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3.34 pm
John Robertson (Glasgow, Anniesland): I was interested in the contribution from the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) or, as he is known in Scotland, the Tory one. I feel that he is a friend, but a misguided one. I have been surprised by the crocodile tears of the Conservatives. Those tears are a ruse: they do not care one jot about means-testing and that has been shown over many years. Nor do they care one jot about the poorest in society. It is political point scoring at its worst and it is done without any thought of or consideration for the people who they are using to make those points.
I represent Glasgow, Anniesland, and we have some 13,500 pensioner households on a conservative—with a small c—estimate, or about 18,000 over-60s. The pension credit appears to be working well. The complaints that we have heard today about the telephone lines are not matched in the Anniesland area. The only problems that we have relate to paperwork and letters received. I have talked to the pension people and, apparently, the letters are written by a computer. They are formulated according to the answers given on the forms. However, that is not the way to do it when dealing with real people, especially the elderly. I ask the Minister to look at the problem—I have mentioned it to him before—so that people receive letters that they can understand. More importantly, MPs should be able to understand them—it has taken me a few readings to work some of them out. I have some knowledge of what has happened with the pension credit, however, and I pay tribute to the people manning the telephone lines for the good work that they are doing.
We should remember what the Government have done and people should realise what could be lost if the Conservatives were to come to power. My pensioner households receive £200 every winter as their winter fuel allowance, not the measly £5 that was mentioned earlier by my hon. Friend the Member for Northampton, North (Ms Keeble), who talked about running all over her constituency trying to hand out forms. The £200 is given to every pensioner household every year and I am glad to say that after my prompting and prodding the Chancellor put it up to that amount. I take personal credit for that.
Mr. Peter Duncan: Are any of the pensioner households that the hon. Gentleman mentions paying more council tax? Is that increase greater than the £200 that he mentions?
John Robertson: I thank the hon. Gentleman for that intervention. The sad fact is that many pensioner households in Anniesland do not pay council tax, because they are so far down the economic ladder. However, for those who do pay it, the council in Glasgow has kept it fairly level over the past four or five years and it has actually gone down in real terms. I thank him for that question because I am sure that it has added a couple more votes to my majority.
The Government have not and should not apologise for means-testing. It was not introduced by this Government, but it is necessary if we are to find out who are the poorest in society. The number of people we have taken care of holds up against any Government in the past and, I hazard a guess, in the future as well. The Government should be commended for their work on pensions. It is important that we look after those who need to be looked after the most. Anybody who suggests otherwise is talking through a hole in their head.
Rob Marris: Other than their mouth.
John Robertson: Exactly. The across-the-board increases mentioned by the Opposition sound very nice, but—as was clear from their speeches—they are trying to help only the top 10 per cent. The Opposition do not care about 60 per cent. of the population. Why not? Because that 60 per cent. do not vote for them. If that 60 per cent. voted for them, they would start to care about them. As it is, the Conservatives are happy to throw that 60 per cent. in a dustbin.
I am aware of the time and I shall be interested to hear what the Opposition spokesman has to say, but I have one further comment about the 18 years of misrule during which the Tories did little for pensioners. We have known for decades that there is a pension problem. It is not confined to the UK, but affects the rest of the world, especially those countries in the western hemisphere that do rather well in financial terms.
We do not need to take lessons about pensions from the Opposition. The Conservative Government created 4 million unemployed. Where were the pensions of the long-term unemployed? I congratulate the Government on what they have done, and want them to do an awful lot more. I wanted to say a word about final-salary pensions, but that will have to wait for another day.
3.40 pm
Mr. Oliver Heald (North-East Hertfordshire): We have had an excellent debate this afternoon. The hon. Member for Glasgow, Anniesland (John Robertson) got a little overheated, but even he made some excellent points about the need for everyone involved to take a serious look at this issue. Early in his remarks, he made the point that there must be means-testing if we are to find out who are the poorest pensioners. That contrasted with the comment made just before by the hon. Member for Caernarfon (Hywel Williams), who said that it is the poorest pensioners who will not and do not claim under the means test.
A range of excellent speeches were made by Back-Bench Members. My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) made a distinguished contribution, to which I shall return. My hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Duncan) did not deserve the somewhat uncharitable comments from the hon. Member for Glasgow, Anniesland, as he made an excellent speech too. Hon. Members of all parties recognise, as the hon. Member for Birmingham, Selly Oak (Lynne Jones) noted, that reform is needed. We must improve the situation with the state pension scheme in particular if we are to tackle the problems that the country faces.
Before this Labour Government came to power, Labour Members were deeply concerned about means-testing. I remember well a document published in 1996 entitled "Getting Welfare to Work", in which the Labour party made the point that means-tested benefits at that time were claimed by 3.5 million people over state retirement age. It complained that 600,000 were not receiving the income support to which they were entitled, and said that they were among the poorest people in Britain. In fact, the present Chancellor of the Exchequer called at that time for an end to the means test, and spoke about the massive increase in inequality among pensioners. He made the point that the poorest pensioners were those who did not claim.
In this debate, we have heard the comments made by the hon. Members for Hamilton, South (Mr. Tynan) and for Northampton, North (Ms Keeble), by my right hon. Friend the Member for Hitchin and Harpenden and by my hon. Friend the Member for Galloway and Upper Nithsdale. They all noted that we parliamentarians will have to work hard to encourage people to take up the benefits to which they are entitled, and of course they are right.
When I was a junior Minister, we used to have take-up campaigns with Age Concern. We used to push hard for take-up. The current Government have made a real effort in that regard, but it has not worked. That is what has led the Opposition to review our policies.
Labour made bold statements in opposition, but the income of the bottom fifth of pensioners, as a percentage of national average earnings, is now lower than in 1979. Stakeholder pensions were supposed to be the solution for those earning between £9,000 and £20,000 a year. The information company Datamonitor has said that that policy was simply "cannibalising" existing retirement provision, and noted that almost everyone joining the schemes was simply changing within the system, rather than being a new applicant. Ninety per cent. of the company schemes set up for stakeholder
pensions have no money in them. Pension credits have been introduced, and they have spread means-testing to more than 50 per cent. of the population.The Government's ambition means that in 2006—that is, in three years' time—1.4 million of the poorest pensioners will still be missing out on the benefits to which they are entitled. And the Government say that they are targeting help on the poorest pensioners. It is nonsense.
The modelling assumes that every poor pensioner will claim the benefits to which he is entitled—the Secretary of State is always saying that, but he is defying the experience of Ministers and individuals who have been concerned about the problem for the past 10 years. We have seen what happens; it does not work. One has only to read the comments of people such as Gordon Lishman, who heads Age Concern, to realise that. He says that there is further evidence that money is not getting to the poorest older people and that hundreds of thousands of older people who are eligible for the minimum income guarantee do not claim because they are put off by the stigma or because they do not understand their pension rights. He has explained all the difficulties.
It is not enough to suggest, as some hon. Members have, that if one calls the means test something else, one gets rid of that stigma. That is not what is happening. Let us look at the latest figures, six months into the pension credit. Of course, there are the 1.8 million households that were transferred automatically to the new system, but only 100,000 further households have been processed in six months, which is fewer than 200,000 individuals. The case load is 3.1 million. How long will those people have to wait for the money that the Government have already committed themselves to? They say that those people are entitled to the money, but it will take years even to reach the point where 1.5 million people get it. It is a failed system.
The hon. Member for Birmingham, Selly Oak has been involved in these issues for years. She and others who spoke in the debate, such as my right hon. Friend the Member for Hitchin and Harpenden and, of course, my hon. Friend the Member for Havant (Mr. Willetts) in his opening speech, pointed out that there is a massive disincentive to save if we have means-tested benefits so high up the income scale. The approach is misplaced. Even the right hon. Member for Birkenhead (Mr. Field) pointed out that the current arrangement is damaging retirement income because it is such a disincentive to save. Under this Government the savings ratio is half what it was under the Conservatives.
What has happened to funded pensions? My right hon. Friend the Member for Hitchin and Harpenden described them as being in "meltdown" and other hon. Members have described the situation as "disastrous". Why did that happen? There was the £5 billion a year pensions tax—the ending of dividend tax credits—and the erosion of the basic protection provided by the minimum funding requirement, which the Government twice deliberately eroded. They slashed it. There were the contracted out rebates, which have not kept pace with the actuarial value of the rights for which they are supposed to pay—a further £1.5 billion pension tax imposed by this Government. Then, we are supposed to
be surprised—they say that it is due to the economic conditions—when only 19 per cent. of final salary schemes are now open to new members. What will that do to the future livelihoods of our people? For the first time in generations, workers will expect a worse income in retirement than their predecessors.Twenty-six organisations have called for state pension reform. The Conservative party has looked into that and come up with proposals that are costed, hold water and will improve the situation. People throughout the country are despairing about the fact that this Government will not even consider reform—even members of the Labour party in Wales are despairing of that fact, as the hon. Member for Caernarfon said.
All that the Government have come up with are proposals designed to limit the damage that they have done: proposals for protection schemes, for example. One can cautiously welcome such proposals, but what about creating incentives to save? As my right hon. Friend and most other hon. Members who have spoken in the debate have acknowledged, savings are what will give people the pensions that they need. Until we have a system that gives pension schemes, employers and individuals some scrap of incentive to save, we will not solve the problem.
I have a lot of sympathy with the point made by the hon. Member for Northavon (Mr. Webb) about the winding-up victims. I have met them and marched with them. We have held debates in the House about them. We supported the Second Reading of the Bill promoted by the right hon. Member for Birkenhead, but blocked by the Government time after time after time.
The Government promised so much. They promised less means-testing, but we got more; more equality, but we got less; better take-up, but we got worse take-up. They promised a move towards more saving and funded provision compared with state benefits, but we got less. Some people say that less is more and perhaps in the language of new Labour—the language of spin—that is the case, but the truth is that this is the failed record of a failed Government. They live in such an unreal world that they believe that failure is the new success. "New Labour—best at its boldest." Bold as brass—brass neck!
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