the Help the Aged survey on benefit helplines is realistic, and I fear that it is, pensioners may have a long wait for service. The new pension service—to which, for the avoidance of doubt, we wish no ill—is going to have its work cut out to serve them adequately. The prospect of 5.5 million pensioners on means-tested benefits is an administratively challenging one.

On some estimates—or assumptions, because the Government have still not disclosed their final hand—the combination of basic and state second pension and pension credit will land two out of three pensioners on means-tested benefits by the time today's entrants retire. It was interesting that, when my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) invited the Secretary of State today to tell us how big a pot would be required to avoid losing out by saving, he declined to give us a figure.

What we know, because these are Government estimates, is that the total cost of the pension credit by mid-century will be anything up to £26 billion a year. By deterring adequate self-funded provision, and by offering

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the possibility of an overall outcome as generous for those who do not save as for those who do, we run the risk of pauperising future generations. That will be so particularly if the state's financial obligations cannot be met. Many young people fear that that will be the case. That alone demands an urgent root-and-branch rethink of the Government's whole approach to pension provision.

In that famous Pearl Assurance advertisement to which I referred, at age 65 the pensionless retiree—he is a little greyer and his hair is a little thinner than it was when he was 25—says:

With any pension failure, whether it is mis-selling, the Maxwell scandal, the closure of a fund or the removal of expectations, whatever goes wrong with a pension is a disaster for the individual. That is why it is incumbent on the Government to bestir themselves and to take the necessary action. If they fail, they will not be forgiven.

9.41 pm

The Minister for Pensions (Mr. Ian McCartney): I sat through the whole of the debate, and listened not only to the speeches of Front-Bench spokesmen for the Conservatives and the Liberal Democrats, but to the other 24 contributions—11 from Opposition Members and 13 from my Labour colleagues. I say that not to curry favour, but because we are serious about what my right hon. Friend the Secretary of State said to the Trades Union Congress and what we were saying before he arrived at the Department. Following publication of the Sandler review and the Inland Revenue tax simplification review, the Government intend to engage in a wide-ranging debate about the future strategy and partnership arrangements between the state, the private sector, employers and employees. I assure my colleagues that I shall take seriously what has been said in the debate and the ideas that have been suggested. I shall encourage my right hon. Friend to take them into account when we respond to the review later this year with the publication of a document.

I grew to like the hon. Member for South-West Bedfordshire (Andrew Selous) during my travails with him on the State Pension Credit Bill. I hope that that does not do him any harm. He commented on value added tax. The last time that the Conservative party put up value added tax it caused a great deal of fuel poverty among pensioners, and it took this Government to reduce it and introduce a winter fuel payment, which we are continuing to provide. Conservative Members may want to get rid of that if they get their hands on power again.

The ABI tax credit is an idea worth considering, and I give the hon. Gentleman an assurance that we will do so. My right hon. Friend and I have a long record on flexible retirement and age-positive issues in opposition and in various positions in government. I am glad that the Liberal Democrats and some in the Conservative party now see the sense of an age-positive strategy not just for pensions and employment, but for goods and services across the whole spectrum of society to ensure that we have a positive image of older people and their contribution to society. Older people are not a burden: they are an asset. We need to enhance and engage with that asset. I give the hon. Gentleman that commitment. I tried to intervene on him to say that his proposal was in the Government's last manifesto.

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The hon. Member for Northavon (Mr. Webb) and I have had many debates in the past few months. Indeed, he may be fed up with looking at me. I do not want to over-rehearse our debates of the past few months. However, one of the basic divides between us is that the Liberal party is extremely simplistic in remaining wedded to the principle that poverty is age-related, because it is overwhelmingly income-related. Liberal Democrat policies are flawed as regards putting investment into helping poor pensioners. Someone who is poor and 60 cannot wait until they are 75 to get income-related benefits and support from the Government.

The Tories had 18 years in government and have had five years in opposition—almost a quarter of a century of paralysing incompetence. During the debate, the hon. Member for Havant (Mr. Willetts) showed no recognition of the harm caused, no understanding of the need for partnership and consensus, and no long-term vision. He represented simple short-term opportunism.

We are not a Government of crisis or complacency. We are a Government who have tackled the incompetence of the Tory years, attacked pensioner poverty and begun to improve state pension income for millions of pensioners through the minimum income guarantee, the pension credit, the state second pension and changes to tax and capital rules, ending the "give with one hand, take away with the other" approach of the Tories. Yet Conservative Front-Bench and Back-Bench Members clearly indicated that if they ever got their hands on power they would get rid of all those reforms that have benefited millions of pensioners.

Mr. Redwood: Will the Minister give way?

Mr. McCartney: Can the right hon. Gentleman wait? I am not quite warmed up yet. I know that he is always warmed up; I am not so certain whether that is good for him. [Interruption.] Perhaps I might as well get it over with.

Mr. Redwood: Can the Minister explain why it is that of all the final salary pension schemes offering good terms to people in 1979, more than half are now closed to new members and are thinking of worsening the pensions of those already in the schemes? Why has that happened under Labour?

Mr. McCartney: There has been a trend in that matter, but under this Government, millions of pensioners who were not in a defined benefit scheme and had no second pension are getting benefit. Under the Conservatives, 2 million pensioners were in poverty; under this Government they are receiving additional income. Under the Conservatives, 14 million low-paid workers had no opportunity to get access to a second pension; under this Government, they are getting that access. This Government, through their simplification review and other measures that we are taking in partnership with employers, are challenging employers to invest in their employees by improving pension opportunities and contribution schemes. I hope that the right hon. Gentleman will play an active part in the simplification review by ensuring that the companies that he is involved

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in start to introduce better pensions for their employees who do not have them at the moment. I take no lessons from him when it comes to delivering pensions.

The Government have acted on the modernisation and simplification of second-tier pensions. We have introduced measures to improve access to pensions and to assist employers to retain or introduce pension products in their workplace—for example, a stakeholder pension. Again, the Conservatives are silent. Are they going to get rid of the stakeholder pension? Are they going to abandon, as did their previous Administration, millions of employees who had no access to a second pension opportunity? Silence. Silence is golden. The hon. Member for Havant should give us an answer. He wants a debate about pension policy—is he going to scrap stakeholder pensions?

Mrs. Browning: The Minister said that the stakeholder pension offers opportunities to millions of people, but the reality is that millions of people have not taken it up. His Government's target is 3 million but the figure has not yet reached even 1 million. Why has this wonderful opportunity been rejected by the people out there? What is wrong with it?

Mr. McCartney: The position is that after just one year, from a standing start, 815,000 employees who under the Tories would never have got a second pension have got a second pension. There is still much to do, but at that rate of investment over the next four or five years, millions of people who did not have access to an additional second pension will get that from this Government.

What was the Tory party's record on mis-selling? The hon. Member for Havant and his colleagues have tried to brush aside mis-selling this afternoon, saying that it did not really matter, as there were only a few victims. They allowed pensions to be mis-sold to over 1 million people and it took this Government to pay back £11.5 billion in compensation. However, the Tories destroyed people's confidence in the marketplace. That was down to the hon. Member for Havant, who sits there smugly.

In addition, the Tories stole the pensions of workers in the privatised sector, including hundreds of millions of pounds from bus workers. It took this Government to get that money back. The Tories weakened the employment rights of people who were transferred to the private sector, who were not given the right to continue to enjoy pension entitlement. Many of them were women workers and low paid. It has taken this Government to rectify that situation by amendments to TUPE.

The Tories halved the value of SERPS, and they tell us that they are now a party of compassion towards pensioners. The fact is that, after a quarter of a century, today's debate has been no more than a smokescreen to hide the fact that they have one simple policy: to privatise the state pension. The hon. Member for Havant can twist and turn. He can smirk and dissemble as much as he likes. He cannot hide from the truth. We have the letter. Like Chamberlain before him, his letter surrenders the basic state pension. Millions of pensioners in the future will be left to market forces under the Tories.

The hon. Member for Havant cannot run and hide from his letter, which says:

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Perhaps the hon. Gentleman can answer some questions. I shall quote from the letter.

I wonder whether, to help the debate, the hon. Gentleman would be prepared to share this material and put it in the Library so we could all read what he provided to his hon. Friend the Member for Sutton Coldfield (Mr. Mitchell)?

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