Previous SectionIndexHome Page

Mr. Tom Harris (Glasgow, Cathcart) (Lab): I apologise for my brief absence earlier in the debate. I was required on other duties elsewhere, on the Committee Corridor.

I am delighted to follow the right hon. and learned Member for Rushcliffe (Mr. Clarke), for whom I have great admiration, as do many of my colleagues. He has the dubious distinction of being the only person here to have served for the whole length of Conservative government, from election day in 1979 until election day in 1997. For political anoraks, there is only one other former Member to have achieved that feat: Malcolm Rifkind.

The right hon. and learned Gentleman can therefore hardly avoid any criticism or responsibility for the dreadful pensions mess that that Government made. He started by suggesting that the debate should centre around the general election campaign and that our proposals should be in our manifestos. Similar comments were made by the hon. Member for Havant (Mr. Willetts). I disagree with them. This is too important a subject for us to turn our backs on the possibility of cross-party consensus, which will surely be best found in the aftermath of a general election and not in the few months leading up to one, if indeed we have one next spring.
13 Oct 2004 : Column 334

The hon. Member for Havant made a valid point, for which he was barracked by some of my colleagues. I have to confess that his claim that some people in the Labour party tried to suggest in the 1997 election campaign that Conservative policy would result in the abolition of the state pension was correct. During campaigning with my predecessor, John Maxton, now Lord Maxton of Blackwaterfoot, we came upon two older voters in Mount Florida who were very suspicious of Government plans for pensions. I immediately got tore in, as we say in Scotland, and assured them vociferously that if the Conservatives got back in they would abolish the state pension. They thanked me for the information and moved on, promising to vote for John, who then took me aside and said that I should really not say such things, as that was not what the Conservatives planned. That was typical of John, as a very honest politician, and it was a lesson to me in our responsibility to tell the truth to voters.

Mr. Nigel Waterson (Eastbourne) (Con): Perhaps I can assist the hon. Gentleman. I have here a document issued during that campaign bearing the names of such luminaries as the present Prime Minister, Deputy Prime Minister and Chancellor, and containing the bald statement:

Mr. Harris: The hon. Gentleman makes my point. As we are now in the game of demanding and offering apologies for everything that we have ever said in politics over the years, I certainly apologise for that particular branch of campaigning in 1997. However, that claim was pretty irrelevant given that we were 20 per cent. ahead in the polls at that point, and it does not take away from the fact that the Conservative Government made a pig's ear of pensions policy over 18 years.

We will need a further debate when the concluding volume of the Turner report is published next year. We need to take a strategic view of the problem. We have discussed the fact that we have an ageing population and a proportionately declining work force, with the possibility of moving from the current five working people to every pensioner to perhaps only three in 40 or 45 years' time—the so-called demographic time bomb. We now need to look at the wider issues. For example, we now have far more students graduating with student debt. That, I am afraid, is an inevitability, but when it is combined with the challenges facing young couples buying their first house at inflated prices it is not a surprise that fewer and fewer people are able to save as much as they should be saving.

The pressures from various aspects of modern life are so great that, as the right hon. and learned Member for Rushcliffe said, many people are putting all their money into property. Many people are putting their money into repaying the student debts that previous generations did not have to cope with. Having said that, there seems to be little indication on the high street that people's disposable income is falling in real terms. But it is worth making these points because we have to look at all the reasons behind the so-called pensions time-bomb, instead of simply concentrating on the increasing number of older people in the years ahead.
13 Oct 2004 : Column 335

It is very tempting to look at the Turner report and some of the news coverage and conclude that means-testing has had its day. It would be a huge mistake to turn our backs on the pension credit, at least before it has done its job, which is to abolish pensioner poverty altogether.

As a Labour MP, I would find it very difficult to justify increasing taxes in order to reinstate the basic state pension at the level that existed when the link with earnings was first broken, and then to upgrade it every year in line with earnings. I would find it difficult to tell my constituents that they should pay significantly higher taxes in order to give extra money to richer pensioners such as Mrs. Thatcher, Peter Stringfellow and the many other millionaire pensioners. Someone said that they account for only 20 per cent. of all pensioners, but that does not justify our paying extra tax to give money to people who do not need it.

In fact, means-testing redistributes wealth in the right direction. Taking away the pension credit, reintroducing the link between earnings and the basic state pension and upgrading the pension for everyone also constitutes a redistribution of wealth, but in the opposite direction. It takes money away from the poorest pensioners and gives it to the richest. That is totally unacceptable.

Mr. Webb: The hon. Gentleman is making a very thoughtful speech. If his constituency is typical, a third of the pensioners in it who are entitled to the pension credit are not claiming it. We can all push harder to change that, produce more leaflets, and so on, but because of the nature of the beast, there will always be a substantial number of pensioners who get nothing. The only way to get money to the poorest of the poor is through the pension.

Mr. Harris: The hon. Gentleman makes a very valid point. The problem that he mentions is a serious one, and the Government must redouble their efforts to ensure that those people do claim the pension credit. I have heard the argument before that many pensioners are too proud to claim. Well, they are not too proud to claim in my constituency. I have not met a single pensioner who has said, "I know that the money is there, but I am too proud to take it." That simply does not happen. The fault probably does lie with Government agencies, and we need to find far more effective methods to deal with the problem. We know who these pensioners are—they already receive the basic state pension in some form or other—but we need to find a more efficient way to contact them and to help them through the process, so that the figure of one third of pensioners who are entitled to the pension credit but do not claim it can be reduced massively, and hopefully eradicated altogether. I accept the truth of what the hon. Member for Northavon (Mr. Webb) is saying, but for reasons I have explained, we should not go down the route of redistributing wealth in the wrong direction.

Interestingly, the nature of the argument has changed out of all recognition. In the 1980s, re-establishing the link with earnings was seen as a great socialist left-wing principle. It is not, and it is no longer recognised as such. As the right hon. and learned Member for Rushcliffe correctly said, means-testing is about targeting. If we want to target the poorest people, the way to do so is not
13 Oct 2004 : Column 336
by increasing the basic state pension. It is a pity that the hon. Member for Perth (Annabelle Ewing) is not in her place. It is so typical that, just as everyone realises that re-establishing the link with earnings is not necessarily a left-wing policy, the Scottish National party decide to adopt it. When the Conservative party adopted it, the cat was surely out of the bag: it was surely clear then that it is not a redistributive policy—or not, at least, in the direction that we would like.

During Prime Minister's questions today, the Leader of the Opposition said—I cannot remember his exact words and I look forward to reading the text in tomorrow's Hansard—that pensioner poverty had not been reduced as a result of this Government's policy. No one seriously doubts that a huge number of pensioners have been brought above the poverty line, so I do not understand why the Leader of the Opposition said such a thing. The Government claim—the figures are open to examination by anyone—that 1.8 million pensioners have benefited from the pension credit and therefore now enjoy incomes that take them above the poverty line. None of the agencies dealing with old people seriously contradicts that figure, yet in the light of what the Leader of the Opposition said today, either he does not recognise it or he does not think that it matters.

Mr. Waterson: I may be able to assist the hon. Gentleman. What my right hon. and learned Friend the Leader of the Opposition may have had in mind were figures about pensioner poverty showing that 1996–97 levels were almost exactly the same as the 21 per cent. of pensioners living in poverty in 2002–03. It is fully set out in "Opportunity for All", the sixth annual report of the Department for Work and Pensions, that that is indeed the case.

Next Section IndexHome Page