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Mike Penning:
The hon. Lady raises an important point. Traditionally, we have relied on private provision, but she will know from her own figures that that is now
in massive decline, and that that has a lot to do with people’s fear of having their pension robbed by the Government.
Jenny Willott: I thank the hon. Gentleman for his contribution to the debate. I would like to turn to the issue of women’s pensions.
Mr. Brian Jenkins (Tamworth) (Lab): To put the record straight, the lack of confidence in private pensions came about solely because of the tremendous scandal of the mis-selling of private pensions in this country, orchestrated by the Conservative party when it was in government. [Hon. Members: “Orchestrated?”] Orchestrated, yes.
Jenny Willott: I would rather not get into the politics of who did what to whom on private pensions, but there are a number of reasons why people are very concerned about saving in private pensions; mis-selling is one, but there are also examples such as Allied Steel and Wire and other cases mentioned earlier where people lost their pensions. People are also concerned that through means-testing, they will lose out on more than they have saved; the disincentive of means-testing puts people off saving through private schemes.
Women’s pensions concern me. Currently, around 30 per cent. of women retire on a full state pension, in comparison with about 80 per cent. of men—a huge disparity. I know that Members on both sides are concerned about this and everybody wants to see progress made. But 2025 is a long time to wait for equality for women pensioners and millions of women are written off in the meantime. Even with the current pension reforms, nearly 40 per cent. of women will not get a full basic state pension in 2018. That seems to me far too far down the line for us to be making progress. We have a sexist system—designed by men for men—that has, over the decades, been to the detriment of women pensioners.
Mr. O'Brien: The way in which the hon. Lady is using these statistics is questionable. She knows very well that, following the 2007 Act, as from 2010—not so long to wait—75 per cent. of women will become eligible for a full basic state pension. She is right to say that it will rise over the following decade and a half to 90 per cent., or full equality. But the big jump will take place in 2010 for carers and for women who will be able to get a full basic state pension.
Mike Penning: On a point of order, Madam Deputy Speaker. If the Minister keeps making interventions after making a long speech at the start, there will be no time for Back Benchers to contribute to this very important debate. Is there any way you can stop the Minister getting up?
Madam Deputy Speaker (Sylvia Heal): Order. The hon. Gentleman knows full well that it is for the hon. Member with the Floor to decide whether they give way or not. It has nothing to do with the Chair.
Jenny Willott: Thank you, Madam Deputy Speaker, and on that note I shall refuse all interventions from both sides of the House until the end of my speech.
Jenny Willott: Apart from one from my colleague.
John Barrett: I thank my hon. Friend for being very generous. On women’s pensions, would it not be a good thing for the Government to allow women to increase their national insurance contributions by buying back previous years’ contributions?
Jenny Willott: Absolutely. The reason I allowed my hon. Friend to intervene was that he had been trying to get in before the point of order. He made a valid point. The Government had a chance to solve the issue once and for all with the Pensions Act 2007, but like Opposition Members here and in another place, we are concerned that they have not done so and have blown the chance they had.
Let me move on to the Conservative party. As the Minister said, this seems to be a strange topic for the Conservatives to have chosen. It is clearly a hugely important issue but, as we have seen, the Conservatives have had nothing new to say at all. They also have nothing to be proud of when it comes to their record on pensioner poverty. The only concrete commitment they have made in the past few years to tackle pensioner poverty was the commitment in their 2005 election manifesto to restore the pensions link to earnings immediately, but that was dropped under the leadership of David Cameron. They have not made any new proposals—
Jenny Willott: I am afraid that I am not going to give way. I may allow some interventions at the end. [ Interruption. ]
Madam Deputy Speaker: Order. Is the hon. Lady giving way?
Mr. Waterson: On a point of order, Madam Deputy Speaker. The hon. Lady cannot say that she is not going to allow interventions if she then provokes interventions by misrepresenting other parties’ policies.
Madam Deputy Speaker: I just remind hon. Members of what was said earlier: it depends on whether or not the Member who has the Floor chooses to give way. If anything needs to be corrected, there may well be opportunities to do that later.
Mike Penning: On a point of order, Madam Deputy Speaker. The hon. Member for Cardiff, Central (Jenny Willott) cited a Member of this House by name in her previous contribution. Surely that remark should be withdrawn, as there is no time for a response to it.
Madam Deputy Speaker: I have made the point that there may well be an opportunity for a response to be made. The hon. Lady certainly made a reference by name, and I remind her that it is usual in the course of debate to refer to hon. Members’ constituencies, rather than their names.
Jenny Willott: I apologise, Madam Deputy Speaker. As a relatively new Member of the House, I find it difficult trying to remember 646 constituency names. As I said before the points of order, I will allow interventions later, should hon. Members wish to make them then, but I want to make some progress now because I know that a number of Back Benchers wish to speak.
In the final three years of the previous Conservative Government, pensioner poverty levels remained roughly constant, at about 2.4 million before housing costs are taken into account and about 2.9 million after housing costs are taken into account. Those figures are higher than the levels under this Labour Government. Income support for pensioners under the Conservatives was worth 18 per cent. of average earnings, whereas pension credit is now worth about 21 per cent. The take-up of income support by pensioners in 1997 was about 65 per cent., which is almost the same as the current figure. The Conservatives did not crack the problem either. Admittedly, they did have slightly better take-up rates of council tax benefit and housing benefit than the Labour Government have achieved, but hundreds of thousands of pensioners still missed out on what they were due.
The biggest error that the Conservatives made was when the former Prime Minister, Lady Thatcher, broke the pensions and earnings link in the 1980s. For all the soft words that the Conservatives have spoken on pensioner poverty, they have not made a concrete commitment to reinstate the earnings link at a particular point in time, unlike the Liberal Democrats. Despite the Conservatives’ making a clear commitment before the previous election—it was made both by the then shadow spokesman, the hon. Member for Havant (Mr. Willetts), and in the election manifesto—and despite the fact that they have been pressing the Government on this point repeatedly, they still have not said when they would reinstate the earnings link.
As befits the party that first introduced the state pension 100 years ago—the then Liberal party introduced it—the Lib Dems have the most radical solutions on reducing pensioner poverty. We are not tinkering around the edges. First, we would restore the earnings link immediately. I shall answer the point made by the hon. Member for Aberdeen, South (Miss Begg)—
Miss Begg: Will the hon. Lady give way?
Jenny Willott:
Not for the moment. The Liberal Democrats would restore the earnings link immediately, so that pensioners stop falling further and further behind the rest of the population, and then we would introduce a radical overhaul of the basic state pension. We would increase it by up to £130 a month for single pensioners, and by up to £220 a month for couples. We would base entitlement on residency, not on national insurance contributions, and that would particularly help carers and women who have taken time out to bring up children. Such an approach would also reduce significantly the means-testing requirements. As well as improving income levels, it would encourage and support private saving, because it would remove the disincentive that has been introduced by significant levels of means-testing. The hon. Member for Eastbourne (Mr. Waterson) referred to that. Those proposals would eventually remove 3.5
million pensioners from means-testing, and would reduce the projected levels of means-testing from the current estimate of 40 to 50 per cent., to about 10 per cent. The problems that having such high levels of means-testing will generate have been flagged up.
We need to tackle the cost of living for pensioners, rather than just their income levels. As has been mentioned by a number of hon. Members, one of the biggest problems is council tax. Scrapping that and replacing it with a fairer system based on people’s income—the hon. Member for Perth and North Perthshire (Pete Wishart) discussed that—would make a huge difference to pensioners’ disposable income. There are also real concerns about fuel poverty and the cost of other items of household expenditure.
The cost of food and fuel has risen significantly, especially recently. Since pensioners spend on average a third of their income on food and fuel, their inflation rate this year is much higher than the national indices produced by the Government. Estimates were produced in January that showed that inflation for pensioners will reach 7 per cent. in 2008. As the hon. Member for Eastbourne said earlier, it may be as high as 9 per cent., or more than double the national inflation estimate. At the same time as pensioners’ income is falling behind that of the rest of the population, the pensioners’ price index is significantly outstripping RPI, and that is a disturbing trend.
Fuel poverty is an issue that I have been concerned about for some time, even before I took on my present role. I represent a Welsh constituency and Wales has much higher levels of fuel poverty than other parts of the UK. It is good to see others taking up the issue and I welcome some of the moves that the Government have made recently to try to tackle the problem by working more closely with energy companies. We have already reached a crisis point on the issue. The number of households in fuel poverty has more than doubled since 2004 and the average energy bill is more than £1,000 this year, which is a huge amount for poor families and pensioners to pay.
In 2005, there were 1,500 excess winter deaths among pensioners in Wales alone, so the figures for the UK as a whole are very worrying. People are dying partly because they cannot afford adequate heating, and that should not be allowed to happen in a civilised country such as ours. We need a much more concerted effort to tackle that issue, and I am glad to see the Government taking the first steps.
The Government have made some progress, but they are grinding to a halt with their abandonment of the PSA target—at the worst possible time, given rising prices, increasing fuel poverty and the basic state pension reducing in value year on year. While I agree with the motion, the important missing element is a commitment to a date for the restoration of the earnings link. The Conservatives are pussyfooting around on the issue and making no firm commitments. Given that the last time that they were in power the situation of pensioners worsened, we have to ask why it would be any different next time.
The state pension was introduced by a Liberal Government 100 years ago this year, and we are still the only party making radical proposals.
5.27 pm
Sir Gerald Kaufman (Manchester, Gorton) (Lab): I listened with great interest to the hon. Member for Cardiff, Central (Jenny Willott). Although she is new to her role, she has fallen immediately into the trap for Liberal Democrat spokespeople on any subject—making unrealisable promises, made because Liberal Democrats know that they will never be in a position to fulfil any of the commitments that they make. It is easy for them, because it is only words.
I have a great personal regard for the hon. Member for Eastbourne (Mr. Waterson) and I always enjoy listening to him. However, I have to say how sorry I am that he has been used as the front man for a Conservative debate on pensions that is one of the most opportunistic debates in which I have ever participated or to which I have listened. Listening to Conservatives bewailing the plight of pensioners is like listening to Scrooge singing, “Have yourself a merry little Christmas”. It does not come credibly from a party that had an appalling record on pensions in the 18 years for which it held office before Labour regained power in 1997. The hon. Gentleman explained to my hon. and learned Friend the Minister how keen the Opposition were to debate pensions, despite the fact that they have postponed the debate twice. The hon. Gentleman did not point out that today is one of the Tory party’s days for choosing the subject, but throughout the debate on this issue, which the Conservatives claim is of such importance to their party, 93 per cent. of the Conservative Members of the House of Commons have been absent. It is their day, and it for them to produce speakers and people to listen to those speakers.
As I said, the Conservative voice on pensions is very difficult to accept as credible. For example, we had an intervention from the right hon. Member for Wokingham (Mr. Redwood), who has now very sensibly made himself scarce. The right hon. Gentleman inveighed against the cost of fuel, yet it was he who, as a member of the Conservative Government, voted for the Norman Lamont Budget that introduced the annual built-in fuel tax escalator. As I said during Question Time the other day, there is no point in the Conservatives’ staging debates and producing commitments when we look at their record. As Aneurin Bevan said, “Why look into the crystal when you can read the book?” The book of the Conservative party’s record on pensions is one of the most abysmal of those on all the subjects with which it has been involved in the House of Commons.
Mr. Graham Stuart (Beverley and Holderness) (Con): Someone who has been in this House as long as the right hon. Gentleman and who is as highly regarded as he is on both sides of the House should surely not seek to make his whole speech on such a serious subject into an attack on the Conservative party, as if Conservative Members have no interest in the subject of pensioner poverty. As the right hon. Member for Birkenhead (Mr. Field) has said, in 1997 the Conservative party left one of the strongest and best pension systems in Europe. It has been destroyed by the Government of whom he is a Member.
Sir Gerald Kaufman:
The hon. Gentleman is a very charming Member and I take his intervention seriously. He refers to my service in this House. When I was first
elected, during my first Parliament, we used to have general subject debates on Fridays. I made a political speech and the predecessor of the hon. Member for Eastbourne, Sir Charles Taylor, came up to me at the end of the debate and said, “You are a new Member and therefore I think I should explain to you that we keep politics out of debates on Fridays.” The fact is that the House of Commons is all about politics. Not one of us would be sitting here on either side of the House without politics. When we are elected, we deal with subjects of profound interest and concern to many millions of people in this country, but the very idea that one can debate a subject such as pensions, or the national health service or law and order, without having a political basis for what one is talking about is very odd.
The hon. Member for Cardiff, Central provided us with a huge number of statistics, which peppered her speech in the intervals between her making commitments that she will never be called on to carry out. The intervention made by the hon. Member for Beverley and Holderness (Mr. Stuart) makes me wonder how he got here. I think that he fought an election campaign as a Conservative candidate and that he talked politics during his campaign. I have the highest possible regard for him as an individual, but I say to him that it is about politics. Without politics, we would not have elections and we would not be able to carry things out. That is my response to him.
Miss Begg: Does my right hon. Friend agree that whenever a politician says that we should not bring party politics into a debate, it is because they have lost the argument?
Sir Gerald Kaufman: As always, what my hon. Friend says is accurate.
The hon. Member for Cardiff, Central and others referred to the earnings link. The earnings link was broken by a Conservative Government in 1980. If they had not done that as a deliberate act of policy, which was announced by their Chancellor of the Exchequer at the time, there would be no debate about restoring the earnings link, or when to do so, because it would never have been broken. Breaking the link forms part of the Conservatives’ record. Our Government have legislated to restore the earnings link. I wish that they could restore it sooner, but at least they have legislated.
Mr. Waterson: As always, I am listening closely to what the right hon. Gentleman is saying. If it was so outrageous of the wicked Tories to scrap the earnings link in 1980, why have the Labour Government done nothing about it over 11 years, and why might they do nothing about it until 2015—and perhaps not even then?
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