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Richard Younger-Ross: My hon. Friend is aware that we have been lobbied today by pensioners, and among those lobbying me was Mr. Cayley. His family has a fairly good income of £17,000, but it is paying £1,900 in council tax. That represents 11 per cent. of the family's income. Even those on better incomes are being hurt by the high levels of council tax.

Mr. Webb: My hon. Friend raises an important point. Those who are hurt hardest by the council tax are not those who are on the lowest incomes, who may have their council tax met in full or in part, but those who have worked hard and saved hard, and have to face that tax burden in full. When one tax comes to represent 11 per cent. of someone's income, clearly something has gone very wrong.

The hon. Member for Northampton, North (Ms Keeble) suggested that replacing the council tax with some form of local income tax would in some way be unfair to pensioners because that would mean getting rid of a property-based tax. Given that two thirds of pensioners pay no income tax at all, they would be the principal group of beneficiaries in a switch away from council tax to local income tax.

Ms Keeble: I actually said that if we sloganise and, for example, talk about flat-rate increases, and then talk about changing from a property-based tax to an income-based tax, there will be unforeseen consequences. I think that the two measures have not been thought through properly by the Liberal Democrats.

Mr. Webb: I recall from the hon. Lady's remarks that she said that, given that many pensioners are property owners, a move from a property-based tax might be to their detriment. Many parts of Europe and the United States run local income tax systems perfectly effectively. Given that two thirds of pensioners pay no main income tax, they would be the principal beneficiaries of such a move.

Rob Marris: I am not saying that the hon. Gentleman is wrong, but what is the provenance of his statistic? The Library tells me, using the Department for Work and Pensions pensioner income series, that it estimates that 60 per cent. of single pensioners have gross weekly incomes of more than £150, and that 60 per cent. of pensioner couples have gross weekly incomes of more than £250. I would expect that to mean that at least those 60 per cent. of pensioners would be paying income tax. That is a different figure from the one that the hon. Gentleman is giving.

Mr. Webb: The hon. Gentleman needs to bear in mind that not all sources of income included in his gross weekly income figures are taxable. It has been understood for many years that roughly one third of pensioners pay tax.

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The hon. Member for Sutton Coldfield (Mr. Mitchell) raised the important issue of care home closures specifically in Birmingham, and drew attention to the pensions crisis, a crisis that the hon. Member for Wolverhampton, South-West believes does not exist. Tell that to those who are in company schemes that have recently been wound up with inadequate funds. Tell that to people in their 40s and 50s who now fear that they do not have a secure retirement ahead of them.

The hon. Member for Eastbourne (Mr. Waterson), who now speaks for the Conservatives on older people's issues—I congratulate him on assuming that role—quite properly raised the issue of pension scheme closures, and highlighted the missing 1 million pensioners who, on the Government's figures, will not claim their entitlement to pension credit. He also criticised the Government for assuming that pensioners can get 10 per cent. income on their investments as part of the pension credit rules. That is clearly absurd. He glossed over the fact that in 1988 the Conservatives introduced similar rules that assumed that pensioners could get not 10 per cent. income on their savings but 20 per cent. The House and the electorate would do well not merely to look at the Government's performance but to remind themselves of the Conservatives' record of doing precisely nothing when they had the chance to do something.

The hon. Member for Wigan (Mr. Turner) quite properly drew attention to his family circumstances, and said that his own experiences of the Pension Service had been positive. I welcome that. However, I intervened to highlight the fact that his elderly mother had found it preferable to ask her son to deal with the authorities. Surely, a system that worked well to maintain the security and dignity of pensioners would guarantee that all pensioners could deal with matters themselves without needing the assistance of family members.

Mr. Neil Turner: I also referred to the importance of access to the Pension Service; employees of the service can go to people's homes to help them fill out the forms. The Pension Service is a hugely important step forward in making sure that ordinary pensioners get the services that they deserve.

Mr. Webb: I am sure that everyone in the House would like the Pension Service to succeed and provide a higher standard of service than that which is currently provided. However, its employees would not have to make home visits to deal with applications for means-tested benefits if people got a decent pension in the first place—that would be a better way of operating the system.

The hon. Member for Caernarfon (Hywel Williams) expressed concern about the centralisation of the Pension Service in Wales, and drew the attention of the House to the case of a constituent who had had her pension stopped because she had been told that she was dead. It is understandable that those who write the computer programmes do not normally allow them to reverse such transitions, but it illustrates a problem. When the IT systems of a Government Department are as ropey as those of the Department for Work and Pensions, such things will happen. We are concerned that when the pension credit is introduced next month many pensioners will have experiences similar to that constituent.

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The Minister began with a social policy analysis of the issues affecting older people, which we all enjoyed and took us back to his days as an academic. I was intrigued that he attacked Sarah Teather, our excellent colleague who is fighting the Brent, East by-election and who we hope, next week, will be an even more excellent addition to the House of Commons, for encouraging people to claim the pension credit. A few moments before, he had exhorted us all to encourage people to claim the credit. Am I missing something? One minute, the Minister says that he hopes everybody will encourage people to claim the pension credit, but when the Liberal Democrat candidate for Brent, East does so, that is apparently outrageous behaviour.

Mr. Eric Martlew (Carlisle): Will the hon. Gentleman give way?

Mr. Webb: If the hon. Gentleman had been here throughout, I would do so.

Malcolm Wicks: Given what the hon. Gentleman has just said, will the Lib Dems scrap the pension credit, yes or no?

Mr. Webb: No. We have made it clear that in government we would spend that £2 billion on the pension for the over-75s. That proposal was in an amendment that we tabled with the Conservatives to the Bill that introduced the pension credit. Once the credit is introduced, we will not scrap it. As the next party of government we will replace the dependence on means-testing with greater dependence on the universal state pension, particularly for older pensioners. In other words, as the economy grows and Governments have to decide whether to put money into means-tested benefits or a universal state pension, we will opt for the pensions route. That is the difference between the Liberal Democrats and the Government.

I suggested that the Minister has a history. He used to be a free thinker. Indeed, some people have unkindly suggested that the delay in his attaining ministerial office—his appointment was long overdue, I hasten to add—was partly attributable to the fact that he had a tendency to free-think rather too much.

I happen to have with me a copy of an article by the Minister that appeared in the New Statesman a year after the 1997 general election, entitled "Back to Beveridge's Basics." [Interruption.] It was a very good article and I commend it to the House. I am not sure whether I have the authority to place a copy in the Library, but I would like to do so. In the article, he asked himself this very important rhetorical question:

He went on to write:

That is the dreadful thing to which they would be subject, and they would be "marginalised and stigmatised." The article goes on to state:

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Those are the Minister's words and perhaps that is his agenda—I do not know. I sometimes ask myself what happened to that idealist of a few years ago. Perhaps the House should reflect on his concluding comment:

How right he was.

To coin a new Labour phrase, I always believed that means-testing should be for the few and not the many, but what sort of policy do we have? It is one in which the majority of pensioners will be allowed to retire into poverty only for some of them to be rescued by a means test. Is that really a vision for 40 years down the line? Should it not be the Government's goal to ensure that the vast majority of pensioners reach pension age with decent pension entitlements in their own right, so that it is the few who have slipped through the net who need lifting out of poverty, not the many? How can a Government have so little ambition for Britain's older people that they allow this situation to persist?

The Minister did not refer to the council tax at all. I wonder why he did not do so and why he did not accept that, year after year, the council tax, which was created by the Conservatives and has been built on by the Labour Government, is becoming more of a burden, especially for Britain's older people. Those are the people who have modest incomes beyond the reach of the benefits system. They have worked, saved and budgeted hard and expect to have a particular standard of living, but find that, through inadequate central Government funding, the council tax is an increasing share of their income and more of a burden. Who is responsible? Year in, year out, central Government builds in an assumption that revenues from the council tax will rise far faster than inflation. Year after year, Governments and local authorities of all political parties and none ratcheted up the council tax, and what do the Government do about it? They have done nothing to address the burden of the council tax on Britain's older people.

My hon. Friend the Member for Cheadle raised the important issue of post office closures. The Minister is to some extent responsible for that policy. He spoke about giving pensioners choice. He even said that about 60 per cent. of newly retired pensioners opt for payment into a bank account. That is fine, as it is their choice. However, 40 per cent. want an order book. Faced with a choice between payment into a bank account and an order book, they want the latter, but the Government are going to take that choice away from them. I am most concerned not about newly retired pensioners, but about the elderly and infirm pensioners to whom my hon. Friend the Member for Cheadle referred, who can just about make it to the local post office and enjoy the social contact, value the order book and have opted to have the book by not choosing payment to a bank account. Why do the Government not respect that choice? They are guilty of a lack of respect of older people.

We make no apology for the fact that our motion is wide ranging. Older people quite properly have a sense that Britain is an unfair place for them. They have worked and saved hard. They were told that the welfare

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state would be there from the cradle to the grave, not from the cradle to when they really needed it most, when the carpet would be pulled away from under them. That is what the Government are guilty of.

We have heard no response to the care homes crisis, the pensions crisis, the closure of post offices or the burden of the council tax. The Government's attitude has been complacent; I hope that the Minister will do rather better.

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