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Mr. Andrew Dismore (Hendon): The hon. Gentleman has given all sorts of percentages. What was the size of the sample from which the mysterious pension provider was working? How many pensions has it sold, so that we can gauge what the percentages mean in terms of numbers?
Mr. Webb: The hon. Gentleman will be aware that if I tell him how many products were sold, he will be able to work out which company sold them. As I have promised to respect that confidence, he must realise that I cannot give that information. If he doubts the percentages, why does not the Secretary of State ring the various companies tomorrow and see whether he gets a different answer? The BBC expressed an interest in the figures and it rang round the other providers, apart from the one that I have mentioned, and they all told the same story. If that survey is not accurate, let the Secretary of State tell us what is, which he has signally failed to do.
The Minister for Pensions (Mr. Ian McCartney): Can the hon. Gentleman answer a question, just in case I have to deal with the matter later? If the BBC rang every other one, he must have told the BBC who that pension provider was.
Mr. Webb: Indeed. The BBC rang a sample of providers. Obviously, it did not ring all of them. I made a slip of the tongue. I accept that. I do not know whether the BBC rang that provider or not, because I of course did not tell the BBC.
Mr. Webb: If the hon. Gentleman reads the personal finance columns of a weekend as assiduously as I do, he will find that people are being recommended to take capital, put it into a stakeholder pension, on which they can get tax relief at the higher rate immediately, which is a fantastic rate of return, and take a quarter of that out tax free, which is another fantastic rate of return. The combined effect of the tax relief on the way in and the tax-free lump sum more than compensates for the relatively modest return on annuities, even if they buy the best annuity that is going.
Mr. McCartney: The hon. Gentleman made a statement to the House that he was maintaining a confidence and had not informed anyone else of the information. He went on boldly and clearly to tell the House that the BBC had phoned everyone else. He must answer the point clearly. If that is the case, he must have informed the BBC. If he has informed the BBC, he should inform the House.
Mr. Webb: The complete absence of a response on the substance of the issue is demonstrated by that line of questioning. I said, as the record will show, that it was a slip of the tongue to refer to the other providers. Let me make the position clear. The BBC knows the figures that I just gave. It does not know the name of the company. It rang pension providers and all of them said the same thing. The substantial question is: are they right or are they wrong? Do the Government know? If they do know, the Minister should have brought that information to the House this evening. If they do not know, they have been negligent. That is the situation.
I look at the hon. Member for Havant (Mr. Willetts) with some respect because it is rather difficult to draw up a motion in the absence of any policy whatever on pensions, with the exception of the annuity policy. The motion says:
While the Secretary of State was speaking, he was heckled by Conservative Members with that memorable phrase, "75p." When the House was invited to divide on the issue of whether 75p was inadequate, only one party said that it was: the Liberal Democrats. [Interruption.] When the Conservatives had the chance to put their money where their mouth was[Interruption.]
Mr. Willetts: I remind the hon. Gentleman that that was perhaps not his finest parliamentary moment because his voting would have stopped any increase whatever in the basic state pension. Voting for no uprating was less than smart.
Mr. Webb: The hon. Gentleman chooses to forget the two occasions on which the House voted on 75p. He may remember the Liberal Democrat early-day motion that said succinctly, as ever, that 75p on the basic state pension would be inadequate. During a Liberal Democrat Opposition day, we put that to a vote, and the Conservative party abstained. Voting for that motion would have had no effect on upratings, but it would have indicated Conservative opposition. Indeed, I recall intervening on the hon. Gentleman to ask whether he would have put it up by 75p. In his characteristically honest manner, because he is nothing if not honest, he said, "I probably would have done the same myself." So while it is true that the growth in means-testing is regrettable, it is clearly not true that Conservative Members would have done anything about the basic state pension other than to make matters worse.
The pièce de résistance of the Conservative motion is in the final line, where the once great Conservative partywhich I am told is Britain's lead Opposition partyissues a radical call to arms to Britain's pensioners. Conservative Members call
In his speech, the Secretary of State pre-empted some of my comments and asked me questions on the Liberal Democrats' approach to pensions policy. I think that it would be in order if I were very briefly to reply to those questions and distinguish our policy from that of Conservative Members.
We believe that means-testing, which was mentioned in the official Opposition motion, will be diminished only when there is a decent basic state pension. That is the heart of our approach. Although the Government amendment to the motion describes the basic state pension as a "foundation", it is a sinking foundation. When the pension credit is introduced, half of all pensioners will receive it and the pension level will not affect their standard of living at all. The pension level will affect only their credit. Moreover, the other half of pensioners will be the richest half, to whom pension levels will increasingly not matter. Therefore, the Government's policy is effectively to phase out the pension entirely. That is the direction of their policy.
We believe that the pension needs to be rescued and that the priority group are thosethe old elderlywho have seen the real value of their pension decline for the past 20 years. At the previous general election, the Liberal Democrats pledged a 50 per cent. income tax rate on those earning more than £100,000 annually. In written answers, the Chancellor told us how much money that rate would raise. It would be more than enough to pay £15 weekly in the pensions of the over-80s, who are the poorest pensioners in the land.
The Secretary of State said that pension increases must be either means-tested or paid across the board, but it is possible to have intelligent targeting. We can target increases on the old elderly, who are the poor elderly. They are the priority group.