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Mr. Waterson: I did not have the pleasure of joining the Select Committee in Glasgow, but that is not the evidence that I receive from my constituency. If the Secretary of State is suggesting that that explains why 1.6 million people are not claiming, he is in cloud cuckoo land.
My hon. Friend the Member for Havant has made it clear that our policy is to match the Government in raising pension credit in line with earnings. That is not to say that pensioners will not be floated off means-testing. The rate may be slower than we had anticipated under our original policy, but that is not to say that we are not trying to get them off means-testing. What is the Secretary of State saying? He seems to be Jekyll and Hyde when it comes to the pros and cons of means-testing.
Mr. Webb: Can the hon. Gentleman confirm whether he stands by 1 million as the number of people that his party would lift off means-testing in the next Parliament?
Mr. Waterson: Obviously, in view of my party's recent announcement and the Government's equally recent announcement, that figure will have to be changed, but that does not mean that it will be zero. A number of pensioners will still be floated off means-testing in the first Parliament, and ever more will be floated off in subsequent Parliaments. That is fairly clear.
It is difficult to contend with the Secretary of State, because there are two Secretaries of State. There is the sober, solemn character who runs the Department for Work and Pensions and then, as soon as he can get away from the Department, there is the character who leaps into a telephone booth, changes his costume and thinks the unthinkable about the universal citizen's pension or whatever it may be. The Secretary of State said:
"the pension credit and means-testing should be there until we have solved the problem of abject pensioner poverty".—[Official Report, 13 October 2004; Vol. 425, c. 309.]
He also said that there were no plans to continue the credit indefinitely.
We are all hanging on the publication of a set of principles—as they have been described—defining how the Government will approach pension policy in the future, although on another day they tell us that they can say nothing because they are waiting for Turner to report. After the document setting out the principles on which the Government will base their pension reforms is produced, how long do they expect pension credit to be around, for planning purposes? Will it be one year, five years, 10 years or 20 years? I assume that the Government agree with the Turner commission that unless there is certainty on that issue it will be difficult for people to plan for their retirement.
If pension credit is needed until, as the Secretary of State put it, we have solved the problem of abject pensioner poverty, when will the Department judge that target to have been met? We shall be interested to hear
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about that, because as I said, there seem to be two Secretaries of State—the one who sticks by the departmental line and the one who goes in for blue-skies thinking on some of the big questions about pensions.
On take-up, it is clear that pensioners are missing out on almost £3 billion-worth of benefits. Some charities have described that as unforgivable. About 2 million pensioners, about half those eligible, fail to claim a total of £870 million in council tax benefit. No one tried to disagree with my hon. Friend the Member for Havant when he said that council tax benefit had the lowest take-up of any means-tested benefit in the system. There is a particular problem because take-up is so low among owner-occupiers. We are all familiar with such people. There are many in my constituency— elderly people who own their homes, but do not have much cash or many savings. That is why our party concluded that the only way to deal with that problem, especially in the light of the 70 per cent. average rise in council tax bills since 1997—it is more like 87 per cent. in my constituency, with a little help from the Liberal Democrats on occasion—is an age discount, to halve bills in households with members aged 65 or over, up to a £500 maximum. That proposal came out only a couple of days ago and has been extremely well received.
Finally, I turn to the FAS, as the Government call it, or "farce" as some of us prefer to pronounce it—the financial assistance scheme and the protection of people's pensions. This is really part 2 of a debate on the APW scheme—an unfortunate state of affairs—that we began in Westminster Hall this morning. Is it not typical that, although at that stage we had not seen today's written statement on the FAS, it emerged in the Minister's winding-up speech that although there are, I think, 380 schemes listed in the statement today, APW is not one of them? Why not? Because that is classed as a solvent wind-up. We are talking about people who, as I understand it, have lost 80 per cent. of their pension rights through absolutely no fault of their own.
As my hon. Friend the Member for Havant was saying, this seems to be an exercise in ad hocery. The original announcement in May last year happened in a rush because the Government were facing defeat in the House over the Pensions Bill. We have had various announcements over the intervening months, which have slowly dragged out of the Government precisely how they think the FAS would work. A lot has changed in that time. The Government have quite properly commissioned research, which came up with a figure of 65,000 people. Other high-profile schemes, such as APW and Turner and Newell, have hit the news, and I am sure there have been many others, less well publicised. Only one thing has remained unchanged and unchangeable: the amount originally set for the FAS itself, which was £20 million over 20 years—a total of £400 million. It was clearly inadequate then and has become ever more obviously inadequate in the intervening months.
Of course, there is still uncertainty. We do not know what is going to happen to people who are more than three years away from retirement. We do not know how many people, as opposed to how many schemes, are to share the £20 million a year. We still do not know the precise relationship between the Pension Protection Fund and the FAS. There is the suggestion, which came out very late in the day, that the PPF itself could be retrospective—something that was always stated not to
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be the case from the time when the legislation started its process. Today, for the first time, we have the Government, in effect and belatedly, finally accepting that their original figure is inadequate, by suggesting that in the next public spending review the figure will be considered again.
One thing that we do agree with the Government about is that the taxpayer cannot be regarded as a bottomless pit, to keep contributing money to compensate people for losing their pensions. At the same time we recognise that those people have a clear moral and perhaps even legal case to be compensated. That is why we revert again to our policy on the use of unclaimed assets—the £15 billion of unclaimed assets reliably estimated to exist in this country. Ireland began by simply taking the interest on those unclaimed assets. Of course, we would require various safeguards as part of our policy to ensure fairness. The Treasury is already well advanced on that process, but for different reasons. The Chancellor wants to get his hands on unclaimed assets to use them for charitable purposes.
Yet again, we plead with Ministers not to set their face against the use of unclaimed assets, but finally to agree to consider them as a possible source of compensation for those people. As I said, only this morning we heard about APW and the very sad situation that those people find themselves in. One thing that I can confidently predict is that they will not be the last. The Government have constantly been trying to catch up with events, rather than sitting down at the very beginning and working out a scheme that will be enduring, successful and achieve the objects required of it.
We will not divide the House on the uprating orders. They raise a host of issues, all of which I expect the Minister for Pensions to deal with in his winding-up speech.
4.59 pm
The Minister for Pensions (Malcolm Wicks): Although in some respects this has been a quiet debate that has not taken place in a crowded Chamber, a range of important issues have been aired on all sides. I pay tribute to all those hon. Members who spoke, including those who made some useful interventions. I would like to single out the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), the Chairman of the Work and Pensions Committee and previously the Social Security Committee. He could not quite remember the number of times that he has taken part in such a debate—it was about 20—but I fear that this may be the last occasion on which he does so because, sadly, he is retiring from the House. Both in my current role and when I had great honour of serving on the Select Committee under his chairmanship, I have found his contributions thoughtful, well informed, intelligent and compassionate.
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