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5.39 pm

Mr. David Willetts (Havant) (Con): The Opposition believe in productivity and my hon. Friend the Member for Huntingdon (Mr. Djanogly) has just said in four minutes as much as most contributors to the debate said in 10 minutes. I congratulate him. I declare my interests, which appear in the Register.

I begin by considering the historical context of the Queen's Speech. The Government have been in office for six and a half years. In that period, they have passed 254 Acts of Parliament, which amount to 16,050 pages. The Government began with 600 targets, but they needed improvement and development so we now have a total of 890. There has been a 50 per cent. increase in spending on public services.

So if Utopia were achieved by legislation, targets and public spending we ought to be in it today: but we are not, and the reason for the growing discontent that is expressed on the Conservative Benches is that it is manifest that we are not. Several of my right hon. and hon. Friends, including my right hon. Friends the

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Members for North-West Cambridgeshire (Sir Brian Mawhinney) and for Charnwood (Mr. Dorrell) and my hon. Friend the Member for Tunbridge Wells (Mr. Norman), drew the House's attention to the problem that we are not producing enough, especially in the public sector where we need £4 of input for £1 of product. That is the kernel of the issue.

The problem was put very well by the Public Administration Committee, which investigated targets. Its report stated:

That will be the Government's epitaph; the discovery that targets and results are different things.

Perhaps Ministers realise that there is a problem. That may be why we are having a big conversation—to find out what ought to be done—perhaps as a result of some loss of direction, some loss of confidence or some loss of momentum. For example, on the constitution, when the Prime Minister was in opposition he said that he supported Labour's commitment to replacing the House of Lords with an elected second Chamber. Yet now the big conversation consultation document asks what should be the role and functions of a second Chamber. It asks how today's House of Lords should be constituted.

Six years ago, the Government knew how they were doing on transport. Their first annual report stated, "Done" in relation to the development of an integrated transport policy. However, in the big conversation, they say that more needs to be done and that they are asking the tough questions about how to fund a world-class transport infrastructure, how best to integrate transport and whether they have got their priorities right.

The Government are losing their way. They are losing momentum and they have lost their purpose. The tragedy is that there ought to be a conversation and we know what it ought to be about. The big conversation ought to be about how we reform our public services. That is the real big conversation and I believe that it goes on among Ministers. We know what they say. We know what the Prime Minister has said. If Tony were free to put his entry on the website, this is what he would say:

I draw the Chancellor's attention to this point—

Perhaps the Chancellor would not agree.

Someone close to the Chancellor also made a contribution to the big conversation. This is what Ed would like to put on the website,

That is what Ed would put in the big conversation.

Mr. Eric Forth (Bromley and Chislehurst) (Con): That is Balls.

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Mr. Willetts: Perhaps, but this is how Tony chips in. He says:

That is the Prime Minister's contribution to the big conversation. The Chancellor comes in and warns:

That is what the Chancellor thinks. In desperation, the Prime Minister comes back with his final throw.

What are the No. 10 spin doctors saying, meanwhile? A senior Government official said:

That would be a big conversation, and it is the one we should be having. It is the one in which Opposition Members are taking part. It is a great pity that, when the debate gets to the heart of the nature of Britain's public services, all we hear from the Government are muffled thuds and sounds emerging from Nos. 10 and 11 Downing street. That is what has gone wrong.

Pensions provide a particular example of where the Government have failed in target setting and control. The Government set a clear target, and the Opposition—in the bipartisan spirit in which we believe—said that we were happy to endorse it. The Government target was to shift the balance of pension funding: instead of pensioners getting 60 per cent. of their income from benefits and 40 per cent. from funded savings, the proportions were to be reversed. What has happened? In practice, the trend has gone in the opposite direction. When the Government came to office, pensioners got 51 per cent. of their income in benefits, and 42 per cent. in funded pension savings. Now they get 61 per cent. in benefits, and 39 per cent. in funded pension savings. The country is heading in the wrong direction.

I remind the Chancellor of his famous promise to the Labour party conference:

We would love to hear him endorse those sentiments again, at the Dispatch Box. Instead, what we have is more means testing. Help the Aged believes that the pension credit is "totally over-engineered" and that it should be much simpler and fairer. It also said that it would be

That would be the right direction—reversing the spread of means testing and rewarding people for building up their funded pension savings. However, the Government are taking us in the wrong direction, which is the opposite of the one set out by the Chancellor in opposition.

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The Government are to introduce legislation to set up a pension protection fund. However, we know what pensions need protection from—the Chancellor who took £5 billion a year away from them. The Government say that they are bringing in the pension protection scheme to restore confidence in pensions. They certainly need to restore that confidence. A polling question asked:

The responses showed that trust scored 16 per cent., while distrust scored 81 per cent.—a net score of minus 66 per cent. That shows that the Government have a problem. I hope that their legislation will do something about that.

The trouble is that we are not clear about how the protection scheme will work, or whether it will offer any extra security, compared with existing pension schemes. It is not clear what will happen if the premiums are insufficient to bail out a large pension scheme. Of course, there is nothing in these measures for the people who have already lost their pension schemes—employees of companies such as Allied Steel and Wire. Nearly a year ago, on 17 January, I wrote to the Secretary of State promising that we would work on a cross-party basis to introduce straightforward, simple measures that would tackle the anomalies in the current rules on wind-ups, but our offer has been ignored. Those measures could be on the statute book by now. We do not need to wait any longer.

The problem with the Government's approach is that it is defensive. They are building a deeper ditch around a castle. They are not offering anybody any incentive for more funded saving. That is what we in the Conservative party believe in.

5.50 pm

The Secretary of State for Work and Pensions (Mr. Andrew Smith): At least until the last speech this was a good debate. We heard from 15 Back-Bench Members. I thank the right hon. Members for North-West Cambridgeshire (Sir Brian Mawhinney) and for Charnwood (Mr. Dorrell), the hon. Members for Banff and Buchan (Mr. Salmond), for Bournemouth, West (Mr. Butterfill), for Stone (Mr. Cash), for Tunbridge Wells (Mr. Norman), for Northavon (Mr. Webb) and for Huntingdon (Mr. Djanogly) for their contributions. Unlike the Conservative Front Bench, they at least were interested in debating the economy. I thank, too, my hon. Friends the Members for Ochil (Mr. O'Neill), for Coventry, North-West (Mr. Robinson), for Doncaster, North (Mr. Hughes) and for Kingswood (Mr. Berry), my right hon. Friends the Members for Llanelli (Denzil Davies) and for Coatbridge and Chryston (Mr. Clarke), and my hon. Friends the Members for Coventry, South (Mr. Cunningham) and for Ealing, Southall (Mr. Khabra) for their contributions.

The debate has ranged so widely that it is difficult to do justice in the nine remaining minutes to all the interesting arguments. I will pick out a number of points for response. First, I assure the hon. Member for Northavon, who made important points about the Child Support Agency, that a lump sum child support payment such as he described would be assigned to the time that it should have been paid and disregarded

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accordingly, so that in the example that he gave the full £520 would be disregarded retrospectively across the year.

The debate opened with the first speech of the right hon. Member for West Dorset (Mr. Letwin) as shadow Chancellor and his inaugural mauling at the hands of my right hon. Friend the Chancellor of the Exchequer. I congratulate the right hon. Gentleman on his appointment. He has the endearing characteristic of saying out loud what is in his mind, so we often get a more honest account for what passes for Conservative policy from him than we do from his colleagues. From a sedentary position a few moments ago, he committed the Conservative party to reintroducing the dividend tax credit at a cost of £5 billion—[Interruption.] He wants to resile from it now. In the limited time available I was not going to go into his record as a self-proclaimed inventor of the poll tax, an enthusiast for NHS vouchers and the proposer of £20 billion of cuts in public spending. From his speech this afternoon and that of the hon. Member for Havant (Mr. Willetts), it is clear that the Opposition have no coherent critique of this legislative programme, never mind any coherent alternative.

The Opposition spoke a lot about targets. They made it clear that they have a target to get public spending down to 35 per cent. of GDP with £80 billion of cuts, privatisation in the NHS and the abolition of the new deal. Where this Government are making tough choices for stability and progress, the Opposition Front Bench propose extreme and muddled policies that would damage schools, hospitals and universities, abolish the new deal, drive up unemployment and threaten Britain's hard-won economic stability.

The Opposition have not understood that our record on economic stability is the product of choices that we made and they opposed. They opposed the symmetrical inflation target and Bank of England independence. They rubbished tough fiscal rules and would abolish the new deal. Those tough choices and our investment in Britain's future have helped the Government to deliver the lowest unemployment rates for a generation as well as record numbers of people in jobs.

To pick up the point made by the hon. Member for Huntingdon, twice as many jobs have been created in the private sector as in the public sector, although the Government make no apology for the thousands of extra nurses, doctors and teachers that there now are. That is a sharp contrast with the period when the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) was responsible for employment policy, when unemployment rose by more than 1 million and 1,300 people were consigned to the dole queues every day.

My hon. Friend the Member for Ochil brought particular passion to the debate when he explained how our investment in the new deal has rescued lives and revived communities. By their plan to scrap that successful programme and by their response to the Queen's Speech, Opposition Members remind the country why, just as they could not be trusted in the past, they cannot now be trusted with Britain's future.

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My hon. Friend the Member for Coventry, North-West and a number of other hon. Members on both sides of the House welcomed our proposed legislation on pensions. I heard with interest the comments made by the right hon. Member for North-West Cambridgeshire and the detailed remarks made by the hon. Member for Bournemouth, West. I hope that their support for the principle of the pensions Bill will be shared by those on the Conservative Front Bench. The pensions Bill will strengthen partnership in pensions, set up a pension protection fund, make it easier for companies to run schemes, extend TUPE protection and give people a better deal when they choose to defer taking their state pensions.

Conservative Front Benchers might also reflect on the fact that, whereas our pensions Bill will extend pension security and retirement choice for the future, the Conservative party's proposals would scrap the state second pension, taking additional entitlements away from 20 million low earners, disabled people and carers—most of them women. A number of Conservative Members have spoken about mass means-testing. Let us be clear that what they really object to is the money—to date, £47 a week on average—that Labour is now getting to millions of pensioners through the pension credit, for the first time rewarding saving, not penalising it.

This week, the shadow Chancellor described the Conservative pensions policy as much misunderstood. Whose fault is that, I wonder? Could it be because the earnings link that the Conservatives propose has been described as a bogus promise, as

and as

Those are not my words, but those of the hon. Member for Havant, when others proposed the very policy that he now has to defend. As the Leader of the Opposition admitted, not only does that policy not help the poor, but whereas our plans are fiscally sustainable, their sums simply do not add up. Again, the right hon. Member for West Dorset, who is wildly gesticulating at the moment, let the cat out of the bag when he said:

to pay for the policy. He owes it to the country to tell us what those cuts would be.

In the limited time remaining, let me welcome the excellent speech by my hon. Friend the Member for Kingswood. I thank him for welcoming the draft Disability Discrimination Bill, and I pay tribute to all his years of campaigning and to all those in the disabled people's movement who have helped us to make such progress. The draft Bill will be subject to scrutiny, and there will be an opportunity to examine all the issues that he raised.

In conclusion, this is a legislative programme that faces the challenges of the future. Just as we have built economic stability by taking tough choices and sticking to them, so we will, with this programme, extend protection and chances in life for children, reform higher education, extend pension security and bring

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integrity to the asylum system. The measures advance progress, fairness and a strong economy, and I commend them to the House.

Question put, That the amendment be made:—

The House divided: Ayes 171, Noes 286.

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