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Kali Mountford: Which of the Conservative party's policies should give us some sense of security about its ability to handle pensions? Would it be the pensions holiday, the cutting of the state earnings-related pension scheme without telling anyone or the mis-selling of pensions? Which of those policies should give us confidence?
Mr. Willetts: I shall turn to our policies for tackling the pensions crisis. I am proud of those policies, and what is happening at the moment—the collapse of funded pensions and the spread of mass means-testing—shows that our policies are needed to get funded pensions going again in our country.
We have had post offices failing to pay benefits, new figures on the state of the pension deficit, and we have seen the Pensions Bill staggering through the House of Lords. There have been new amendments, and clauses tabled and withdrawn. At the latest count, 360
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Government amendments have been tabled in the Lords. We read that the Government are so desperate to get their Hunting Bill through that they are willing to contemplate abandoning the Pensions Bill in order to do so. I see the Minister shaking his head. If he can give a categorical assurance that the Government will not abandon the Pensions Bill in favour of their obsession with banning hunting, I would be very interested to hear it. [Interruption.] Does he wish to come to the Dispatch Box and give that assurance?
The Minister for Pensions (Malcolm Wicks): The Government and our supporters in the House are absolutely determined to ensure that the Pensions Bill receives Royal Assent. I hope that hon. Members on both sides of the House will ensure that that is done so that, among other things, the protection fund will be up and running in April next year.
Mr. Willetts: I guess that that was the Minister saying that he would not allow the Government's obsession with the Hunting Bill to get in his way. He is the Minister responsible for the Pensions Bill, and I should warn him that some of the briefing has affected him as well. On the BBC "News at Ten O'Clock" the night before last, the political editor said:
"A senior source told me tonight that the Pensions Bill is still in a shambolic and chaotic state."
That is what No. 10 is saying about the Minister's Bill. He had better watch out because at that rate, I do not think he will be the new Secretary of State.
Mr. Peter Pike (Burnley) (Lab): I know that the hon. Gentleman is an expert on the subject of pensions but does he accept that many of the problems of shortfalls in funding would not have been created if companies had not had pensions holidays when the stock exchange and the market were in a different position a few years ago?
Mr. Willetts: When the hon. Gentleman says "different position", he means everything was a lot better. That is what "different position" means. In that different position, under my party, when pensions had surpluses—those were the good old days—it is right that there were contributions holidays. Of course, there were also increases in benefits for members of pension schemes that went beyond what was necessary according to the terms of the pension or the law of this House. Everyone participated in the benefits of those pension surpluses.
Mr. David Tredinnick (Bosworth) (Con): Will my hon. Friend explain why, if everything is so marvellous and the Government have done such a wonderful job, hundreds of pensioners have come to Westminster today—including some from Hinckley and Bosworth—to complain about the atrocious situation the Government have created?
Mr. Willetts:
Exactly. One of the reasons we have called the debate is to show that we care about the plight of millions of our pensioners. The Government cannot even field a Secretary of State to handle the subject. Our pension funds are in crisis, pensions are not being paid through post offices, and we had the latest figures on
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pension credit this week as well. They showed that out of the 4.8 million pensioners eligible for the pension credit—as we know from a parliamentary answer from the Minister to me—3.1 million pensioners are claiming it. That means that 1.75 million pensioners eligible for the new means-tested benefit are still not receiving it. After next month, it will be impossible for them to claim the full backdated benefit from the introduction of the new pension credit. As we have always warned, the Minister has a massive problem of low take-up of his complicated means-tested benefits. No wonder the National Pensioners Convention, and just about every outside group, is pressing for the reversal of the pernicious spread of means-tested benefits.
Sir Nicholas Winterton (Macclesfield) (Con): My hon. Friend mentioned in passing the role of the right hon. Member for Birkenhead (Mr. Field). Am I right in saying that the right hon. Gentleman was struggling hard to produce the right results and was about to recommend the unthinkable? If his proposals had been taken into account by the Government and implemented, many of the problems we are facing today would not be with us.
Mr. Willetts: My hon. Friend makes a very good point. Perhaps I could briefly remind the House of the cycle that we have been through. We have been told again this week in the briefing from No. 10 that the Government are about to get serious about reforming welfare and tackling the pensions crisis. We have been through this before. In fact, we have been through it several times. Before the 1997 election, it was stated:
"Social security requires very bold thinking."
The right hon. Member for Birkenhead (Mr. Field) was appointed as the Minister for Welfare Reform because
"Mr. Blair saw welfare reform as crucial to his administration."
Sadly, the right hon. Gentleman left the Government because they were not willing to embark on serious welfare reform.
Mr. Frank Field (Birkenhead) (Lab): The hon. Gentleman has been speaking for almost 15 minutes. Is it not fair comment that both the major parties, looking back on their records, may well regret some of the things that they have done, but they never set out with the intent to arrive at the current position? The crucial matter in the debate is what both the major parties plan from now on. If I catch your eye, Mr. Speaker, I want to talk about the ideas that I advanced, which are ideas for the future. Before the hon. Gentleman sits down, will he give us a clear idea of where the Opposition stand on the matter? Although lots of pensioners are rightly here today, it is pensioners in the country who want to know where all three parties stand before they cast their votes at the next election. During the next election, for the first time ever, the majority of those turning up at the ballot boxes will be pensioners.
Mr. Willetts:
The right hon. Gentleman is absolutely right. As he knows, my party has been putting forward constructive proposals concerning the pensions crisis, how to reform the mess of state benefits for pensioners, and how to encourage more funded pensions saving over many years. We shall continue to do so, and I hope to touch on that in my remarks.
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However, we are talking about a Government who do not even have a Secretary of State for Work and Pensions to explain their policies on a major crisis affecting our country. The Opposition are entitled to hold the Government to account for that. We have been told again this week not to worry, as the matter is about to be tackled, No. 10 is about to make it a priority and the Prime Minister will focus on it during the third term. To remind everyone, we were told that he was going to tackle it as part of his first term. When the right hon. Gentleman was a Minister, he was appointed to do precisely that.
We were then told that the matter was to be the Government's priority in their second term. They have endlessly produced documents announcing that they are about to start tackling the pensions crisis because they are committed to doing so. We endlessly go through the same cycle, where Secretaries of State come and go, but the situation gets worse and worse. The right hon. Member for Edinburgh, Central (Mr. Darling) was Secretary of State for four years. During that time, an average of 50,000 members were affected by pension schemes being wound up every year. He produced Green Papers, and announced that
"the time for talking and discussing is coming to an end. We now actually need to implement our programmes."
The Secretary of State who has just left office was there for two and half years. During his time, 60,000 people a year were affected by the winding up of pension schemes. He began the job announcing that he was insisting that reform of welfare was vital to Labour's second term. What has happened? The problem has got even worse. This week's briefing sets out the matter as a priority for the third term. That is not good enough. The Government have been in office for long enough to seriously tackle the crisis instead of making it worse. Millions of pensioners are trapped on means-tested benefits and many pensioners are not claiming the benefits to which they are entitled.
Household saving was 10 per cent. of household income when we lost office, but it is now down to 6 per cent. Funded pensions are in crisis and many of our constituents are worried about the severe financial problems they face as a result of their pension schemes winding up. Tackling the pensions crisis would therefore be one of our priorities in government.
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