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Malcolm Wicks rose—

Mr. Field: I shall happily give way to St. Sebastian.

Malcolm Wicks: I have not seen an effective arrow coming my way. However, does my right hon. Friend recognise that our argument is that we need to get the balance right between universal provision using the national insurance system, and a more selective approach? When I cited some of the evidence to show that although an older age criterion has some sense, it is nevertheless imperfect because many poor people are under, and some richer people are over, the age of 75. Did he hear the evidence? Has he yet been able to assess it, and is there just a chance that it might affect his thinking?

Mr. Field: It did not do that. I am sad to hear that St. Sebastian now needs an eye test. If he did not see any arrows aimed in the opposite direction, goodness knows what occurred.

The importance of the Prime Minister's position is that, of course, any social security system will have means tests in it. The question is whether we are increasing the scope of means tests or lessening it. The truth is that, up to the reshuffle, it looked as though we had a strategy of increasing the numbers on means-testing. It now looks as though we have an option of opposing that. One of the better ways of doing that is to use age, rather than income, as the basis.

The hon. Member for Northavon (Mr. Webb) did not suggest that this one move alone would solve all our pension difficulties. It does and could play a part in a short-term strategy of reversing the tide to run against means-testing. There is, of course, a need for the Government and perhaps the Opposition parties to have an idea of what their major and longer-term reforms will be. When the Adair Turner Pensions Commission report is published, there may not be a hiding place for a political party that does not have longer-term or fundamental proposals to put before the electorate next May, if that is the correct date.

After all the good old razzamatazz of the debate, I make a plea to my hon. Friend that we consider seriously such ideas. I welcome his cutting through the typical Liberal Democratic claptrap of looking for a trendy phrase and almost sinking a good idea because of it. Somehow it does not matter how hard or long one has worked. That record will be ignored.

If we lived in a 1950s-type society in which social bonds were strengthening rather than weakening, if we did not have major problems of family and social
 
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breakdown in our constituencies, and if more and more younger people felt that they had a sense of belonging not only to their own towns but to their country, there might be a case for saying that we can be cavalier with the idea of what national insurance has meant to people in the past. However, in the circumstances of vast social disintegration, it would be folly to do that.

Mr. Webb: The right hon. Gentleman thinks deeply about these matters, so one must think deeply about what he is saying. Does he acknowledge the flipside, which is that the national insurance system has failed to value many things that he values, such as caring and low-paid work? We are not saying that people who have contributed nothing to society should have something, but that people who have contributed to society, yet receive nothing, should get something. Surely that would contribute to social cohesion.

Mr. Field: Of course it would, so we would keep the baby and the bathwater rather than throwing both out. I thought that my hon. Friend the Minister was saying to my hon. and learned Friend the Member for Redcar (Vera Baird) during their interesting interchange that when the report is published next year one suggestion that follows on might be to make good some of the glaring gaps in the national insurance system by ensuring that credit is given for jobs such as caring for vulnerable old people, to be taken into account when computing people's pension entitlement.

We must be able to pay for any proposals that we make in the election campaign. I agree that the Liberal Democrats have come up with a slightly hazy scheme of abolishing the Department of Trade and Industry, especially given that they want all its functions to be carried out elsewhere.

I leave this point with my hon. Friend the Minister, because I suspect that he knows the figures and he used to write about such matters when he was a free agent. This year is the first in which higher-rate taxpayers will take half the tax subsidy that goes towards pension savings. It is not the case, as the hon. Member for Eastbourne (Mr. Waterson) suggested, that if we allowed such subsidy at only the standard rate—meaning that everyone was treated equally—we would rip £6 billion from the system. We would, however, find an extra £2 billion with which we could make payments to schemes such as those advocated by the Liberal Democrats. Given that our present tax subsidies support those with the most generous pension provisions to the greatest extent, we should have a little courage when fighting the next election and decide to redistribute some, but not all, of that money to the poorest people. That would go a long way towards ensuring that we could significantly increase payments to the over-75s through the national insurance system. Such a payment would have nothing to do with whether those people were citizens, but it would have a lot to do with whether they would vote for us.

5.52 pm

Angela Watkinson (Upminster) (Con): I am sorry that this debate is necessary, because I hate to hear women being talked about as though they are a race apart or a bunch of lame ducks—we are half the population, after all. I look forward to the day when such debates are no longer required.
 
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Today's debate has focused mainly on pensions, and I shall not go into the technicalities of pensions and benefits in the august company of many experts, but I know that a large percentage of older women left school young without qualifications and that many never worked outside the home at all. There are also those who had a mixed record of wartime outwork—if anyone can remember what that was—during which they collected bulk items of sewing to do at home or did light assembly work. They also split mica, and although I am not sure what mica was or what it was used for, women used to split it and it was jolly unpleasant. Women also cared for their families—both the older and younger generations—and worked in their homes without the benefit of modern appliances. They juggled that with spasmodic periods of low-paid employment outside the home, all of which meant that they had no personal pension to show for an arduous existence. Some older women had rewarding employment, paid national insurance contributions and earned a pension in their own right.

The Liberal Democrats' policy is unfair in that respect—the effort of those individuals should not be disregarded.

I recall the 1960s, when married women were given the option of giving up paying the full national insurance contribution and paying a reduced married woman's contribution. There were obvious risks in that, not least the failure of the marriage, or if the wife was much younger than the husband, there was a considerable wait until he was 65 before she could draw a pension on the strength of his contributions. My personal recollection is that the provision of information was very good, and I was in no doubt whatever about what was being offered and what the likely pitfalls were, but I accept that many women claim that they did not understand at the time the disadvantage that they were storing up for themselves in the future.

May I commend to the House the Conservative party policy, which will link the pension to earnings? The Conservatives will increase the single person's pension by £7 a week and a couple's pension by £11, on top of increases for price inflation, over four years. The pension credit will not be abolished, but of course as the state pension increases in line with earnings, fewer pensioners will be eligible.

Vera Baird: I am slightly puzzled by what the hon. Lady says, because if the basic state pension is to be index-linked, there will be no increase in the number of people coming off pension credit, as that too is linked to earnings. The two things will increase in parallel. The Conservatives will help off the minimum income guarantee element of the pension credit only those people who currently are about £6.99 below the MIG level—no one else will ever move off it. That is unless, of course, the basic state pension will go up with earnings but the Tories will freeze, and link to prices, the minimum income guarantee. That is the only way that it can be done. Is that what is going on?

Angela Watkinson: I was going to thank the hon. and learned Lady for her intervention, but I am now
 
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reluctant to do so. Her assumption about the parallel lines is misguided. The differential will change, and the value of the pension will rise so that more pensioners will be lifted out of means-testing.

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