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David Taylor (North-West Leicestershire) (Lab/Co-op): If my hon. Friend cares to walk the road between Havant and Damascus, he will find, among the discarded McDonalds wrappers, many abandoned policies that the Tories were happy to implement during their last period in office.
Mr. Cunningham: It seems to me that we entered the era of Pol Pot politics in 1997 so far as the Tory party was concerned: that was year zero, and every misdemeanour was laid at our door, but history shows that the Tories are very good at blaming others for their own shortcomings.
I see that the hon. Member for Eastbourne (Mr. Waterson) is dying to intervene.
Mr. Nigel Waterson (Eastbourne) (Con): May I lure the hon. Gentleman away from Cambodia for a moment? His main complaint seems to be that restoring the link with earnings is our policy. If it became his party's policy tomorrow, would he be happy about that?
Mr. Cunningham: Of course I would be happy about it, but I would see it as only a short-term measure. The one thing that cannot be avoided by Government or Opposition, although the Opposition tried to avoid it when they were in power, is the fact that people are entitled to a decent pension. Until that is dealt with, there will always be this to-ing and fro-ing across the Chamber.
We now have to tackle the new phenomenon of final salary pension schemes and the moving of goalposts. My right hon. Friend's proposals are a step forward, but something that has not been addressed so far—certainly not when the Conservatives were in Government—is the
issue of pension holidays. Companies would take pension holidays, and after four or five years there would suddenly be a problem with pension funds. I find that strange; there should have been some form of compulsion. Another thing that went on when the Conservatives were in power was the use of pension funds to finance other businesses. Conservative Members speak of people complaining in their surgeries about pensions, but I am sure that Labour Members' surgeries have been visited by people complaining about one of those two practices. Some of the companies involved eventually folded.As I have said, the Government's proposals are a step in the right direction and we should not be negative about them but should view them as something on which to build. We should take a leaf out of the Conservative Government's book, and do things gradually. They cannot be done overnight.
I have tried two or three times to get my Pensioner Trustees and Final Payments Bill through the House, without success. Nevertheless, although the law says that trustees must represent everyone, groups of retired people who are members of pension schemes feel that they have no voice, and are left out when decisions are made. Over the last 12 months, I have had a number of meetings with retired Rolls-Royce employees. As many as 300 or 400 people have turned up from all over the west midlands, which gives some idea of the strength of feeling—a strength of feeling that is beginning to gain momentum among the former employees, and doubtless among those of other companies.
On numerous occasions, along with my hon. Friend the Member for Coventry, North-West (Mr. Robinson), I have spoken to the Minister about the scandal of former Massey Ferguson employees who were faced with a "take it or leave it" redundancy proposal, and who, more importantly, never received from their pension scheme what they had put into it. The last I heard was that the issue had gone to the High Court, and the Secretary of State was saying that we would have to wait and see what decisions it made. Whatever the decisions, however, and even if the issue is being addressed, there remains a great deal of bad feeling among Massey Ferguson's former workers—certainly in Coventry—about what happened to them.
My hon. Friend the Member for Cardiff, West (Kevin Brennan) has, from time to time, mentioned steelworkers. He will find that the employees of Massey Ferguson were in exactly the same position. I certainly had a lot of sympathy with him when he raised those issues, because I—along with my hon. Friend the Member for Coventry, North-West—was among those making representations to the Secretary of State. It is about time that my hon. Friend and I had another meeting with the Secretary of State to talk about the future of Massey Ferguson workers. [Interruption.] My right hon. Friend is grinning, but as he knows, we shall certainly return to that issue.
In some ways, in a debate such as this, pension schemes are only part of the problem. In addition to the need for an adequate pension is the question of care and how to fund it. That is all part of the big equation. From time to time, social service departments are in conflict with the private sector over the cost of providing care. Thanks to a measure introduced by the previous Conservative Government, people had to find their own
means and methods of paying for care. The cost of care varies thorough the country, which is part of the pensioners' lot. That is why, in trying to understand the plight of pensioners, we must take a number of factors into consideration. For example, it is not too long since we had the problem of bed blocking. On investigating that problem, we discovered that we did not have sufficient social workers to ensure that people returned to the accommodation and care that they needed on leaving hospital.The issue of pensions is complex, therefore, and we cannot talk about occupational pensions in the abstract; we must consider the plight of pensioners in its entirety. Of course, in some parts of the country, such as the west midlands, pensioners get free travel, but in others they pay a 50 per cent. fare. To a certain extent, we must congratulate the Government on introducing that fare. It constitutes progress, but pensioners nevertheless feel strongly about free travel, which allows them to see friends in different parts of the country with whom, perhaps, they grew up, but who moved away. In discussing these issues, we must therefore start to think about the general needs of pensioners. In fairness, however, it must be said that this Government have done a lot for pensioners, particularly those on the poverty line.
Nobody will deny that the pension protection fund is bound to be welcomed. It has been a long time coming but it is finally here; let us hope that it goes from strength to strength. The introduction of a regulator should have happened years ago, and it will be very interesting to discover how the regulator will regulate the various pension schemes and occupational schemes. Many people will also welcome the simplification of paperwork. Pensioners often have to fill in reams of paperwork that they do not really understand. Such simplification is really a job for the regulator. Pensioners are often aggravated by the amount of form filling required when they apply to local authorities for benefits or rate reductions. We have raised this issue with Treasury Ministers from time to time to see whether such forms can be simplified.
It will be interesting to discover how the state pension lump sum develops. I should point out to the Secretary of State that we will certainly monitor that proposal, on which there is not too much detail. Nevertheless, it, too, is a step in the right direction. There is also the vexed question of informed choice in promoting pensions. The regulator should probably consider that issue, and here we come back to the mis-selling of pensions and the hard selling that occurred in the days of Conservative Government. I would certainly welcome the provision of such information.
The key measures that the Government are trying to introduce include safeguarding accruable pension rates during periods of statutory paternity and adoptive leave. If we think about it, that issue has never really been addressed before, and there will be a particular impact on women. The lack of pensions, particularly occupational pensions, for women, often forces them on to benefits. If the fact that they have to rear a family was taken into consideration, they might be in a far different situation.
The House would certainly want to monitor the capping limit in relation to price indexation. It is one thing to link a pension to the price index, and quite another to link it to average earnings. There is a difference. Overall, however, we talk about capping issues, and Secretaries of State under previous Governments always had the right to decide whether to link pensions to prices or wages and to do it through regulation; the discretion has always been there. It is up to the Secretary of State, in discussion with the Chancellor, to have a good look at that.
The trade unions and the TUC have given the proposals a cautious welcome on the basis that they are a step in the right direction. For many years, many people outside the House—it certainly continued when we came into the House—raised those issues because we all knew that we would reach pensionable age ourselves at some time in the future. That sounds a bit mercenary, but, seriously, anyone who has watched the plight of pensioners over the years and done case work or attended surgeries knows how easy it is to come across heartbreaking stories. They often happen because people do not know what benefits they are entitled to. People need to be experts to work out what benefits are available and who should get them.
Pensions are often increased in line with inflation only to be taken away by increases in council tax. That is a Catch-22 dilemma that many pensioners face, but I notice that the Government are going to take the necessary action to deal with the situation. There are a number of ways of doing it. They can cap councils and stop them increasing the tax that way, but that is a short-term measure. We know what happened when the previous Government capped councils. Programmes and revenues were capped, which meant school buildings and council houses could not be repaired, so it is only a short-term measure.
The real measure that the Government should take is to ensure that councils are properly funded. In Coventry, for example, when the Opposition were in Government, we lost something like £600 million in grant from the central Government as a result of the change from the old rates to the poll tax. That is a lot of money in Coventry's circumstances. We often find that councils are asked by successive Governments to introduce measures without the necessary funding. All in all, I note that the Secretary of State is saying that his measures will go a long way to ensure that the burden does not fall on the taxpayer. Again, that remains to be seen.
I finish by saying that I welcome the Government's proposals, and I hope that they will be introduced in the form of legislation. However, I still believe that the Secretary of State must reflect more on the question of pension holidays and the ability of companies to use pension fund money for other purposes. Mention was made earlier of the Pensions Act 1995, introduced under the Conservative Government; that was a very weak Act that did not address the fundamentals that I have raised in the House today.
I hope that the Secretary of State will take some of my points into consideration, and I remind him that I hope to have a further meeting with him, together with my hon. Friend the Member for Coventry, North-West, about the plight of the ex-employees of Massey Ferguson.
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