Baroness Fisher of Rednal: My Lords, does the Minister agree that the people concerned have earned that pension, by their entitlement and through the insurance scheme? Does he further agree that when they go into hospital they are still faced with the same responsibilities to keep the home going, whether it be house, bungalow or flat? Is it right that they should then be deprived of that money if they spend more than six weeks in hospital undergoing treatment which is designed to make them better, when going there is not their personal choice?
Lord Mackay of Ardbrecknish: My Lords, the downrating of the state pension when someone is in hospital for over six weeks and the further downrating when they are in hospital for over 52 weeks is of long standing and has been the policy of governments of both parties since the inception of the pension system in 1948. Of course, the pension is not all lost. The downrating is merely a portion of the pension after six weeks and then a slightly larger portion after 52 weeks. The reason is that, if the state is looking after many of the person's needs in hospital, it would be double provision to continue to pay the pension should they be in hospital for some time. The state system is pay-as-you-go, unlike Basic Pension Plus, which we have just announced and which would be funded.
Lord Stoddart of Swindon: My Lords, does the Minister agree that whether it is something which has been operated by all kinds of governments does not matter? The fact is, as my noble friend said, that it is an
Lord Mackay of Ardbrecknish: My Lords, the fact of the matter is that pensions are paid out of the taxes and national insurance contributions collected in the same year as the pensions are paid out. As I mentioned, it is not a properly funded policy. The point is that the taxpayer and national insurance payer are paying to look after someone in hospital for more than six weeks initially and, if it goes on, for more than 52 weeks. It seems to me that it is double provision if they get the help there and at the same time receive their full retirement pension. I believe that they get sufficient of their retirement pension to continue with any responsibilities for their house and so on that they might have. But if the noble Lord wants the social security budget to rise by another £60 million, I suggest that he talks to his honourable friend Gordon Brown about his suggestion that the budget that we are providing for the next two years is perfectly adequate in social security.
Baroness Fisher of Rednal: My Lords, will the noble Lord clarify that £60 million? How many persons does it represent in one year who are benefiting from the state, as the noble Lord said? How many persons are involved?
Lord Mackay of Ardbrecknish: My Lords, the position on downrating is that approximately 35,000 people at any one time have their pension downrated. Approximately 20,000 of them are in the six to 52-week period and approximately 15,000 are in the over-52-week period.
Lord Fraser of Carmyllie: My Lords, my noble friend is absolutely right. Noble Lords may laugh, but I do not believe that there is anything in the least bit humorous about it. Dunfermline is an area that many in the party opposite had written off as a place for employment, opportunity and reasons for optimism. Two thousand jobs will be created there. That is as a result of this Government's policy in attracting inward investment. I have no doubt whatever that, were we to sign up to the social chapter, that quite remarkable record in Europe, which is better than anyone else's, would seriously be put in peril.
Lord Bruce of Donington: My Lords, in order that the Question may be considered within its correct perspective, will the Minister confirm that, according to the Government's figures, for every £1 invested inwards in the United Kingdom, £2 is invested outside Britain?
Lord Fraser of Carmyllie: My Lords, I am not sure that those figures are correct. However, we have a remarkable economy in that we attract almost as much inward investment as we invest outwards. We wish to see that activity maintained. It is as desirable that we attract inward investment as it is that we invest elsewhere around the world. We are doing that extremely satisfactorily and efficiently.
Lord Clark of Kempston: My Lords, does my noble and learned friend agree that one of the reasons the UK has the bulk of inward investment into Europe, not only from Europe, but also from Korea and America, is the competitive position of our industries? They have a lower labour on-cost than our main competitors in Europe. Does he agree also that, if the social chapter was signed, inward investment would dry up?
Lord Fraser of Carmyllie: My Lords, yes. An interesting indication of that is not so much the Japanese and Korean investment that we now attract to the United Kingdom--we are the number one location for Asian investment--but that some of the most important investments undertaken by German companies are now in the United Kingdom. Most notable, in recent years, is the massive Siemens semi-conductor plant in the north-east of England.
Lord Fraser of Carmyllie: My Lords, all manner of companies. One group that certainly would not have been investing abroad, had it not been for this Government, are the privatised utilities which now have
Lord Gisborough: My Lords, to what extent would a dissipation of the funds of the utilities through the proposed windfall tax--which will give six months employment to the unemployable--deny investment in restructuring which would create genuine long-term jobs?
Lord Fraser of Carmyllie: My Lords, I have just made the point that those utilities that have been privatised have been extremely successful and are now investing in every continent in the world. If they were to be subjected to a windfall tax, I would consider that their prospects of being able to continue that high level of investment, either in the United Kingdom or overseas, would be seriously diminished.
Lord Sewel: My Lords, does the Minister accept that the evidence he gave earlier indicates beyond doubt that inward investment into Scotland is not at all deterred by the prospect of a Scottish Parliament?
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