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Vera Baird: I understand what the hon. Gentleman is saying, but all the women who do not have a full basic
 
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state pension and have to claim means-tested benefits would still have to do so until they were 75. Why should they wait that long, when others do not?

Mr. Webb: Indeed. One of the points about pensions policy is that we need both a long-term destination and a route map. We need to know where we want to be and how we are going to get there. I contrast the Government's destination which, as the hon. and learned Lady well knows, is mass means-testing, with our destination, which is precisely as she describes—a citizenship pension, paid at the level of the means test to obviate the mass from requiring means-testing, and linked to earnings so that that standard of living is available across the board.

We have, however, had to be realistic about how far we can rescue an entirely inadequate pension. The fact that the pension has fallen so far behind the means test means that were we to stand up and say, "Vote for me and I'll give everybody lots more money", we would rightly be ridiculed. We have had to make what my hon. Friend the Member for Twickenham (Dr. Cable) would call a tough choice, and rightly so, to begin with those most in need—those over 75. But the hon. and learned Lady is right: the argument applies equally to those under 75, and we want to extend the principle as quickly as we can.

I move to the third plank of the Government's approach to financial support for women. We have seen the inadequacy of the basic state pension of barely £50 a week. The answer, apparently, is the second state pension, which provides barely £10 a week. The Government would say, "Yes, but it's just building up. Give it a few years", but it is a pension that takes a generation to be truly awful. By the time it is fully in, a typical woman—not an extreme case—on a full basic pension and a full second pension will find during her retirement that she falls below the poverty line and has to claim a means-tested top-up.

Even if we give the second pension 40 years, it will be so poor that it will not keep people clear of means-testing in their retirement. If that is the answer, one wonders about the question.

The basic pension is inadequate for women and the second pension is woefully inadequate for women, which brings us to the Government's real triumph, the pension credit. The Government amendment states that the pension credit is the answer. The pension credit gives more to women than to men, but that is because women are so poor. It also misses more women than men. The Minister did not say "yeah" to that, but "yeah" would have been appropriate.

Older pensioners are the least likely to take up the pension credit, and they tend to be women, particularly widows. The pension credit is like a scattergun: it hits some—we do not doubt that those people are grateful—but misses many. How long can we rely on a system that gives way when pressure is exerted? How long can we rely on a system which is meant to plug the holes in the basic pension and second pension, but which misses more than 1 million of our fellow citizens, who are predominantly women?

Vera Baird: The hon. Gentleman took my point that his proposal would only give equality to women over 75.
 
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Since that is his proposal's consequence, he must try to come up with a solution to the problem that I raised before—how to allocate carers' credits for part-time caring; otherwise he will disregard all women aged between 60 and 75 who are carers and who do not receive credits towards their pensions. He must look for a solution to that problem, as well as offering a solution for the over-75s.

Mr. Webb: The Government do not pay women who have reached that age group a penny. Many carers, who perhaps care for elderly relatives, are angry because, when they reach pension age, the Government say, "You can either have your meagre retirement pension or your carers' money, but not both." Many carers resent that treatment.

We accept the principle that caring must be valued and want to make progress towards valuing it, but we cannot achieve everything at once. As my right hon. Friend the Member for Ross, Skye and Inverness, West said, what have the Government been doing? The fact that the figures that I quoted are after six years of a new Labour Government makes one realise the scale of the problem.

We welcome the new Secretary of State for Work and Pensions to his post. He is widely regarded as an able politician—I mean that in the nicest possible way—and I look forward to forming a constructive working relationship with him. The cynics in my party said that if one wants to sack 30,000 people, why not put in a trade unionist? I would not say that. I welcome him to his post and look forward to finding the consensus on pensions that is everywhere except in the new Labour Government—hopefully, we can take one extra convert with us.

The basic pension and second pension are inadequate, and the pension credit misses out far too many women. Where do we go from here? The Government strategy is gradualist, which may not be ideal for those who are 83. The Government say that the second pension will be worth a bit more in a decade or two, but it will be so inadequate that one will need to claim a means-tested top-up. They say that all will be well with pension credit after another phone line, advertising campaign or leaflet drop, but they fail to recognise the endemic problem—the people who need it most do not take it up.

We do not need incremental change of the sort proposed by the Conservatives, which would deliver £7 for a man and £5 for a woman. I do not know whether the wider British public recognise that that is Conservative policy—the increases would occur over the course of a Parliament and are pro rata to what women draw. The 21st-century Conservative party should not be in favour of such a measure, but perhaps I am wrong.

It is not good enough to introduce incremental change. We cannot say, "Those people have already retired. We will write them off, but we will do something for the next generation." Retired people have often given their best to this country, to bringing up their families, to caring and to fairly menial work that does not pay enough to pay national insurance.

Liberal Democrat Members believe that radical reform rather than marginal incremental change is required.
 
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That is why I was proud last week to join my right hon. Friend the leader of the Liberal Democrats in proposing a dramatic change to the basis on which pensions are paid. We want a pension based on citizenship that says, "We value you for being a citizen of this country, not because you've done better-paid work." We want a pension that lifts people clear of the unnecessary processes of means-testing that leave many in poverty and keeps pace with the living standards of the majority. That is the radical approach that we are advocating.

It was worth coming back to the House for a second week to talk about pensions, because none of those ideas was properly explored in last week's debate moved by the Conservatives, who are still thinking in the old way of a few pounds here and a few pounds there. The fact that they have not tabled a motion on women's pensions makes one realise how low a priority they attach to the issue.

It is time that the injustices that older women have faced are tackled. This motion suggests how we should do it, and I commend it to the House.

4.55 pm

The Minister for Pensions (Malcolm Wicks): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

I, too, start by welcoming our new Secretary of State, fresh from the TUC conference in Brighton. I very much look forward to working with him.

As I like to be generous on these occasions, I acknowledge that the Liberal party has, historically, made a substantial contribution to British social politics. I mention once again the Old Age Pensions Act 1908, the introduction of the original national insurance
 
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scheme before the second world war, and of course the seminal report of 1942 by that great Liberal, Sir William Beveridge.

Sadly, however, since the 1940s the Liberals have had a rather thin period. To be blunt, there has been nothing much to report in the past 60 years. We have seen the strange death of Liberal social reform; I hope that the more literate Liberals will understand a reference to a great and important book. That great gap in six decades of Liberal history has not been put right by today's announcements or by the speech by the hon. Member for Northavon (Mr. Webb), despite the help that my right hon. Friend the Member for Birkenhead (Mr. Field) tried to give him. I always see that help coming and duck.

Yet, as I say, I want to be kind. I welcome another opportunity to debate pensions having done so last week. We do not have a pensions debate for a few weeks and then two come along at once. This time I want to address the subject in a slightly different way by discussing two key themes that were mentioned by the hon. Member for Northavon: women and pensions; and the needs of the most hard-pressed elderly people.

The Liberals are keen on addressing issues about women. They even have one or two women MPs to help them along, but when I look at their Benches I see more gender inequality in terms of political representation than I do when I look at my own.

Women's pensions must be analysed in the context of changing social structures, gender roles, work patterns and caring patterns in the late 20th and early 21st centuries. Since the 1940s, substantial changes to key trends have added up to a fierce hurricane that has battered the post-war welfare state and the assumptions that underlie it. As a keen student of social policy and of William Beveridge, the way in which things have changed is perhaps best illustrated by looking at some of the assumptions that underpinned Beveridge's great report of 1942, in which he said that

That was what William Beveridge wrote in 1942. Although, from a modern and feminist perspective, one could almost make fun of that rather sexist view of women, I suspect that it would have been prevalent in all our political parties at the time. I cite the quote so that I can talk about subsequent changes.

Since then, changes in employment patterns and patterns of care, divorce and separation, the growing number of one-parent families and women's changing attitudes and ambitions have presented new challenges and raised fresh questions. What are the implications for women's pensions? First, I would argue that anyone who is concerned about women's pensions should start not with pensions but jobs and incomes. If women earn well during their working lives, they are more likely to have decent pensions in retirement. We are therefore working to reduce the pay gap.

We gave a boost to low-paid workers' pay, 70 per cent. of whom are women, with the introduction of the national minimum wage, which is, therefore, a key part
 
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of pension strategy. Approximately 1 million women have benefited and it has contributed to a 2 per cent. drop in the pay gap since 1997. We are reducing the gap further by making it easier for women and men to take up equal pay claims by simplifying and speeding up existing tribunal procedures. For example, we introduced an equal pay questionnaire procedure in April 2003 and we are committed to a target of 45 per cent. of large companies undertaking pay reviews by April 2008.

Other matters are important to women's earnings and careers. The part-time workers' regulations that the Government introduced will ensure that 6 million workers, the majority of whom are women, are not treated less favourably than comparable full-timers in their terms and conditions. In a sense, access to affordable and good quality child care is part of the pension strategy. We want to provide an extra 250,000 child care places by 2006, helping with the costs through the tax credit system.

If we start with an analysis of employment and pay, we should go on to ensure that modern pension systems are not based purely on a traditional idea of an economy and a male-dominated perception of work. In recent decades, home responsibility payments have therefore credited young mothers with children into the national pension system. Despite the traditional cynicism of the hon. Member for Northavon about social progress, I make no apology for introducing the state second pension to boost the pensions of low and moderately paid employees. It provides, for the first time, additional pensions for carers and long-term disabled people. That will especially help women, many of whom work part-time or as carers. Almost all the 2.5 million carers who will benefit from the state second pension are women, as are approximately 70 per cent. of the 5 million low earners.

Stakeholder pensions are another part of the story because they will help women in the modern labour market who often move between employers and occupations and may, at different times, be self-employed or employed on a limited contract or a permanent contract. Flexibility means that stakeholder pensions are a good option for women who take a break from work, for example, to raise a family, because they can stop and restart their contributions without penalty. Stakeholder pensions are open to non-earners and, therefore, enable women or others who do not work but can afford to save something towards retirement to do that. Stakeholder pension rules allow family or friends to contribute towards someone else's pension. That may help the large number of women who are carers. During their first year, a third of all stakeholder pensions were taken up by women. There are currently approximately 2 million stakeholder pensions.

Other measures that are in place or proposed in the Pensions Bill will improve the position for women by making pensions cater more fairly for those with fragmented working lives. For example, our proposals on full transfer value for early leavers will allow people in short-stay jobs to take the full value of their pension with them when they leave such jobs. Often in the past, women who worked for relatively short periods essentially lost much of the build-up of their pension rights.
 
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Our informed choice programme, which offers help, such as workplace financial advice, will benefit those who have most often been excluded from pension provision in the past.

I have spoken about today and the future but we are also presented with demands about pensions that are inherited from the past.

So, just as we need to look forward many decades to plan for an uncertain future—the pension protection fund will be crucial in that regard—we also need to understand past decades if we are to tackle current problems. New policies will affect pensions that are drawn in 2050 and beyond, but our policies also affect those elderly people whose life chances and incomes were perhaps determined in the 1920s and 1930s.

In 1997, the Labour Government understood that all too graphically. Some pensioners were struggling on as little as £69 a week, such was the debilitating impact of the Tory inheritance bequeathed to us. That is why we make no apology for seeking to focus some of the additional resources that we have put into pensions on the poorer and more pressed elderly person. Hence the pension credit, which provides a guarantee that no pensioner need live on less than £105 a week. That means that the poorer third of pensioner households are now £1,750 better off in real terms than they would have been, compared with the system that existed in 1997. That is an extra £33 a week.

Opposition Members say that they object to the indignities of the means test. Perhaps they have forgotten the days when the Tory means test meant that prudent pensioners who had made modest provision for their retirement saw their benefits reduced pound for pound because of their savings. The days of 40-page-long claim forms, of having to visit unpleasant local offices in inconvenient locations, and of having to tell the DSS—as it then was—about every change in their finances have gone.

The new Pension Service—we are the first Government to have such a specific service—means that people can claim their pension credit over the telephone, where one of our advisers will fill in the form on behalf of the elderly person or her carer, or people can go to advice surgeries in all our constituencies. Alternatively, they can arrange for a home visit. More than 500,000 home visits have now been carried out by the Pension Service.

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