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Commons Chamber

Volume 410: debated on Wednesday 10 September 2003

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House Of Commons

Wednesday 10 September 2003

The House met at half-past Eleven o'clock

Prayers

[MR. SPEAKER in the Chair]

Oral Answers To Questions

Northern Ireland

The Secretary of State was asked

Assets Recovery

If he will make a statement on the work of the Assets Recovery Agency in Northern Ireland. [128486]

If he will make a statement on the use of powers by the Police Service of Northern Ireland to confiscate assets.—[128488]

I have been informed by my right hon. Friend the Home Secretary that the Northern Ireland branch of the Assets Recovery Agency has 10 cases which are currently under active investigation. I have every confidence that the Assets Recovery Agency is getting to grips with the problem in Northern Ireland. I am pleased to be able to tell the House that on Monday of this week the agency was granted a freezing order for £1.5 million-worth of assets allegedly derived from drug dealing. I believe that there is much more to come.

My hon. Friend will be aware of the Select Committee on Northern Ireland Affairs and its interest in the genesis of the Assets Recovery Agency, as reflected in its report on the financing of terrorism. However, many problems arise from local hoodlums being involved in activities such as the drugs issue that she mentioned and which the Select Committee is investigating. Will she ensure that those areas are tackled?

I welcome the interest that the Northern Ireland Affairs Committee takes in these matters, particularly the development of the Assets Recovery Agency. The agency will not only target the so-called Mr. Bigs and the kingpins of organised criminality, but will take a great interest in local hoodlums who, as my hon. Friend says, do so much to blight their communities.

The agency was only established in February this year under new legislation which, by common consent, is complex. Can my right hon. Friend confirm that there are sufficient resources for both the Police Service of Northern Ireland and the Assets Recovery Agency to ensure that we make inroads into drug trafficking, particularly among paramilitary groups?

Through the work of the organised crime taskforce we have a better understanding of the nature of organised criminality in Northern Ireland and the links between organised crime and paramilitary organisations. However, there is also better coordination between the agencies in their efforts to tackle that. The Police Service of Northern Ireland and the Assets Recovery Agency remain in regular and close touch with my office about the resources that they require to complete their work, and I am confident that both organisations have the necessary resources. The Police Service of Northern Ireland is a highly effective police force. The drug squad in particular deserves special commendation by the House for its success in recent weeks.

I congratulate the organised crime task force, PSNI and customs and trading standards officials on their recent successes, which prevented paramilitaries and criminals from benefiting from the sale of fake goods at Ballycastle and elsewhere in Northern Ireland. Can the Minister tell the House when an evaluation of the work of the Assets Recovery Agency will be carried out, whether she is willing, if necessary, to strengthen the legislation under which it operates, and whether that can be done without creating another all-Ireland body?

The hon. Gentleman will know that I am in regular contact with the chief executive of the Assets Recovery Agency, her deputy and the Chief Constable. None of them has expressed any specific concerns about the legislative framework, but obviously the legislation will be reviewed in due course as a matter of routine. The Police Service of Northern Ireland already enjoys a close working relationship with its counterparts in An Garda Siochana. It could not enjoy the success that it does without that very good working relationship. At the end of May this year, senior representatives of both PSNI and the Garda met to discuss proposals to develop a joint cross-border organised crime threat assessment. I believe that we can further develop and cement those good working relationships. I am always open to further ideas about ways in which we can strengthen the performance of those organisations, and I will consider any such ideas that are offered.

Will the Minister give an assurance that all the necessary resources will be given to the Police Service of Northern Ireland and the Assets Recovery Agency in their fight against organised crime and paramilitary fund-raising-a point that was made in the Select Committee's report on the financing of terrorism, to which the hon. Member for North-East Derbyshire (Mr. Barnes) referred? On a more general point, will the Minister review the issue of resources for the police generally in the fight against crime in Northern Ireland? My constituents complain to me all the time about the lack of response, manpower and police on the streets. Can the Minister ensure that adequate resources are provided to make sure that people are safe on the streets of Northern Ireland?

As I have already said, I keep these matters under constant review and remain in very close touch with both the Chief Constable and the chief executive of the Assets Recovery Agency. I believe that the agency is being adequately funded. As the hon. Gentleman and members of the Select Committee will know, the initial budget was established at £13 million, but that will be kept under review. There are about 90 staff in total in the UK, and 17 of them are attached to the Belfast branch. I believe that the Belfast branch deserves particular commendation for the success that it has had in the very short period since its establishment.

Is the agency adequately resourced by comparison with its counterpart in the Republic, or does the Minister share the serious concerns about that indicated by the Select Committee?

The short answer is no. I believe that the Assets Recovery Agency is adequately funded and, indeed, that the Northern Ireland branch is adequately resourced, although I obviously keep such matters under constant review. The success of the agency is very important because its success will continue to underpin that of law enforcement agencies in Northern Ireland in their battle against organised crime.

Decommissioning

2

If he will make a statement on the extent of verifiable decommissioning of illegally held weapons and explosives in Northern Ireland.[128487]

There have been three acts of decommissioning to date—one by the Loyalist Volunteer Force and two by the Provisional IRA. Each has been verified by the Independent International Commission on Decommissioning in accordance with the Government's schemes and regulations.

I thank the Secretary of State for his reply. I congratulate his Minister of State on her membership of Her Majesty's Privy Council. I know no more charming member of the Privy Council.

Does the Secretary of State agree that verifiable decommissioning should have taken place many years ago? Will he give me an assurance that no further concessions will be made to any terrorist organisation—Sinn Fein-IRA or any other organisation—before such decommissioning has taken place? Otherwise, the whole process of confidence of the people of Northern Ireland will be undermined.

I thank the hon. Gentleman for his kind words about my right hon. Friend the Minister of State. I can testify to her intelligence and ability, as well as to her charm.

The hon. Gentleman is aware that decommissioning was a very important part of the Good Friday agreement. It is a vital part of ensuring that confidence in that agreement is maintained in Northern Ireland. He can also rest assured that the negotiations and discussions that will now obviously be important in coming weeks will, among many other things, deal with decommissioning as well.

Does my right hon. Friend agree that the retention of arms by any group distorts the whole political process, so it is crucial that all paramilitary activity be ended to ensure that we can restore a bit of trust in normal political processes?

I agree with my hon. Friend. Of course, he is aware that the reason why we could not come to an agreement in March and April this year is that, although we achieved some successes, we failed at the end of the day to agree on how to deal with the items identified in the joint declaration as dealing with paramilitary activity. Those issues are still important and will be an important part of the negotiations that we face in the next few weeks.

Does the right hon. Gentleman remember 27 November, when he was sitting beside the Prime Minister, who made it clear in answering a question that I asked him during Prime Minister's questions that there could be no further progress towards peace in Northern Ireland until the matter of acts of completion was dealt with—and that those acts of completion were not merely words, but real acts of giving up weaponry? Why is it that the legislation that will shortly be put before the House on Northern Ireland contains no mention whatever of acts of completion? Why is this important matter off the agenda when the Prime Minister said that there could be no further progress until—

The hon. Gentleman is aware that the one of the duties of the independent monitoring commission is to monitor paramilitary activity. That is crucial to the success of the peace process in Northern Ireland. He is also aware that the joint declaration defined that activity as including surveillance, targeting, procurement of weapons, incitement to riot and so-called punishment beatings. Those are all hugely important issues that we have to tackle. The task of the new commission is to investigate such activities, then to report to the Assembly and to me.

Belfast Agreement

4

If he will make a statement on the state of the implementation of the Belfast agreement.—[128489]

The central issue remains that only by restoring trust and confidence can we get stable and inclusive devolved institutions up and running again. We have taken positive steps towards that—most recently, as I mentioned just now, with the announcement of substantive progress on the independent monitoring commission. It is also necessary to have clarity on the ending of paramilitarism and on the stability of the institutions, once restored. We will continue to engage with the parties in Northern Ireland, and I hope that that will lead to the early progress that we all want.

It is now five and a half years since the Belfast agreement. Critically, as the Secretary of State said, terrorist arsenals remain intact and the institutions of the agreement are largely suspended. How does that leave the review of the agreement that, according to page 26 of the agreement, is planned for four years after its implementation, and which is due in December? There are no parties in the Assembly to call for the review. Will the review go forward and what is the Government's position on it, as a whole?

The position is that it was decided in the Good Friday agreement—in paragraph 8, I think—that there should be a review after four years. People in Ireland, north and south, voted for the agreement, so they obviously expect the review. The hon. Gentleman is right to point out that it refers to parties in the Assembly. Of course, it was anticipated at the time that the Assembly would be up and running at the time of the review. Although the agreement is not a legal document, but a political document, we all hope that elections will be held before the year is out so that there will indeed be parties in the Assembly to participate in the review.

Does the Secretary of State agree that the overwhelming consent of the people of Northern Ireland was given to the Good Friday agreement; that the principle of consent has always been central to Unionism; that that principle of consent is now accepted by all other parties in Ireland, north and south; and that if those parties that are trying to overthrow the agreement succeed in not having it implemented, they are completely overthrowing the principle of the consent of the majority of the people of Northern Ireland, which means that if there has to be a future agreement it would be confined solely to the two Governments to work it out together?

Of course we do not want to get into the situation whereby it is for the two Governments to work it out together, as my hon. Friend suggests. It is for the parties and the Government in Northern Ireland to be able to come to a proper settlement. He is right to remind the House that the principle of consent is central to the Good Friday agreement and that people north and south overwhelmingly voted for that. I still believe that the Good Friday agreement is the best way forward and that the majority of people in Ireland believe that as well.

Can the Secretary of State confirm that it s still the Government's policy that there must be effective and substantial acts of completion—which is a euphemism for complete decommissioning and effective disbandment—before there can be a resumption of the Northern Ireland Assembly? Can he give his assessment of whether we will see early movement on effective acts of completion?

I sincerely hope that there will be early movement on such acts. The right hon. Gentleman will be aware that in March and April we made considerable progress over a number of weeks—although not enough, of course, to be able to do what we wanted in setting up the institutions. I believe that by working on what occurred in March and April, and because all parties in Northern Ireland want to make progress, we can be hopeful that there will be progress on acts of completion in order to ensure that we can get the institutions up and running again.

The right hon. Gentleman is aware—more than anybody, I suppose—that we want to get not only the Assembly but the Executive up and running in Northern Ireland. The establishment of that Executive must be based on mutual trust, understanding and confidence among the parties that make it up.

When the Secretary of State presents the Northern Ireland (Monitoring Commission etc.) Bill next week, will he ensure that the measure requires parties in the Executive to attend Executive meetings and north-south ministerial meetings as part of their duties and to ensure that they assume collective responsibility along with their ministerial colleagues? Will he ensure that the Bill deals with such breaches of rules or will they be put on the long finger again? [Interruption.]

Order. May I ask for the private conversations, which are unfair to Northern Ireland Question Time, to cease before the Secretary of State replies?

My hon. Friend is right that the independent monitoring commission will deal, among other matters, with political breaches of the Good Friday agreement. He also knows that the commission will report to the implementation group in the Northern Ireland Assembly. There will be an opportunity next week to debate that in detail. It is therefore up to the Northern Ireland Assembly to consider the best way to deal with such a report. I repeat that we shall debate those matters in greater detail next week.

Does the Secretary of State accept that the implementation of the Belfast agreement is going nowhere unless and until the Northern Ireland Assembly is allowed to renew its democratic mandate? Will he therefore take the opportunity to confirm that elections will be held in the autumn and that there will be no further postponement, which would constitute cancellation?

No one wants postponement or cancellation of elections. Earlier, I said that we all want the elections to take place before the year is out. I repeat the point that I made to the right hon. Member for Upper Bann (Mr. Trimble): that we want the other institutions as well as the Assembly to work again. Of course, we want the Northern Ireland Assembly to be up and running, but we also want the Government of Northern Ireland to do those things that my fellow Ministers and I currently have to undertake on behalf of the people of Northern Ireland.

Does the Secretary of State agree that it is not enough for the nationalist community to give its support to the Belfast agreement and that we can have no lasting, stable political structures unless both sections of the community support them? The support of half the Ulster Unionist party, which represents less than half of the Unionist community, is not sufficient to provide that consent. Will he therefore allow politicians to get a mandate for new negotiations for an agreement that has the support of both sections of the community?

I agree that, for the agreement to work, it must have the commitment of both sides of the community—Unionist and nationalist—in Northern Ireland. However, I disagree with the hon. Gentleman's analysis that the Unionist people are opposed to successful implementation of the Belfast agreement. He knows that the latest opinion poll in Northern Ireland showed that most Protestant and Unionist people want the agreement to work. I still believe that it is the best way forward.

As the Secretary of State said, there has been agreement that the best way forward for all the people of Northern Ireland is reconciliation and the restart of the Belfast agreement. Given that the breakdown and suspension of the Executive last year was due to extra-political activity in Stormont, can he give evidence of willingness on the nationalist side, especially on Sinn Fein's part, to play a more constructive and positive role in bringing about the negotiations?

My hon. Friend is right to highlight the importance of the republican movement in Sinn Fein and that of the IRA in ensuring that the IRA undertakes the necessary acts of completion so that people in Northern Ireland—nationalist and Unionist—can have proper confidence.

I must take up the Secretary of State on an answer that he gave my hon. Friend the Member for Blaby (Mr. Robathan). He implied that the four-year review for which the agreement provides could take place in December, whether or not the Assembly was in place. Is that seriously what he meant? Has he forgotten the provision in paragraph 8 of the agreement that the two Governments and the parties in the Assembly must summon the review?

Of course I have not. I was present when the agreement was signed and helped to make it. I repeat what I said to the hon. Member for Blaby (Mr. Robathan)—I was referring specifically to parties in the Assembly. The document in question is not a legal document. It is imperative that we have an Assembly up and running; that is what everyone wants. The parties in that Assembly will take part in the review.

It might not be a legal document, but it is a very finely balanced one that has resulted from extremely delicate negotiations, in which the Secretary of State took part. It cannot be unilaterally rewritten in part. This is just one reason among many why, if we are to make any progress in the peace process, the Government really must stop shilly-shallying and call an election.

No one wants to rewrite the agreement; no one is suggesting that. I am merely pointing out to the hon. Gentleman the facts in relation to the paragraph 8 review. He is right to say that everyone wants an Assembly in Northern Ireland, but we also want a Government there and a review. I sincerely hope that all three will be achievable before the year is out.

Sea Fishing

5.

What assessment he has made of the future economic viability of the Northern Ireland sea fishing industry. [128491]

The Northern Ireland sea fishing industry continues to land top-quality fish that is much sought after at home and abroad, and I am confident that it has a viable economic future. The Prime Minister's strategy unit is currently undertaking a review of the medium-term prospects for the UK sea fishing industry as a whole, and hopes to report around the end of this year—[Interruption.]

Order. Before the hon. Lady asks her supplementary question, I would say again that the noise level in the Chamber is unfair to Members who wish to speak.

I rather regret that the Minister has not recognised that the first six months of this year have been the worst for the Northern Ireland sea fishing industry for many years, going back in some cases to the mid-1980s. Bearing in mind the industry's grim future, will the Minister therefore undertake personally to visit fishing enterprises in the Province that have been disadvantaged and suffered losses because of European Union decisions? Will he discuss with them retrospective and future aid to secure their future?

The hon. Lady is clearly unaware that I meet representatives from the fishing industry on a regular basis. Following the decisions of last December's Fisheries Council, I immediately launched a fishing villages taskforce, which is due to report shortly, and which has members of the fishing community on it. We have also announced a vessel decommissioning scheme, and the Government have put in about £20 million to support the industry over the past five years. We are clearly listening, and we want to support the fishing industry to ensure that it has an economic and environmentally sustainable future.

The Minister seems to be badly out of touch with the fishing communities in Ardglass, Kilkeel and Portavogie. Is he aware that the white fish quota has already almost been met by the fishing fleet in that part of Northern Ireland? Will he speak to his opposite number during the next negotiations in Brussels and get a proper, increased quota for white fish in the Irish sea? There has been a considerable increase in stocks, but the fishing industry in Northern Ireland is not benefiting from it.

I am aware of the implications of the December decision on the swingeing reduction in tax that took place. I talk regularly to representatives of the industry and to UK and other European Fishery Ministers about this issue. It is important that we act on the basis of the best available science, and I understand that the industry disputes some of the science. We have to act on the basis of the science, however, and to take measures that are in the best long-term interests of the fishing industry to ensure that we have sustainable stocks of fish.

Is the Minister aware that when I was in Derry on Saturday, I was able to buy my fish with euros? In that respect, is Northern Ireland not the most progressive part of the United Kingdom?

Northern Ireland is a very progressive community. It has done extremely well economically over the past five years. Its economic performance has been better than that of any other UK region, and I am convinced that it has a bright economic future, given a peaceful and sustainable society.

Prime Minister

The Prime Minister was asked—

Engagements

Q1. [128501]

If he will list his official engagements for Wednesday 10 September.

Before listing my engagements, I know the whole House will join with me in sending our deepest sympathy and condolences to the families of the British people-serving soldiers and others-who have lost their lives in Iraq since the House rose on 17 July. They were doing an extraordinary and heroic job in trying to bring normal and decent life to people in Iraq, and the whole country and their families can be immensely proud of them, even as they mourn them.

In particular, we should mention Fiona Watson, who was a servant of this House for many years with very distinguished service, and someone who is not British, the United Nations Special Representative Sergio de Mello, who tragically lost his life in the terrorist outrage on the United Nations building.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in House, I will have further such meetings later today.

Conservative Members echo the Prime Minister's initial words. Given the disastrous summer that he and his Government have had, what is his definition of "deceit"?

We all know what that is. As to the summer, it is important to recognise that the British economy is in better shape than virtually any other. There have been 1.5 million extra jobs since we came to power, we have had the best ever school results, a further fall in waiting lists, a halving of the number of asylum seekers, and we now have the pensioner tax credit, which gives help to pensioners for them to look forward to.

Will my right hon. Friend join me in paying tribute to my constituent Fusilier Russell Beeston, following his funeral yesterday?

Certainly, we join my hon. Friend in offering our deep sympathy and condolences to the family of his constituent, as I am sure will everyone in the House.

May I join the Prime Minister in paying tribute to our servicemen out in Iraq who are risking their lives, and particularly to the families of those servicemen who have lost their lives? It is also worth reflecting on the fact that one of our hon. Friends is still serving in those dangerous zones.

If it becomes clear that the Secretary of State for Defence misled the Intelligence and Security Committee, will the Prime Minister dismiss him?

I think it quite wrong that we make any assumptions until we see the Intelligence and Security Committee report, which is to be presented to me tomorrow. It would be wrong to comment on it before that is done.

Senior Downing street officials are already spinning their version of the leak. It is in the newspaper report. The point is that with new troop deployments in Iraq, surely it is absolutely essential that there be complete confidence in the Defence Secretary? How can the Prime Minister justify leaving him twisting in the wind, when it is in his power to end all the uncertainty and speculation and publish the report right now?

On the right hon. Gentleman's first point, if he has evidence that somebody from Downing street has put the report into the newspapers, perhaps he would produce it now, because I believe that to be completely untrue.

In respect of the Defence Secretary, we should recognise that over these past few months, under his leadership in the Ministry of Defence, we have won a magnificent victory in Iraq; our troops are now engaged heroically in rebuilding that country; and, if I may repeat what I said to the right hon. Gentleman, we should see what the Intelligence and Security Committee, and, indeed, the Hutton inquiry, say when the reports are published.

The Prime Minister knows very well that his own officials are briefing on it even as we stand here. Is not the leaked report another nail in the coffin of this Government?

You can get rid of Campbell; you can even get rid of the Defence Secretary. But the lying and the spinning will not stop until we get rid of this Prime Minister.

It is a measure of the right hon. Gentleman's objectivity that he has decided what the report says before it has actually been published. [Interruption] It is no use holding up a piece of paper. Why does the right hon. Gentleman not wait until the report is actually published tomorrow? It is to be presented to me by the Committee. Perhaps in the light of that report tomorrow the right hon. Gentleman can make his comments clear. I simply say to him that, rather than deciding what that report or the report of the Hutton inquiry says before it is published, we should actually wait and see and not make up our minds beforehand.

Today, booklets published by Tory-controlled Hertfordshire county council have been landing on the doormats of parents all over Watford who are due to send their children to school next September, telling them that consultations have taken place on the closure of Leavesden Green school and that the last intake of pupils will be in January next year. In fact no formal consultation has taken place, and councils have not even voted on the issue. The community is overwhelmingly against the proposal.

This is an outrageous deceit of the community, and an insult to democracy. Will my right hon. Friend ensure—[Interruption.]

Obviously I am not aware of the details of the consultation in my hon. Friend's constituency, but I think she has made a powerful case.

When President Bush delivered his televised address to the United States a couple of days ago, he specifically chose not to refer once to weapons of mass destruction. Does that mean that we can now expect the Prime Minister to follow suit?

No. The reason we went to conflict is absolutely clear—the evidence of weapons of mass destruction. We should allow the Iraq survey group to do its work; but as I have said to the right hon. Gentleman on many occasions, the notion that the issue of Iraq and weapons of mass destruction was invented by British or American intelligence is absurd.

I remind the right hon. Gentleman that last November the whole United Nations came together and agreed that as a result of Saddam and his attempts to develop weapons of mass destruction, he was a security threat to the entire world. This is not an issue to do with British or American intelligence. It has to do with the stated facts, mainly contained in UN weapons inspectors' reports.

Given that the position in Iraq remains dangerously unstable, given that Iraqi citizens are still being denied basic necessities and resources, and recognising—as the British public do-the need to bolster the safety of our forces in the country, does the Prime Minister not realise that what the public also seek from the Government is a clear lead in the attempt to internationalise the situation there under the auspices and authority of the UN itself?

Today there are already more non-US and non-UK troops in Iraq than there are UK troops—some 15,000. The new UN resolution will help to bring in further troops. It is true that the situation in Iraq is extremely difficult, but it is worth pointing out that much progress has been made. For example, all the hospitals are now open and functioning, and some 5.5 million children managed to take their end-of-year exams in June and July for the first time in ages. It is also the case that we are doing our level best to get the country back on its feet. We now have an Iraqi governing council that actually represents the people of Iraq.

The right hon. Gentleman says, "Should we not be worried about the situation?" Yes, of course we should, but the answer is not to run away from Iraq. The answer is not to turn our back on the task. The answer is to see the task through, because it was the right thing to do at the time, it is the right thing to do now, and we will get the job done.

Iraq

Q2. [128502]

If he will discuss the military position in Iraq with President Bush.

I have regular discussions with President Bush on a wide range of issues, and of course that includes the continuing military operations in Iraq.

In the light of the letter from Captain Peter Kimm, Royal Navy retired, to which I drew the Prime Minister's attention on Monday-it was published in The Times on 29 August—did certain of the chiefs of staff, led by the then chief of defence staff, without the knowledge of the chief of air staff, express their unease to the Prime Minister on Sunday 9 March about going to war in Iraq, not least in relation to the legality of what he and President Bush were asking the forces to do?

No, that is not correct-none of the chiefs of staff expressed such unease to me. If I may I shall quote to my hon. Friend from the then chief of air staff, Air Chief Marshal Sir Peter Squire, who said on 31 August:

"As far as I am concerned there's absolutely no truth in it whatsoever."

May I thank the Prime Minister for paying tribute to those who have died in Iraq, and draw his attention to the case of Ian Rimell of Kidderminster, a bomb disposal expert who was working for the Mines Advisory Group? He was murdered while driving home from his work defusing shells, while in a clearly marked MAG vehicle. May I also ask the Prime Minister to express his sympathy to Mr. Rimell's wife and three grown-up children, who are devastated by this pointless loss, which was not due to his work? Does the Prime Minister agree with me that the only fitting memorial for Ian Rimell is the establishment of a humanitarian, protected zone for workers who are doing this crucial business of defusing mines and shells? Will he consider instituting that?

I am deeply saddened to learn of the death of Ian Rimell and of the serious wounding of his colleague Salim Ahmed Mohammed, which took place near Mosul on 4 September. I pay tribute to Ian Rimell and to the other people doing similar work in Iraq.

UK and Danish teams have to date cleared some 350,000 unexploded munitions in Iraq, and it is worth while mentioning that as well as our serving soldiers, there are many people in Iraq from non-governmental organisations they are doing tremendous humanitarian work—whose lives are also at risk. I have to say, however,that their lives are at risk from people who do not recognise any humanitarian zone, and who do not recognise any concept of humanitarian protection. These are people who have committed outrages on the United Nations and on people worshipping at the mosque in Iraq. These people are terrorists who want to stand in the way of precisely the type of Iraq that Ian Rimell and others wanted to see. The best memorial to him, in my view, would be to make sure that we see the job done and create an Iraq that is stable, democratic and prosperous.

Engagements

Q3. [128503]

Antisocial behaviour, often fuelled by under-age drinking, continues to blight many of our areas. Will my right hon. Friend join me in urging the police to take tougher action to combat drinking on our streets, particularly by juveniles?

The provisions of the Licensing Act 2003, which I think come into effect today, will give the police additional powers in respect of the abuse of alcohol, and in particular in respect of cracking down on antisocial behaviour caused by alcohol. These measures, along with the other measures in the legislation that we are introducing on antisocial behaviour, give the police hugely important additional powers in dealing with what is, in many constituencies up and down the country, the single biggest issue of concern to people.

Q4. [128504]

Given that the Prime Minister has a copy of the Intelligence and Security Committee report, what reason does he give for not publishing it today?

The proper procedure is that the Intelligence and Security Committee present the report to me tomorrow. That is the right way of doing it, and it should be done in accordance with the procedure that we laid out. It would be quite wrong of us to do it in any other way.

Q5. [128505]

Prime Minister you are an outstanding example of a Scot who has benefited from coming south to study at one of the UK's most prestigious universities. Will you accept that concern exists that the top-up fees proposal will deter Scots from following suit, and create a golden triangle of research-based universities in the south-east, to the great disadvantage of universities throughout the UK? Recent polls have shown that 80 per cent. of people are opposed to the proposal. Will my right hon. Friend now think again?

What surely is important is that universities get additional access to funds, either from the taxpayer or through a contribution from students once they graduate. It is also important that we widen access so that more and more people go to university. We have said that we want half of all school leavers in this country to go to university, but we cannot do that unless we extend the funds available to universities. That is precisely why it is important that we proceed with the reforms that we have set out. It would be disastrous to adopt, for example, the policies of the Conservative party, which would mean 100,000 fewer students going to university every year.

In public, the Government say that the European constitution is just a tidying-up exercise. In private, we know that the Prime Minister has said that it is absolutely fundamental and will define the relationship between Britain and the rest of Europe for generations. Which of these two faces of the Government should we believe?

Of course the outcome of the convention is absolutely fundamental, which is why it is right that we secured the positions on foreign policy, defence and tax that preserve Britain's identity as a nation state, at the same time as making the changes necessary so that Europe at 25 can govern itself and operate effectively. That is why the draft constitution for Europe is good for Europe and for Britain, and essential if we are to make enlargement work and secure British interests.

Earlier this year, the Prime Minister said that if the European constitution were about fundamental change, he would hold a referendum. He has told his Cabinet in secret that it is absolutely fundamental. So where is the referendum?

The outcome of the constitution, of course, is fundamental, which is why it is important that we have secured the positions that we set out. What I said to the right hon. Gentleman was that if we ended up in a situation where we were giving up, for example, our right to set our own tax rates, it would be appalling; but we are not. The right hon. Gentleman is opposed to any constitution in Europe at all and would veto it. We see that that is what the Conservatives nod their heads to. Let us try the old game with him: there are 25 Governments in Europe, some Labour, some Conservative. Name me one that is in favour of his position.

What is absolutely clear is that the Prime Minister says one thing to his Cabinet and another thing to everyone else. Whether it is the Kelly tragedy or the TUC speech that he never actually delivered—[Interruption.]

Order. The House must allow the Leader of the Opposition to speak. [Interruption.] Mr. King, you must be quiet.

They do not want to hear it because it is true. Whether it is the Kelly tragedy, las night's TUC speech that he did not actually deliver or the deliberate deceit about the European constitution, is it not true, now as ever, that no one will ever believe a word that the Prime Minister says any more?

In relation to the European constitution, I note that the right hon. Gentleman could not tell us a single other Government who support his position. So that the country understands, his position would mean that he would go to the conference in Italy in a few weeks and veto the whole thing. No one else would support him and the Conservatives would then get to where they want to be: saying that Britain should get out of the EU. That is their game; it is what they want.

On trust, the additional jobs in our economy are important, as are the lowest inflation and mortgage rates. The fact that we have the lowest long-term unemployment in this country for more than 30 years is important, as is the fact that we have 25,000 extra teachers and 50,000 extra nurses. Also, the fact that every single aspect of NHS waiting is better than in 1997 is important. That is what we were elected to do and what we will continue to do.

I welcome the publication of the Green Paper "Every Child Matters", which seeks to address the problems, issues and failures highlighted in the Laming report. I welcome also the proposal for a children's commissioner. Will my right hon. Friend ensure that sufficient parliamentary time is available to get this measure through as quickly as possible? Will he ensure also that there are clear lines of accountability for the welfare of our children in the future?

I think that the proposals that we set out in the Green Paper on children will help enormously. I know that my hon. Friend would want to put the proposals for the children's commissioner alongside the other measures that the Government are taking to help some of the most disadvantaged children in our country. The sure start programme has, I believe, been enormously successful along with additional child benefit, the working families tax credit, free nursery education and more child care places for many families in the most disadvantaged parts of our country. Step by step we are trying to create a situation in which no child is denied the opportunity to make the most of their abilities, but that can be done only if we keep the investment going through to our local communities.

Given that the Prime Minister is one of the few people left in Britain who does not think that the September 2002 dossier was sexed up—

Can the Prime Minister explain how inserting chemical and biological material into battlefield mortar shells or small calibre weaponry poses a threat to the region or the stability of the world?

First, in respect of allegations about the dossier, perhaps it would be right to wait for the publication of the Intelligence and Security Committee report tomorrow and, indeed, the Hutton inquiry report at a later time. In respect of the Conservatives' position, however, their opportunism on the issue of Iraq is absolutely unbelievable. Here they are, yet as I recall it, they as a political party were urging me to take action against Saddam. The right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) was urging that long before the dossier even came along. Now they go around the country saying that we were duped and misled by this terrible Prime Minister who got us into the situation of conflict. What they should learn over time is that, if they want to be an effective Opposition-never mind an effective Government—a little less opportunism would be a good idea.

Q7. [128507]

The Prime Minister will he aware of my one-and-a-half hour Adjournment debate this afternoon on seaside town regeneration, and I hope that he finds time in his busy schedule to attend it. Failing that, will he support the calls for a dedicated Minister to be responsible for seaside town regeneration? Will he also support the call for ring-fenced funding for seaside regeneration similar to the amounts given to coal, steel, rural and inner city communities?

Actually, I am aware of my hon. Friend's Adjournment debate—it is on the Order Paper. It is worth pointing out to my hon. Friend that, for the first time, we are making sure that seaside towns, some of which may be relatively prosperous, but many of which have real pockets of deprivation and poverty, are eligible for assistance. My hon. Friend will know that there are two communities in the area that he represents which have had hundreds of thousands of pounds of funding, and we obviously want to do anything more that we can to assist them. The fact that these seaside towns are now recognised as suitable for the new deal for the regeneration of local communities shows that we recognise that although, as I said, there is prosperity among parts of our seaside communities, there is also a great deal of poverty and deprivation.

Q8. [128508]

Why are the Government currently borrowing at the rate of £35 billion a year, when only four months ago the Chancellor of the Exchequer said that the figure was £24 billion?

The hon. Gentleman should wait for the pre-Budget report for the figures, but if he looks at the debt:GDP ratio, it is a darn sight better than it was when his Government were in power. I seem to recall that he was a Minister in the previous Conservative Government when interest rates were between 10 per cent. and 15 per cent., 3 million people were unemployed, and borrowing reached £80 billion. Whoever else can give us lessons on prudent finance, it is certainly not the hon. Gentleman.

Does my right hon. Friend agree that one of the reasons for the relative lack of interest on the part of the British people in the European Union is the widespread belief that it is effectively the fiefdom of the political elite? In addition to other good reasons for holding a referendum on the new constitution, would not such a move instil greater interest among the British people in EU matters and effectively show them that their views really do matter on these vital issues?

I think that my hon. Friend should have a little more faith in our parliamentary debates to deal with the issues. In joining with the Conservatives and calling for a referendum, he should bear in mind the fact that Ted Heath did not have a referendum when he took us into the European Community, nor did Margaret Thatcher on the Single European Act, nor did John Major on Maastricht. I repeat that if there were a change in the fundamental nature of our constitution, a referendum would be right, but there is not. My hon. Friend should realise that Opposition Members who call for a referendum want it as the first step in a two-step process to get us out of Europe—[HON. MEMBERS: "No."] Yes, they do—[Interruption]

Order. It seems that every time the Prime Minister stands, some hon. Members want to shout. That will not be allowed and I will not tolerate it.

I was merely pointing out gently that the Conservative party proposal—which we will not follow as a Government, which is why I comment on it—is a two-stage process, first to paralyse Europe and then to withdraw. That would be a disaster for our country.

Q9. [128509]

For each of the past six years under Labour, the tax burden has been higher than the one that it inherited. In the interests of the British taxpayer, will the Prime Minister take this opportunity to rule out further increases in national insurance contributions in this Parliament?

First, if the hon. Gentleman looks at the Conservative Government as a whole, he will see that the tax burden was higher than at present in most of the years for which Mrs. Thatcher was in office, at least. Secondly, I make no apologies for raising national insurance. It was a difficult decision, but it was the right decision because it allows us to put extra investment into our national health service. If the Conservatives oppose that tax increase, perhaps they would say how they would fund the extra investment in the health service that is delivering better cancer care, better cardiac care and reduced waiting lists.

Is my right hon. Friend aware that the Denby Poultry Products factory in my constituency has been at the centre of a massive meat fraud conspiracy that released tonnes of condemned poultry waste to shops, hospitals and schools? Will he take urgent action on failings in the meat inspection system and the legislative framework identified by Amber Valley council officers and Derbyshire police, and will he congratulate them on their persistence in pursuing the case over several years and securing the convictions of six men involved in that appalling conspiracy?

I agree. My hon. Friend makes an extremely import ant point about the importing and exporting of illegal meat products. That is the reason why the Department for Environment, Food and Rural Affairs and Customs and Excise have been working hard on the issue. I assure her that we will continue to take every possible action to stamp the practice out.

Q10. [128510]

As the Prime Minister has ruled out a referendum on the European constitution, despite the fact that it is absolutely fundamental—as he said today—will he give a complete undertaking that if the other place rejects the proposals, he will not apply the Parliament Act?

We will maintain the position that we have set out because we believe it to be right. I repeat that the outcome of the constitution process is, of course, absolutely fundamental, but it is the right outcome for us. If we were to give any of our main positions away—on foreign policy, defence or tax—it would be a different matter. But we are not going to do that. We are going to secure every single one of those red lines. We have already principally done so in the outcome of the Convention and we will do it again at the intergovernmental conference. The hon. Gentleman and others should be honest about their position. They want to veto the European constitution, which would end up paralysing progress in Europe, as the first step to getting Britain out. That is a position that we as a Government will not adopt.

Ql 1. [128512]

I have several successful manufacturing companies in my constituency, including New Balance, which produces world-class athletics shoes, and M-Sport, which produces the very successful Ford rallying car that recently won world championship rallies in Finland and Greece. However, some manufacturing companies are struggling. What more can the Government do to help and support our manufacturing industry?

It is true that the manufacturing sector in our country has been through difficult times, as has the manufacturing sector in the major countries round the world. Indeed, manufacturing output has fallen by 1.5 per cent. in the US, 2 per cent. in Germany and 3.5 per cent. in Italy, so obviously the situation is not confined to us. I have to say, however, that the most recent figures on manufacturing output show an upturn. The most important thing is to carry on with the investment in the measures that will improve skills and productivity, and science and technology, and with the research and development tax credits introduced by my right hon. Friend the Chancellor. Above all else, we must maintain our economy's stability because, in the end, manufacturing—like any other part of our economy—depends on that stability in order to make progress.

Q12. [128513]

Three years ago, the Government stated unequivocally that they would veto any attempt to incorporate the European charter of fundamental rights in EU law. Yesterday, the Government said that they would horse-trade on incorporation at the intergovernmental conference. Given that history, what confidence can the British people have that the remaining so-called "red-lined" areas—defence, foreign policy and taxation—will not be sold out in the same way, either at the IGC or later?

We made it clear that we will not sell out the issue of the European charter on fundamental rights. There is no way that that should extend the jurisdiction of the European Court of Justice. In my view, that position will be secured at the IGC that is coming up. I have to say to the hon. Gentleman and other Opposition Members that, overall, this constitution is right. If we expand Europe from 15 members to 25, we must have a more effective and efficient way of working. If we simply sit there and say no to everything coming out of Europe—to extensions of qualified majority voting even when that is in our interests, to the first involvement of national Parliaments, or to a full-time President of the Council which will hugely strengthen the nation state—we will not advance this country's interests, but betray them.

Licensing And Registration Of Gangmasters

12.31 pm

I beg to move,

That leave be given to bring in a Bill to register and license gangmasters in the agricultural and food processing industries.
To begin with, I should like to pay tribute to my predecessor Sir Richard Body for his tremendous and unstinting work in this area.

The term "gangmaster" is not new. Ganging has been conducted in the fens and East Anglia for as long as anyone can remember. Ganging refers to the provision of casual labour for agricultural work.

The need for such casual labour used to be seasonal, but that is no longer the case. Increased consumer demand and changes in supermarket practices that demand consistency of supply 52 weeks a year for prepackaged and pre-prepared goods now mean that demand for such casual labour is all-year round. Producers and packhouses now import produce when their own supply cannot meet supermarket demand. These imported goods are prepared, packaged and dispatched to supermarkets around the country 364 days a year.

The gangmaster system is not any longer confined to the agriculture and horticulture industries. Ganging has now spread to any sector where there is demand for casual labour. It pays an important role in the fishing, catering, construction, cleaning and retail industries. These highly organised gangs of labour move around the UK fulfilling different labour requirements in different industries, often on a daily basis.

I do not seek to make the gangmaster system illegal. It has to be recognised that gangmasters play a vital role in many industries, particularly in the agricultural sector. Ganging is an essential tool that provides efficient and cost-effective labour for the production of food in the UK. The role of gangmasters is even more important when considered in the context of the pressure placed on producers and packers by the supermarkets. Being a gangmaster is a legitimate business, providing large numbers of workers at short notice. A number of gangmasters pride themselves on their good working practices.

Historically, gangmasters used to employ labour from the immediate locality to bring in the harvest, but packagers, producers and the industry are now hugely dependent on migrant labour. The point must be made, however, that without that migrant labour the food industry would not be able to operate. It has been said that 95 per cent. of the horticulture industry is now dependent on foreign labour. To give the House a sense of the scale of the problem, half the 72,000 casual workers employed in the industry are provided by gangmasters. It has been calculated that 20,000 workers per annum are employed by the gangmaster system in a 16-mile stretch between Spalding and Boston, and a further 20,000 workers are employed in the stretch between Spalding and Ely. However, the real scale of the problem is unknown. It is out of control to such an extent that gangmasters travel to Europe to recruit workers directly.

I am sorry to have to tell the House that some suppliers of gang labour use abusive, evasive, intimidating, fraudulent and exploitative working practices. Regular and significant offences include unlawful deductions from wages; the use of casual workers in receipt of benefits; the use of illegal immigrants; evasion of tax and national insurance payments; non-registration of VAT; evasion of payment of VAT to Customs and Excise; and the use of under-age workers. The implications of those practices are not only the human misery and suffering of the exploited individuals, but significant loss to the Exchequer; damage to legitimate providers of labour owing to undercutting from illegal operators through unfair competition; and damage to the reputation of the entire food chain.

To make life more difficult for the authorities, gangmasters often subcontract to smaller, untraceable labour suppliers, which means that no paper or audit trail is provided. Although the initial gangmaster may be legitimate, the subcontractor may not. It is thus important that all subcontracting gangmasters be included in any scheme, and they must also be licensed.

The House should be under no illusion: this is a multimillion-pound business—so much so that the police believe that professional criminal gangs from around the world have moved into the casual labour market in the UK to exploit the current legislative loophole. Some illegal gangmasters have contacts with migrant importers, who charge people to come to the UK, promising them employment. Once an individual is in the UK, often in massive debt, they are found accommodation, which is often substandard. They are provided with transport to and from their place of work. The transport and accommodation costs are deducted from the worker's pay packet, along with tax and national insurance payments. However, as many of the workers are in this country illegally, there is no justification for many of those deductions, which are inevitably not passed on to the relevant authorities. The worst of the examples brought to my attention is that of an eastern European woman employed by an illegal gangmaster. Her gross wage was £149, but after deductions for accommodation, food and transport her net pay was £19.

If a worker complains or queries deductions from their wages, they can find themselves on the streets, homeless, penniless and passportless. More often than not, however, the van that takes them to work will not turn up, and as many of them are housed in rural areas where transport is limited, if the van fails to arrive there is no work.

There is an atmosphere of intimidation permeating illegal ganging. Stories of verbal and physical abuse are widespread and subsequently generate an understandable reluctance to come forward, so much of the evidence is anecdotal. Indeed, the last reliable statistical data are from 1995; they emanated from the agricultural compliance unit, which identified more than 5,500 gangmasters and, by investigating them at that time, managed to recover £537 million in unpaid tax.

The Government have recognised that the situation is deteriorating and that the prevalence of illegal gangmasters is increasing. In 1998, Operation Gangmaster was established to look into the problems of illegal ganging. However, it is clear from evidence to the recent inquiry into gangmasters conducted by the Select Committee on Environment, Transport and Regional Affairs that the Government have so far failed in their efforts to tackle the problem. They admit that no one has any idea of the extent of the difficulties.

Five years on, Operation Gangmaster has no overall budget, reports to no Minister, has no identified aims or goals and no time frame by which anything must be achieved, and the relevant individuals in each Department with responsibility for Operation Gangmaster have not met during the past year. It is no wonder that little is being done, that nothing is being achieved and that the problem is getting worse.

The Government have no idea of the number of migrant workers—illegal and legal—involved in the problem, how long they have been in the UK, where they are located, where they are working, what they are doing, or whether they are being exploited or intimidated. It is essential to confront those issues for the sake of local economies and the workers themselves.

The fundamental step in combating the problem is to establish a legislative framework to introduce a compulsory code of practice. All gangmasters and subcontractors must abide by that code to obtain a licence and to be allowed to organise casual gang labour. Registration must be kept simple and unbureaucratic, unlike the existing voluntary codes, which are clearly not working. If gangmasters fail to comply with the legal obligations, they must be removed from the register and not be allowed to operate as gangmasters. An annual levy would be charged to make the scheme self-financing.

Any scheme must take into account the importance of the need to maintain flexibility in the labour market and must not add further to the burden on the agriculture and horticulture industries. Such schemes have existed before-for example, under the Agricultural Gangs Act 1867. In the 1940s, there was a licensing scheme administered by magistrates. In 1973, a scheme worked reasonably successfully, alongside the White Paper on employment.

Such a self-financing legislative scheme is supported by supermarkets, producers, farmers, packers, the National Farmers Union, the Fresh Produce Consortium, the trade union movement, legitimate gangmasters and many hon. Members.

In conclusion, it is not acceptable to have many thousands of vulnerable legal and illegal workers being transported across the country and being exploited. It must stop. It is essential that we must encourage the legitimate supply of labour to the detriment of the illegal and illegitimate.

Question put and agreed to.

Bill ordered to be brought in by Mr. Mark Simmonds, Mr. John Hayes, Mr. Peter Luff, Mr. Henry Bellingham, Mr. Mark Prisk, Mr. John Baron, Mr. Mark Hoban, Mr. Mark Field, Mr. George Osborne, Mr. Peter Duncan and Mr. Hugo Swire.

Licensing And Registration Of Gangmasters

Mr. Simmonds accordingly presented a Bill to register and license gangmasters in the agricultural and food processing industries: And the same was read the First time; and ordered to be read a Second time on Friday 21 November, and to be printed [Bill 156].

On a point of order, Mr. Speaker. You will of course be aware that the House is voting in deferred Divisions at the moment, as indicated on today's Order Paper. Will you perhaps cause that to be looked into, as the House is voting on matters that were debated in early July and thus being asked to reach a decision some two months after they were debated in Committee? That is surely ridiculous, and yet another sign of modernisation going fairly crazy. Should it not be reviewed?

All I would say to the hon. Gentleman is that Members of Parliament have a long memory.

On a point of order, Mr. Speaker. I should be grateful if you could provide me with some guidance on the procedures of the Intelligence and Security Committee of the House. Is it the case that, once the Committee submits a report to the Prime Minister, he decides when that report is published?

All I say to the hon. Gentleman is that, thankfully, that is not an issue for me; it is not a Committee of the House, so he will have to make his inquiries elsewhere.

Opposition Day

[16TH ALLOTTED DAY]

Fairness And Security In Old Age

We now come to the first debate on the Opposition motions. I inform the House that I have selected the amendment in the name of the Prime Minister.

12.44 pm

I beg to move,

That this House believes that this Government has failed to deliver fairness and security for older people; is concerned that home care services for older people have been cut back and that the Government has presided over the collapse of the care home sector through botched regulations and underfunding; condemns the Government for putting in place rules that allowed thousands of elderly people to be forced to give up their life savings and homes to fund their continuing healthcare; believes that the Government has failed to tackle the pensions crisis both for current and future pensioners, putting in place a complex system of means-tests that fails to get help to the poorest pensioners, whilst heaping extra costs on pensioners by relying on the unfair Conservative council tax to fund local services; is concerned that many pensioners will suffer as a result of the closure of local post offices, a problem made worse by the Government's plans to scrap the pension book and introduce direct payment; and calls on the Government to stabilise the care home and home care sectors, offer security and real choice to older people, simplify the pension system, boost the basic state pension and abolish the council tax and replace it with a tax related to ability to pay.
Liberal Democrats have called this debate because we believe that the Government have failed to deliver fairness and security for older people in this country. It is convenient that we are debating this subject today, because many hundreds of our constituents from the National Pensioners Convention and many other pensioner organisations up and down the country are coming to this House to lobby Members of Parliament about their concerns. Their message and ours is that older people feel cheated by this Government-cheated out of their life savings to pay for their care, cheated out of a decent pension and cheated out of a reasonable standard of living by an unfair and ever-rising council tax.

A growing concern exists among older people that there is a crisis in our care system. Day after day, more and more care homes are closing their doors, but where are the extra home care services to make up the difference? As care homes close their doors, where are the provision in people's own homes and the staff to enable people to continue to live in their own homes?

Since the peak in 1996, some 74,000 care home places have been lost in this country. In the 15 months to April this year, a further 13,400 places have been lost. The prospects remain bleak. The number of new registrations of care homes is falling even faster than the number of closures is rising.

To underline my hon. Friend's point, is he aware that in Cornwall so many care homes have been closed that people have had to be transferred into our hospitals, taking up beds that are then blocked for those who should be there?

My hon. Friend makes an important point, to which I want to refer in a moment.

As a consequence of that lack of care home capacity in our communities—and the lack of foresight on the part of this Government that has allowed a shortage of supply to arise in more and more places—growing numbers of people are getting stuck in hospitals when they are ready to go to a care home.

In the 15 months to April this year just 96 new homes were registered for care of the elderly in this country. I repeat: 96 in 15 months. Since 1997, the number of people receiving home care has fallen by 110,000: almost a quarter of home care places have been axed in this country since 1997. Social services departments have always been gatekeepers of services, but increasingly the elderly are finding the gateway to those services firmly locked, and opened to them only when they are at death's door or in desperate straits. More and more councils are rationing services. Who picks up the pieces? It is the relatives, the husbands, the wives, the parents, the children—all of them carers. They find themselves asked to carry on that caring role for longer and longer because adequate provision of social care services is not available to support them in that role, and indeed when they can no longer carry on in that role.

At the same time, the Government have driven through half-baked plans to put a price on the head of every elderly person who is stuck in a hospital bed. Of course we want older people to receive the right care in the right place at the right time, but this Government's obsession with targets and fines runs a risk of more and more elderly people getting the wrong care in the wrong place at the wrong time. As the number of people labelled as bed blockers falls—and it is falling—the number of people returning to hospital as emergencies is rising. The Department of Health's own figures show that there has been a 23 per cent. increase in the numbers of elderly people over the age of 75 returning to hospital within less than 28 days of being sent home. That is a startling figure. Indeed, the last available set of figures for the whole of a single year show that 140,000 people over the age of 75 are now being put through the misery of being discharged prematurely only to return to hospital within 28 days of that discharge. That makes no sense at all. The research that has been done on emergency readmissions shows that two in five could have been avoided. The NHS must do more on that, and the Government, by their fixation on delayed discharge, are overlooking that problem and failing to tackle it.

Both the hon. Gentleman and I are parliamentary representatives on the Greater London Forum for the Elderly, as he will be aware. As he also knows, the forum is having a community awareness week in October, in which it hopes to bring out clearly the problem of care homes in London, which is particularly acute. I would be glad if he made note of that.

I certainly do make note of it, and in a minute I shall quote some examples from a report of the National Audit Office that demonstrate clearly that in London and the south-east we have gone beyond meltdown in the care home system. There is an excess of demand over supply when it comes to care home capacity. The NAO report states that

"for London and the south-east as a whole demand exceeds supply. There is a particular shortage of beds affordable to councils."
Increasingly, because the capital is funded to a higher level than elsewhere for social services, it can afford to poach places outside London. Increasingly in Kent and other parts of the home counties, London councils are competing with local councils for care home beds, and they are able to outbid local councils, making life even more difficult for many others outside London.

The problem of demand outstripping supply is not confined to the capital and the south-east. It is becoming a widespread issue. It is not only a matter of a growing shortage of places, for there is also a shortage of staff. Again, the NAO warned the Government earlier this year, when it said:
"Both residential and home care capacity are constrained by shortage of care assistants in the public and private sectors, who carry out many of the more basic but vital tasks. Potential applicants in some parts of the country are currently able to earn higher wages by working, for example, in supermarkets."
The reality is that in too many places care home owners fear the day that a new supermarket opens because they know that it will have an impact upon their ability to continue to provide a quality of care for the residents in their home.

A shortage of places and staff means less choice for older people. It leaves families struggling to find a good care home on their doorstep. For many, the choice is simple: sending granny or granddad miles away or topping up what the council is willing to pay to get into what they hope will be a better home. Not only do the Government expect the elderly to spend their life savings and to sell their homes to pay for care. It seems that they are now content to stand idly by while the children of older people also pay for their parents to be in the right care home. No wonder these people feel that the system is unfair. No wonder so many of them feel insecure.

The hon. Gentleman knows that £4.5 billion of private money is spent on residential care, which is equivalent to 1.4p on income tax. Is his party saying that it would pay that private money? If the hon. Gentleman and his party are not going to fund it, he should shut up and move on to something else.

So the hon. Gentleman is telling me that a debate about the future of older people and their security should not include care homes and should not pinpoint the key reasons why care homes are going out of business. Is that what he is telling us? Many people outside the Chamber would be appalled to hear that that is what the hon. Gentleman is saying

Geraint Davies rose—

No, I will not give way.

The hon. Gentleman makes a point about money. I shall deal with funding shortly.

Is my hon. Friend aware that in my constituency two care homes have closed recently? A constituent told me last week that having moved her grandmother to the Gatehouse care home in Dawlish, only for it to be closed six months ago, she then moved her to the Kiniver care home in Teignmouth last week, only to discover that it is closing. Is it not the cost of the Government policy that elderly people are moved from care home to care home at a time in their life when they are least able to cope?

Sadly, what my hon. Friend has described is all too often now the reality for people in care homes. People can be given notice of no more than four weeks that their care home is about to be closed. The trauma of being evicted from a care home can shorten lives and result in people losing their lives. My hon. Friend is right to highlight that concern. There is a fundamental lack of security of tenure, which means that people can easily be passed from pillar to post in the way that he rightly describes.

I have said that the Government are presiding over a back-door tax on the frail and elderly and their families. As the gap between care home fees and what councils are willing to pay widens, more and more families are forced to choose between eviction or topping up the care home fees. It is no wonder that so many older people feel betrayed by the Government.

As more care homes close and demand outstrips supply, the problem can only grow. The plain and simple fact is that the market for care homes is still in freefall. Fee levels are at the heart of the matter. Councils cannot or will not pay a fair rate for care. Yet fees must rise if care homes closures are to be halted. That is not only my view, and it is not only the view of a number of organisations from Age Concern and Help the Aged to the King's Fund, as well as many others. It is also the finding of the Government's research last year. The research states:
"An increase in care home fees paid by local authorities was the change that might have prevented home closures identified most often by providers."
That was one of the findings of research commissioned by the Government from the Personal Social Services Research Unit. It seems that that finding has not yet landed on Ministers' desks. It certainly has not impacted upon their consciousness to the extent that they have acted to make a real difference.

Have fees risen enough to make a difference? Earlier this year I received a letter from the National Care Homes Association, which said:
"This year … Local Authorities have awarded a fee increase of between two and five percent. These fee increases came into effect in April. At the same time care homes have had to face additional 'on costs' imposed by the Government."
The association goes on to list the 6 per cent. increase in the national minimum wage, the 20 per cent. increase in the fees that care homes must pay to be inspected by the National Care Standards Commission and the 130 per cent. increase in charges for criminal record checks for new employees. None of these increases is wrong in itself, and none of the services is wrong in itself. But for all of them to have been overlooked by the Government in their funding settlements, which means that councils cannot passport the money through to cover the extra costs, means that care homes are increasingly working with a bottom line that does not make any sense to the owners or their bank managers.

This means increasingly—certainly in my constituency—that those running care homes look at property values and judge that they have been in the business long enough and that it is time for them to retire. They close their care homes and realise a profit by selling them for something else. The victims are the people who, as a result, get passed from pillar to post, having been told that they must move from one home to another.

I want to make it clear that, for us, the issue is not about the livelihoods of care home owners; it is all about the lives of care home residents. A care home can close in just four weeks. A resident has no security of tenure. As I have said, it is a traumatic experience to be told that a home that you have lived in, possibly for many years, is suddenly to be denied to you. That experience can be terrible. It can shorten lives, and in some cases it has cost lives.

Most of those deaths—those tragedies—go unnoticed and unreported. However, earlier this year two cases widely highlighted the plight of the frail elderly. These were the tragic deaths of Winnifred Humphrey and Violet Townsend in different parts of the country, Kent and Gloucestershire. Winnifred Humphrey was forced to move home because her council was not willing to pay the home's latest care home fees. She died 16 days after her move. Violet Townsend was forced to move when the home she had lived in for eight years stopped subsidising council-funded places.

The question of charitably run care homes subsidising state-funded placements is a big issue. Two years ago, the charitable sector was having to find more than £184 million a year to plug the gap between what councils were paying and what was necessary to provide a decent quality of care for older people in care homes. As a consequence of being forced to move, Violet Townsend died five days afterwards. I hope that the Minister responsible for these matters at Westminster has had the opportunity to study the report commissioned by Gloucestershire. It was a local inquiry into the events surrounding Violet's tragic death. I shall quote the report's conclusions. It said:
"The funding required to support the provision of residential and nursing care beds has not kept pace with the growth in the market resulting from improved healthcare and subsequent changes in demography including longer life expectancy. National research and local experience shows that funding initiatives tied to current government priorities do little to address the underlying weakness in the funding structure. When seeking to supplement a shortfall in resources for residential and nursing care, the Council is obliged to balance the risk to its other social care responsibilities, notably in services to children.
Market forces including recruitment and retention problems, increased care standards and rising expectations are resulting in a shrinking care home industry. The Council, working in partnership with the care home industry, is seeking to secure future provision by developing a mutually acceptable contract strategy. In the longer term the Council may be priced out of the market unless additional funds are available to pay the level of fees required to attract private capital investment in new build provision that is compliant with the improved care standards."
What will the Government's response be to that report and to many others like it?

I have been listening carefully to the hon. Gentleman, and accept what he is saying about the tragedy of those two cases. However, care homes close for various reasons ——not just because of lack of funds, but often because they do not come up to the new care standards. I would expect the hon. Gentleman from his political perspective to accept that that is quite right. However, what is the solution to the difficulties caused by the closure of care homes that simply do not come up to the standards that we expect in a modern care service?

The hon. Lady makes an entirely fair point. At the moment, care home residents have less security of tenure than a council tenant or a private tenant. We are arguing that they need greater security, and we need a procedure for care home closures — there will be closures, because there are bad care homes that should be closed—that is slow-paced and meets the needs of the individuals. It should not be rushed to meet the needs of the social services budget or care home owners' priorities in selling their care homes. That is what we want, as it is not standard practice everywhere. The findings of the inquiry in Gloucestershire show that there are lessons to learned from the way in which the tragic circumstances of Violet's death were handled, and changes in procedure will be required in future.

The Government's response to the problem is apparent in their amendment — it is simply to pat themselves on the back and to say what a wonderful job they are doing and that everything in the garden is rosy. Good regulations and higher care standards are something that we all want, but the Government, in fact, have managed to pull off a double whammy of botched regulations and, as a consequence of their botched introduction, poor standards. The care standards that were introduced in April 2002, only to be ditched in July 2002, were for many care home owners the final straw. During the passage of the legislation in 2000, the Government said that better standards would be cost-neutral. Larger rooms, wider doors, lifts and many other physical changes are required to bring homes up to standard so that that they are fit not only for today but for future generations. The Minister has stuck to the line that that need not cost more, which was nonsense in 2000 when the legislation went through the House. When the penny finally dropped with Health Ministers, they ran away from higher standards and the higher costs of meeting them, and waved away the physical standard requirements for the care home sector. The standards for care homes for disabled children and adults are in practice and detail higher than the standards that will apply to the care of the elderly. What happens to an adult in a care home who makes the transition to an older persons' home? Suddenly, they are told that they have to start sharing again because standards do not require the provision of single rooms in a care home for the elderly. Such changes are the result of the Government's ill-thought-out approach. Yet again, elderly people face discrimination solely on the basis of age.

Discrimination does not end there. In February this year, the health service ombudsman published a highly critical report on long-term care. She found that the NHS had adopted unfair, even unlawful, rules for deciding who was entitled to fully funded continuing health care. Despite court judgments and the ombudsman's rulings, the Government have done next to nothing to put that injustice right. They remain in denial about the fact that they have done anything wrong at all. However, the guidance issued by the Department of Health under this Government's watch has served only to obscure the legal position and left the NHS locally to draw up its own rules. Those rules amount to age-based rationing of health care. Once assessed—and thousands never even get that far—people who are turned down are directed to social services and are means-tested. It is a scandal that for so long the sick elderly in need of health care have been forced to sell their homes to pay for services that they thought throughout their working and taxpaying lives they would receive free when they needed them.

We are not talking about personal care or the recommendations of the royal commission on long-term care. We are talking about the law of the land, dating back to the institution of the national health service and the principle that health care is free on the basis of need. For far too many elderly people, that is not the practical everyday reality —they are denied that right and are charged for going into a care home. In too many cases, the rules mean that people only qualify for NHS funding when they are at death's door, yet no law was ever passed to draw the line between what is free and what is paid for. It has been done instead by poorly drafted guidance and neglect. Ever since the ombudsman reported in February, Ministers have stonewalled on the Government's response. I hope that when the Minister stands at the Dispatch Box today, he will offer a sincere apology to the families who have had to battle for so long to get their rights recognised and who had only the ombudsman to rely on to get change and recompense for what they have lost.

The problem is not just unfairness and insecurity in care — the same goes for pensions. The withering away of the basic state pension started under the previous Government, but it has continued under this one. Today's basic pension is a weak foundation on which to build security in old age. Women do particularly badly, and their relative position in the past decade has not improved. The basic pension should be a strong foundation for income in old age. The oldest pensioners, as we know—indeed, even the Chancellor now accepts this—are the poorest pensioners. We believe that they should receive much more as part of their basic state pension.

I shall now come on to the questions asked by the hon. Member for Croydon, Central (Geraint Davies). If the money that the Government are ploughing into mass means tests for the pension credit were spent on a better basic pension, the figure that my hon. Friend the Member for Northavon (Mr. Webb) reported to the House a while ago would be of great interest. The over-75s would receive an extra £19 week in their basic pension—no questions asked, no forms to fill out. Even the Government accept that the basic state pension is not enough, which is why they are introducing the state second pension. I had the doubtful pleasure of serving on the Committee that considered the legislation introducing that pension. The trouble with that measure is that, after 40 years of making contributions, someone retiring on a full basic pension and a full second pension will be so poor that they will immediately have to apply for means-tested support.

The basic pension and the state second pension both leave pensioners in poverty, so the Government are introducing the pension credit to fill the gap. However, they have introduced more complication and confusion in the system. Complication and means testing lead to lower take-up. The Government think that 3.8 million pensioner households should be entitled to the pensioner credit, but the reality is that by next year Ministers expect just 2.8 million of them to be receiving it-1 million pensioners will, on the Government's own figures, be living below the Government's pensioner poverty line.

What the hon. Gentleman is saying is at odds with my own experience. Thousands of pensioners in my community are accessing the Pension Service, and I have repeatedly been told that it is as easy as picking up a phone — the work is done for claimants, and they get returns within days. If that is not the hon. Gentleman's experience in his area, may I suggest that he ask some questions, as that service is available in many other parts of the country?

The Minister may be able to deal with that puzzle in a minute, because the Government's own figures are based on the assumption that they will fail to get 1 million pensioners into the pension credit. It is for the Government to explain why there is such a difference between what the hon. Lady has been led to believe is happening on the ground and the Government's expectations. Our experience of the system leads us to believe that it will require regular reviews, which means that in reality it will be complicated.

May I bolster the point that the hon. Gentleman is making by pointing out that as recently as this morning the Secretary of State himself gave evidence to the Select Committee on Work and Pensions? He accepted my figure when I suggested that 1 million pensioners entitled to the pension credit would not be claiming it, and he expressed a blithe confidence that, despite all the problems with tax credits and the Child Support Agency computer problems, things would be done seamlessly and efficiently when the day dawned in October.

The hon. Gentleman has made a useful point in demonstrating the Minister's acceptance of the figure that I have given. I hope that when Ministers respond to our debate they will do more to allay the concern of many Members about the way in which the pension credit system will operate.

Is the hon. Gentleman arguing that, by next year, 2.8 million pensioner households will be better off as a result of the introduction of the state pension credit-a measure introduced by the Government which his party opposed? Is that what he is saying?

What I am saying is that I am more ambitious than this Government. I do not believe that 1 million households should be left in poverty, but the Government seem to be complacent about that and prepared to accept it. They are complacent about the situation even in 2006, as they expect 800,000 of our pensioner households to continue to live in pensioner poverty.

I have been generous in giving way and I have given way to the hon. Lady, so I wish to make some progress.

That poverty is made worse by huge council tax increases. The most recent Government figures show that the poorest 20 per cent. of pensioners pay almost four times as much of their income, even after benefits, on council tax as the top 20 per cent. Council tax has a disproportionate impact on the poorest.

I support what my hon. Friend is saying about council tax. In May, I presented a petition on behalf of 5,000 residents in Weston-super-Mare who were concerned about the existing rates. We are now talking about next year, when there will be a further whammy. Does the hon. Gentleman agree that people are very concerned about fairness and ability to pay?

My hon. Friend is right to underscore something that many outside the House feel — council tax has now become the unfairest tax in Britain. It really does hit hardest the poorest and most vulnerable. That is why during the Budget process in this place, we argued that there should be a £100 across-the-board cut in this year's council tax as a way of beginning to alleviate and ameliorate the impact of council tax rises. It is also why the Liberal Democrats still believe that what we need is a fair income tax-based solution to raising local taxes. The Government say in their amendment simply that they are reviewing council tax. Six years after coming into office, they are still reviewing. While they do so, pensioners are getting poorer.

Our motion also addresses the concern felt by many pensioners about the loss of their pension books and the introduction of what the Government confusingly call direct payments. We now have direct payments in the Department of Health and the Department for Work and Pensions. They are totally different and confusing on the ground. Payments into banks, building societies and post office card accounts may make sense for some people, but the option of keeping the pension book should not be discarded so casually. The Government are introducing the post office card account, but it is difficult to apply for. People have to go through six separate stages to make an application, and the account is difficult to use in practice. For example, my hon. Friend the Member for Twickenham (Dr. Cable) found back in July that only one in 10 post office card account applications had been processed. Let us hope that the Government have been able to speed that up.

Even now, it is not clear what happens to pensioners who have an account who fall ill suddenly and have not made any prior arrangements allowing someone else to use their personal identification number. Indeed, if someone else uses their PIN, they will lose their eligibility for a card account.

I am afraid that I shall not give way at this point.

The same point applies to those who are relying on a number of different carers. We are still waiting for the Government to spell out the details of their exception scheme. If pensioners feel that the pension book suits their needs, they should be allowed to keep it.

We initiated this debate because those are the issues and concerns that are on our constituents' minds. They are on the minds of those who are lobbying Members of this House today. On the ground, people are seeing care homes closing, and confronting the difficulties of finding a good care home for their loved ones. People are forking out a fortune to pay for what they believed was free health care and struggling to make ends meet while coping with a meagre pension and huge council tax rises. This Government have had six years to start to deal with those issues. As a result of their failure, thousands — indeed, millions—of pensioners in this country still feel insecure and feel that this Government are not giving them a fair deal.

1.14 pm

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"welcomes that from 2004–05 Government will be spending £9.2 billion extra per year in real terms on pensioners compared with the 1997 system; notes this is £5.7 billion more than if the basic state pension had been linked to earnings; recognises that the poorest third of pensioners will be £1,600 a year better off in real terms compared with the 1997 system; applauds Government action for older people on health and social care, fuel poverty, transport and lifelong learning; approves of action to stabilise the care home sector by increasing resources available to councils to increase care home fees where required; supports the Government's commitment to increase resources available for social services by on average six per cent. a year in real terms over the next three years, the expansion of intensive home care support, and the largest ever sustained increase in funding for the NHS; welcomes the real terms increase of 25 per cent. in grant to local authorities since 1997, and the review of the balance of funding between central and local government; further welcomes the successful introduction of universal banking services, giving Post Office access through a number of current accounts, basic bank accounts and the Post Office card account; congratulates Government on its intention to bring in Pension Credit from October; notes eligible households stand to gain on average £400 a year; and applauds the actions of the Government which result in over 1 million people being ready to receive Pension Credit who will gain more money than they had before."
We very much welcome this debate on fairness and security in old age. Clearly, the ageing of the population is one of the major challenges for societies such as ours. Indeed, it is the major factor behind what I might term the rise of demographic politics, although low birth rates across Europe and much of the western world are another major factor behind demographic politics. We face serious challenges and there are some serious questions to be asked and answered.

The hon. Member for Sutton and Cheam (Mr. Burstow) raised many such questions, and many of them have huge resource implications. In debating these matters, however, we must avoid two dangers. The first is an excessive negativism and pessimism about the ageing of our population. Let me turn to the words of a former tutor of mine, Professor Richard Titmuss of the London School of Economics:
"Viewed historically, it is difficult to understand why the gradual emergence in Britain of a more balanced age structure should be regarded as a 'problem of ageing".
I think that that is a text for our times, although the book was published in 1963. Let us avoid pessimism about ageing. The second danger is any temptation to suggest that there is some conflict between different generations or that they are in a battle for resources. Incidentally, I am not accusing the hon. Gentleman of falling into either of those traps, but trying to make two broad points.

In looking at the demography of ageing, we need to address two trends. First, there are many ways in which we can paint a statistical picture of the general ageing of our population. Back in 1901, a few years before Lloyd George introduced the old-age pension at the generous rate of five shillings, the 65-plus population represented some 5 per cent. of the overall population. Those aged 65 and over now represent approximately 16 per cent. By the middle of this century, 2051, that level will rise to24 per cent. However, there is another trend that we need to understand—the ageing of the elderly population itself and the rise in the number of people in their 70s and 80s. Back in 1901, only 61,000 people were over 85, but the figure is now 1.1 million and it will be 3 million by 2051. The ageing of the population has major implications for pensions issues and the ageing of the elderly population has particular implications for the social and health care issues that the hon. Gentleman raised.

To give another bit of broad context, we also need to recognise the life cycle of the typical 21st century Briton. The Briton of the 21st century may well spend 20 or even 25 years in education and training, preparing for economic activity. That hugely contrasts with the situation of their grandparents and great grandparents, who would have left school at 14. Of course, although when people retire—we all hope that they will be able to retire later if they wish to do so — they may currently face retirements lasting 20 years, as the century progresses, they may last 25, 30 or more years.

I mention those facts because, in terms of such demography, we need to ask serious questions, as we are doing, about how we will afford education for a long period at the start of people's lives and decent retirements at the end. Although we often have separate debates about those issues, they are linked in terms of resources and life cycles.

We should also avoid generalisations about "the old". We all fall into that trap, and I shall probably do so today. However, when we consider groups of elderly people—some now talk about ageing starting at 50, which I can hardly believe—we are clearly talking, in the light of the fact that some people are now surviving as centenarians, about different cohorts of people with different needs, and about different financial and social circumstances. Such cohorts have different interests and may not agree with each other about the allocation of resources, and we should recognise that.

While much of our debate is perfectly properly about the rights of elderly people to decent health and social care, and decent retirement pensions, let us also remember and pay tribute to the fact that this generation takes very seriously not only its rights, but its duties and responsibilities. It takes its responsibilities seriously in terms of volunteering. Many of our volunteer army are the younger old, who are often looking after the older old. Many are carers of spouses with dementia or children with serious conditions. We need to recognise the responsibilities taken on by the old, as well as their rights, and obviously we need to combat age discrimination.

The Liberal Democrat spokesman highlighted one or two cases in which older people had had their human rights breached, which often takes place in a care setting. Does the Minister agree that sometimes older people find it difficult to defend and promote their rights? Is it not about time that they had a human rights commissioner who could work on such breaches, as I suggested to his ministerial colleague a week or two ago?

In terms of the broad agenda, I shall focus mainly on incomes and pensions, while the Under-Secretary of State for Health, my hon. Friend the Member for South Thanet (Dr. Ladyman), will address other issues. We are all sensitive to the fact that when people who may be in their final years of life need to move to various kinds of institutions to be cared for, often by strangers, potential breaches of human rights come very much to the fore. I am sure that that unites all hon. Members, whatever our policy positions. My hon. Friend the Under-Secretary is very mindful of the issue.

Given that higher take-up of pensioners' benefits demands greater simplicity in the system, does it in any way trouble the Minister that, as was said of the Schleswig-Holstein question, only three people have ever understood the complexities of Government pension policy, one of whom is dead, while the second is mad and the third has forgotten the answer?

I think that I personally knew all three. I do not accept the hon. Gentleman's point. I shall talk about pension credit, which he may have in mind, in a few moments.

One of the issues involved in rights is that of outlawing age discrimination. It is extraordinary that at the very time that, demographically speaking, more of our citizens are elders, there remains absurd discrimination against older workers that bars people from the work force. We have several programmes to deal with that, and we are going to outlaw age discrimination. That will come into force in October 2006.

Will the Minister take the opportunity to confirm on the record that when he says that the Government are committed to dealing with age discrimination, he means that they are focused only on the workplace and will not tackle—in other words, they will tolerate—discrimination against older people in welfare and health services and in many other aspects of their lives?

I am surprised that the hon. Gentleman did not pay tribute to the fact that we are the first Government to outlaw age discrimination. In a range of arenas in the private, voluntary and public sectors, we need to be on guard against such discrimination—not least in the national health service, where we have taken major steps in that respect.

Our strategy for older people involves a number of strands, but I would emphasise the need for all pensioners to have a decent and secure income in retirement, opportunities to remain active in later life—there is a role for employment, of course, but also for education, lifelong learning and community activity—and a better and more co-ordinated health and care system to promote the independence of old people. It is also important at central level—even more so at local level—that we involve older people themselves in running and consulting on such services.

I turn to incomes and pensions. That is my brief, and it is extremely significant to the debate. We are tackling pensioner poverty and will continue to do so. Our approach strikes a balance between providing a solid foundation of support for all, looking after the needs of all older people through pensions while targeting support at those who need it most. We make no apology for targeting the poorest pensioners. Income support through the minimum income guarantee introduced improvements, which have increased in line with earnings since 1999. Current rates are £102.10 for single pensioners and £155.80 for couples. The winter fuel payment benefits all older people, providing an additional £200 a year for around 11 million pensioners. From this winter, there will be an extra £100 for households containing someone aged 80 or over, benefiting an estimated 1.9 million people. In addition, free TV licences are available for all those aged 75 or over, without any income test.

In 2003–04, the Government will spend around £8 billion extra a year on pensioners as a result of policies introduced since 1997. Although much of that benefits all pensioners, as I have been at pains to emphasise, it includes £3.75 billion more on the poorest third of pensioners. It is a matter for debate in this House as to whether Opposition parties agree with our determination to target extra resources on the poorest, but we think that that is right in terms of social justice. That figure amounts to almost six times more than would have been provided by an earnings link to the basic state pension since 1998. Those who argue simply for the re-indexing of the pension with earnings must recognise that that would deny extra help to the poorest. As a result of our measures, the poorest third of our elders will be approximately £1,600 a year better off.

Rightly, it has been noted that many of the poorest among our elderly population are women. There are two reasons for that—women's increasing life expectancy and, more importantly, the fact that their work patterns mean that they are less likely than men to have occupational pensions and their savings may have diminished. About two thirds of pension credit beneficiaries will be women. We need to highlight that in our campaigns on take-up.

I shall give way to the hon. Gentleman first, because I am not a sexist, then to the hon. Lady.

Can the Minister confirm that his statistics on the average gain for poorer pensioners are based on his Department's simulation models, which assume, incorrectly, that every pensioner takes up all his or her entitlement?

I will deal with the methodology of the statistics in a note to the hon. Gentleman, if that is satisfactory.

On the crucial issue of take-up, I want to ask the Minister a question that I asked in a previous debate, when I am afraid that I did not get an answer. Will a specific take-up target for pension credit be set for Scotland, and if not, why not?

We have estimated figures on the numbers of people who are entitled to pension credit in Scotland, as well as in the regions of England and Wales. I am coming to the issue of take-up. I hope that even those who oppose the introduction of pension credit will help us in the campaign, and that all people who are entitled to the benefit will claim it.

Pension credit will be introduced from October this year. For the first time in the history of the welfare state, the Government will ensure that it pays to have saved above the foundation of the basic state pension. Pension credit will reward people aged 65 and over for some of the savings and incomes that they have built up for their retirement. In the past, those who managed to save a little were left no better off than those who had not saved at all. People with capital of £12,000 or more could get no help at all, however low their income. That is the historical situation; no doubt the Conservative spokesman will seek to defend it.

Pension credit is less complex, less intrusive and less bureaucratic, and will give people more. Around half of all pensioner households will be eligible and stand to gain, on average, some £400 a year. The application process has been designed to be straightforward. It involves a simple telephone call on a free phone number. People are sent a form to check, sign and return to the Pension Service. I say to old people who, despite our best efforts to design a simple form, understandably find form-filling difficult, as many of us do, "Throw it in the bin and make the telephone call. In a 20–minute call, one of our trained staff will fill in the form for you. You simply have to verify it."

From the age of 65, most pensioners will have their entitlement fixed for five years, during which they need to report only major life events. We are thus doing away with the weekly means test. We need to communicate to elderly people that the pension credit does not mean an old-style means test. Since April, we have issued mail shots to approximately 1.3 million pensioner households and we shall write to remaining households in the next nine months. I hope that hon. Members understand that that is a colossal exercise and it would be wrong to try to write to all pensioners in the same week or even the same month; we do not want to gum up the administrative works. We are therefore undertaking the work gradually and sensibly for public administration.

People who apply at any time up to October next year will have their credit backdated to this year so that no one will lose out. Of those who have already been through the process—mainly people on the existing minimum income guarantee who have been transferred to pension credit, but also others—we estimate that, even at this early stage, more than 1 million will get more money than they received previously.

Does the Minister agree with the comments of Mr. Mervyn Kohler of Help the Aged that the Department has designed a system so byzantine that no one can understand it?

No, I do not. The hon. Gentleman does not appear to understand that the fact that people do not have to fill in the form and that one of our experts can fill it in during a 20–minute phone call — people have only to verify the details — is a major step from old-style means-testing.

I welcome the Liberal Democrats' choice of pension credit for the debate because they have an interesting track record that should be understood. They opposed its introduction. When the hon. Member for Northavon (Mr. Webb) was not examining statistical methodologies, he stated on 25 March 2002:
"The savings credit neither rewards those who save today nor encourages people to save for tomorrow, and I urge the House to reject it outright."—[Official Report, 25 March 2002; Vol. 382, c. 629.]

The hon. Gentleman clearly stands by his comments, since he judges them to be perceptive. I am glad that someone does.

If we follow the hon. Gentleman's advice and spend all our pension credit money on increasing the basic state pension, we could increase the maximum rate from £77.45 to approximately £90. However, that would mean losses of around £30 a week for households that receive pension credit. The Liberal Democrats need to explain that to older and poorer people: if the Government foolishly followed their advice, the poorest would be denied £30 or more a week.

Although I do not agree with the Liberal Democrats' approach, I at least respect it and understand their position. However, it is curious to compare their opposition to pension credit with their comments in the Brent, East by-election campaign. I have a piece of paper which is so interesting that I shall subscribe to future editions. It is called "Focus on Pensions" and discusses pension credit. Since we are considering "honourable gentlemen" in the House and outside, I assumed that the headline might read "Scrap Pension Credit" or possibly "Take Away £30 from the Poorest Pensioners". However, it is: "Are You Missing Out?" The article states that "local Lib Dem"—they call themselves Lib Dems—campaigner Sarah Teather
"has launched a major campaign to urge all local pensioners to apply for the new Pension Credit".
She said:

"I want to make sure that all pensioners in our area who are entitled to the new Pension Credit actually claim it."
Once again, we understand that being a Liberal Democrat means never having to be consistent. What hypocrisy¡ I hope that the hon. Member for Northavon or his colleagues will say whether they are for or against the pension credit, and whether they would back or scrap it. Answer came there none. Liberal Democrat Members opposed the pension credit in Parliament. campaigned for its success at the hustings and soon they will doubtless claim that they thought of it.

The Minister has been generous in giving way. I promise not to try to intervene on his speech again, unless provoked.

The virus is spreading, because in my constituency the Liberals are writing to pensioners extolling the virtues of the pension credit and demanding to know whether they will take it up. I am pleased that there is no by-election in my constituency, but I gather that in Brent, East the "local Lib Dem campaigner"—how that phrase rolls off the printing presses—lives in Islington.

The hon. Gentleman is looking very well, doubtless with the benefit of a summer holiday, and I am sure that a by-election will be much delayed.

A major part of the discussion must focus on not only today's but tomorrow's pensioners. The Green Paper and our response to it are crucial to the pensions agenda.

Unlike the Liberal Democrats, I strongly support the pension credit. I am pleased that such a policy has emerged from the demand in constituencies such as mine that were let down because small occupational pensions or savings were not properly taken into account. My supporters will deliver 35,000 leaflets to urge my constituents to apply for the pension credit.

However, having stressed the good points, I wish to raise a technical matter. When I was first elected to Parliament and means-tested benefits were examined, I was upset by the assumption that every £250 in savings resulted in an income of £1 a week. That has been changed and savings of £500 result in a notional income of £1 under the proposed pension credit. I believe that the figure remains excessive.—

Order. The hon. Gentleman must conclude his intervention.

That was an important and complex question. I welcome my hon. Friend's support for the pension credit. The Liberals are in some difficulties if they are honest on the pavement—a rare sight—and say that they are urging people to claim a credit that they would abolish if they came to power. However, that is a conundrum for them. The first £6,000 of savings are not taken into account. We estimate that 85 per cent. of those eligible for the pension credit will not have to bother us with details about savings. As he acknowledges, the withdrawal rate is more generous than it was in the past. We suspect that approximately half of all pensioners will qualify for pension credit, so there must be a cut-off point.

The hon. Member for Sutton and Cheam made some rather negative remarks about payment modernisation and direct payments. There are important reasons why the changes are happening. Order books and girocheques are vulnerable to fraud and theft; about £80 million is lost in the postal system and elsewhere every year. Sadly, on average, about 100 pensioners a week have their order book stolen, and some are mugged and seriously assaulted on their way to the post office.

It is vital that we recognise the importance of the post office network. The Government are putting a great deal of resource into the network: some £2 billion over the next five years, including £450 million earmarked to support the rural post office network. It is not for our Department, or, indeed, the Government, to ensure the future of every post office, but ensuring that the Post Office becomes a modern banking service offering Post Office card accounts and facilities that allow people to draw out their cash using other bank and building society accounts—as I do at our local post office here in the House, using my own bank account—will stop people walking away from the postal service. If we look at the statistics for before the change was introduced, we see that almost six out of 10 people in the newer group of pensioners—those who have retired in the last year or two—had their pension paid into a bank or building society account. That is why we had to transform the system.

To hear the Liberal Democrats whinge and moan about this issue, one might assume that applying for a Post Office card account was so difficult that only a few dozen people were doing it. In fact, I am advised that 1 million people have applied for one, and our working assumption is that some 3 million people will have them, although there may be more. It is up to the elderly person herself, not the Government, Ministers or the Post Office, to choose. I am sure that the new system will be a success. We are talking to the representative groups and listening to the issues as they arise. For those who find it impossible to access their money through a Post Office card account, or a bank or building society account, there will be a cheque-based exceptions service. We are working on its details, but I would like to assure the House that it will be there.

The Government's amendment to our motion refers to

"giving Post Office access through a number of current accounts".
May I draw the Minister's attention to the situation in Scotland, where the current accounts of the three main Scottish banks cannot be accessed at the post office? What are the Government doing to reach an agreement with the Scottish banks so that Scottish pensioners may have the same rights of access to their bank accounts at the post office as other pensioners?

I recognise that issue, and discussions with banks are proceeding.

Given that I am the Minister for Pensions, I have understandably focused on pensions issues, but it is important for us to recognise, as the hon. Member for Sutton and Cheam did, that there is a wider agenda. A specific issue that is close to my heart is the need to attack fuel poverty. As a young researcher, I worked on the appalling problem of hypothermia, which became known as the "old and cold" problem. It is a scandal that people die in the winter simply because they are too cold to live.

I am proud of the way in which we are tackling the problem. There is still some way to go, but the UK fuel poverty strategy, published in November 2001, was the first of its kind in the world. It set out a coherent programme to end the blight of fuel poverty for vulnerable households by 2010. What have we done so far? In England, the home energy efficiency scheme—now marketed as warm front—has assisted more than 600,000 households, and more than 30,000 new gas central heating systems have been installed. Grants have been increased to £2,500 for the over-60s. I am sure that all hon. Members who have visited elderly people benefiting from the scheme and seen the joy on their faces as they realised that they could now live in a warm home will back the project. The scandal of fuel poverty must be eradicated; it is a 19th century problem that should not have lingered on into the 21st century.

In terms of a healthier old age—which will be dealt with by the Under-Secretary of State for Health, my hon. Friend the Member for South Thanet—the extra resources that we are putting into the national health service are absolutely vital, as are the extra resources that we are putting into social services. My hon. Friend will also deal with some of the issues raised by the hon. Member for Sutton and Cheam in that regard.

We have set out programmes to improve the health and well-being of older people in the national service framework, which was published in March 2001. The framework delivers the commitments to older people made in the NHS plan. It tackles the differing levels of access to services and is rooting out age discrimination in the national health service. The framework will raise the quality and standards of health and social care for older people.

I wonder whether the Minister feels any frustration towards the Office of the Deputy Prime Minister, in so far as the pensioners who are here protesting and lobbying today are concerned about the rise in council tax, which is a consequence of decisions made by the ODPM. The increase in Devon was 28 per cent. this year, and is likely to be 11 per cent. next year. Does that not undermine what the Minister is trying to do? Is it not time for him to say to the Deputy Prime Minister that one of the best ways to help pensioners is to axe the tax?

It is, rightly, not the job of central Government to set the level of local council taxes. We all want to see more localism. It is, however, the task of central Government to fund local government adequately. In real terms, we have put in an extra £9 billion since 1997, and this year's expenditure settlement was above the level of inflation. These are issues that citizens have to talk to their local councillors about. That is why we have local government. Our job is to fund local government as best we can—I believe that we are doing that—and, in terms of old people's incomes, to pursue the programmes that I outlined earlier.

When I ask the many elderly people I know about the issues that count, they talk about safety, antisocial behaviour and the fear of crime. I talked to many people in my constituency over the summer about what was on their mind. It is always salutary to talk to people in the real world, as opposed to the world that some of us inhabit for too many months of the year here in Westminster. The issues out there are not always the same as those we discuss here; indeed, they are often very different. I have been struck by people's concern about crime and antisocial behaviour. We know that, among old people, the fear of crime is a major issue.

We are doing many things to address the problem. Eighty-five neighbourhood warden schemes have been developed or extended, working in communities to tackle the fear of crime. There are more police officers across the country. Schemes such as "locks for pensioners" have provided security upgrades for pensioners on low incomes who live in areas where the burglary rate is above average. We are investing £170 million in 683 closed-circuit television schemes across England and Wales to make our towns safer. These things are important. Transport is important, too. Access to public transport is absolutely vital, as are the half-fare discounts that we have introduced since June 2001, which have helped some 7 million older and disabled people in England.

In regard to adopting a positive approach to ageing, I would place an emphasis on education and lifelong learning opportunities. I once had the honour of being the Minister for Lifelong Learning, and I always recognised, as many elderly people do, that retirement is the new learning zone. Education is not just about younger people.

The hon. Gentleman has a lot of learning to do, if I may say so. A good way to do that is to listen.

To illustrate the point that education is not just for the young, we once held a competition to find England's oldest learner. We found Mr. Fred Moore, who was then aged 107. Those of us who have been to online computer centres, to Learn Direct and to adult education institutions often find that the people sitting in front of the computers are our senior citizens. Why are they doing it? They are doing it to help them run their businesses, to pursue their hobbies as secretaries of various associations or community bodies, or simply to find out how to get into e-mail contact with their grandchildren or great-grandchildren who might live in the Antipodes or in Canada.

Education is vital if we are to take a positive approach to ageing, and an important component is to recognise that all age groups contain people who do not have basic literacy and numeracy skills. One of my happiest moments as a Minister was visiting an elderly lady of about 73, who, through community opportunities, had learned to read and write for the first time. She had become literate—an opportunity denied her at school and in her working life. Her delight that she could write—she was writing essays and so on—was a wonder to behold. Retirement as the new learning zone is an important theme.

This is a formidable agenda. Ageing is not a crisis facing societies, but it is a challenge and the Government are facing up to it.

1.50 pm

I shall address my remarks to post office closures, as they are particularly apposite to what the Minister said about not being pessimistic about ageing. I intend to show that I am not pessimistic about ageing. I want older people to be able to exert their independence for as long as possible.

So far, three post office closures have affected my constituency: two in the constituency itself, in Fir road in Bramhall and in Grove lane in Cheadle Hulme, and one just outside the constituency in Grosvenor road in Cheadle. We have just passed the so-called consultation period for the closure of Cheadle road post office. My colleagues, local councillors and I invited local people to tell us about their circumstances and to say how the closures would affect them. There was only a short month in which to conduct the investigation, but we did so. Some of the messages we received were poignant. As we suspected, we found that we were dealing with real people living in real, linked, identifiable communities, based around local shopping parades at the heart of which is often the post office—not urban sprawl, as the Post Office terms it.

In other cases of possible closure, I have had occasion to speak with representatives of the Post Office about their so-called visits to the areas involved to get to know their characteristics. On close questioning and as a result of frequent letter writing, I found that their visits to local areas are based on geographic information systems. Those visits were conducted via computers; they were two-dimensional visits looking at streets and roads, with communities marked as grey shading around roads. Those representatives did not actually visit the area. That is not good enough; it certainly does not allow them to know what truly forms a community.

The present public consultation is a sham, as the postmaster has already made it clear that he has decided to close one post office, and in the other cases we have heard that he intends to do so. We are not quite holding our breath but we are waiting to see whether we will receive the same standard letter about the closure of Cheadle road post office as was sent about all the other closures.

We have received more than 100 individual replies about the matter, and many more have written to the Post Office team, and Stockport metropolitan borough council has also responded. The key point people made was that the distances quoted by the Post Office when they engage in consultation are as the crow flies, post office to post office; they do not take into account the additional distances that people often have to travel. The distance to alternative offices from more distant areas of my constituency, such as the lower parts of Buckingham road in Cheadle Hulme, Grange avenue and Warwick close, are much greater than the 0.7 miles quoted by the Post Office in the consultation.

The distances quoted do not take into account the particular circumstances when the alternatives are examined. The alternative Mellor road post office in Cheadle Hulme may be accessible once people get there, but people in wheelchairs and elderly, infirm people cannot cope with the steep climb up the road to get to it in the first place. It is therefore impractical, and there are no alternatives to get to that post office by bus.

Older and younger people recognised the valuable contribution that sub-postmasters and sub-postmistresses make to the community, and the impossible position that the Government and the Post Office have created for them. My constituents, like everyone else, use the post office for drawing their pensions, withdrawing money, buying stamps, paying bills by giro and using their council swipe cards, which the council introduced to make it easier for people to pay their council bills, and for posting parcels.

Elderly people told us what a difference it will make to their lives if they cannot access the post office. For example, Mrs. Menges of 2 Rosthernmere road can walk to the post office now; she would have to drive to Turves road and Mellor road post offices, where the parking is inadequate; Mrs. Wright, who also lives in Rosthernmere road, has a walking disability, so although she walks to the Cheadle road post office she could not walk to the others; Mr. Ford, of 35 Farley court is an 80-year-old who can walk to Cheadle road post office but would not be able to get to the alternatives; Mrs. H. Scott, aged 92, and Mrs. M. Jones, who is 89, both walk to Cheadle road post office in spite of disabilities, but they cannot be expected to get on the bus to go to the other post offices.

Dr. Al-Hassani can walk to Cheadle road post office in spite of having a disability but he, too, could not walk to the alternatives; Miss Holloway, who is 86, finds it hard to walk even to Cheadle road post office and certainly could not do so to the alternatives. Mrs. McDonagh of 105 Buckingham road suffers from chronic asthma, osteoarthritis and osteoporosis and is being treated for breast cancer. She could not reach the alternatives except by taxi, which she cannot afford. Mrs. Wellings is 86 years old and suffers from Parkinson's disease. Mr. Bean of flat 10, Regency Court is a younger person who is wheelchair bound and is looked after by his parents, who are in their 80s. They could not wheel him to alternative post offices, nor cope with getting him in and out of a car.

I could go on. Mr. Masters who, in spite of being 91 and blind still manages to get to the post office—

Before the hon. Lady moves on, I hope she will recognise that decisions on consultation on post office closures or changes are matters for the Post Office. Does she accept that the Government share her understanding of the importance of local post offices to local communities, and especially to older people? Will she also accept, as my hon. Friend the Minister for Pensions said, that that is why we are putting £2 billion into the Post Office network, including £450 million for rural post offices, and why we welcome Post Office discussions with the banking sector to ensure that we can underpin the viability of the post office network by allowing it to offer banking services?

I am extremely grateful for the Minister's intervention, because I hope that such thinking will go into the decision on Cheadle road post office. If it does, that post office will undoubtedly be saved or some alternative arrangements will be made. Unfortunately, that has not been the pattern so far in my constituency, and we await the results of the so-called consultation any day now, which we are concerned will affect real people in real communities. The fact that they do not live in a rural area but, according to the Post Office, in a so-called urban sprawl, means that they do not get as much consideration as people who live in rural areas.

We should maintain old people's independence, and ensure that they do not lose their links with the community. I tried the House's patience by reading out all those names, butt here are dozens more people in the same position. If this post office closes—and I have no reason to suppose that it will be treated differently from the others—the cost of social services and health care will rise as all those people become isolated and dependent on others. I am delighted that they want to remain independent in their 80s and 90s. I glory in their desire to do so. The post office makes that possible, and motivates them to go out and collect their pensions by whatever means they choose. There is no local bank, and if the post office is taken away many of them will be unable to make the journey on their own. Along with local shops, the post office is central to their independence.

If the closure is really necessary, what will be done to promote and maintain that independence? It is not sufficient to say that more will be spent on social care and health, for these are people who want to live without those services. Could not post offices, with the Government's encouragement, form an association with supermarkets? Could there not be mobile post offices? They would be a valuable accessory to the mobile library in Stockport, which has made a real difference, although Stockport is an urban area surrounded by suburbs.

It is simply not right to say that the council tax is applied fairly. In my constituency, which is considered to be affluent, its application takes no account of the fact that 51 per cent. of people in the borough are receiving either pensions or benefits.

What concerns pensioners particularly is that while the state pension is the same throughout the country, council tax levels differ from mile to mile, and do not reflect the level of services. Some people pay less council tax than my constituents although they have free transport. Is there not a case for equal treatment?

My hon. Friend makes my point for me. People in their 80s tell me that they cannot afford to live much longer because the council tax keeps going up. They can cope with everything else, but the council tax is becoming too great a burden. It is not fair to expect older people to retire having made what they thought was reasonable provision, and then find that the council tax is the biggest cost that they must meet each year.

The Government have a responsibility to communities, not just in regard to decisions on how much grant areas should receive and how much they should raise for themselves. The Government also have a responsibility when it comes to post offices and other small local services. The one thing of which I can be sure is that if those services are allowed to disappear, the Government and local communities will pay more in the long run.

2.5 pm

The hon. Member for Cheadle (Mrs. Calton) ended by talking about the council tax. It seems to me that the Liberal Democrats are again being somewhat two-faced on the question of whether they want decentralisation or centralisation in the context of equality of services throughout the country. I am in favour of equality, but I am also in favour of decentralisation. I hope that the Liberal Democrats will forgive me if I am wrong, but I do not think I have heard them talk about council tax benefit today. They talk about ability to pay, but that is what council tax benefit is there for.

The difficulties that exist throughout the country this year, especially in the south-east, have been caused by councils' unrealistic views over the years on the level at which they should set their taxes. In my area of Wolverhampton, in the west midlands, we have had no such problems, because the Government's new formula redresses the historic imbalance affecting the rate support grant—now the formula spending share—that the city council used to receive.

Let me give an example to bolster my assertion that there was an historic imbalance in England. When I entered Parliament two and a half years ago, I moved into a property in the London borough of Lambeth. Like the property in which I have lived for many years in my constituency, it is in band D. I found that the council tax in London was considerably lower than that in Wolverhampton-not because Wolverhampton council is much more inefficient than Lambeth, as hon. Members probably realise, and not, as far as I can deduce, because the services provided for Lambeth residents are much worse than those provided in Wolverhampton. Given the considerably higher cost of conducting council business in London, I think the differential can only be explained by the historic imbalance of moneys from central Government. The adjustments that have been made surely redress that imbalance, as you may agree, Madam Deputy Speaker.

The house in Wigan that I have lived in for some time is in band C, but I pay exactly the same council tax as I pay in London, where my property is in band E. Does that not reinforce my hon. Friend's point?

Indeed, and we as a Government are now working out how to redress the imbalance. That has caused difficulties in the past year, but it would have been wrong of the Government to back away.

Should the Government allocate the additional £9.2 billion that they are providing to all pensioners, or only to the neediest? That question has caused a key political division between the parties. Not surprisingly, I support the Government. As a socialist I have always wanted to focus resources on the neediest in society, and that means applying the modern means-testing regime that we are introducing to pension credit and the Government's minimum income guarantee.

The hon. Gentleman has mentioned pension credit and council tax credit. Can he confirm that council tax credit is reduced by the award of pension credit, and that therefore the Government are effectively giving with one hand and taking away with the other?

I do not believe that council tax benefit, as it is called, will have that effect, and nor will housing benefit, but I stand to be corrected by the expert Ministers present.

On targeting money on the neediest, figures from the House of Commons Library, which got them from the Department for Work and Pensions, show that expenditure on the minimum income guarantee for the financial year just ended—2002–03—as about £4.5 billion, at this year's prices. The projected expenditure on the pension credit for the next financial year—2004–05—is about £5.3 billion. There are 7.2 million single-pensioner households in the United Kingdom, and 2.8 million couple-pensioner households in which at least one of the couple is a pensioner. That totals about 12 million pensioners. If that pension credit money—the minimum income guarantee and the pension credit, totalling some £9.2 billion—were evenly divided, each pensioner would get £16 a week. That would take the basic state pension for a single pensioner from £77.45 a week to £93.45 a week—in contradistinction to the single pensioner with the minimum income guarantee, who gets £102.10 a week. In round terms, that is £9 a week more for the neediest pensioners. I salute and support the Government for doing that.

The hon. Gentleman, who is a member of the relevant Select Committee, is thoughtful and knowledgeable, and I have been following his argument with care. How does he reconcile the figure he has just given of £9 a week less for the poorest pensioners, if this money were spread evenly, with the absurd figure of £30 that the Minister quoted?

I go by my own figures, although I always stand to be corrected. [Interruption.]I heard the Minister say £30 a week, but I go by my own figures. As the hon. Gentleman will agree, there would still be a considerable gap, even if his party's policy of introducing such a provision across the board were adopted. That is the key political divide, and it is one of the divides that we are debating today.

I want to move on to something that rarely gets mentioned in terms of this Government's provision for pensioners: the massive increase in spending on the NHS. Two thirds of NHS spending goes on older people, and I support that. Again, that is supporting the neediest, with provision free at the point of use. So, in examining what this Government have tried to do to assist pensioners, we should not overlook that magnificent investment in the NHS, two thirds of which is rightly benefiting pensioners.

I want to turn to the "pensions crisis", as the Liberal Democrat motion describes it. That phrase is very overworked and does not illuminate what is happening with pensions. In terms of pensioners' average incomes and the average amounts saved by prospective pensioners, there is no crisis whatever. Rather, as ever, there is an imbalance between poorer and better-off pensioners, which this Government are seeking to redress.

The difficulties for prospective pensioners and for certain recently retired pensioners in company schemes have been highlighted—if not made transparent—by the Government putting forward the financial accounting standard FRS 17 and by the minimum funding requirements for pension funds, which disclosed under-provision in some private companies' works pension schemes. Those difficulties came about partly because the stock market came down, but principally because many private companies—not all—would not put their hands in their pockets to make up shortfalls in private pension schemes arising from pension contribution holidays that they had taken when times were better. In other words, they took the money out in the good times, but did not put it in during the bad times.

There is also the scandal whereby managers of companies with company pension schemes suddenly retire when the company is about to go bust. They become pensioners three months later, when the company finally goes bust, and are thereby a different category of claimant from the poor working stiff who does not see the writing on the wall or have the inside information, is still employed and gets treated differently, in terms of their prospective pension, from the managers who have jumped ship.

The final salary scheme debate has been used by companies as an excuse to cut their pension contributions. When companies move to a money purchase scheme for new entrants, they cut their pension contributions greatly—on average, by about half the employers' pension contribution to the works pension scheme. Companies have used this as an excuse to lessen the pension emolument that they pay to their employees. Given what we have experienced in the past three or four years, in the medium term, final salary schemes in the private sector will wither and die, particularly for new pensioners. Such schemes were designed to provide security. People who worked for a company for 40 years, say, knew what pension they would get. If it was an eightieth-based scheme, they would get 40 eightieths on retirement—in other words, a half-pension. Every year they would clock up an eightieth and get a half-pension if they stayed with the company for 40 years.

However, the countervailing security is whether there is any money in the kitty to pay people out when they have done the 40 years. Those chickens have come home to roost, and in the medium term the work force, whether unionised—as they should be—or not, will not stand for a lack of security, whereby it is uncertain whether there will be any fund at all, or whether it will come anywhere near meeting promises that were made when in employment. Final salary schemes will be able to continue in the public sector because Government backing will be there to top up local authority schemes, for example, if necessary, but that will not happen in the private sector. We must look at this issue, because it is a question of how we view the term "security".

When we as a society focus, as we should, on the under-provision of pensions for women in particular, we must note that final salary schemes often discriminate against the low paid, many of whom are women. A cleaner, for example, who has been in a local authority final salary scheme for 30 years, doing the same job and paying the same contributions, would get 30 eightieths, but if they were a cleaner for 20 years and worked for the

final 10 as a supervisor, they would get the 30 eightieths at a much higher rate, even though they had paid only 10 years' worth of higher-rate contributions. So, although there is often sex discrimination, overall we are talking about discrimination against the low paid.

t

The hon. Gentleman is normally a fair man in these matters, but he has come perilously close in the past few minutes to suggesting that such schemes are closing because of the wicked, feckless actions of the bosses, who are grinding the faces of their poorer workers. He will agree that that is not so. Many of these schemes are closing for proper, prudent financial management reasons, rather than for the reasons he came close to suggesting.

As a former Select Committee member and a former Minister in the predecessor Department, the hon. Gentleman is very knowledgeable about these matters. However, some schemes have indeed ripped off members, and the employers have been, to use his word, feckless. As he points out, other schemes are closing because it is financially prudent to do so, but what constitutes financial prudence in a given climate depends on how one got there and on how much money is in the kitty. Before he seeks to intervene on me again, I should remind him that I did mention the fact that part of the current difficulty with private pension schemes—but only part—is the downturn in the stock market. However, the stock market, like capitalism, is cyclical, and as I said, some companies that took pensions contribution holidays will not now put their hands in their pockets when times are bad. Instead, they are closing the scheme, which is despicable to say the least.

The Government are doing what they can in the current climate. We are in a transition phase, in that pensions have moved up the political and social agenda, which is a good thing. The Government are seeking to address some of the historical difficulties that have arisen under Governments of both political colours since the second world war.

A major step forward is the pension protection fund, which will be designed to help workers who are ripped off and find that their pension scheme has gone bust or is significantly underfunded. Sometimes they find this out very much toward the end of their careers. If a company scheme goes bust, there will be a 90 per cent. kick-in from the insurance. I am delighted to say that the pension protection fund will have a cap regarding the salaries of high earners. Solvent employers—this touches on the issue raised by the hon. Member for Sutton Coldfield (Mr. Mitchell)—who choose to wind up their pension schemes, as they are legally entitled to do, will be required to meet their promises to that pension fund in full, and that will be policed.

It is a step forward that the Government are looking at the priority order that applies on company insolvency, which has had particularly adverse effects on long-serving members who are nearing retirement and may have decided to work an extra five years, perhaps because their children are in university; but that is another debate, Madam Deputy Speaker. However, if the person at the next desk or bench decides to go and, two years later, the company scheme goes bust, the person who already receives the pension but who may have shorter service and may be slightly younger gets much better protection than the person who has worked there longer.

Finally, I am delighted that the Government are at last making serious noises about the situation for workers when their employment is transferred. Every Member knows that under the acquired rights directive and the Transfer of Undertakings (Protection of Employment) Regulations 1981, as amended, pensions are excluded. The EU made a mistake on that and the UK Government made a mistake in continuing that exclusion when we did not need to after the acquired rights directive was translated into domestic legislation in the UK. The Government addressing that issue is long overdue, and I hope that they do so to ensure that someone whose job is being transferred has protection for their pension as well as for their pay and conditions of work.

2.22 pm

I fear that I could not possibly bring myself to congratulate the Liberal Democrats on their motion today, but they have done the House a service in following the example of Her Majesty's Opposition yesterday and raising an important bread and butter issue that is of huge concern to our constituents. It is noteworthy that the Westminster village spends its time being obsessed by issues around the Hutton inquiry. However, there are many important issues in education, health, transport and taxation that are of great importance to our constituents on a daily basis, and I am glad to be able to take part in this debate today.

I agree with the Minister for Pensions, who said that excessive negativism should be avoided. He was irritatingly reasonable throughout most of his speech; not something we usually get from Ministers in this rotten Government. It remains to be seen how the Under-Secretary of State for Health, the hon. Member for South Thanet (Dr. Ladyman), winds up the debate.

The Minister for Pensions is right to inveigh against excessive negativism, to point to the fact that we are all now, thank goodness, living longer and to state that better medicine is keeping us alive and in a better condition for much longer. That is a good thing. I agreed also with the Minister when he set out the Government's policy on age discrimination. As someone already in his mid-40s, I recognise that this is an increasingly important agenda and I approve of what the Government are doing in that respect.

I want to raise three issues. The first is the crisis in our care homes in Birmingham, a mater that I have raised in the House before and which remains extremely important and worrying. Secondly, I want to follow the hon. Member for Wolverhampton, South-West (Rob Marris) in his analysis of where the pensions crisis for existing and future pensioners now rests. Thirdly, I want to refer to an important point that was touched on briefly by the Minister—the effect of crime on the security of our old folk.

Sutton Coldfield, for local government purposes, is a part of Birmingham. I have watched with great concern the way in which the crisis in our care homes has unfolded and the apparent inability of Birmingham's Labour council or the Labour Government to do anything about it.

The issues behind care home closures were well set out by the hon. Member for Sutton and Cheam (Mr. Burstow), who touched on the bed-blocking crisis, which is not directly associated with the problem but is close to it. He referred also to the fiasco of the Government's implementation and consequent withdrawal of the national minimum environmental standards for existing care homes, which caused great distress and anger across the country.

We know that demand for elderly care is growing. Between 2005 and 2020, over 130,000 more people each year will require residential care than currently receive it, an increase of 25 per cent. The number of people receiving domiciliary care has fallen by almost 100,000 since 1997, a fall of over 20 per cent. The number of care home beds available has dropped by 13 per cent. since 1997, a loss of 70,000 long-term care places.

According to the latest data published by Laing and Buisson in July 2003, 13,400 elderly care places were lost in the 15 months to April 2003 alone. A net 11,000 places were lost in the independent sector—often small, privately operated and voluntary care homes—in the 15 months to April 2003, an increase on the 9,600 places lost in the same time frame in the previous calendar year. A further 900 places in local authority-run residential homes were lost, along with an estimated 700 continuing care places in NHS hospitals. As a result of this capacity loss, supply has reached dangerously low levels; across the country, the average is 5.7 care home places per 100 people over 65. In the northern home counties, the supply ratio has dropped to 4.6, and in London it has fallen to as low as 3.8, one third lower than the average.

Despite frequent warnings from industry bodies and the Conservative party, the availability of care continues to decline. Sometimes closure is inevitable, and several speakers have referred to the huge human cost of those closures. The closure of care homes not only causes disruption to vulnerable residents; on the Government's own reckoning, as many as 1,000 people every year may be dying as a result of care home closures. In general, over-prescriptive, expensive and bureaucratic regulation has greatly exacerbated the crisis in the sector and has driven many recent closures, including those of some high-quality homes.

Hon. Members will recall the early-day motion tabled by me and my hon. Friends in respect of the Birmingham care homes crisis, which said:

"That this House expresses its grave concern about the crisis in care for the elderly in Birmingham and elsewhere in England; is alarmed that over 80 care homes have closed in Birmingham over the last 18 months; recognises that a main contributory factor to this crisis is the decision by Birmingham Social Services to pay substantially less than the real cost of providing care for the elderly in care homes and that this practice is threatening to force good quality independent care homes out of business, causing grave distress and confusion to vulnerable, frail and elderly residents in Birmingham."
That remains the case. I have said that I am appalled that Birmingham social services paid private care homes substantially less than the real cost of providing care for the elderly in care homes, a practice that led, obviously, to the closure of many more care homes.

Mike Gimson, the spokesman for the Birmingham care consortium, which represents care home owners in the city, said that the consortium had been warning the council about the escalating closures. He said that the figures

"prove what we have been saying. It is a disgrace and there is worse to come as the pressure increases. We are now facing the under-provision of beds in Birmingham."
Birmingham has been particularly hard hit because of the action of local authorities that have discriminated against the private sector by paying fees way below the levels that they are prepared to pay to their own homes. Birmingham city council pays £570 per resident per week for its own social service places, but for private homes it is prepared to pay between £300 and £310 per week, and for nursing homes only £398 per week. That is an absolute disgrace. Approximately 100 private homes have closed within the past two years and last year Birmingham city council spent some £17 million on agency staff for social services. At the very least, that is indicative of the demoralisation of the department and its inability to recruit and retain staff.

Even the social services inspectorate has acknowledged that there is a problem with care in Birmingham. The city is officially designated weak and is zero-starred. The Government pump money into social services, but except for domiciliary care and sheltered housing, the money is not ring-fenced. The result is a huge underspent budget for domiciliary and sheltered housing, and money intended for residential care is diverted elsewhere. The situation in Birmingham cannot be allowed to go on. It is an abuse of council tax payers' money and an absolute disgrace. Today I call once again on the Government to take steps to resolve the problem.

My party has come up with a six-point plan for longterm care, which I have no doubt will be further elucidated by the Front Bench. One point was missing from the proposer's speech. The hon. Member for Sutton and Cheam accurately described much of the problem in the sector, but he did not go on to explain precisely what Liberal policy would do about it. Our six-point plan will reverse the decline in the number of care homes and remove unnecessary regulation, which is costly and often does not improve care. It will break down the rigid divide between health and social care, and lead to the greater integration of funding streams from health and social services. It will recognise the sacrifice of those who provide for their own long-term care, and make it easier for people to care for their elderly relatives in the home or in their own homes.

My second theme is the pensions crisis. Nothing could more accurately exemplify how the Government have been caught in the headlights of the pensions crisis than the fact that for a considerable period the Prime Minister did not even deign to appoint a Minister for Pensions. Let us first consider the crisis for those who are already receiving pensions. In spite of the Minister's warm words about his intention to reduce the gap between the richest and the poorest in the pensions sector, that gap has increased—not decreased—by 16 per cent. since 1997.

Let us examine the gross domestic product figures on how much we as a country spend on pensioners. Ten years ago we spent 6.2 per cent. of our GDP on pensioners, and we are now spending 6 per cent. Above all, perhaps millions of people are dependent on means tests. Soon many more will be dependent on them as a result of the pension credit. In 1997 some 37 per cent. of pensioners were means-tested; the figure now is 60 per cent., and it will not be long before it rises to 75 per cent.

Of course I acknowledge the need for some means-testing—that is right—but not up to 75 per cent. One has only to listen to the words of a former Minister with responsibility for pensions, the right hon. Member for Birkenhead (Mr. Field), who has warned about the debilitating way in which means-testing undermines dignity, when people feel that they have to go cap in hand to the state. Means-testing is unwise and should, where possible, be avoided. I believe that a system in which 75 per cent. of people stand to be means-tested is bizarre.

We have heard much discussion of the pension credit today, but I warn Ministers that they will find it extremely difficult to implement successfully. They have the example of the tax credit system to warn them of the dangers of implementing such new systems. I thought that the Minister might have been succumbing to the disease that afflicts Ministers of all parties in the social security sector, recalling what the previous Department was called—being persuaded by their brilliant officials that systems introduced through form filling and case management are essential in their complexity, but will work and be easily understood. History is littered with Ministers who believed that, but found to their cost that it was not true.

On the long-term crisis in pensions, the hon. Member for Wolverhampton, South-West was quick to say that he did not believe that there was one. He and I have debated in the Select Committee whether "crisis" is an accurate term. I persist in believing that it is. The Government have as yet failed to respond adequately to the scale of the crisis. They have been advised by the CBI, the TUC and, indeed, the Select Committee, as well as numerous other lobby bodies on the importance of taking action, but, like rabbits caught in the headlights, they appear to find it difficult to know what to do.

Much talk has gone on in the House about the £5 billion per annum raid on pension funds, but I do not propose—important though it is—to rehash it today. More could have been done to prevent some schemes from closing, but even the stakeholder policy—one of the flagships of the Government's attempts to increase the amount of funded pensions—has been a lamentable flop. Practically no one in the target group has taken up the stakeholder pension, and the company schemes, which must be set up by law, have received very few takers indeed. Perhaps one bright spot for the Government is that they have at least had the wisdom to appoint someone of the calibre of Adair Turner as their pensions tsar. I hope that they will listen carefully to what he has to say when he reports to them.

The funded pensions policy, which was bequeathed by the last Conservative Government to the present Government, was a great success. At one point we had more funded pensions in this country than all the rest of Europe put together. It is crucial for the Government to produce a sensible policy for future pensioners who will be retiring. They have not yet done so, and it is a travesty

that it is now nearly two years since we last had a debate on pensions in Government time. Such debates that have taken place have been on Opposition days.

Finally, I want to quote the right hon. Member for Birkenhead from an article in The Sunday Telegraph,and I hope that the Government will listen. The right hon. Gentleman said:

"All too many families stand on the brink of financial disaster as they see their pensions snatched away from them. Failure to act will be punished by voters as surely as markets punish cuts in dividends. Government cannot continue to hide behind the claim it is consulting; it has been doing that for the past 6 years. What is now desperately required is action."
The right hon. Gentleman is entirely right.

My third point is about the way in which elderly people suffer disproportionately from crime in our society. As many hon. Members do, I conducted a survey on crime and related issues throughout my constituency. I was surprised by the massive response that I received, and particularly impressed by the emphasis on the debilitating effect of fear of crime. Fear of crime can have a massive effect on the quality of life of elderly people. It leads to exclusion from other activities in the community and a sense of isolation, and it certainly has an effect on health. A comparatively minor crime can have a disproportionate effect on elderly people and can be extremely traumatic for victims. The average age of victims of distraction burglary is 81, and it is a significantly under-reported crime because of the embarrassment that elderly people feel—wrongly—at being victims of it.

We need to see more police on the streets. The popular view that a policeman on the beat stops a crime only once every 33 years misses the point. Having police on the street is reassuring to our communities. The lessons from New York about the success of more precinct policing must be evident to everyone and they are certainly now evident to the Mayor of London. I greatly welcome the decision by my party to pledge to increase the number of police by 40,000, if we are successful at the next election. It is pleasing to know that in that happy event, 2,600 more police would come to the west midlands.

2.41 pm

I have some experience in this subject because of the previous job of my boss and because I have just had to do some work for my mother. I certainly do not recognise the picture painted by the hon. Member for Sutton and Cheam (Mr. Burstow). My mother had to move from her home in Carlisle to the Wigan area, to be nearer to me, and I did much of the work involved. I found plenty or choice of residential homes and I managed to get her into a good one. It was brand new and around half full.

Wigan does not have problems with bed blocking, because many of our old people are cared for at home by our excellent social services department. That may be the answer: we have an excellent Labour-run council, as confirmed by the comprehensive performance review performed by the independent district auditor. The Sutton and Cheam local authority, of course, is not as good.

I also did not recognise what the hon. Gentleman—or the hon. Member for Sutton Coldfield (Mr. Mitchell)—said about pension credit. I applied for the minimum income guarantee, as it then was, on behalf of my mother.

She wanted me to do it because she has problems with her hearing. I was happy to do it and it took about 10 minutes. There were no byzantine forms to fill in and the only difficulty was trying to find out her national insurance number. The payment came through in about a fortnight and was backdated. The difficulties outlined by the hon. Member for Sutton and Cheam do not exist. The form-filling and other obstacles that he described do not happen for the majority of pensioners. They may arise in the Pension Service, but not for the person making the application.

I apologise if I sounded defensive when I asked why the hon. Gentleman's mother did not apply herself. My point was that she had the advantage of having an able and articulate son to deal with the system for her, because she did not feel able to deal with it herself. Had the money been added to the pension, the process would not have been necessary.

I shall deal with that point shortly. My experience is shared by hundreds of thousands of people. Most pensioners in my constituency find the system fairly easy, once they overcome the perception—promoted especially by the Liberal Democrats—that the scheme is difficult. It is not, and it puts people off when they are told that they have to fill in 40 pages of complicated forms.

My mother was notified a couple of weeks ago of how much she would receive from the pension credit, and it is significantly different from what she would have got had we followed the Liberal Democrats' proposals. According to the hon. Member for Sutton and Cheam, those over 75 would receive an extra £19 a week to add to the single person's pension of £77.45, so she would have received £96.45. She currently receives £102.50 under the pension credit. So according to the Liberal Democrats, my 90-odd year old mother should have her pension reduced by £6 a week. Others would benefit from their proposals. For example, Baroness Thatcher would get an extra £19 a week, and I am sure that she would find a good use for it. However, the Liberal Democrats will have great difficulty explaining to the people of Brent, East, let alone anyone else, why their proposal would mean that the poorest pensioners would lose more than £6, while those who are better off would gain £19 a week.

Pension credit is important in getting extra money to the very poorest. That is a socialist principle that I am happy to support. It is allied to the recognition that people who have small savings or a small pension should be rewarded for their thrift, not penalised, as in the past.

We must also face the problem mentioned by the hon. Member for Northavon (Mr. Webb), which is the difficulty that some people have in accessing various services for pensioners. That is why we have made huge changes to the way in which the Pension Service operates. A fortnight ago, I held a forum for pensioners' groups in the Wigan constituency. Members of the Pension Service staff came along to answer questions and give details of the pension credit, including the relevant telephone numbers. I shall visit the town centre again soon with staff from the Pension Service to ensure that people understand the pension credit and how to apply for it.

The whole point of setting up the Pension Service is so that it can play a much wider role. Far too often, pensioners are passed from one agency to another, from a local authority to the NHS and back again, or from one voluntary body or council department to another. It is a bureaucratic merry-go-round that can be debilitating for pensioners. The Pension Service is designed to be a one-stop shop to ensure that services for pensioners, be they public or voluntary, can be much more easily accessed. Pensioners can also obtain advice about the services to which they are entitled. People with difficulties hearing, such as my mother, seeing or understanding the forms will be able to contact the Pension Service and receive the help they need, perhaps including a home visit. It is important that the Pension Service be seen as part of an overall package with the pension credit to ensure that pensioners get their entitlements.

I applaud the Government's advances on pensions. We introduced the minimum income guarantee early to tackle pensioner poverty. We have also introduced the winter fuel allowance, free eye tests and free television licences. In real terms, £3 billion has been given to pensioners over and above what they would have received if the pension had been increased in line with inflation. The pension credit will mean an additional £2 billion from October.

I also welcome the introduction of the Pension Service to ensure that people can access services more readily and obtain the help that, all too often, they need. I welcome the help that the Government have given to future pensioners. We sorted out the problems with the state earnings-related pension, left by the previous Government. We also sorted out the problems with the financial services industry after the desperate mis-selling of private pensions, which left so many people high and dry with the loss of pounds and pounds a week. We have also introduced the state secondary pension, with the recognition that it gives to carers and the help it will give them in the future. Of course, we have also introduced stakeholder pensions. Despite what the hon. Member for Sutton Coldfield said, people are taking them up, as they allow those who would not otherwise have a pension to have access to a pension for their future.

Most important in respect of the immediate future is the pension protection fund. It will guarantee that people whose company pension schemes have gone bust will get protection in the future.

I shall be happy to support the Government amendment and to oppose the motion.

2.50 pm

It is always a pleasure to follow the hon. Member for Wigan (Mr. Turner) in these debates. One thing to have emerged from the debate is that, whereas Sutton and Cheam is clearly a near hell hole for older people's services, Wigan is a veritable garden of Eden. It is a place in which we should all aspire to grow old, under the hon. Gentleman's benign leadership.

I am told that I should begin by declaring an interest, in that I have some private pension provision of my own. This is my first outing, if that is the right word, as the newly appointed official Opposition spokesperson on older people's issues. In modern jargon, my brief is crosscutting, and although there have not been many signs of joined-up government in the debate so far, I can promise joined-up opposition on these issues.

Lots of important issues have been covered in the debate. I cannot do them all justice, but I shall start with the issue of care homes, which is close to my heart. There are many good care homes in my constituency, and they make up a significant part of Eastbourne's local economy. However, a number of very good ones have closed recently, as a direct result of Government policy. The Government were told—by us, by the Liberal Democrats and by everyone outside the House who knows anything about care homes—that they were making a massive error with their legislation on the matter. However, they blundered on and insisted on their proposals and, as we have heard, the latest figures show that 13,400 care home places disappeared in the 15 months to April this year.

My hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) explained very graphically the particular problem in Birmingham. However, the problem is replicated up and down the country, with many good private care homes being forced to close. All too often, councils insist on paying themselves much more than they pay the private sector, even though the accommodation that they provide is relatively poor.

In collaboration with the Liberal Democrats, the Opposition attempted not that long ago to increase pensions significantly for older pensioners. We know that older pensioners are those most likely to be living in poverty. I am sorry to say that our attempt was defeated.

We have heard a great deal about funded pensions. My hon. Friend the Member for Sutton Coldfield reminded us that they are a great British success story, but they are seriously threatened by a combination of factors. My hon. Friend the Member for Havant (Mr. Willetts) has rightly likened the matter to the film called "The Perfect Storm" The stock market has fallen, and people now live longer-although that greater longevity is of course welcome. However, other matters are within the Government's control, such as the Chancellor's £5 billion annual raid on pension funds.

There has been an apparent lack of urgency when it comes to tackling the problems. Another Green Paper has been published, but the Government could and should do a lot more to increase and restore confidence in funded pensions. At least one fifth of company pension schemes have closed in the past 12 months. That is all the more worrying, as the Watson Wyatt survey on which that information is based predates the extra burdens likely to be placed on companies by the Government's pension protection scheme.

The Government's stated aim is to restore confidence in funded pensions, which is vital. A whole generation of young people cannot be persuaded that putting money into pensions is the smart thing to do, because they see stories about problems with pensions every time they open a newspaper.

The TUC, for example, has spoken about the erosion of the notion of shared responsibility, and has noted the decline of the mixed-economy approach to pension provision. The hon. Member for Wolverhampton, South-West (Rob Marris) outlined an even more dramatic problem that arises when companies go bust and take the pension fund down with them.

There is a great deal of work to be done. A policy of compulsion appears to be developing through the mists of Liberal Democrat thinking, but the Conservative party does not believe in compel ling people to make particular pension provision. However, we believe that the forces of inertia should be harnessed, so that people have to opt out of that sort of provision for their futures.

That brings me neatly to the issue of pension credit. As I noted in an earlier intervention, we on the Select Committee on Work and Pensions were privileged to have the Secretary of State appear before us as a witness this morning. When I put it to him, he readily conceded that, even on the Government's projections, a million pensioners will not receive pension credit even though, on the face of it, they are entitled to it.

Two fundamental matters wholly undermine the Government's approach to the policy, and the crucial one is take-up. As with so many of these benefits, take-up is limited.

The Government have been very dismissive about criticisms of this flagship policy. Only recently, the Department criticised Mr. Mervyn Kohler, head of public affairs at Help the Aged, for his comments on the system. Clearly unbowed, he said:

"I'm afraid I rather upset them. It seems ministers are very tender at the moment. But it is not my fault if they design a system which is so Byzantine that no one can understand it."
That is going to be the reality.

The Secretary of State was almost alarmingly upbeat about the other matter that I put to him—whether the system can cope. The Child Support Agency offers an example of what happens when an old formula combines with a new technology, and now we have a possibly even more potent combination—a new formula and an old technology. It remains to be seen whether the fiasco of the tax credits, which caused our mailbags to be so full in recent months, will be replicated.

Some of the claims in the Government's advertising campaign for pension credit are simply wrong and untrue. The central claim—that every pensioner will now enjoy a minimum income of £102.10—is simply untrue. The guaranteed income will be a mixture of existing pensions, savings income and, where necessary, a pension credit top-up. However, any savings will be assumed to generate a notional income of 10 per cent. a year. That is not bad; I wish that I could plug into that sort of return, rather than the more realistic 3 per cent.

It is no wonder that the Department for Work and Pensions told The Sunday Telegraphthat the publicity surrounding the pension credit had been kept "deliberately low key".

Has the hon. Gentleman checked that point? As I understand it, the imputed income of a certain percentage applies only when a pensioner has savings of more than £5,000—

I thank my hon. Friend. The basic savings level is £6,000. The imputed income applies for every £500 on top of that. Overall, that does not work out at a return of 10 per cent. on the savings total. That is important for people who might be thinking of claiming.

The hon. Lady merely serves to show how complex the new system is for our constituents. I am sure that many hon. Members will be wondering what it will be like when their surgeries fill up with people who do not know whether they are entitled to make a claim.

Well, the hon. Lady has a good degree from a good university, but not everybody is as privileged—[Interruption.]She suggests that I might be able to understand it, but whether everyone will is another matter.

I said that there were two issues. The second is means-testing. My party believes that the entire system is moving in the wrong direction. In 1997, only 37 per cent. of claimants were on means-tested benefits. This year, with the introduction of the pension credit, that figure could reach almost 60 per cent., and it is projected to grow to 73 per cent. by 2025. There are thus two extremely worrying aspects: take-up and means-testing, which promote a cap-in-hand approach for poorer pensioners.

I shall touch on some of the other issues, especially those raised by the Liberal Democrat spokesman. We can all testify to the fact that big council tax rises are extremely regressive, especially for older people. In my constituency, the local council—sadly, it is controlled by the Liberal Democrats—put up its share by 38 per cent. this year, a staggering amount. No wonder the Liberal Democrats are dusting off their old proposals for local income tax, on the basis of "Please stop me before I do it again". If a local council, such as Eastbourne, can make such an increase under the current system, imagine what it could do if it could charge a local income tax, quite apart from the Liberal proposals for an energy tax, which would be even more regressive because utility bills are often painful for pensioners, for regional taxes, more taxes through the European Union and the Liberal version of a new inheritance tax.

The hon. Gentleman may be aware that Devon, which is run by a four-party coalition, was led by the Conservatives last year when council tax was increased by 28 per cent., as proposed by the Conservative leader, Christine Channon. He may also be aware that, in her speech, Christine outlined the injustice of the council tax; she said that it should be abolished and replaced by a fairer taxation system.

I should like to hear Christine's views on the matter, but that does not alter the fact that many Liberal Democrat councils, and those in which they participate, are making sharp increases in council tax.

I endorse some of the comments that have been made about post office closures. All hon. Members should beware: the Post Office has embarked on a scheme to consider closures on a constituency basis. Eastbourne is privileged to be one of the first and the Post Office has come up with five closures in my constituency, so some time soon: "This is coming to a post office near you".

I feel strongly about age discrimination. The Government have reneged on their pre-1997 promise to legislate on age discrimination. The EU has finally forced them to do so by 2006.

We hear much from the Liberal Democrats about free personal care for the elderly, despite the fact that it seems to be bankrupting several local authorities in Scotland. Furthermore, some councils run by the Liberal Democrats charge substantial fees, up to £5,000 a year, for care services for the elderly.

As on so many things, the Liberals are the "Do as I say, not as I do" party. They voted for greater bureaucracy for care homes, causing many homes to close.

No, we did not.

Liberal Democrat councils charge heavily for care services for older people. They jack up council tax mercilessly and, in the case of my council, sack older workers merely because they turn 65-turning their birth certificate into their P45. Outside this place, in Brent, and indeed in Eastbourne, Liberal Democrats extol the virtues of the pension credit, but in the House, they say that they want to scrap it. They certainly do not mention the means-testing that is at the heart of its approach to poorer pensioners.

I hope that the voters of Brent will have taken some of these points on board. Advice from the booklet for Liberal Democrat campaigners is that they should "act shamelessly, stir endlessly" and not "be afraid to exaggerate". That is how they operate throughout the country.

I urge the Liberals to make the difficult journey from piety to reality and not to mislead people, especially vulnerable pensioners. They should drop their empty rhetoric and their hypocrisy. I shall not urge my right hon. and hon. Friends to support the motion both for those reasons and because the motion makes the ritual attack on the Conservative record in government. I invite my right hon. and hon. Friends to abstain on the motion but to vote against the Government amendment, which is astounding in its complacency, even by the standards of this Government.

3.5 pm

It is a pleasure to follow the hon. Member for Eastbourne (Mr. Waterson). I congratulate him on his appointment. I am glad to see that some of his colleagues have joined him on the Opposition Benches; for a while he seemed to be offering not so much joined-up opposition as a one-man band, which did not say much for the Conservative Opposition's commitment to older people, or for their support for a colleague on his first appearance in his new position.

I agreed with the hon. Gentleman on one point. Although the Liberal Democrats did us a great service in bringing the issue to the House, some of the ways in which they presented their arguments did not help to tease out the important factors. They presented us with a catch-all set of grievances. There are real pressures and problems facing pensioners and they require long-term solutions, which must be agreed and maintained over time. What we put in place will, we hope, benefit pensioners for many years to come.

My hon. Friend the Member for Wigan (Mr. Turner) offered us an example. Giving everybody a flat-rate increase of £19 week sounds nice, but we would need to explain two things. First, it would mean taking money away from the poorest pensioners, who would receive only £96 instead £102; and, secondly, because the Liberal Democrats are talking about changing from council tax, which is property based, to a local income tax, it would increase the burden of taxation for pensioners. Rather than going for cheap slogans, we should carefully examine the problems for pensioners.

My constituency is in a "middle England" area and many pensioners do not fall into the poorest income ranges. However, there are specific historical reasons for pensioner poverty in the region. People worked for companies that have disappeared, such as those in the boot and shoe industry, which is in the process of change. A large number of women have broken employment records, because they took a break for family reasons. A phenomenally high percentage of women worked part-time and had no pension entitlement in their own right. In later life, they have been caught in poverty.

People think that middle England is extremely affluent, but it is not. Northampton has a high number of people on low incomes. Even if they contributed to an occupational or second pension scheme, those pensions and their savings are now extremely low. I asked a group of pensioners, who were here for the lobby this afternoon, about the rate of their second pensions. They told me what I had heard before—[Interruption.]The hon. Member for Northavon (Mr. Webb) is nodding. I am sure that he knows the figures: about £15 a week, or £50 month. That is not much, yet people receiving those amounts will not qualify for some of the benefits designed to help extremely poor pensioners. We need to help pensioners who are in that poverty trap and do not have enough to live comfortably.

The Government have done wonders in systematically considering what has made pensioners' lives so uncomfortable. I am sure that everyone will say, "Well, she would say that", but the Government have put in place very good programmes to tackle the real causes and symptoms of pensioner poverty. First, they have introduced the minimum income guarantee, which deals with the terrible problem of absolute hardship and destitution that existed among an awful lot of pensioners when we first took office in 1997. I am sure

that all hon. Members had pensioners coming to their advice surgeries in dire straits because they simply did not have enough money.

Targeted measures have dealt with some of the pressure points in pensioners' lives. The winter fuel allowance is absolutely wonderful. It has made a real difference and has tackled the problem of fuel poverty among pensioners, who used to get so cold during the winter. Pensioners now enjoy free television licences. Concessionary fares have worked better in some areas than in others. They have worked best in Labour areas, where Labour councils top them up and provide free transport for all pensioners, which is wonderful. Free eye tests are now available. One of the cruellest things that the Conservative Government did was to hit pensioners at a point when they were particularly susceptible.

Measures have also been taken to ease the burden of income tax on pensioners, such as increasing personal tax allowances and introducing the new starting rate of tax. Pensioners will say that everyone on low incomes will get that, but those measures are really important when we consider how many pensioners are on low incomes. I know that many pensioners do not like to pay tax, but they have special tax protection, which I very much welcome.

My hon. Friend the Member for Wigan (Mr. Turner) mentioned national health service measures, but I want to say a few words about the pension credit. The hon. Member for Eastbourne was quite wrong in his proposals, because the pension credit is an incredibly important benefit for those areas, such as mine, where a lot of pensioners are caught in the poverty trap: they have too much to be entitled to Kate benefits designed for the very poor, but they still do not have comfortable lives. It is important that those people at least feel that they will be comfortable if they claim the credit, and that if they do make a claim they do not feel intimidated; otherwise what the hon. Gentleman says about the numbers not claiming will become a self-fulfilling prophecy.

The hon. Gentleman's point about savings and the interest rate was wrong. I agree that there is an assumption about earnings on savings. Some people might think about such things and say, "If only", but people can get help with making claims. If they do not have statements of interest from their banks or building societies, assumed amounts may be included in the booklets. Of course, as they can use assumed interest, they do not have to dip into their capital. They can keep their capital, which is very important for pensioners because it means that they can keep their nest eggs to pay for their funerals and save for other expenses in their very old age.

It is quite wrong to frighten people by saying that they will be means-tested, because the system will be much more like filling in a tax form. People will not have to keep claiming, as they do with housing benefit and other benefits. I am sure that the Minister will correct me if I am wrong, but people will have to submit a claim only when their circumstances change—otherwise, there will be a reassessment in five years' time—so the pension credit is not like an ordinary benefit.

People can phone up, and someone on the end of the line can complete the form and send it to them for signing. I have been running a campaign about that in my constituency. Before doing so, I asked a couple of people to test the phone number, and it works; it is user-friendly service. I congratulate the Pension Service on doing some very good outreach work. People are going out to help those who do not have phones. The benefit has been designed in the light of pensioners' suggestions. Those of us who held meetings on the consultation document know that the policies emerging now are exactly those that pensioners said they wanted. I hope that the benefit will be a big step forward, certainly in areas, such as mine, where a lot of pensioners have some occupational or private pension or savings, but not very much.

I agree that a good number of things remain to be done to improve pensioners' lives, and I am sure that the Government will continue to take on some of those things. The first thing to do is to ensure that next month's introduction of the pension credit is as smooth as the arrangements have been so far for claiming and outreach work. I am sure that many others will want that to happen.

The development of home care packages is extremely important. That is mainly a job for local authorities, but such measures need to be in place if we are to provide pensioners with a decent standard of living in the years to come. We also still have to deal with pensioners who are asset rich and cash poor and find ways to secure their home ownership in their old age. That involves people who may have bought their council properties, as well as those in areas such as mine who have always owned their own homes, as it is often not cost-effective for them to move into smaller places.

The Government must consider ways of supporting equity release—either by making it safer, or by introducing some sort of CAT mark—so that people can afford to pay for repairs, major maintenance and adaptations by releasing some of the capital value. In that way, people could achieve what they often want: to stay on with dignity in their own homes, without their homes deteriorating and failing down around them.

I want to press a couple of final points. First, the procurement of residential care must be improved. The hon. Member for Sutton Coldfield (Mr. Mitchell) should consider the incredibly imaginative work being done in Castle Vale in Birmingham, which has enabled more old people to leave hospital and return to their own homes. The work has involved very clever joint funding, and I commend that model.

Secondly, we should look at some of the anomalies in the benefits package, so that pensioners who are carers can receive benefits that they should receive, including important mobility benefits that are denied to them.

I recognise that some important and positive changes are taking place. Pensioners are living longer and enjoying better health, and they have higher aspirations. Female pensioners rightly aspire to be independent. As a society, we need to take on the challenges and to protect pensioners and their standard of living in their older years and give them dignity in their retirement. I believe that our Labour Government have made an incredibly good start, with some very thoughtful and well put together programmes, so I urge the House to support

the amendment and not to go for cheap slogans, but to go for things that will give people security and dignity in their old age.

3.19 pm