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Lord Graham of Edmonton: Fifty-four.

Earl Russell: My Lords, I am grateful to the noble Lord, Lord Graham of Edmonton, for the correction. I am glad for the confirmation that my mathematics are not that far out either. Fifty-four people on the Government Benches have come in to listen to a single speech by a single Back-Bencher.

The noble Baroness, Lady Castle, deserves that honour. She has made an extremely powerful speech. I am grateful to her for her compliments to my noble friend Lord Goodhart. I would like to return those compliments in the same measured terms. It gave me great pleasure to listen to a speech which showed the same concern that we feel about the basic state pension as a right. However, as she said of my noble friend, we feel that she has not quite got the answer. What we have in common is that we both think that there is a question which needs an answer. But, in the end, whether or not we think it irrelevant, the voters think it in very large numbers.

I spent quite a long time in Romsey; I spent even longer telephone canvassing. I shall not soon forget a half-hour argument with a lifelong Labour voter who told me that he was never again going to vote for anyone. At the end of that conversation, he said, "We

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will vote for you this time, but, if you let us down, God forgive you because I won't". I have paraphrased in order to make his remarks acceptable inside the Chamber.

I was in Tottenham last Tuesday and I heard the same response. I shall not prophecy what sort of news we might hear in an hour's time or thereabouts, but I read in today's Evening Standard a prophecy, which appears to emanate from Millbank, that the poll may be even lower than the 19 per cent scored in Leeds Central. My own experience gives me nothing that leads me to dispute that. We live in a democracy; we must listen to our masters.

When it was decided that the basic state pension was going to be uprated in line with prices, we created a situation where it was in danger of withering. It is about time we took on board the fact that what is true of the basic state pension also applies to income support. Indeed, the need in income support may be greater in some ways than the need in pensions. That means that the problem is greater, but it also means that the potential costs of a solution are greater. In effect, it is a matter of double or quits: it doubles the stakes and makes the problem that much more difficult.

I recall the very constructive debate we had on the matter during the Committee stage of the Welfare Reform and Pensions Bill last Session. The Minister generously agreed with me then that, as a consequence of uprating in line with prices, it was necessary, "as resources allowed"--we agreed on those words--to uprate from time to time, and when possible, fairly well above the level of prices. I believe that the Minister will find that I have recollected her words accurately. This year resources did allow, but the Chancellor of the Exchequer did not take his opportunity. He has already lived to regret it. If there had been a decent uprating this year, and one which was fairly significantly above the level of prices, the problem might have been diffused. That has not happened. The voters will not soon forget.

The sort of anger I faced is directed against the whole of our profession. With respect, I do not think that Mr Hague has the answer to the problem. The redistribution that he suggests might have been a perfectly sensible way of tackling such matters if he had not tried to call it an increase. It is not an increase, except by the 42 pence calculated by my honourable friend Mr Webb, and that comes below the Government's 75 pence. Incidentally, if the noble Lord, Lord Higgins, is to speak later in the debate--I imagine that he will--I hope that he will tell us how the Conservative Party means to find the £90 million from the finances of the Social Fund, which I have always regarded as one of the most cash-strapped parts of the whole social security system.

Therefore, we need increases above the level of prices, as resources allow. That is not to say necessarily that regular increases in line with earnings will be sustainable. Here is where we part company with the noble Baroness, Lady Castle. You may calculate the figures for a short period of time. The difference each

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year is small. Here, I think, is where Mr Darling was completely mistaken in denying my argument that what we are offering here is imprecise targeting. An annual uprating uses a machine-gun. It has a repeat rate of fire. If you get into the target area with the first bullet, you will get a good deal closer over the next 10 or 12. So, the catching up goes on.

If you are uprating by earnings, over the length of a Parliament the increase may or may not be sustainable. But the earnings link means a commitment, year in, year out, in good years and in bad, in fat years and in lean years, to uprate above the rate of prices. It is that continuing commitment over a generation which we on these Benches feel a great deal of doubt about sustaining.

I listened to what the noble Baroness, Lady Castle, said about the surpluses in the National Insurance Fund. The surplus this year is indeed considerable. It would not have been difficult to use some of it for a significant increase this year. But belief in the continuation of future surpluses involves an element of faith. I have not forgotten the first amendment on which I had to consider whether to seek to divide the House from this Front Bench. It was on the then Social Security Bill of 1989. Those were the years of hubris. The government had a healthy surplus in the National Insurance Fund. They believed that it would be there for ever. They introduced a provision to end the Treasury supplement to the National Insurance Fund. They believed that it would never be needed again. I decided not to seek to divide the House but I said that I expected to live to see the provision reversed, as, in the gloomy Budget of 1993, it duly was. Even I had not expected it quite so soon.

The National Insurance Fund responds extremely quickly to economic fluctuations--in fact, on occasion, even more quickly than the Government Actuary expects. It goes up very fast in a period of recovery and goes down extremely fast when that recovery comes to an end. No economic recovery lasts for ever. If the Chancellor of the Exchequer has discovered a way of making it so, he has discovered the philosopher's stone. He is not the first to make that claim, but he would, were he to succeed, be the first in all recorded history to make it good. That would surprise me.

We on these Benches feel a great deal of doubt about the long-term sustainability of a commitment to the earnings link. On the other hand, we feel a great deal of doubt about the long-term sustainability (in the eyes of the voters in a democracy) of the present system of uprating by prices without any further increases, as resources allow. It is no good talking about MIG. First, we are not convinced about the means of delivery of MIG. On the previous occasion that we discussed this matter in Committee I grant that the Minister gave a powerful, well thought out answer. She has thought of a great many ways of encouraging people to apply for money under MIG. What she has not got over is the sense of entitlement felt among voters who believe--as both my noble friend and the noble Baroness, Lady Castle, have said--that, because of their own contributions, they have a resulting

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entitlement to a pension. That is deep seated in the minds of voters. As Angela Rumbold once said of child benefit, it is deep in the culture. Facts and Ministers will not eradicate it. So if they see MIG as being a matter of charity--as do a great many of the voters that I have talked to in recent weeks--it will not be enough to satisfy them; the voters believe that they have a right. If they do have a right, our right to be here at all is contingent on what they say. We must take that on board.

We must have a significant measure of progress. My noble friend has put forward the right answer in spite of all the criticisms that have been made. I shall address those criticisms later. I am not addressing them now because the Minister replied immediately to my noble friend and they would be wide of the present amendment; but the Minister will hear me address them.

I hope that the Minister will listen to one or other of us--or else come up with a real, significant, immediate increase. If it is not immediate, the voters will make her pay for it.

Baroness Park of Monmouth: My Lords, I am not an expert in any of these matters. I am a pensioner and, like the noble Baroness, Lady Turner of Camden, I pay all my pension back in tax. So I have no direct interest in that way.

I feel very strongly about this issue. I do not know how the objective can be achieved--I recognise that all the pundits say that there is not the money to promise it forever--but something has to be done quite urgently now. There are a lot of people out there--not just the old but their families too, who will grow old later--who are watching us to see whether we care enough about them. As the noble Baroness said, the whole issue is one of dignity and self-respect. The Government say a lot about inclusiveness; these people are being excluded--and they feel excluded.

It is absolutely vital that we should also recognise that, if one has independence and self-respect, it has a remarkable effect on, for instance, one's health. We could save a lot of money from the health budget if people were more independent, more able to look after themselves, more able to pay to look after themselves, and had the independence, dignity and self-respect that is part of health.

There are strong arguments for doing something. Whether it will be what the noble Baroness wants I do not know--I shall vote for her anyway--but it is absolutely vital that people do not neglect the fact that there are a lot of angry, resentful people out there who are losing their faith in all politicians--and that matters to all of us. We have to think about that as well.


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