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Ms Sally Keeble (Northampton, North): Has the hon. Gentleman checked that point? As I understand it, the imputed income of a certain percentage applies only when a pensioner has savings of more than £5,000—

Mr. Neil Turner: The figure is £6,000.

Ms Keeble: I thank my hon. Friend. The basic savings level is £6,000. The imputed income applies for every £500 on top of that. Overall, that does not work out at a return of 10 per cent. on the savings total. That is important for people who might be thinking of claiming.

Mr. Waterson: The hon. Lady merely serves to show how complex the new system is for our constituents. I am sure that many hon. Members will be wondering what it will be like when their surgeries fill up with people who do not know whether they are entitled to make a claim.

Ms Keeble: I can understand it.

Mr. Waterson: Well, the hon. Lady has a good degree from a good university, but not everybody is as privileged—[Interruption.] She suggests that I might be able to understand it, but whether everyone will is another matter.

I said that there were two issues. The second is means-testing. My party believes that the entire system is moving in the wrong direction. In 1997, only 37 per cent. of claimants were on means-tested benefits. This year, with the introduction of the pension credit, that figure could reach almost 60 per cent., and it is projected to grow to 73 per cent. by 2025. There are thus two extremely worrying aspects: take-up and means-testing, which promote a cap-in-hand approach for poorer pensioners.

I shall touch on some of the other issues, especially those raised by the Liberal Democrat spokesman. We can all testify to the fact that big council tax rises are extremely regressive, especially for older people. In my constituency, the local council—sadly, it is controlled by the Liberal Democrats—put up its share by 38 per cent. this year, a staggering amount. No wonder the Liberal Democrats are dusting off their old proposals for local income tax, on the basis of "Please stop me before I do it again". If a local council, such as Eastbourne, can make such an increase under the current system, imagine what it could do if it could charge a local income tax, quite apart from the Liberal proposals for an energy tax, which would be even more regressive because utility bills are often painful for pensioners, for regional taxes, more taxes through the European Union and the Liberal version of a new inheritance tax.

Richard Younger-Ross: The hon. Gentleman may be aware that Devon, which is run by a four-party coalition, was led by the Conservatives last year when council tax was increased by 28 per cent., as proposed by the Conservative leader, Christine Channon. He may

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also be aware that, in her speech, Christine outlined the injustice of the council tax; she said that it should be abolished and replaced by a fairer taxation system.

Mr. Waterson: I should like to hear Christine's views on the matter, but that does not alter the fact that many Liberal Democrat councils, and those in which they participate, are making sharp increases in council tax.

I endorse some of the comments that have been made about post office closures. All hon. Members should beware: the Post Office has embarked on a scheme to consider closures on a constituency basis. Eastbourne is privileged to be one of the first and the Post Office has come up with five closures in my constituency, so some time soon: "This is coming to a post office near you".

I feel strongly about age discrimination. The Government have reneged on their pre-1997 promise to legislate on age discrimination. The EU has finally forced them to do so by 2006.

We hear much from the Liberal Democrats about free personal care for the elderly, despite the fact that it seems to be bankrupting several local authorities in Scotland. Furthermore, some councils run by the Liberal Democrats charge substantial fees, up to £5,000 a year, for care services for the elderly.

As on so many things, the Liberals are the "Do as I say, not as I do" party. They voted for greater bureaucracy for care homes, causing many homes to close.

Mr. Burstow: So did you.

Mr. Waterson: No, we did not.

Liberal Democrat councils charge heavily for care services for older people. They jack up council tax mercilessly and, in the case of my council, sack older workers merely because they turn 65—turning their birth certificate into their P45. Outside this place, in Brent, and indeed in Eastbourne, Liberal Democrats extol the virtues of the pension credit, but in the House, they say that they want to scrap it. They certainly do not mention the means-testing that is at the heart of its approach to poorer pensioners.

I hope that the voters of Brent will have taken some of these points on board. Advice from the booklet for Liberal Democrat campaigners is that they should "act shamelessly, stir endlessly" and not "be afraid to exaggerate". That is how they operate throughout the country.

I urge the Liberals to make the difficult journey from piety to reality and not to mislead people, especially vulnerable pensioners. They should drop their empty rhetoric and their hypocrisy. I shall not urge my right hon. and hon. Friends to support the motion both for those reasons and because the motion makes the ritual attack on the Conservative record in government. I invite my right hon. and hon. Friends to abstain on the motion but to vote against the Government amendment, which is astounding in its complacency, even by the standards of this Government.

3.5 pm

Ms Sally Keeble (Northampton, North): It is a pleasure to follow the hon. Member for Eastbourne (Mr. Waterson). I congratulate him on his appointment.

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I am glad to see that some of his colleagues have joined him on the Opposition Benches; for a while he seemed to be offering not so much joined-up opposition as a one-man band, which did not say much for the Conservative Opposition's commitment to older people, or for their support for a colleague on his first appearance in his new position.

I agreed with the hon. Gentleman on one point. Although the Liberal Democrats did us a great service in bringing the issue to the House, some of the ways in which they presented their arguments did not help to tease out the important factors. They presented us with a catch-all set of grievances. There are real pressures and problems facing pensioners and they require long-term solutions, which must be agreed and maintained over time. What we put in place will, we hope, benefit pensioners for many years to come.

My hon. Friend the Member for Wigan (Mr. Turner) offered us an example. Giving everybody a flat-rate increase of £19 week sounds nice, but we would need to explain two things. First, it would mean taking money away from the poorest pensioners, who would receive only £96 instead £102; and, secondly, because the Liberal Democrats are talking about changing from council tax, which is property based, to a local income tax, it would increase the burden of taxation for pensioners. Rather than going for cheap slogans, we should carefully examine the problems for pensioners.

My constituency is in a "middle England" area and many pensioners do not fall into the poorest income ranges. However, there are specific historical reasons for pensioner poverty in the region. People worked for companies that have disappeared, such as those in the boot and shoe industry, which is in the process of change. A large number of women have broken employment records, because they took a break for family reasons. A phenomenally high percentage of women worked part-time and had no pension entitlement in their own right. In later life, they have been caught in poverty.

People think that middle England is extremely affluent, but it is not. Northampton has a high number of people on low incomes. Even if they contributed to an occupational or second pension scheme, those pensions and their savings are now extremely low. I asked a group of pensioners, who were here for the lobby this afternoon, about the rate of their second pensions. They told me what I had heard before—[Interruption.] The hon. Member for Northavon (Mr. Webb) is nodding. I am sure that he knows the figures: about £15 a week, or £50 month. That is not much, yet people receiving those amounts will not qualify for some of the benefits designed to help extremely poor pensioners. We need to help pensioners who are in that poverty trap and do not have enough to live comfortably.

The Government have done wonders in systematically considering what has made pensioners' lives so uncomfortable. I am sure that everyone will say, "Well, she would say that", but the Government have put in place very good programmes to tackle the real causes and symptoms of pensioner poverty. First, they have introduced the minimum income guarantee, which deals with the terrible problem of absolute hardship and destitution that existed among an awful lot of pensioners when we first took office in 1997. I am sure

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that all hon. Members had pensioners coming to their advice surgeries in dire straits because they simply did not have enough money.

Targeted measures have dealt with some of the pressure points in pensioners' lives. The winter fuel allowance is absolutely wonderful. It has made a real difference and has tackled the problem of fuel poverty among pensioners, who used to get so cold during the winter. Pensioners now enjoy free television licences. Concessionary fares have worked better in some areas than in others. They have worked best in Labour areas, where Labour councils top them up and provide free transport for all pensioners, which is wonderful. Free eye tests are now available. One of the cruellest things that the Conservative Government did was to hit pensioners at a point when they were particularly susceptible.

Measures have also been taken to ease the burden of income tax on pensioners, such as increasing personal tax allowances and introducing the new starting rate of tax. Pensioners will say that everyone on low incomes will get that, but those measures are really important when we consider how many pensioners are on low incomes. I know that many pensioners do not like to pay tax, but they have special tax protection, which I very much welcome.

My hon. Friend the Member for Wigan (Mr. Turner) mentioned national health service measures, but I want to say a few words about the pension credit. The hon. Member for Eastbourne was quite wrong in his proposals, because the pension credit is an incredibly important benefit for those areas, such as mine, where a lot of pensioners are caught in the poverty trap: they have too much to be entitled to state benefits designed for the very poor, but they still do not have comfortable lives. It is important that those people at least feel that they will be comfortable if they claim the credit, and that if they do make a claim they do not feel intimidated; otherwise what the hon. Gentleman says about the numbers not claiming will become a self-fulfilling prophecy.

The hon. Gentleman's point about savings and the interest rate was wrong. I agree that there is an assumption about earnings on savings. Some people might think about such things and say, "If only", but people can get help with making claims. If they do not have statements of interest from their banks or building societies, assumed amounts may be included in the booklets. Of course, as they can use assumed interest, they do not have to dip into their capital. They can keep their capital, which is very important for pensioners because it means that they can keep their nest eggs to pay for their funerals and save for other expenses in their very old age.

It is quite wrong to frighten people by saying that they will be means-tested, because the system will be much more like filling in a tax form. People will not have to keep claiming, as they do with housing benefit and other benefits. I am sure that the Minister will correct me if I am wrong, but people will have to submit a claim only when their circumstances change—otherwise, there will be a reassessment in five years' time—so the pension credit is not like an ordinary benefit.

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People can phone up, and someone on the end of the line can complete the form and send it to them for signing. I have been running a campaign about that in my constituency. Before doing so, I asked a couple of people to test the phone number, and it works; it is user-friendly service. I congratulate the Pension Service on doing some very good outreach work. People are going out to help those who do not have phones. The benefit has been designed in the light of pensioners' suggestions. Those of us who held meetings on the consultation document know that the policies emerging now are exactly those that pensioners said they wanted. I hope that the benefit will be a big step forward, certainly in areas, such as mine, where a lot of pensioners have some occupational or private pension or savings, but not very much.

I agree that a good number of things remain to be done to improve pensioners' lives, and I am sure that the Government will continue to take on some of those things. The first thing to do is to ensure that next month's introduction of the pension credit is as smooth as the arrangements have been so far for claiming and outreach work. I am sure that many others will want that to happen.

The development of home care packages is extremely important. That is mainly a job for local authorities, but such measures need to be in place if we are to provide pensioners with a decent standard of living in the years to come. We also still have to deal with pensioners who are asset rich and cash poor and find ways to secure their home ownership in their old age. That involves people who may have bought their council properties, as well as those in areas such as mine who have always owned their own homes, as it is often not cost-effective for them to move into smaller places.

The Government must consider ways of supporting equity release—either by making it safer, or by introducing some sort of CAT mark—so that people can afford to pay for repairs, major maintenance and adaptations by releasing some of the capital value. In that way, people could achieve what they often want: to stay on with dignity in their own homes, without their homes deteriorating and failing down around them.

I want to press a couple of final points. First, the procurement of residential care must be improved. The hon. Member for Sutton Coldfield (Mr. Mitchell) should consider the incredibly imaginative work being done in Castle Vale in Birmingham, which has enabled more old people to leave hospital and return to their own homes. The work has involved very clever joint funding, and I commend that model.

Secondly, we should look at some of the anomalies in the benefits package, so that pensioners who are carers can receive benefits that they should receive, including important mobility benefits that are denied to them.

I recognise that some important and positive changes are taking place. Pensioners are living longer and enjoying better health, and they have higher aspirations. Female pensioners rightly aspire to be independent. As a society, we need to take on the challenges and to protect pensioners and their standard of living in their older years and give them dignity in their retirement. I believe that our Labour Government have made an incredibly good start, with some very thoughtful and well put together programmes, so I urge the House to support

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the amendment and not to go for cheap slogans, but to go for things that will give people security and dignity in their old age.

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