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Mr. Andrew Mitchell (Sutton Coldfield): The hon. Gentleman is normally a fair man in these matters, but he has come perilously close in the past few minutes to suggesting that such schemes are closing because of the wicked, feckless actions of the bosses, who are grinding the faces of their poorer workers. He will agree that that is not so. Many of these schemes are closing for proper, prudent financial management reasons, rather than for the reasons he came close to suggesting.

Rob Marris: As a former Select Committee member and a former Minister in the predecessor Department, the hon. Gentleman is very knowledgeable about these matters. However, some schemes have indeed ripped off members, and the employers have been, to use his word, feckless. As he points out, other schemes are closing because it is financially prudent to do so, but what constitutes financial prudence in a given climate depends on how one got there and on how much money is in the kitty. Before he seeks to intervene on me again, I should remind him that I did mention the fact that part of the current difficulty with private pension schemes—but only part—is the downturn in the stock market. However, the stock market, like capitalism, is cyclical, and as I said, some companies that took pensions contribution holidays will not now put their hands in their pockets when times are bad. Instead, they are closing the scheme, which is despicable to say the least.

The Government are doing what they can in the current climate. We are in a transition phase, in that pensions have moved up the political and social agenda, which is a good thing. The Government are seeking to address some of the historical difficulties that have arisen under Governments of both political colours since the second world war.

A major step forward is the pension protection fund, which will be designed to help workers who are ripped off and find that their pension scheme has gone bust or is significantly underfunded. Sometimes they find this out very much toward the end of their careers. If a company scheme goes bust, there will be a 90 per cent. kick-in from the insurance. I am delighted to say that the pension protection fund will have a cap regarding the salaries of high earners. Solvent employers—this touches on the issue raised by the hon. Member for Sutton Coldfield (Mr. Mitchell)—who choose to wind up their pension schemes, as they are legally entitled to do, will be required to meet their promises to that pension fund in full, and that will be policed.

It is a step forward that the Government are looking at the priority order that applies on company insolvency, which has had particularly adverse effects on long-serving members who are nearing retirement and may have decided to work an extra five years, perhaps because their children are in university; but that is another debate, Madam Deputy Speaker. However, if the person at the next desk or bench decides to go and, two years later, the company scheme goes bust, the person who already receives the pension but who may

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have shorter service and may be slightly younger gets much better protection than the person who has worked there longer.

Finally, I am delighted that the Government are at last making serious noises about the situation for workers when their employment is transferred. Every Member knows that under the acquired rights directive and the Transfer of Undertakings (Protection of Employment) Regulations 1981, as amended, pensions are excluded. The EU made a mistake on that and the UK Government made a mistake in continuing that exclusion when we did not need to after the acquired rights directive was translated into domestic legislation in the UK. The Government addressing that issue is long overdue, and I hope that they do so to ensure that someone whose job is being transferred has protection for their pension as well as for their pay and conditions of work.

2.22 pm

Mr. Andrew Mitchell (Sutton Coldfield): I fear that I could not possibly bring myself to congratulate the Liberal Democrats on their motion today, but they have done the House a service in following the example of Her Majesty's Opposition yesterday and raising an important bread and butter issue that is of huge concern to our constituents. It is noteworthy that the Westminster village spends its time being obsessed by issues around the Hutton inquiry. However, there are many important issues in education, health, transport and taxation that are of great importance to our constituents on a daily basis, and I am glad to be able to take part in this debate today.

I agree with the Minister for Pensions, who said that excessive negativism should be avoided. He was irritatingly reasonable throughout most of his speech; not something we usually get from Ministers in this rotten Government. It remains to be seen how the Under-Secretary of State for Health, the hon. Member for South Thanet (Dr. Ladyman), winds up the debate.

The Minister for Pensions is right to inveigh against excessive negativism, to point to the fact that we are all now, thank goodness, living longer and to state that better medicine is keeping us alive and in a better condition for much longer. That is a good thing. I agreed also with the Minister when he set out the Government's policy on age discrimination. As someone already in his mid-40s, I recognise that this is an increasingly important agenda and I approve of what the Government are doing in that respect.

I want to raise three issues. The first is the crisis in our care homes in Birmingham, a matter that I have raised in the House before and which remains extremely important and worrying. Secondly, I want to follow the hon. Member for Wolverhampton, South-West (Rob Marris) in his analysis of where the pensions crisis for existing and future pensioners now rests. Thirdly, I want to refer to an important point that was touched on briefly by the Minister—the effect of crime on the security of our old folk.

Sutton Coldfield, for local government purposes, is a part of Birmingham. I have watched with great concern the way in which the crisis in our care homes has

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unfolded and the apparent inability of Birmingham's Labour council or the Labour Government to do anything about it.

The issues behind care home closures were well set out by the hon. Member for Sutton and Cheam (Mr. Burstow), who touched on the bed-blocking crisis, which is not directly associated with the problem but is close to it. He referred also to the fiasco of the Government's implementation and consequent withdrawal of the national minimum environmental standards for existing care homes, which caused great distress and anger across the country.

We know that demand for elderly care is growing. Between 2005 and 2020, over 130,000 more people each year will require residential care than currently receive it, an increase of 25 per cent. The number of people receiving domiciliary care has fallen by almost 100,000 since 1997, a fall of over 20 per cent. The number of care home beds available has dropped by 13 per cent. since 1997, a loss of 70,000 long-term care places.

According to the latest data published by Laing and Buisson in July 2003, 13,400 elderly care places were lost in the 15 months to April 2003 alone. A net 11,000 places were lost in the independent sector—often small, privately operated and voluntary care homes—in the 15 months to April 2003, an increase on the 9,600 places lost in the same time frame in the previous calendar year. A further 900 places in local authority-run residential homes were lost, along with an estimated 700 continuing care places in NHS hospitals. As a result of this capacity loss, supply has reached dangerously low levels; across the country, the average is 5.7 care home places per 100 people over 65. In the northern home counties, the supply ratio has dropped to 4.6, and in London it has fallen to as low as 3.8, one third lower than the average.

Despite frequent warnings from industry bodies and the Conservative party, the availability of care continues to decline. Sometimes closure is inevitable, and several speakers have referred to the huge human cost of those closures. The closure of care homes not only causes disruption to vulnerable residents; on the Government's own reckoning, as many as 1,000 people every year may be dying as a result of care home closures. In general, over-prescriptive, expensive and bureaucratic regulation has greatly exacerbated the crisis in the sector and has driven many recent closures, including those of some high-quality homes.

Hon. Members will recall the early-day motion tabled by me and my hon. Friends in respect of the Birmingham care homes crisis, which said:

That remains the case. I have said that I am appalled that Birmingham social services paid private care homes substantially less than the real cost of providing care for the elderly in care homes, a practice that led, obviously, to the closure of many more care homes.

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Mike Gimson, the spokesman for the Birmingham care consortium, which represents care home owners in the city, said that the consortium had been warning the council about the escalating closures. He said that the figures

Birmingham has been particularly hard hit because of the action of local authorities that have discriminated against the private sector by paying fees way below the levels that they are prepared to pay to their own homes. Birmingham city council pays £570 per resident per week for its own social service places, but for private homes it is prepared to pay between £300 and £310 per week, and for nursing homes only £398 per week. That is an absolute disgrace. Approximately 100 private homes have closed within the past two years and last year Birmingham city council spent some £17 million on agency staff for social services. At the very least, that is indicative of the demoralisation of the department and its inability to recruit and retain staff.

Even the social services inspectorate has acknowledged that there is a problem with care in Birmingham. The city is officially designated weak and is zero-starred. The Government pump money into social services, but except for domiciliary care and sheltered housing, the money is not ring-fenced. The result is a huge underspent budget for domiciliary and sheltered housing, and money intended for residential care is diverted elsewhere. The situation in Birmingham cannot be allowed to go on. It is an abuse of council tax payers' money and an absolute disgrace. Today I call once again on the Government to take steps to resolve the problem.

My party has come up with a six-point plan for long-term care, which I have no doubt will be further elucidated by the Front Bench. One point was missing from the proposer's speech. The hon. Member for Sutton and Cheam accurately described much of the problem in the sector, but he did not go on to explain precisely what Liberal policy would do about it. Our six-point plan will reverse the decline in the number of care homes and remove unnecessary regulation, which is costly and often does not improve care. It will break down the rigid divide between health and social care, and lead to the greater integration of funding streams from health and social services. It will recognise the sacrifice of those who provide for their own long-term care, and make it easier for people to care for their elderly relatives in the home or in their own homes.

My second theme is the pensions crisis. Nothing could more accurately exemplify how the Government have been caught in the headlights of the pensions crisis than the fact that for a considerable period the Prime Minister did not even deign to appoint a Minister for Pensions. Let us first consider the crisis for those who are already receiving pensions. In spite of the Minister's warm words about his intention to reduce the gap between the richest and the poorest in the pensions sector, that gap has increased—not decreased—by 16 per cent. since 1997.

Let us examine the gross domestic product figures on how much we as a country spend on pensioners. Ten years ago we spent 6.2 per cent. of our GDP on pensioners, and we are now spending 6 per cent. Above

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all, perhaps millions of people are dependent on means tests. Soon many more will be dependent on them as a result of the pension credit. In 1997 some 37 per cent. of pensioners were means-tested; the figure now is 60 per cent., and it will not be long before it rises to 75 per cent.

Of course I acknowledge the need for some means-testing—that is right—but not up to 75 per cent. One has only to listen to the words of a former Minister with responsibility for pensions, the right hon. Member for Birkenhead (Mr. Field), who has warned about the debilitating way in which means-testing undermines dignity, when people feel that they have to go cap in hand to the state. Means-testing is unwise and should, where possible, be avoided. I believe that a system in which 75 per cent. of people stand to be means-tested is bizarre.

We have heard much discussion of the pension credit today, but I warn Ministers that they will find it extremely difficult to implement successfully. They have the example of the tax credit system to warn them of the dangers of implementing such new systems. I thought that the Minister might have been succumbing to the disease that afflicts Ministers of all parties in the social security sector, recalling what the previous Department was called—being persuaded by their brilliant officials that systems introduced through form filling and case management are essential in their complexity, but will work and be easily understood. History is littered with Ministers who believed that, but found to their cost that it was not true.

On the long-term crisis in pensions, the hon. Member for Wolverhampton, South-West was quick to say that he did not believe that there was one. He and I have debated in the Select Committee whether "crisis" is an accurate term. I persist in believing that it is. The Government have as yet failed to respond adequately to the scale of the crisis. They have been advised by the CBI, the TUC and, indeed, the Select Committee, as well as numerous other lobby bodies on the importance of taking action, but, like rabbits caught in the headlights, they appear to find it difficult to know what to do.

Much talk has gone on in the House about the £5 billion per annum raid on pension funds, but I do not propose—important though it is—to rehash it today. More could have been done to prevent some schemes from closing, but even the stakeholder policy—one of the flagships of the Government's attempts to increase the amount of funded pensions—has been a lamentable flop. Practically no one in the target group has taken up the stakeholder pension, and the company schemes, which must be set up by law, have received very few takers indeed. Perhaps one bright spot for the Government is that they have at least had the wisdom to appoint someone of the calibre of Adair Turner as their pensions tsar. I hope that they will listen carefully to what he has to say when he reports to them.

The funded pensions policy, which was bequeathed by the last Conservative Government to the present Government, was a great success. At one point we had more funded pensions in this country than all the rest of Europe put together. It is crucial for the Government to produce a sensible policy for future pensioners who will be retiring. They have not yet done so, and it is a travesty

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that it is now nearly two years since we last had a debate on pensions in Government time. Such debates that have taken place have been on Opposition days.

Finally, I want to quote the right hon. Member for Birkenhead from an article in The Sunday Telegraph, and I hope that the Government will listen. The right hon. Gentleman said:

The right hon. Gentleman is entirely right.

My third point is about the way in which elderly people suffer disproportionately from crime in our society. As many hon. Members do, I conducted a survey on crime and related issues throughout my constituency. I was surprised by the massive response that I received, and particularly impressed by the emphasis on the debilitating effect of fear of crime. Fear of crime can have a massive effect on the quality of life of elderly people. It leads to exclusion from other activities in the community and a sense of isolation, and it certainly has an effect on health. A comparatively minor crime can have a disproportionate effect on elderly people and can be extremely traumatic for victims. The average age of victims of distraction burglary is 81, and it is a significantly under-reported crime because of the embarrassment that elderly people feel—wrongly—at being victims of it.

We need to see more police on the streets. The popular view that a policeman on the beat stops a crime only once every 33 years misses the point. Having police on the street is reassuring to our communities. The lessons from New York about the success of more precinct policing must be evident to everyone and they are certainly now evident to the Mayor of London. I greatly welcome the decision by my party to pledge to increase the number of police by 40,000, if we are successful at the next election. It is pleasing to know that in that happy event, 2,600 more police would come to the west midlands.

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