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Huw Irranca-Davies: I have visited my local pension centre and the telephonists who deal with the pension credit, and I was assured that, on average, applications are dealt with in less than nine minutes. People in the remoter parts of my constituency have been visited in their homes by people from the local Pension Service to help them to complete the forms. It seems that we are bending over backwards to make things as easy as possible. I am sure that my right hon. Friend would agree that the worst disservice that the House could do would be to put obstacles in people's way and dissuade anyone from applying for what is rightfully theirs.
Mr. Smith: I wholeheartedly agree with my hon. Friend, especially in suggesting that praise is due to his constituency's local Pension Service, which is clearly doing such a first-rate job.
Kevin Brennan (Cardiff, West): Was my right hon. Friend as surprised as I was that the hon. Member for Havant (Mr. Willetts) did not tell us about another of his hare-brained ideas for pensioners: that we need people to breed more to reduce the burden on the state? I know that the hon. Gentleman has been seduced by
something that he previously spurned, but in thinking that he can affect the birth rate, is he not exaggerating his own allure?
Mr. Smith: I shall not comment on that, except to say that I read one comment on the hon. Gentleman's unfortunate remarks in which someone said that nothing would be more likely to put her off having children than the idea that those on the Tory Front Bench wanted her to.
Ann McKechin (Glasgow, Maryhill): Does my right hon. Friend agree that the biggest pension crisis that we have inherited is a lack of proper pension provision for many of the oldest women living in our society today? The Opposition have offered nothing to assist those women. In fact, their policies will specifically work against them.
Mr. Smith: Yes, indeed. I certainly accept that the pension credit already has the potential to help much more effectively the older women on low incomes to whom my hon. Friend refers, but we must do even more, through the Pension Service, to ensure that they get their entitlement. As I said earlier, I believe that the fact that the pension credit comes through the Pension Service, rather than the social security system, helps to tackle the stigma. I invite any hon. Member to go out with those in the local Pension Service and to see the meetings that they are holding in sheltered housing schemes and lunch clubs and how they are sitting down with pensioners and helping them through this. That is the way in which we can ultimately ensure maximum take-up. I hope that I have the support of the whole House when I say that we want everyone to get their entitlement.
I will draw my remarks to a close now, but I shall sum them up by saying that, whereas the Tory policy is manifestly unfair, unaffordable and unsustainable, the Government will continue our drive to tackle pensioner poverty, while giving more help to all pensioners. With pension credit, we both put the poorest first and reward saving. Looking more widely, we will simplify the occupational pensions landscape, removing millions of pounds of unnecessary cost and making it easier for firms to get on and run good schemes.
We will offer the chance for flexible retirement, enabling people to combine part-time working with drawing a pension from the same employer—something that could be very popular—giving a better deal when people choose to draw their state pension later and tackling the age discrimination that is still a barrier to so many. We will also drive forward with our measures to bolster occupational pensions security, working in partnership with employers and trade unions.
As I have said, greater longevity brings challenges to both state and private pension provision, but we should never forget that longer lifespans are good news and that, to make the most of them, older people need security in retirement. They must be enabled to lead full and fulfilling lives. The measures that Labour has taken—and the further steps to come—will help them do just that.
1.47 pm
Mr. Steve Webb (Northavon): Hearing the Conservative party's announcements on pensions in the past few weeks has felt like stepping into a parallel universe. The Government are pledged to extend mass means-testing, but the old Labour Member for Havant (Mr. Willetts) demands that the link with earnings be restored. We might have assumed that a policy that became public only about 10 days ago would have formed the centrepiece of today's debate, so it is rather interesting to read the motion that the Conservative party has tabled. In rather a long motion about state pension reform, there is no mention of restoring the earnings link. If that is that party's flagship new policy, why is it not in the motion? It is possible that the Conservatives are not absolutely sure whether it is their party's policy, or whether it will survive any hypothetical change in leadership, for example.
The Conservatives might, if they had the opportunity, restore the earnings link for perhaps four years, although the sums do not add up, but they will then break it again. As the Conservative party spent 18 years undermining the real value of state pensions, can pensioners believe that it will restore the link and keep it? The hon. Gentleman has already stated in the past that the earnings link is unsustainable in the long term, and the costings that the Conservatives have put together to show how it will be afforded simply do not stack up.
During the hon. Gentleman's speech, I showed the House a press release from Conservative central office. That press release is not available on the Conservatives' website unless people have a password, but the password is available only to the press, because the Conservatives do not want the public to know what they are claiming about their policy because it is not true. The Conservative news press release is headed "Tories to end the pensioners' means test".
Kevin Brennan: What is the password?
Mr. Webb: I think that it is IDS, or something like that, but I cannot remember.
The Conservative motion says nothing about ending the means test; it suggests reducing it. One of the problems with that policy is that it is relatively limited—£7 over four years does not take people a terribly long way—yet that has been elided into getting rid of the means test. The means test is £25 above the pension, not £7, so despite the policy being described as ending the means test, that will be nowhere near by the end of one Parliament. The first problem with the policy is therefore that its potential benefits are absurdly exaggerated—spin indeed.
It gets worse. Other things are not included in the motion. The Conservative party conference also featured an announcement that the Conservatives want to scrap contracting out. That would give the hon. Member for Havant £11 billion burning a hole in his back pocket. He does not know what to do with it—he knows that he wants to scrap contracting out, which, dare I suggest it, is an £11 billion tax hike, and even I, in my wildest tax-and-spend moments would not go quite that far—so he is going to consult the industry. I have a suggestion for him. His motion suggests that the
Chancellor of the Exchequer is responsible for a £5 billion hole in pension funds. If he is going to have £11 billion burning a hole in his back pocket, why does he not pledge to use half of that to restore the dividend tax credit? That would have been a reasonable idea, but he did not propose it. Even when he has £11 billion to spend, spending it on restoring what is complained about in the motion is low on his list of priorities. His are crocodile tears.The critical point on which the Tory policy is dishonest is that it conceals the fact that the poorest pensioners will do worse under it, because we have seen the minimum income guarantee linked to earnings. The Tories want to pay for some of their policies through those recipients of the minimum income guarantee and the pension credit getting smaller rises in future years, which is part of how they make the sums add up. The hon. Member for Havant says that the people who are not claiming it will do well out of a good state pension, which is right. He would accept, however—I think that he has used these numbers—that in a year or two roughly 3 million pensioner households will get the pension credit and 1 million will miss out. Of those 4 million poorest pensioner households in the land, therefore, three quarters will do worse under his policy than under maintaining the link with earnings of the means test.
Mr. Willetts: The hon. Gentleman may not have been listening when I asked the Secretary of State what his policy was. I did so to establish whether the Government intended that the pension credit should be uprated by earnings not prices. In our careful costings, we have used the cautious assumption that the pension credit will rise in line with prices. If and when we hear any alternative policy proposed by the Government, we can decide how we should reply. He should work on the basis of what we have just heard from the Secretary of State, not on fantasies that the rise will be in line with earnings.
Mr. Webb: We tend to judge political parties by their record in office. Whereas in their 18 years the Conservatives broke the link—so there is no reason to believe that they would restore it—we have the evidence that this Government have linked the means test to earnings and most of the projections produced by the Department for Work and Pensions are on that basis. If the Government go ahead with linking the means test to earnings, will the hon. Gentleman clarify what will be the Conservative policy in relation to poorer pensioners?
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