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Mr. Ellwood: Wait another eight years.

Lyn Brown: Like many nations throughout the developed world, our people are living longer and, thankfully, better lives. In 2002, there were 10.9 million pensioners in the UK; according to Government figures, their number will increase to 15 million by 2031. The issue does not only affect us. Age Concern points out that by 2050 more than 30 per cent. of all European Union citizens will be aged over 60. All developed nations are looking to secure their future. If we want future pensioners to share in our nation's prosperity, as is right, we must recognise that the changing demographic picture creates new challenges for our society. That is why the Government are taking action. It is a sign of those changes that when the state pension scheme was first introduced, there were 10 people in work for every pensioner; now, there are four, and within the next 50 years we will reach the point where there are only two people in work for every pensioner.

Greg Clark: If things are as rosy as the hon. Lady implies, why is indebtedness at an all-time high?

Lyn Brown: I do not think that I painted a rosy picture. I clearly stated the difficulties facing us. I said that by 2050 more than 30 per cent. of the citizens of the European Union will be aged over 60. We should be concerned about how we will provide for the retirement of all those citizens, not just a few. The Bill will not help us to do that.

Those who are now under 50 will be affected by the changes that I have described. We need to make decisions now to avoid difficulties in 15 to 20 years' time, especially given the rapid and extremely welcome increase in longevity that this country has experienced in recent decades.

As the Member of Parliament for West Ham, I know that the picture of personal financial prosperity that the Bill represents does not speak to the majority of people in this country. The biggest difference to the incomes of
 
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many of the elderly residents of my constituency has come not from the stocks and shares they possess, but from the Labour Government's increases in the basic state pension and their introduction of the minimum income guarantee and pension credit, which I understand the Bill does not reflect.

Mr. Harper : I do not think that my right hon. and learned Friend the Member for Kensington and Chelsea (Sir Malcolm Rifkind) suggested that the Bill is the answer to every aspect of the pensions crisis. It is worth remarking on means-tested benefits, to which the hon. Lady has drawn the House's attention. I do not criticise the Government for their initial reliance on means-tested benefits—the Conservatives had means-tested benefits when we were in power—but it is becoming clear that increasing reliance on such benefits to the point of being over-reliant on them gives younger people only negative incentives. She talks about the current older generation, but we must also be concerned about the younger members of our community who are not saving; we should worry about whether they will be in a good financial position when they are older.

Lyn Brown: I recognise that we live in a world in which some people are getting by on the minimum wage. Report after report from the social exclusion unit shows that a person who starts work on a very low wage often finishes work on a very low wage. Such people do not have the opportunity that every Member of this House has to save for their old age. They are the people I want to protect. It is low-wage earners who keep our social services and our public services going; they contribute to our industry, our economy and our community, and just as they have provided for us, we must provide for them in their old age.

If we are to address the pressures on our pension system, our focus must change. As my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry) said, we must think about priorities—our own and those that the Bill reflects. I am concerned that SaRAs and retirement income funds will do little to help those who do not already have pensions or those who are at risk of pensioner poverty in future. The proposals would create tax breaks for the wealthy, I fear. Labour Members' interest is and will continue to be how to ensure that we in the UK end the scandal of pensioner poverty and make decent pension provision for all. It is no coincidence that retirement income has increased faster than earnings in recent years, with the largest increases seen among the less well-off, which reflects our priority of tackling pensioner poverty. In the past eight years, the boost to the state pension and the introduction of the tax-free winter fuel payment have helped all pensioners, whose average net incomes have increased by 19 per cent.—7 per cent. more than the increase in earnings.

The Government's pensions policy has been one of progressive universalism. I wholeheartedly support that approach, which has ensured that all pensioners benefit from a Labour Government, but that the most help goes to those who are in greatest need.

Julia Goldsworthy (Falmouth and Camborne) (LD): Is the hon. Lady aware that a quarter of all people
 
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entitled to pension credit do not receive it? That is 1 million households. What are the Government doing to help to improve that situation? What is being done to reduce poverty among pensioners?

Lyn Brown: I am pleased to say that in my local authority, the London borough of Newham, we have done a great deal to ensure that there is a take-up. I understand that the borough has one of the highest take-up rates for pensioners in the UK. I believe that take-up is 80 per cent. That is good but it is not good enough. Twenty per cent. of the community in Newham need to have the message put out to them. It is the duty of us all in the House to ensure that our communities have access to the information that they need.

Mr. Dan Rogerson (North Cornwall) (LD): The hon. Lady rightly points out that good work on take-up is going on throughout the country. I would not seek for a minute to say that that work is not taking place, but is it not right that there is not the money in the budget at present to pay all pension credit claims, if everyone were to take them up? Is that not a rather cynical move on the part of the Government? They are banking on people not having access to pension credit.

Lyn Brown: It is incumbent on us all to ensure that the people who need the money most get that money. That means that everyone on pension credit is entitled to the money that is owed them. I do not see anyone on either side of the Chamber stating that that is not the case.

Measures such as pension credit have done so much to change the legacy that we inherited, when the greatest predictor of poverty was old age. In contrast, we have lifted almost 2 million pensioners out of poverty, and 3.3 million are receiving pension credit. That is why, on average, pensioner households are £1,500 a year better off than they were in 1997. The poorest pensioners are £2,000 a year better off.

It is a source of pride to me that in West Ham nearly 5,000 pensioners received the additional funding of pension credit, with an average award of £65.41 per week. That is a sign of the difference that the credit is making to the people of West Ham. That sum is nearly the total amount that the previous Administration were prepared to offer.

I am giving way.

Mr. Deputy Speaker: Order. The hon. Lady should be a little more explicit before she resumes her seat, otherwise another Member may have been called and her remarks would have come to a premature conclusion. I think that the hon. Member for Putney (Justine Greening) has been given the opportunity to intervene.

Justine Greening : The hon. Lady has moved on from the point on which I wished to intervene, so I do not intend to interrupt her flow any further.

Lyn Brown: Lower pay often keeps the state second pension and the basic state pension out of the reach of many women. It is a great pity that space was not found in the Bill to include women within its remit. For example, 1.4 million women do not earn enough in a
 
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week to pay national insurance contributions. It is worth noting that anyone earning the minimum wage, working 16 hours a week, will not earn enough to build up an entitlement to the basic state pension. For many women who choose to work part-time to fit in with family commitments, those restrictions guarantee pensioner poverty in retirement.

In seeking to reform our pension provision to meet the needs of the age, our focus must not be limited to those who have capital and the assets to take part in occupational pensions or private savings schemes, or to those who are eligible for large payments upon retirement. We must seek legislation to ensure that in the years ahead all members of our society are offered the security and dignity in retirement that their contribution to our society requires.

11.44 am

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