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6.29 pm

Chris Grayling (Epsom and Ewell) (Con): Is this really the best they can do—10 years after they played the song “Things can only get better” from every loudspeaker and battle bus around the country, 10 years after the Prime Minister stood up in this Chamber as
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Chancellor of the Exchequer and promised action on investment, skills and employment opportunities, and 10 years after he stood at the Dispatch Box promising more to help the poorest pensioners? Unfortunately, this really is the best he can do, even though he has been planning for this moment all his life—he has had 13 years longer to prepare for it than he originally planned. He has built up networks of people and organisations to help him, from the Smith Institute to Deborah Mattinson. He set up policy teams in the Treasury to help him plan his agenda for the future and his move on No. 10. He shipped teams of advisers and speechwriters in from north America to help him. Never in the history of British politics has an aspiring Prime Minister been given so long to plan his agenda for Britain, and never in the history of British politics has so much work come to so little.

The right hon. Member for Oldham, West and Royton (Mr. Meacher) was absolutely right to say that his party still has a real need for a distinctive vision—although I must say that it is not the only party in the House without a distinctive vision, as today’s Liberal Democrat amendment was so narrowly phrased that even its spokesman did not want to move it.

Mr. Simon: It is a bit rich of the hon. Gentleman to be telling us about distinctive visions when the shadow Chancellor did not mention a single one of his policies or a single aspect of the Conservatives’ position, which is totally lacking in vision. Who are they to stand up and tell us about vision?

Chris Grayling: What a load of nonsense. My hon. Friend the Member for Tatton (Mr. Osborne) gave a whole series of policies and ideas, many of which the Chancellor pinched and put into his autumn statements.

Back in 1997, the current Prime Minister made his first Budget speech, in which he set out his priorities. He told us that,

Ten years and billions of pounds of spending later, the reality is rather different from the rhetoric. We have had the first run on a bank for 150 years. Personal and public sector borrowing is running out of control. Youth unemployment is higher than 10 years ago. The poorest pensioners are getting poorer. We have a higher proportion of children being brought up in workless households than any other country in Europe. As my hon. Friend the Member for Peterborough (Mr. Jackson) rightly pointed out, almost 5 million people in the country are stranded on benefits. Also, the proportion of British people in work is falling.

Whatever happened to the promises on skills and education, when one in five school leavers cannot even read or write properly? Whatever happened to the promises on investment and manufacturing when we continue to fall down the world competitiveness leagues, when employment in manufacturing continues to drop—as my hon. Friend the Member for Ludlow (Mr. Dunne) ably pointed out—and when the Government continue
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to bring forward ill-thought-out changes to taxation and regulation that make it increasingly difficult to do business in this country, as my hon. Friends the Members for Northampton, South (Mr. Binley) and for Preseli Pembrokeshire (Mr. Crabb) eloquently said? Whatever happened to that so-called man of principle who stood at the Dispatch Box in this very debate 11 years ago and railed against Conservative ideas on inheritance tax? He told us then that the Conservatives were putting the interests of the privileged few ahead of the interests of the many. I wonder how many of his friends imagined back then that, as Prime Minister, he would be so panicked by a Conservative announcement on inheritance tax that he would steal the policy and claim it for his own a matter of days later. I thought he might at least wait a few months so it did not look too obvious, but our Prime Minister is clearly not a man who does well when on the back foot.

It is interesting to look back at the Prime Minister’s last speech from the Opposition Benches on a Loyal Address, which he gave just before the 1997 general election, and in which he set out all his flagship policies, demanded change and called in terms of skills for the introduction of a university for industry and for individual learning accounts—both subsequently introduced and both subsequently failed. Hundreds of millions of pounds of taxpayers’ money were wasted. The hon. Member for Coventry, North-West (Mr. Robinson), a former Minister and colleague of the Prime Minister, said that the Government need to do better on skills.

In the same speech from the Prime Minister that I mentioned, a new national employment policy was called for to tackle the issue of workless households. That was, again, subsequently introduced and billions of pounds were spent on it, but 10 years later, nearly one household in five is workless and the number of children brought up in poverty is rising. The Prime Minister also had a new savings policy, which he said would channel investment, but 10 years later, we have another fiasco. Savings have collapsed, the number of people saving for retirement is down by 2 million and 125,000 people who took the trouble to save for their retirement have been left with a fraction of what they expected, as their funds were swept away by this Government’s and this Prime Minister’s great pensions disaster.

Mr. Heald: Does my hon. Friend agree that the attack on entrepreneurship is an attack on the nation’s future? It affects issues such as future youth unemployment, and it is a disgrace that this Government are doing so little for the future of this country.

Chris Grayling: I agree with my hon. Friend. I find it extraordinary that a Chancellor who gives us so much talk about enterprise does the opposite when he puts into practice the policies in which he believes.

The absence of any measure in this Queen’s Speech to help those 125,000 pensioners is one of the biggest blights on this set of proposals. Last summer, this Government sheltered behind the Parliament Act 1911 as they sank the pensions lifeboat, which Conservatives and hon. Members from both sides of this House sought to introduce to restore pensioners to a reasonable
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level of income in retirement. Some people are living beyond retirement with a fraction of the income that they have been promised, some are struggling with serious illness, even having to carry on working while receiving treatment to make ends meet and some are faced with the prospect of selling their homes.

The Government’s financial assistance scheme was supposed to provide such people with the help that they need. Instead, it has spent more on administration than it has paid out to pensioners, and even when it occasionally pays out money, it still offers them only a fraction of the money that they expected. In the past few months, the best that the Government have been able to offer these people is a review of the options. We are waiting with bated breath to see what Andrew Young recommends. I genuinely hope that he finds an easy solution to the problem and that this Government implement it quickly. If he does not, I say to Ministers, and to those pensioners, that we will bring back our proposals for the pensions lifeboat and we will carry on our fight to get them implemented. I have given a public commitment to implement those proposals within the first three months of the next Conservative Government, but now that the election has been postponed, those people cannot wait that long. They need help now. So let me say to a Government who are developing rather a habit of stealing ideas from the other side that they are welcome to take this one. I will personally gift wrap it and deliver it to their door if they will just get on with the job and give those pensioners the support that they need.

Of course, the pensions debate in this Session will be much broader than that. Over the coming months, we will debate the final elements of the Government’s pension reforms, the package that they have put together in the wake of the Turner report. Let us be clear that reforms to our pensions system need to be long term and they need to be able to outlast changes in Government. That is why there has been such a focus on achieving consensus on the reforms. Conservatives want the reforms to work, but I am not prepared to abandon the need for a real debate about their detail in an attempt simply to defend the principle of consensus. The reality is that there are still problems with the reforms, and they must be sorted out in the process of debating the pensions Bill.

I have written to the Secretary of State setting out a number of concerns. The big unaddressed issue is how the package will sit alongside the system of means-testing that this Government have introduced over the past decade. The means-testing system for pensioners represents another of the Prime Minister’s great U-turns, because in Opposition he railed against the idea of means-testing for pensioners and set himself the goal of eliminating it, but in Government he has established a process to draw more pensioners into means-testing than ever before. If the pensions Bill goes ahead without further modifications to how the system works, some people who save for retirement will derive no benefit from having done so.

Labour Members know full well that setting aside a few hundred pounds a year for retirement represents a big commitment for somebody earning £12,000 a year. For that person to reach retirement and discover that they have effectively lost their savings, because their income is no greater than it would have been had they
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simply waited for means-testing, cannot be right. We are happy to engage in a constructive debate with Ministers about how to deal with the problem. One option might be a system in which people are able to take back part of their contributions if they reach retirement and are still below the means-testing limits. Other organisations have suggested different routes, and we have seen suggestions in the past couple of days.

I want to see Ministers work through the options available and present them to the House so that we can debate the issue properly. If we do not deal with the problem now, when the Conservative Government we intend to form introduce the reforms in 2012, they will not work as well as they should. If some people are in danger of losing out, the story will be written whatever I say and whatever the Secretary of State says. The story will be written of people moving in and out of work or people who do not own their own homes putting aside money for retirement, reaching retirement age and seeing their friends who did not save getting exactly the same income in retirement.

In a society in which people have a propensity not to save, many will use that fact as an alibi for opting out. As a result, personal accounts may struggle to get off the ground. If that happens, the cost to future generations of taxpayers of pension provision is bound to rise. If the Government put their head in the sand on the issue, their successors will have a big price to pay. We have already seen one major pension reform—stakeholder pensions—fail to deliver what the Government promised. We cannot afford for that to happen again, which is why I will not shirk from challenging the Government over the flaws in their plans. It is why I will fight to ensure that the changes that are needed are put into place now. We should not have to wait for a change of Government to get it right.

Paul Farrelly (Lab) rose—

Rob Marris rose—

Hon. Members: Give way.

Chris Grayling: I give way to the hon. Member for Newcastle-under-Lyme (Paul Farrelly).

Paul Farrelly: I have listened carefully to the hon. Gentleman’s litany, which implies that everything was rosy in Tory times. I remember 3 million unemployed; the monetarism-induced recession of the early 1980s; the stock market crash in 1987; the recession of the early 1990s; negative equity; and Black Wednesday. What I cannot remember in the 18 years of Tory rule are 10 years of uninterrupted economic growth. Can he tell us when they happened?

Chris Grayling: I am not sure whether that was an intervention or a speech, so I shall give way to the hon. Member for Wolverhampton, South-West (Rob Marris), in the hope that he has something constructive to say.

Rob Marris: The hon. Gentleman talks about reaching consensus, and I wish to press him on consensus on the financial assistance scheme. The Government have bailed out Northern Rock, for which
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they were not the guarantor of last resort, although they became so. I think that the Government should go 100 per cent. on the FAS, but the lifeboat scheme is not a good way to produce the funds to do so. I declare an interest, because my wife and I have an endowment policy with a company that will have excess funds. The lifeboat scheme would nick money from those excess funds, which could come to me, and give it to pensioners. I want a good deal for those pensioners, but the lifeboat scheme that the hon. Gentleman proposes is a deeply flawed way to achieve it. Let us have consensus on 100 per cent., but look at a different mechanism for funding it.

Chris Grayling: I accept the spirit of that intervention and I suggest that we work through the detail in Committee. I would be delighted if the Government would propose a different package that achieved the same goal. The issue is sorting out the pensioners, and how we do it can be a different creature—but let us at least do it.

The Queen’s Speech was born of political expediency, not a vision for a better Britain. It was all about Gordon knows best, and not about the British people knowing best. Of course there are some things in it that we welcome, such as the support for youth projects, and the measures on climate change and deposit insurance. But too much of it is a rehash of the failed messages of the past 10 years. Indeed, Ministers sometimes appear to have forgotten just how long they have actually been in power. That is why we keep hearing them giving history lessons and trying to pass the buck back to the past. Do they not realise that there comes a time when Governments have to take responsibility when things do not work out? Do they not realise that the first-time voters of 2010 were five years old when they came to power? Do they not realise just how absurd they sound when they try to create alibis that are more than a decade old to excuse the waste and the failings of this Government?

Debates on the Loyal Address have always provided Oppositions with an opportunity to lay bare the failings of a dying Government. In the debate on the same subject 11 years ago, the present Prime Minister stood at the Dispatch Box and laid into his opponents. I wonder whether he could ever have realised how appropriate his words would prove to be when repeated by his future opponents to describe the failings of his exhausted Government. He said:

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6.45 pm

The Secretary of State for Work and Pensions (Mr. Peter Hain): The hon. Member for Epsom and Ewell (Chris Grayling) made a speech of typical bluster, uncosted spending commitments and what sounded suspiciously like an intention to vote against the pensions Bill and to abolish pension credit.

First, I congratulate my right hon. Friend the Member for Sheffield, Central (Mr. Caborn) on moving the Loyal Address. He made a typically pugnacious and witty speech, such as we have come to expect from him.

After five days of debate on the Queen’s Speech, the Opposition have tried desperately to assert that they would be so much better in government next time than they were last time. Yes, last time they allowed inflation to reach 9.5 per cent. They raised interest rates to a full 15 per cent. They managed to push the claimant count up to 3 million. They tripled the numbers of those on incapacity benefit and cemented the sick note into the foundations of the British economy. They left one in three children in poverty, which was the worst of almost every industrialised country. They left 1 million more pensioners in relative poverty than there are today. However, that was then. The Opposition promise that they will be better now. They will not, because they cannot. Fundamentally, they have not changed because they cannot. They are still peddling uncosted promises to spend more and tax less, magically all at once. Those are the same old failed policies all over again: boom and bust is in the Tory DNA.

Only Labour recognises the long-term challenges facing the country, and only Labour has set the policies to meet them. They are policies of economic stability to produce unprecedented year-on-year economic growth, to anchor inflation at 2 per cent. and to produce the lowest mortgage rates since the 1950s. Those policies have put 29.2 million people in work, more than ever before, with 2.8 million more people in jobs than in 1997. They have caused the number of those on jobseeker’s allowance and the number of lone parents on income support to come down. For the first time in two decades, the number of those on incapacity benefit has fallen. One million claimants have come off key out-of-work benefits since 1997 and more are coming off benefit and going into work every day.

That shows concrete, credible Labour success against Tory failure in the past and shallow Tory spin today. For the first time, we can aim at genuine full employment, defined not just by low unemployment but by high employment based on radical reductions in the benefit mountain that we inherited from the Tories. Yes, there will be thousands more opportunities for British benefit claimants to become British workers by taking British jobs.

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