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Ms Smith: I apologise, Mr. Deputy Speaker. I was led down that path by the intervention. I return to my point that macroeconomic stability is important in delivering the right pension settlement for the future. We need the outcome of the Turner commission and the right structural arrangements to provide for the future, as the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind) made clear, but we also need above all the economic stability that will allow people to build up their own prosperity for the future.

12.43 pm

Mr. Edward Vaizey (Wantage) (Con): I am grateful for the opportunity to speak in this debate. The hon. Member for Sheffield, Hillsborough (Ms Smith) suggested that her generation was seared, but—to use another cooking analogy—my generation has been
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stuffed by this Government as far as our pension provision is concerned. When I look at the Government's record in the past eight years, I sometimes wonder whether they are as hostile to savers as they are to smokers. The Government have done everything possible—short of banning the purchase of a pension in a public place—to discourage saving.

Vera Baird: I am sure that the hon. Gentleman is about to embark on a serious analysis of the problem and he will therefore be unable to refute the point that, inevitably, the gross pensions mis-selling presided over by the last Tory Government shattered people's faith in saving and we are doing all that we can to rebuild it.

Mr. Vaizey: I am concentrating on the past eight years, and we are having a pensions review because of the failure of those years. It began even before the Government came to power, during the 1997 election campaign, when Labour rubbished the proposals of my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) for basic pensions plus, which over a period of a few years would have put a fully funded state pension in the hands of every worker in this country. The Labour Government attacked that as the privatisation of pensions, pushed it into the long grass and proposed no alternative. They then appointed a far-sighted and radical Minister for Welfare Reform—so far-sighted, so radical, so talented and such a threat to the Chancellor that he was sacked after a year. They then introduced a pensions tax of £5 billion a year, which not only hit pensions directly but stuffed the stock market, costing about £150 billion in share values over the past eight years. They abolished TESSAs and PEPs out of spite.

Mr. John Hayes (South Holland and The Deepings) (Con): Before my hon. Friend moves on from referring to the right hon. Member for Birkenhead (Mr. Field), will he draw to the Minister's attention the right hon. Gentleman's comments on the Government's record? He has been among the chief critics of the Government's record on pensions and particularly of the failure of stakeholder pensions to benefit the target group. Perhaps my hon. Friend will invite the Minister to deal with that matter when he sums up the debate.

Mr. Vaizey: I certainly accept my hon. Friend's comments; in fact I will incorporate them in my remarks. He is right: the stakeholder pension was a damp squib. One hears the pious nonsense preached by Labour Members about the need to help those on low incomes and the financially excluded, but the stakeholder pension has helped only the middle classes and the latest initiative allows people to put their second home into a pension. That, I am sure, is welcomed in low-income households throughout the country, which are only now planning to purchase a second home.

As I said earlier, the Consumer Credit Bill contains no measure that would really help the financially excluded. There is no definition of "unfair" to help them avoid unfair contracts. There is no cap on interest rates, so loan sharks remain free to go about their business. If ever a Bill missed its target and failed to take an opportunity, it is that Bill.
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For the benefit of Labour Members, I point out that a pension is not necessarily a complicated instrument. It is simply a long-term savings instrument. All one asks from a pension is that when one is working one can put aside enough money, over the years, to have sufficient income when one retires. The Government help by providing tax incentives, not only to incentivise saving but to top up those savings. A pension should be a very simple product, and there should be every incentive for people to save.

People do not save because, as my hon. Friends have pointed out again and again, they do not want to lock up their savings 30, 40 or 50 years before they have access to them. They want flexibility: a simple product; a one-stop shop where they can make savings which can be used at key moments in their life which, in the 21st century, include purchasing a first home, returning to education and retiring on sufficient income.

Vera Baird: Will the hon. Gentleman be so kind as to help me understand how, by the time a person is anxious to purchase their first home, they are supposed to have saved through this clever scheme £40,000 on which they can draw?

Mr. Vaizey: There is a counsel of perfection among Labour Members which is epitomised by the hon. and learned Lady. My answer is that I do not know, but perhaps a person would have saved if they had a long-term savings product with tax incentives. They do not have that at the moment. As the hon. Member for Yeovil (Mr. Laws) pointed out, in the debates on child trust funds his party sensibly proposed that people could simply roll the child trust fund into a long-term savings product. Perhaps if Labour Members adopted the principles in the Bill, someone aged 25 who had been saving since birth would have, with tax incentives and contributions from parents and relatives, enough for a deposit on a home. It is ridiculous simply to dismiss the idea and say, in a mocking way, that people could not possibly have enough money. This is a good plan; it is welcome and it is long overdue.

Ms Angela C. Smith: The hon. Gentleman suggests how people born now might be able to afford to buy a house, but what would he do for those who are reaching maturity now? How many years will it take someone on £12,000 or £15,000 a year to save the deposit necessary to buy a house?

Mr. Vaizey: I never opposed the child trust fund. How ironic that the Government propose a saving scheme for babies but oppose one for my generation. Why not adopt the principles behind the child trust fund? Labour Members talk constantly about social exclusion and say that the scheme proposed in the Bill will not work because people on low incomes will not be able to use it, yet the Labour Government created the child trust fund for precisely that purpose. I urge Labour Members to adopt those principles, to vote for the Bill and to have the vision at last to create a long-term savings scheme for everyone in our country.

12.51 pm

Anne Snelgrove (South Swindon) (Lab): The right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind) started the debate in fine
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rhetorical style, for which I thank him. His was an impassioned, interesting and well delivered speech. I do not agree with much of what he said, however, so I will take lessons from him in rhetoric, but not lessons in content.

The Rights of Savers Bill does not respect the rights of taxpayers or the wishes of the majority of pensioners and working people, especially women. Conservative Members should look at the Government Benches and see how many lady Members are present here. We have a passionate interest in pensions for women in this country and are greatly concerned about solving the problems in that area. I recommend that you look at your own Benches and see what you can do about women's representation—

Mr. Deputy Speaker: Order. I repeat what I said earlier: hon. Members must use correct parliamentary language.

Anne Snelgrove rose—

Mr. Ellwood: Will the hon. Lady give way?

Anne Snelgrove: No. We need to make progress.

The Bill does not respect the Government's consensus approach to pensions reform. Getting the politics of pensions reform right is as important as getting the reform itself right. Consensus is important because we need to make changes that are durable in the long term, so let us stick with what the Government are doing—the ongoing national pensions debate and the Pensions Commission report—rather than take up a Bill that represents the Opposition's fourth attempt in the same mould in recent memory.

Labour Members have identified the many savings plans and important measures that the Government have introduced in recent years, including generous tax reliefs granted on pension savings in particular, to encourage people to provide themselves a secure income on retirement. However, the purpose of the tax relief on pension savings is to provide pensions; it is not to enable people to accumulate money to pass on to their heirs, or to allow them to save up money to spend on another purpose altogether, as the Bill would do.

Savings and pensions are as important in South Swindon as they are in Kensington and Chelsea, but perhaps the number of people in Chelsea with pension pots of more than £30,000 is very high. When the Labour candidate in that constituency, whom I know well, was campaigning in the general election, she issued a leaflet saying that she was running on policies that benefited the majority of people rather than the millionaires. She received a sack load of complaints from the millionaires, so I think we know where the right hon. and learned Gentleman is coming from. His Bill is about slush funds for rich people.

People in my constituency, many of them women, have told me that under the pension credit system they are better off now than they have ever been in their lives. Some 3,500 pensioner households in South Swindon are benefiting from pension credit, with a local average award of more than £40 a week, and most of the beneficiaries are women—but we do not stand still.
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Before I judge the Bill, I ask a series of questions. Is it fair to me and to others? Does it reward responsibility and discourage irresponsibility? The answer to both questions is, no, it does not. In the context of the ongoing national pensions debate, the Bill is an interesting sideshow, but we will wait for the Pensions Commission to publish its second report. We will go for consensus rather than this con.

12.55 pm

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