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I congratulate the hon. Lady on extending her brass neck further by apparently making Liberal Democrat policy on the hoof, in proposing biennial Finance Bills. I have not heard a whiff of that before. It was clear, following some penetrating questions from my right hon. Friend the Paymaster General, that that policy was being made on the hoof. The hon. Lady did not seem to understand the difference between a Finance Bill and Budget resolutions, and she really floundered when asked what she would do about the haemorrhage that might occur if an avoidance loophole were suddenly discovered.
I have a further reason to question the hon. Ladys memory. I, too, was on the Public Bill Committee considering the Statistics and Registration Service Bill. She referred to pre-legislative scrutiny, but my recollection is that no outside body availed itself of the new opportunities under the procedure of this House to put forward evidence on that Bill. She was suggesting that such evidence might be taken on a Finance Bill. I understand her point of view, although I am not sure that I agree with it, but to pray in aid a Bill on which no outside body put forward evidence seems to provide rather weak support for her case.
Julia Goldsworthy: I would be interested to hear from the Minister why the Finance Bill was specifically excluded from those provisions. The hon. Gentleman will know that the Statistics and Registration Service Bill was the first for which these scrutiny and evidence-taking sessions were available. As he proposed the introduction of a new vehicle excise duty band, I would also be interested to know why he feels that the system is so complicated that there could be no read-across to the aviation industry.
Rob Marris: On the hon. Ladys first point, I cannot answer for the Minister. The Minister is answerable for the policy of the Government. On vehicle excise duty, the hon. Lady was not listening to me, as is sadly all too often the case. Perhaps it is my own fault for not being clear enough. I merely made some points and asked her a question in an intervention. In my opening remarks, I responded to the points that she had raised, as she would not let me intervene further on her. I have not decried complications in the Finance Bill, although she seems to assume that I have, and that there is therefore a contradiction in my position. Such a contradiction exists in her position, however, given that she decries complications and then suggests that we should introduce them. I entirely agree with her that it would involve complication to introduce a band of £2,000 for the most polluting new vehiclesI stress that it would apply only to new vehicles; there would be no retrospectionnine out of 10 of which are not 4x4s, by the way. But, unlike the hon. Lady, I have not, so far as I can recall, stood before the House, before any Finance Bill Committee or before any other body decrying complications in the Finance Bill. So although there is a contradiction in her position, I see no such contradiction in mine.
Andrew Miller (Ellesmere Port and Neston) (Lab): Does my hon. Friend think it a little odd that the Liberal Democrat spokesperson, who represents a constituency in Cornwall, sought to encourage the Minister to increase taxation on aviation, and did not come up with a banding system that would take into account legitimate flights to the Isles of Scilly?
Rob Marris: Well, that is certainly true with the Liberal Democrats, because we do not really have any Liberal Democrat policy. As the hon. Lady proudly told us, some tax review will report some time later this yearI stand to be corrected, but I cannot recall whether she said July or September. If she is anxious to reinforce that point to the House, no doubt she will do so in an intervention, but some time later this year, we might find out a bit more from the Liberal Democrats.
Mr. Mark Francois (Rayleigh) (Con): I apologise for interrupting the hon. Gentlemans flow, but it is worth noting that not only do we not have any Liberal Democrat policy on something as important as the Finance Bill, but there are no Liberal Democrat Back Benchers here today, either.
Rob Marris: The hon. Gentleman is quite right. That may say something about the quality of the contribution by their Front-Bench spokesperson, or they may all be off somewhere trying to put policy togetherI know not which.
I shall move on to the main part of my speech, which refers to the reasoned amendment moved by the hon. Member for Chipping Barnet (Mrs. Villiers) on behalf of her right hon. and hon. Friends. I wish to address two aspects of the amendment; the first relates to the so-called pensions crisis, and the second to tackling climate change. On the first point, we need to put the situation in three contexts: the experience of current pensioners; the experience of prospective pensioners; and, given the recent history of this country, the experience of those two groups combined. That covers, for example, someone who was a prospective pensioner in 1997, has since reached retirement age and is now drawing their pension. It is to those three groupscurrent, prospective, and current and prospective together looking at the historyto which I now turn.
First, on current pensioners and the so-called pensions crisis, the hon. Member for Chipping Barnet used the hackneyed phrase about our having the weakest pension system in Europe. That shows a certain ignorance about other European countries with
pension schemes. I do not claim to be an expert, but if she genuinely thinks that the pension system in the United Kingdom, both public and private, is, for example, anywhere near the systems in Albania, Bulgaria, Romania or some other European countries, I suspect that she is wrong.
Rob Marris: I may have misunderstood the hon. LadyI apologise if I havebut she was quoting that person approvingly, which suggests that she associated herself with those remarks, with which I disagree.
Rob Marris: If someone is quoting people approvingly, it is better to know the substance to which the quote relates, and whether they agree with it or are just mouthing the words, which may make a glib soundbite but which are, I think, inaccurate.
Secondly, on the position of people who are pensioners in the United Kingdom, we need to look at how far we have come in the last 10 years. That is often overlooked by Her Majestys Opposition, for understandable reasons, because they had a terrible record in that regard. In 1997, when the Government came to office, a single pensioner was expected by the state to live on £69 a week. There has been some inflation in the intervening 10 years, but that figure is now roughly £120 a week. To make the comparison clear to the House, a pensioner then could have received council tax and housing benefit on top of the £69but that is also true for the sum of about £120 a week.
Rob Marris: Of course it includes pension credit. The hon. Lady will intervene on me if I have misunderstood her, but I think that she is trying to say that one third of those who would be eligible for pension credit do not claim. Again, she has given a sloppy statistic, because a lot more than one third of pensioners do not claim pension creditit would be a waste of time for millionaire pensioners to claim pension credit.
To put the current pensions situation in context, we also need to consider the national health service. It is estimated, although such estimates are difficult, that two thirds of spending on the national health service goesunderstandably and properly, because it is a great thingon pensioners. Generally, as people get older, they tend to have poorer health. In the first
11 years of the Labour Governmentwe know the figures for the coming yearNHS spending has increased from about £30 billion to £90 billion a year. That is a £60 billion increase. Two thirds of that increase would come to £40 billion per year, for about 12 million pensioners. I am not very good at doing mental arithmetic on statistics, but that comes to about £3,500 per pensioner per year. The working generation are putting forward, quite properly, an average of £70 a weekI defend that stoutlyin support of pensioners.
Mr. Redwood: Most pensioners do not think that a load more administrators and a very expensive computerisation programme represents an increase in their welfare. To return to the comparison, the Conservative Government did not expect pensioners to live on the sums to which the hon. Gentleman referred. We assumed that they would either have a good private pension top-up, because we did not tax it and wreck it, or that they would receive means-tested benefits, as is the case under this Government. The big change that we made was to link the standard pension to prices, not earnings, which obviously made an impact. This Government have done exactly the same for the past 10 years, and will continue to do so for the next five years, if they stay in power.
Rob Marris: As ever, I stand to be corrected, but part of that intervention shows the shocking state of the country in 1997, when senior Members such as the right hon. Gentleman were not aware of the nature of the pension system. The means-tested figure was £69 a week.
Rob Marris: I note the right hon. Gentlemans sedentary intervention. I made it absolutely clear that the £69compared with the £120, which includes pension creditcould have housing benefit and council tax benefit on top.
Mr. Flello: I seem to recall members of the then Conservative Government telling pensioners to stay in one room, knit themselves a woolly hat and have a flask at their side to stop themselves expiring over the winter, because of exactly the situation that my hon. Friend describes.
Rob Marris: My hon. Friend is absolutely right. I say rhetoricallyI stress the adverb rhetorically, because I do not want any misunderstandingthat the Conservative Government did not want people going out to the local hospital, because every year there was a winter crisis, such as we have not had for several years, and they did not want them going out and voting Labour, either, so they told them to stay at home.
Andrew Miller: Should not we also remember the previous Administrations imposition of VAT on fuel, which penalised pensioners, and Labours removal of that and introduction of winter fuel allowances?
My hon. Friend is absolutely right. Contrary to the perceptions of some individuals, the Governments support for pensioners over the past 10 years has consisted of a mixture of means-tested
benefits such as pension credit, and non-means-tested benefits such as winter fuel allowances and free television licences for the over-75s, which I hope will be provided for the over-65s. We also restored free eye testsanother non-means-tested benefit. To focus help on the poorest pensioners, which the Government have tried to do, we mustsurprise, surprisehave some means of determining who the poorest pensioners are.
Stewart Hosie: Before the hon. Gentleman gets too carried away describing this utopia for senior citizens, he will recognise that independent work done in Edinburgh in the past year showed pensioner inflation at 9 per cent., with fuel prices skyrocketing. Although we have winter fuel allowanceswhich have never been upratedI hope that he will recognise that many pensioners still had to choose between eating and heating last winter. Work does need to be done on pensions, and especially on the introduction of a properly indexed citizens pension in the future.
Rob Marris: I would not want the hon. Gentleman, or the House, to think that I am suggesting that everything is rosy for pensioners. I am trying to draw a contrast between the situation for pensioners today and that in 1997. Pensioner inflation has been higher, and one hopes that that will lessen markedly, with gas prices coming down by 16 per cent. Sadly, the energy companies are occasionally a little slow to feed those decreases through to domestic customers. I am not saying that all problems are solved for pensioners, or that pensioners are living in a land of milk and honey. Many pensioners in my constituency, however, have said to me that life now for pensioners is not nearly as bad, bleak and grim as it was when they had to sit at home in one room, in a woolly hat, with a one-bar half-kilowatt electric fire on for half the day. Far too many pensioners found themselves in that situation in 1997. The situation for pensioners has improved. In that context it is not right to talk about a pensions crisisand it is bit rich coming from the official Opposition.
The situation of the category of pensioner that I delineatedthose who were prospective pensioners in 1996, but who are now pensionersis undoubtedly grim. Pension schemes have gone bust at the British Shoe Corporation, Allied Steel and Wire in south Wales and Chart Heat Exchangers, at which establishment some of my constituents worked, in the constituency of my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), who is in his place.
The situation of pension schemes in the private sector today, however, was not simply caused by the Chancellors tax changes in 1997, as somebut, to their credit, not allOpposition Members would seek to suggest. I agree that those tax changes, taken by themselves, had an adverse effect on private pension funds[Hon. Members: Ah.] I hear Ahs from the Conservative Benches, but I do not hear them from the Liberal Benches, because there is only the hon. Member for Falmouth and Camborne sitting there. There was a change to corporation tax at the same time, however, which more than made up for other changes in the tax regime, such as those in advance corporation tax.
Another factor in the difficulties in which private pension funds found themselves from 1997 onwards was the dotcom bubble. Some of them thought that it was like the South Sea bubble, but they did not realise that it was a bubble. Whether one looks at Kondratiev waves or other cycles in the economy, things go up and down, and the stock market vastly overvalued dotcom companies.
Andrew Miller: My hon. Friend might be interested to know that H. H. Robertson was originally the Wolverhampton Iron Works, and people walked from Wolverhampton to Ellesmere Port to get their jobs. Its pension scheme collapsedprompting the first case of any Member arguing for what became the financial assistance schemeunder the Conservative Administration.
Rob Marris: My hon. Friend is right. There are strong links between his constituency and mine, forged not least by Stan CullisI have an office in Stan Cullis House. Pension schemes were getting into difficulty before 1997, most notably in the Maxwell case, when the remedies put forward were not the same.
As for the reasons for pension funds difficulties, one of the legacies that built up to 1997 and onwards was that of underfunding, and contribution holidays taken by greedy employers. The extent of that underfunding started to emerge only when the Labour Government insisted on FRS 17, to try to get pension funds to indicate whether they were solvent. Some of them had been hiding the situation for years. It was like pyramid sales: they had been taking contribution holidays, building up deficits in the scheme and not telling anyone about them. We often hear about such cases in this place. I understand the ebb and flow of politics. When a Government change a regime so that there is greater transparency, they can catch a political cold for disclosing something that has been building up for years.
Parenthetically, I say that we had the same difficulty with methicillin-resistant Staphylococcus aureus in hospitals, about which the Conservative Government did almost nothing for 18 years. They would not publish the figures, but we did. That transparency meant that our constituents became aware of the widespread difficulty with MRSA in some health institutions. We got clobbered for something that had been allowed to build up, almost totally unaddressed, under the previous Government.
Mr. Dunne: The hon. Gentleman places considerable emphasis on pensions holidays as a contributory factor to the pensions crisis. What relative weight would he place on that, which was estimated in last weeks debate to have cost £18 billion, compared with the estimate of between £50 billion and £500 billion for the cost of the Chancellors decision to scrap dividend tax relief? Which is the greater?
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