Social Inclusion

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Tony Worthington (Clydebank and Milngavie): I welcome what my right hon. Friend is saying. It was a tremendous achievement by the Government to solve the problem within about four months, when the financial services industry had, once again, failed the people whom it was supposed to serve. Does she welcome the Fairchild judgment in the House of Lords? That matter was also causing misery to millions of people throughout the world. I know that she will work with us to ensure that people who are still suffering from asbestos receive their due compensation quickly.

Mrs. Liddell: I take the opportunity to pay tribute to my hon. Friend. Few Members of this House have done more to get justice for asbestos victims. Like him, I have seldom had a greater sense of relief than I did when I heard that judgment. The difficulties that were encountered in relation to Fairchild were extremely complex and could have caused real hardship. I shall continue to remain involved in the issues. I pay tribute to colleagues across Government who have recognised the special Scottish interest in the matter and to my officials, who have gone out of their way to maintain—in some cases—daily contact with the companies involved, to ensure that there is no backsliding. We shall keep in there until we make sure that those who are entitled to payment receive it. More than £3 million has been paid out under the scheme that was put in place by the Association of British Insurers and the financial services compensation scheme.

I come now to pensioners. The Government know that our pensioners deserve a decent future. When we came to power we recognised that while some pensioners were doing well, the poorest had not shared in the general prosperity. We therefore introduced the minimum income guarantee, which provides direct help for the poorest pensioners and benefits around 181,000 pensioners in Scotland.

We have taken significant other measures to help pensioners. Free TV licences—a simple thing to do, but an expensive one—for people aged 75 or over were introduced, benefiting 300,000 people in Scotland. Often, the older pensioners are the poorer pensioners.

Our introduction of winter fuel payments—increased to £200—was one of the best things that the Government have done. It put money into the hands of people when they most needed it, and gave them a sense of pride, especially coming, as it does, at

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the beginning of winter when people are thinking about their additional costs.

Sir Robert Smith: The Secretary of State mentioned that the older pensioners tend to be the poorer pensioners. Does she not recognise that one of the quickest and most targeted ways of reaching those poorest pensioners would be a greater uprating of the pension for those aged over 75 and older pensioners, to take more of them out of means testing and make it much simpler for them to get the money that they need?

Mrs. Liddell: The introduction of the minimum income guarantee is intended to even out some of the difficulties that have occurred. It is a great source of comfort for pensioners, regardless of their age.

I return to the winter fuel payment, which goes to every pensioner and benefits some 1 million Scots. Together with increasing the basic state pension by more than inflation for each of the last two years, it has benefited some 900,000 pensioners in Scotland. We have also guaranteed that the full annual basic state pension will rise by at least £100 for a single pensioner and £160 for pensioner couples in 2003–04, and that in future years the basic state pension will rise each year by 2.5 per cent. or the increase in the September retail prices index, whichever is higher. We have also reformed the state earnings-related pension scheme, introducing the second state pension, which helps people with broken work records. Carers who have had to give up their employment benefit from that a great deal.

We have also introduced stakeholder pensions, and next year we will introduce the pension credit, which will make a huge difference for pensioners with small savings and will benefit around half of all pensioner households. I do not know how other Members feel, but when somebody comes to my surgery who, because they have a small occupational pension, misses out on everything else, I find that very frustrating. The pension credit will enable us to cope with that. It will mean that no single pensioner need live on less than £100 a week and no pensioner couple on less than £154 a week.

There is currently real concern about the future of occupational pensions and, as the House knows, the Government commissioned two major reviews on occupational pensions and long-term savings. The review on savings reported yesterday and the Pickering review is due very shortly. The Government will examine those reviews very closely and bring forward proposals later in the year. We understand people's anxiety about the future, their savings and their pensions.

The subject is close to my heart, because within a few days of our being elected in 1997 I was able to work with my colleagues to right the injustice of personal pension mis-selling. Five years on, that process is nearing completion and the Financial Services Authority estimates that £11.8 billion in compensation will be paid and 1.7 million consumers will have had their cases reviewed. I still get letters from members of the public who have received their compensation cheque in the post and remember that it

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was a Labour Government that acted to end the scandal of pensions mis-selling.

When we were elected in 1997, we knew that we had to tackle the problem of people in our society who felt marginalised. The new deal has brought hope to thousands, including young people, lone parents and people over 50, making a difference to their lives and giving them self-esteem as well as putting hard cash in their pockets.

We are thinking ahead. As outlined in the Budget, the new tax credits are radical reforms to our welfare system to improve and modernise the support we provide. We have not forgotten those who have suffered as a result of their employment. We have made a difference to them and to their families, too.

The Prime Minister made it plain that our commitment to halving child poverty by 2010 and abolishing it within a generation is a challenge. But it is a challenge that we are ready for.

The Government and the Scottish Executive must think ahead, take action and then evaluate, and we will continue to do all of that, because we share a vision with the Executive of the future as opportunity for all—a society for the many and not for the few. Not just because that is morally right, but because using everybody's talents is good for society and good for the economy. In this area, head and heart go together.

We know that we are on the right course and we will continue to work within Government and with the Scottish Executive to tackle the deep-seated roots of poverty that we inherited. I invite Members throughout the House to join us in that crusade.

10.51 am

John Thurso (Caithness, Sutherland and Easter Ross): I, too, welcome you to the Chair, Miss Begg.

I welcome this debate, which, as we contemplate the beginning of the summer recess, is timely. Many of the questions to which the Secretary of State alluded in her speech are ones that we will all face at our clinics and surgeries as we tour our constituencies, particularly those of us with large rural constituencies, some parts of which we can get to only in the summer because of the working week at Westminster.

I also have no doubt that many of the actions undertaken by this Government since 1997 are extremely welcome. The Government have done much with which Liberal Democrats agree. We need to remind ourselves of the state of the country and the problems that we faced in Scotland in 1997, following 18 years of Tory rule. I recall a speech made by my late father in another place, about 18 months before he died, on the subject of local government reorganisation in Scotland. It was a most compelling dissection of the damage done to Scotland by Thatcherism.

Let us not forget those Thatcherite ideas: greed is good; there is no such thing as society; if one cannot fight one's way up, get down—all alien ideas to Scots, who believe in community, working together and helping each other. That is the background to this debate, against which I have no hesitation in saying that Scotland is immeasurably better off today than it

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was in those dark days of the early 1990s. It will be at least a generation before we see more than one Tory in Scotland, given that the previous Leader of the Conservative party marched them up a blind alley and the current one has sat down to play blind-man's buff.

I shall move on to the Government's achievements. Like the Secretary of State, I would say that the Government's single biggest achievement, which the Liberal Democrats welcomed and took part in, was the creation of the Scottish Parliament. Without a doubt, devolution has given Scots the ability to control their destiny in many important ways while sharing in the partnership that is necessary for dealing with macro events in the United Kingdom. Probably the most important way in which we can combat social exclusion is to ensure that the young receive a good education and that opportunities are available to them. Many achievements of the devolved Parliament promote that, such as the McCrone settlement, increased pay for teachers, and the abolition of tuition fees for those in higher and further education.

Annabelle Ewing: The hon. Gentleman mentioned that tuition fees had been abolished. They have not. Only up-front tuition fees have been abolished.

John Thurso: Like her colleagues, the hon. Lady adores flogging a dead horse. If one asks any student in England where they would rather go to university, they will say that they would prefer to go to Scotland, where there are no tuition fees. Of course, the hon. Lady may be referring to the graduate endowment scheme. Frankly, I see no reason why those graduates who have successfully completed their education should not be asked, as they begin to earn in later life, to contribute something to those who come behind them and who may be less fortunate. However, the £10,000 threshold is low, and we, in this Parliament, should ensure that the threshold for student loans in England is raised and that the administration for the graduate endowment scheme is introduced.

To continue on the subject of young people, it gave me great pleasure to support the legislation that introduced the minimum wage. At that time, I was chief executive of a leisure company, and many people in industry said that the minimum wage would be a disaster. I argued the exact opposite, saying that if we wanted quality jobs in the hotel industry, instead of a greater quantity of jobs, and if we wanted trained staff and productivity, we had to deal with the failure in the labour market and ensure that those at the bottom received a decent wage. In 1997, I was delighted to introduce a minimum wage of £4 an hour in my business and to support the Government in introducing that legislation.

 
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