Richard Younger-Ross: I note the Ministers point about what the Government inherited in 1997. I also note that we heard nothing from Conservative Members on policy and on what they would do in terms of commitments. However, Department for Work and Pensions research shows that, in 2006, 50 per cent. of pensioners on low incomes relied on handouts from family and friends. That suggests that although the Government might have done something, they have not yet done enough.
Ms Winterton: I want to come to the take-up of benefits. We have to be careful with the language that we use in this area. The term handouts might be a little derogatory when applied to the support that people might be giving to their own family members. It is important to emphasise that people are perfectly entitled to the assistance in the form of pension credit and help with council tax. We have to be careful when using the word handouts and others as though implying that somehow people are not deserving of the help. Some families may support their elderly relatives. That should not always be regarded as charity; it is something that families may wish to do. We have to be careful about the language that we use.
I was referring to winter fuel payments. In 1997, £252 million was being spent to support pensioners in cold weather; now, we spend £2.1 billion. There is free off-peak bus travel, to which the hon. Member for Teignbridge referred. There are free eye tests, free TV licences and free swimming. We have tried to provide all those things on a comprehensive, universal basis because we think it important to recognise that the discussion about older people is about quality of life as well. This is not only about benefits and payments. Other things, such as free bus passes, are about recognising the importance of quality of life.
There are huge challenges as a result of demographic changes in society. That is why, in the last two pension Bills, we have made a huge change in how we will be helping people to save for their retirement in the future. There has been welcome cross-party agreement on the changes that we wish to bring in. They will make a big difference to women saving for their retirement as well. I join the hon. Member for Teignbridge in paying tribute to Baroness Hollis with regard to the recent changes that she made and pressed for, which the Government have accepted. I am referring to the change in the conditions for voluntary national insurance contributions. We will see a radical shift in how we approach saving for retirement in the future. The changes that we are making constitute recognition of the demographic changes that are coming, but they are also about fairness, equality and justice.
While on the subject of future changesa subject raised by a number of hon. Memberswe have legislated to reintroduce the earnings link for the basic state pension. We are committed to restoring the link with earnings by 2012, or at the latest by the end of the next Parliament. As a result, the basic state pension should double in value by 2050, more than if the current uprating policy is continued. As I say, that is legislated for.
I have spoken about raising the basic state pension to £151 a weeka sum called for by a number of organisations. The first problem is that many pensioners
would be worse off as a result, as it would reduce our ability to target help on those with the lowest incomes. There is no doubt that it would also cost an additional £30 billion a year in the first couple of years. That would be a huge commitment. I do not know whether the Liberal Democrats are making such a commitment today, and I doubt whether the Conservative party has made such a commitment.
We have invested much more money in pensions. We have allocated much more money to support pensioners, but we cannot ignore the fact that the call to raise the basic state pension to £151 a week would carry additional financial burdens. Nowadays, in many ways the pensioner population reflects the wider population. As I have said, pensioners will not necessarily be on relatively lower incomes than those in other parts of society.
One important subject that was raised in the debate was how to encourage the take-up of benefits. It is true to say that people dislike complexity. They crave simplicity, which is why we have made it much easier to calculate pension credit awards. We have also made the system more automatic. With one phone call, people can claim pension credit, housing benefit and council tax benefit without the need for a signed claim form.
The hon. Members for Eastbourne (Mr. Waterson) and for Ceredigion (Mark Williams)I may need another lesson on pronunciationand the hon. Member for Edinburgh, West (John Barrett) spoke of automaticity. We want to work closely with organisations like Age Concern and Help the Aged to maximise the take-up of benefits. I was in Macduff two weeks ago with Age Concern, considering what more could be done to encourage people to take up pension credit and council tax and benefits.
I asked about automaticity when first being briefed on these issues. Some people feel it to be a slight invasion of privacy if their details are seen to be handed over, particularly when they are told that they may be entitled to a benefit. However, we need to balance that against what we do now, which we will continue, with one phone call giving people access to all the benefits.
We make direct contact with people if we feel that they may be entitled to extra help, sometimes just sending letters. However, some people feel that that it is up to them to make a claim, and they do not necessarily want interference. All the time, we are considering what else can be done to ensure that people take up their benefits. All ideas are welcome. Members of Parliament, too, have a role to play in helping people. It is good to see some of the schemes that people have adopted. However, we sometimes need to be careful.
The hon. Member for Ceredigion spoke of veterans. It is absolutely right to say that, for them, we need to take a cross-Government approach, as I know from my work at the Department of Health and the Department for Transport, particularly to ensure that veterans are able to take up their entitlement. We are supporting them in doing that.
Several hon. Members referred to the Institute for Fiscal Studies report. I recognise what they said about inflation, but the report suggests that, over the long term, average inflation for both pensioners and non-pensioners is almost identical. It shows that pension credit is worth about £430 more a year than if it had been uprated by the inflation index used in the report
since 2001, and that the basic state pension is worth about £340 more a year than if it had been uprated since 1987 by the reports inflation figure. We need to look carefully at the statistics to ensure that we target help where it is most needed, as I have suggested, yet at the same time we are investing more in our pensioners, with the £12 billion extra that we are providing.
A number of hon. Members, particularly the hon. Member for Eastbourne, mentioned the current economic climate. It is important to say that pension funds are long-term investment vehicles. Fluctuations in financial markets will affect the value of assets in the short term, but it is the long term that is important. We would certainly encourage people to realise the importance of saving for their pension. It is one of the most effective ways of saving for security in retirement, and I hope that all hon. Members endorse that view.
The hon. Member for Eastbourne also raised the matter of annuities. We have considered the points that he made, but I have to say that the vast majority of people buy annuities well before the age of 75. Only 5 per cent. of people delay until after the age of 70, but it tends to be the wealthier pensioner. We did look at the matter, but the industry indicated that temporary suspension would be particularly unworkable.
It has been an interesting and wide-ranging debate. I hope that I have been able to illustrate that we always do everything that we can to support our pensioners. The Government have a proud record in that respectone that I believe is appreciated by pensioners. The changes made since 1997 pay due respect to the important contribution that pensioners make to society. However, we will continue to work with pensioners and pensioner groups to ensure that we are doing all that we can to support them.
John Bercow (in the Chair): The next debate, as hon. Members will know, is due to start in just under a minute at 11 oclock. It might be helpful for Members to know, just before I call the hon. Member whose debate it is, that no fewer than nine Members have indicated to me in writing that they wish to speak from the Back Benches on this very important matter. Hon. Members will know that I am always to keen to include as many Members as possible, but they are perfectly capable of doing the arithmetic for themselves, and a certain self-denying ordinance will be required.
Charlotte Atkins (Staffordshire, Moorlands) (Lab): I am very pleased that so many hon. Members have found the time support the debate and grateful for the opportunity to talk about the vital issue of the future restoration of our waterways network. I welcome the Minister to what is his first debate on waterways, and I hope that this is one of many on inland waterways to which he will respond. He has already demonstrated his enthusiasm for canals by booking a holiday in February on the Shropshire Union canal. That shows real enthusiasm, and it should demonstrate to him the work that British Waterways has done on flooding. I hope that his visit is not too interrupted by inclement weather. It is probably just as well that he has recently announced an extra £1 million to help British Waterways, which is welcome.
Britain has a wonderful asset in its inland waterways. Some were built more than 250 years ago, but the canal age was well and truly over by the middle of the last century and the vast majority of freight movements were transferred to rail and road. The network fast became disused and fell into disrepair. However, a small band of dedicated individuals saw a future for our canals and rivers. They formed the Inland Waterways Association. Their drive, vision and enthusiasm ensured a renaissance for the canals and the waterways system. More than 500 miles of waterways have been restored to use, and a further 500 miles are currently under active restoration. Every weekend, groups of volunteers around the country work to restore more of our historic waterways network. IWA volunteers have created a waterway recovery group, which has been actively engaged in restoration since the early 1970s. Indeed, they brought my local canal, the Caldon, back from dereliction in 1974. The IWA provides volunteer working parties and logistical and expert help to waterway societies up and down the country. More than 31,000 boats travelled on the waterways network last year, and 11 million visitors, including anglers, walkers and cyclists, used the towpaths.
The Government have played a key role in the waterways for a long time. I should like to remind the Minister that the waterways were first nationalised in 1947I can do so now that nationalisation is back in fashion. Unfortunately, those early years of nationalisation did nothing to protect the canals from closure and disrepair. Only in the late 1960s did the Government begin to recognise the recreational value of the waterways. However, the outstanding contribution that waterways can make to both regeneration and the environment was recognised only when the Labour Government launched Waterways for Tomorrow in 2000.
Mr. Mark Field (Cities of London and Westminster) (Con): We all support the use of public and private money for the renovation of waterways. The hon. Lady refers to the events of eight years ago, but I hope that she recognises that in many of our citiesI speak for London, but the same applies to the centre of cities such as Birmingham and Manchesterthere has been a huge amount of renovation, with the public and private sectors working together, much of which predates the important initiatives that I am sure she will address.
Charlotte Atkins: The regeneration has been brought about by a huge partnership between the Government, local canal trusts and volunteers, who had the vision to research and create feasibility plans for many of the important developments around the country in the past eight years.
David Taylor (North-West Leicestershire) (Lab/Co-op): Will my hon. Friend, who is the IWA parliamentarian of the year, confirm that British Waterways has been working steadily towards self-sufficiency and reducing its reliance on grant? Does she agree that the hit that it has takena real-terms reduction of 30 per cent.since the peak funding of the second canal age in 2003-04 is too rapid to absorb with other commercial activity and diversification? Is not that the issue?
Charlotte Atkins: Absolutely, and I must say that flattery will get my hon. Friend everywhere. It is true that the Government grant is still 40 per cent. of British Waterwayss income, and it will therefore remain an important part of its income for the medium if not the long term. The huge dive in the grant has had a tremendous impact on its ability to respond to maintenance needs and its aspirations to expand the network.
Waterways produce nearly £500 million-worth of benefit each year to this country. That is a fantastic return for the Government, who put in between £60 million and £70 million a year. The benefits are delivered to local people and communities and make a real difference where local authorities are willing to embrace the opportunities.
Lembit Öpik (Montgomeryshire) (LD): I strongly support what the hon. Lady is saying. In my local area, the complete restoration of the Montgomery canal, which is currently separated from the rest of the network, would create 340 new jobs and generate more than 1.5 million visits to the area. That would generate about £20 million in visitor expenditure every year. Does she therefore agree that investment in the canal network pays for itself surprisingly quickly and that it would be an excellent way for the Prime Minister to fulfil his promise of directly reinvigorating the recession-bound economy?
Charlotte Atkins: I hope that the Prime Minister listens to the debate, because the hon. Gentleman is absolutely right that the amount of money that goes into the canal network for restoration pays for itself many times over, not only for a few years, but for decades to come.
Government funding rose steadily from the mid-1990s, creating what has been described as the second canal age. The Government grant to British Waterways, which
is the custodian of the largest network of waterways and historic buildings in the UK, peaked in 2003-04 at more than £76 million; but as my hon. Friend the Member for North-West Leicestershire (David Taylor) indicated, it then took a dive. When the Department for Environment, Food and Rural Affairs reviewed the performance of British Waterways between 1999 and 2004, it found that it had achieved a step change in the condition, management and reliability of the inland waterways infrastructure, that the safety backlognot the total backloghad been eliminated and that six major restoration schemes, which created more than 200 miles of new navigation and the associated urban and rural regeneration, had been completed.
Tim Farron (Westmorland and Lonsdale) (LD): The hon. Lady makes a good point on the peak in funding, but is she not concerned that the change in funding that led to many schemes, including the Lancaster canal restoration project, which had got off the ground and was making huge progress and promised to bring vast amounts of investment into south Cumbria, brought an emphasis on maintenance rather than developing and extending schemes? Is that not possibly a waste of the money that has been invested so far? Does she agree that the best thing is for the money to come forward to ensure that the new schemes and the restoration of old canal ways such as the Lancaster northern reaches can be fulfilled?
Charlotte Atkins: I should certainly like the money to come forward, but I do not think that the other money that has been invested would be a waste, because local canal trusts and volunteer bodies are so determined to get the projects off the ground that we are talking about a delay rather than an end to the prospects for those developments. The schemes are such good value for money that they should be brought forward.
The money that was invested produced many new developments, such as the Millennium link and the famous Falkirk wheel. Since 2004, grants have been severely reduced. Inevitably, that has impacted on British Waterwayss works programme, and it must also have jeopardised its target of a vibrant expanded network by 2012. From wanting to expand the network, British Waterways is now having to retrench and focus only on maintaining the existing network, as hon. Members have said. Without continued improvement, confidence in the future of the network will leach away, thus damaging prospects for private sector investment, particularly in such difficult economic times.
We have already seen the impact of the credit crunch on British Waterwayss income. The downturn in the property market has made it impossible for the organisation to sell two very big development sites for about £9.5 million. The BBC recently cited the canal centre of Birmingham as an area that has seen the greatest fall in property values. Such falls must also apply to other city-centre developments around canals, and that is bound to hit British Waterwayss income. Even before the credit crunch, British Waterways had pulled out of schemes, such as the Cotswolds canals restoration. Funding is very tight. We risk losing the huge benefits of investment in our canals if maintenance is not sustained.
British Waterways has a long-term aim to become largely self-sufficient. At present, the Government grant
still represents some 40 per cent. of BWs income, and is critical to achieving its works programme. Any year-on-year underspend will lead to increased costs, because any maintenance that is not undertaken now allows minor problems to deteriorate, so that they require major works in the future. Any cutback is counterproductive, putting at risk the tremendous progress made before 2004. There will always be a need for some Government grant to contribute to British Waterwayss income in recognition of the wider public benefits generated by the waterways. In its report in 1989, even the Tory-dominated Environment Committee recognised that that was the case. That is why the extra £1 million that was announced for BW this month is so welcome.
Mr. James Gray (North Wiltshire) (Con): I am listening very carefully to the hon. Lady and believe that she talks a great deal of sense. However, I am disappointed that she occasionally adds a misplaced party political tinge to her remarks. She was wrong to suggest that the revival of the canals has occurred only since 1997. The Kennet and Avon canal, the Wiltshire and Berkshire canal and the Cotswold canal, which the Labour Government have been responsible for pulling the funding on, all started their revivals long before Labour came to power. Therefore, will the hon. Lady acknowledge that this is not a party political but a cross-party issue?
Charlotte Atkins: Enthusiasm for canals is a cross-party issue. However, the amount of funding that has gone into British Waterways and other authorities has massively increased since we have had a Labour Government.
The Environment Agency, which operates about 20 per cent. of the network, is in a similar position to British Waterways. It is handicapped by a large maintenance and navigational improvement backlog. The Environment Agency currently receives some £14 million in grant in aid but the estimated cost of completing the backlog of capital work to its waterway structures is said to be £30 million. Therefore, structures, such as locks and moorings, have not received the routine maintenance that they need to ensure that they remain operational.
In the past four years, there has been a 24 per cent. increase in the number of boats on the network and an 18 per cent. increase in visitors. That is a fantastic achievement, but satisfaction with the waterway network is falling. Only 49 per cent. of boaters say that their experience of the waterway and its upkeep is good or excellent. That is a dramatic drop from the previous year, in which 66 per cent. of boaters held that view. However, boaters are not the whole story. They represent only 3 per cent. of the visitors to the waterways. None the less, without the boats, much of the colour and vibrancy of the waterways is lost. Boats are an essential component of a living waterways network.
My local Inland Waterways Association branch has reported to me that real difficulties are beginning to be encountered by boaters who have to operate a large number of gate paddles on the Cheshire locks. Of course, winding lock gear requires a degree of physical effort, but the problems are well beyond the usual. With so many locks causing problems in the same area, it will not be long before boaters learn to avoid that stretch of the canal.