Will the Leader of the House please give the business for the forthcoming week?

The business for next week will be as follows:

MONDAY 13 NOVEMBER—Opposition Day [20th Allotted Day].

Until about 7 o'clock, there will be a debate on London Underground public private partnership followed by a debate on the millennium dome. Both debates will arise on Opposition motions.

Motion on the Energy Act 1976 (Reserve Powers) Order 2000.

TUESDAY 14 NOVEMBER—Consideration of Lords amendments to the Criminal Justice and Court Services Bill.

WEDNESDAY 15 NOVEMBER—Supplemental motion—relating to the Transport Bill.

Consideration of Lords amendments to the Transport Bill

THURSDAY 16 NOVEMBER—Remaining stages of the Insolvency Bill [Lords].

FRIDAY 17 NOVEMBER—There will be a debate on embryology on a motion for the Adjournment of the House.

The provisional business for the following week will include:

MONDAY 20 NOVEMBER—Motions relating to Westminster Hall and Thursday sittings.

THURSDAY 23 NOVEMBER—There will be a debate on European affairs on a motion for the Adjournment of the House.

I thank the Leader of the House for her statement. She will be aware from the just-completed Treasury questions that many hon. Members are very anxious to have much more information on certain aspects of the pre-Budget statement made yesterday by the Chancellor, particularly in relation to ultra-low sulphur petrol. Will she ask, please, whether a Treasury Minister—preferably the Chancellor—could find time for a proper statement and debate on that specific aspect of the statement?

Last night, in television interviews with Treasury Ministers, it was very clear that the Government were ill-prepared to answer questions on the availability of ultra-low sulphur petrol, and on whether the new discounts will be treated in the same way as current ones—particularly the 1 p discount that is being retained by the oil companies. There has also been a discount on ultra-low sulphur diesel which has not been passed on to hauliers. The question being asked in Treasury questions today was: what precise arrangements are there to ensure that the discounts will benefit consumers and hauliers? Were those arrangements discussed in September at No. 10 Downing street when the Prime Minister met the oil companies? It is a very important matter that merits more of the House's time, so that Opposition Members can question Treasury Ministers on it.

On 26 October, I asked the right hon. Lady whether we could expect the Prime Minister to make a statement to the House on the conclusion of the Biarritz summit. She said that she expected that there would be a statement. However, the summit was held on 13 and 14 October, but a statement has not yet been timetabled. It is very important that the House should discuss the summit, not least because—as we have learned in the media—key discussions were held on the charter of fundamental rights, which will feature in the Nice treaty, among other things. We feel that it is incumbent on the Prime Minister not to break the habit of reporting to the House on summits. I hope that the right hon. Lady will convey urgently to the Prime Minister the fact that the House deserves a statement.

The right hon. Lady has just announced to the House that on Friday 17 November there will be a debate on embryology. I assume that it will include the Government's response to the Donaldson report. I hope that she will identify for us how the proposals in that report—if the Government accept them—will be put into legislation. I understand that there would need to be an amendment to the Embryology Act 1990, presumably in secondary legislation. The right hon. Lady will be aware of the strength of feeling on both sides of the debate, and right hon. and hon. Members—not just those who serve on the relevant Committee—will want to be assured that they will have the right to vote on the matter, particularly in respect of the findings of the Donaldson committee.

First, the hon. Lady asked for information about the availability of ultra-low sulphur fuel in the aftermath of the pre-Budget report. Off the cuff, I would have thought that it was a matter for Ministers at the Department of the Environment, Transport and the Regions rather than for Treasury Ministers, as we are talking here about the availability of supplies rather than the price that is charged for them, but no doubt there will be a variety of forums in which the issues can be explored. The hon. Lady will not have forgotten that what my right hon. Friend the Chancellor announced yesterday are proposals for consultation. She asked about aspects of the proposals that no doubt will be explored in that consultation.

If I understood her correctly, the hon. Lady asked the Treasury to account for whether or not oil companies pass on any reductions in the price which might flow from the Chancellor's decisions. That is certainly a very interesting question. I am not entirely sure that anybody has ever said that the Government or the Treasury can take responsibility for that. We can all make our views known and heard, but the public should clearly be aware that if potential price cuts resulting from Government decisions are not passed on, they should direct their strictures to others than the Government.

The hon. Lady then, quite correctly, referred to our previous exchange on the Biarritz discussions. I am glad that she did so because she has reminded me that on this matter I definitely owe the House an apology. She asked me to confirm that the Prime Minister would maintain the previous pattern of statements on these matters, and of course he will, as he always has. The hon. Lady will know that the pattern is to make a statement after formal Councils. There has never been a pattern for the present Prime Minister or any other coming to the House to make a statement after an informal Council, such as the one at Biarritz. I owe the hon. Lady and the House an apology, as when she asked about the Biarritz Council it had gone out of my mind that it was an informal discussion and the formal Council will take place at Nice. So the proper reporting conventions will indeed be observed, but they do not apply to the discussions at Biarritz.

The hon. Lady then asked about the Government's response to the Donaldson report. Again, I am grateful to her for giving me the opportunity to make the issue entirely clear, particularly because she asked me for an assurance that hon. Members would be able to discuss the important issue of embryology and have an opportunity to vote on any proposals that are made. Let me at once stress to the hon. Lady and to the House that we envisage that debate as a preliminary stage in those discussions. There is no suggestion that the Government will put forward their response during the debate on Friday 17 November. We regard these as profound and serious matters which should be thoroughly aired, not least in the House, without a commitment being made or framework being set. Of course, when orders might be made and the content of those orders is for discussion and can be looked at in the long term. The Government fully recognise that there is a need for a thorough, on-going debate and examination of these delicate issues, and we see the forthcoming debate as the opening discussion and nowhere near its closing stages.

Will my right hon. Friend consider having a debate to consider the hidden costs of road transport, such as the cost of treating children with asthma, the cost of improving flood defences and the cost to local authorities and the Government of helping flood victims, such as my constituents at Stockbridge last week and others throughout the country?

My hon. Friend makes an important point. She will know that a report was published recently by Transport 2000, I think, or some such body, drawing attention to the full costs of road use and the need to be as environmentally sound as we can. She will also have noted the various measures announced by my right hon. Friend the Chancellor yesterday, such as those to encourage the provision of new and more environmentally effective road haulage, which were all designed to lead to the same end. I fear that I cannot undertake to find time for a special debate on these matters in the near future, but I suspect that she may find an opportunity to raise them in the debates that will undoubtedly flow from the proposals advanced by my right hon. Friend yesterday.

Will the Leader of the House investigate urgently and report back to the House next week on the extent of the pre-briefing by the Chancellor's staff before his pre-Budget statement yesterday? It appears that certain journalists had details of what was to be announced 72 hours ahead of the statement, whereas the Conservative and Liberal Democrat spokesmen saw the details only seven minutes before it was delivered. That is a reflection on the relative importance that the Government attach to the House and to the media.

Will the Leader of the House please listen carefully to the concerns expressed by the hon. Member for Tiverton and Honiton (Mrs. Browning) on the real confusion about the so-called "green fuels"? This has all the aspect of a quick idea that has not been properly thought through. If it is to be an important part of Government policy, surely we should have some more details.

May I suggest a couple of candidates for the two empty spaces in our diary for the week after next, on Tuesday 21 and Wednesday 22 November? I wonder whether the Leader of the House has seen the article in The Times today by the right hon. Member for Henley (Mr. Heseltine), headed "How many more jobs must be lost while we stay out of the euro?", in which he says

Ten years ago Geoffrey Howe stood in the House of Commons and issued a stark warning that those who feared Europe and economic and monetary union would lead Britain into isolation and "scrambling to join the club later, after the rules have been set and after the power has been distributed by others to our disadvantage. That would be the worst possible outcome.

May I suggest a debate on five sectors of British industry that have been badly affected: manufacturing; export industries; the holiday industry—devastated this summer by the discrepancy between the value of the pound and the euro; the fishing industry; and farming, which has been the worst affected of all?

Finally, do the Government believe that the electoral system in the United States is preferable to our own?

The hon. Gentleman asked me to investigate and report back, but it is not entirely clear to me whether he has seen a specific report suggesting pre-briefing, or whether he is merely drawing on some of the material that appeared in the press. It is certainly within my memory, and I am sure within his, that for many years, under the previous Government, there was a series of what some would call leaks and what we regarded as trailers—balloons sent up to test the reaction and see whether the policies were popular or unpopular. That has been, I fear, a characteristic of these discussions.

The hon. Gentleman will also know that many journalists make all kinds of prognostications and, even when they turn out to be completely wrong, they are never willing to admit that any of it was guesswork. They always assure us that it was based on the soundest information. During my right hon. Friend the Chancellor's statement, I observed, and I saw many of my hon. Friends observing, how much of it was different from, and additional to, what had been pre-reported. That came through very clearly.

On green fuels, I repeat what I said to the hon. Member for Tiverton and Honiton (Mrs. Browning), that these are proposals for consultation. This is the pre-Budget report, and when we come to the Budget itself, my right hon. Friend the Chancellor will report back to the House the outcome of that consultation. I am sure that all the issues about the use of more environmentally friendly petrol will be explored in the consultation period.

I understand the hon. Gentleman's reference to our lack of detailed announcements for provisional business. He called them empty spaces, but he will know as well as I that, at this stage in the Session, such a description is pretty inaccurate. We confidently expect that any spaces will be filled with material returning from another place.

The Gentleman is right to identify the interest in the remarks by the right hon. Member for Henley (Mr. Heseltine), and in the case that he makes. I am not sure whether the article makes clear how little the decision about whether to advocate entry into the euro was anticipated by the previous Government, but the hon. Gentleman may recall that they confidently asserted that the euro would not be launched—certainly not in January 1999. As a result, even the most basic preparations had not been made, which was certainly to Britain's disadvantage. However, the hon. Gentleman will have noted that there is to be a debate on European affairs on 23 November. I feel confident that he, or someone else, will manage to raise the matter then.

Finally, the hon. Gentleman asked me to comment on the outcome of the American election, whatever it might be. I do not wish to intrude on private grief, but the situation was summed up admirably by the present President, who said that the people had spoken, but that it would take a while to determine what they had said.

Could my right hon. Friend find time for a debate on the mis-selling of endowment mortgages by the financial services industry? I declare an interest in that I have one of those mortgages, but Members of Parliament are more fortunate than many of our constituents who cannot afford to increase payments. Those people are the victims of a real rip-off by an industry that was largely unregulated by the previous Government. Should we not have time to debate the matter?

I, and I am sure many other hon. Members, have a great deal of sympathy with what my hon. Friend says. I can assure her that she is not alone in having taken advice that she now wishes she had not taken.

Did you?

Yes.

My hon. Friend the Member for Warrington, North (Helen Jones) is also right to say that Members of Parliament are perhaps placed more fortunately than many other people when it comes to dealing with the consequences of taking such advice. Although time is at such a premium during this part of the year that I fear I cannot undertake to find space for a debate on the matter in the near future, I recommend to my hon. Friend the vastly increased opportunities for such a debate that the Government have provided in Westminster Hall.

In our debate on 13 July on strengthening Parliament, the Prime Minister promised a free vote on the report from the Select Committee on Liaison entitled "Shifting the Balance". That report is the welcome subject of today's debate on a motion for the Adjournment of the House, but can the right hon. Lady promise that there will be an opportunity to have substantive votes on specific resolutions?

The right hon. Gentleman will be well aware that my right hon. Friend the Prime Minister and I have always said that any votes on House matters are always free votes. He will also know—because, as shadow Leader of the House, he raised the matter often at business questions—that the motion on which such a report is debated is always left in the balance. I hear what the right hon. Gentleman says, but that is not how we will discuss the matter today.

Will my right hon. Friend find time for a debate as soon as possible on Mr. Justice Coleman's report published yesterday into the reopened inquiry into the sinking of the MV Derbyshire? The report exonerated those who died from any blame, but it also contained some worrying findings about safety standards at sea. In the 20 years since the Derbyshire went down, bulk carriers of a similar design have continued to sink at regular intervals. I should be grateful if my right hon. Friend could facilitate an urgent debate on how safety standards can be raised and lives saved in the future.

I am grateful to my hon. Friend for raising the matter, on which she has long campaigned. All those who have campaigned will feel that the report offers some vindication and justification for their efforts. However, I fear that I cannot undertake to find time for a specific debate on the matter. My hon. Friend may find that opportunities may arise to discuss safety matters in general, although I appreciate that she may consider maritime safety to be a special subject in itself. May I therefore recommend Westminster Hall to her, too?

In the light of what the Leader of the House has said, can we have an early debate on the mis-selling of Government policy? She has told us today that the Chancellor's statement yesterday about low-sulphur fuel being available at every garage from the Budget next year is contingent upon the machinations of the Deputy Prime Minister, consultation and so on. Yet yesterday, the Chancellor said:

When the excise duty cut is introduced at Budget time, motorists using any petrol station in Britain should be able to benefit from the duty cut.—[Official Report, 8 November 2000; Vol. 356, c. 322.]

Clearly, the Chancellor was misleading the House if—

Order. No one was misleading the House. The hon. Gentleman should withdraw that remark.

I was going on to say that I am sure that the Chancellor was not misleading the House, which is why I should like the Leader of the House to explain the difference between what the Chancellor said yesterday and what she has told us today.

I did not say that the measure was contingent on the work of the Deputy Prime Minister. I said that the proposals will be subject to consultation and that the background to them is the express view of the oil companies as to what can be provided. The hon. Gentleman will know that the AA's policy director said yesterday that the key question was whether the oil industry would deliver on the timetable and to the price suggested by the Chancellor.

On whether we should debate the mis-selling of policies, that is always an attractive proposition. Given that the hon. Gentleman has just been reminded of the mis-selling of endowment policies under the previous Government and given the scandal of the mis-selling of personal pensions that hangs round their necks, I am surprised that he even suggested such a thing.

Could we have an early debate on how far countries that are signatories to the Hague convention on child abduction are implementing its provisions? I say that with reference to my constituent, Caroline Taylor, who has been separated from her son Stidi for more than a year now, despite verdicts of the Greek court. Although Greece is a signatory to the convention, it is not ensuring that the provisions of the convention are complied with. That has to end.

I am sure that everyone in the House understands and sympathises with my hon. Friend's concern about the case of Caroline Taylor, which he has pursued. I sometimes think that these are the worst cases that come before Members of Parliament, because we all understand the difficulty with regard to the child involved and how vulnerable children are to exploitation in these circumstances. I understand his concern that the Greek courts have taken some decisions on the matter, but that it remains unresolved. He will know that my noble Friend Baroness Scotland raised the subject with the Greek Minister of Justice when she met him over the summer. I know that the child abduction unit has been involved and has done what it can to help. I believe that there is a further hearing in the very near future. I fear that I cannot undertake to find time for a specific debate on the matter, but I am sure that my hon. Friend will continue to look for opportunities to raise it in this House.

The Leader of the House will recall that I have been pressing on different occasions for a meeting of the Northern Ireland Grand Committee in Northern Ireland, according to the Standing Orders of this House. This has been thwarted time and again by one party, which finds it difficult to attend even when the Committee is held here. Can the commitment that the Grand Committee would be held from time to time in Northern Ireland be now met, because four years have passed without it having been met?

I entirely understand the seriousness with which the hon. Gentleman raises the matter. I will draw his views to the attention of my right hon. Friend the Secretary of State for Northern Ireland, who I know will give them serious consideration.

Can we have a debate on rape and the way in which the law is working—particularly in the light of the fact that a number of men have been released from prison because the women they were supposed to have raped have changed their evidence and gone back to the police to tell the truth? Has not a huge injustice been perpetrated against some men, and should not Parliament debate the matter?

My hon. Friend has, quite correctly, identified a matter of great concern. There is continual debate to and fro about how best to handle those issues. We want to ensure that people are willing to come forward when they have a serious accusation and also that people who have been unjustly accused can be helped. I fear that I cannot undertake to find time for a special debate on the matter in the very near future. However, it is Home Office questions on Monday, and my hon. Friend might have the opportunity to raise the matter then.

May I remind the Leader of the House of my private Member's Bill, which sought to extend fuel rebates for community bus services, and which the Government blocked? Since then, however, the Government have included the proposal in their 10-year plan. Will the right hon. Lady arrange for the Deputy Prime Minister to come to the House and tell us exactly when he intends to implement this? A lot of people would welcome such a scheme, but are still waiting for the details to be announced.

I cannot, I fear, provide a special slot for the Deputy Prime Minister to deal with that specific subject. However, the hon. Gentleman will know that we hope to have the urban and rural White Papers in the not-too-distant future, and he may well find an opportunity to raise the matter then.

As the Parliament of a country in which a young woman was recently dragged through the courts for using cannabis medicinally, a chief constable has said that he would not arrest a person for using cannabis recreationally and heroin deaths are the highest in Europe, should we not debate urgently the self-admiring report by the drugs tsar, which is filled with vacuous irrationality?

Policy on this area is raised and discussed continually. Indeed, one reason for providing the opportunity for extra scrutiny in Westminster Hall is to allow some of the issues about the work of individuals and non-departmental public bodies to be scrutinised. All I can do is draw my hon. Friend's attention to that opportunity, which I know he will make use of.

At 10.45 this morning, the Vote Office received copies of the National Audit Office report into the operation and financial management of the millennium dome. Now that we have had the opportunity to study the report, it is clear that the information that the Prime Minister gave the House yesterday, suggesting that all decisions had been taken by the previous Administration, is wholly false, and that the key decisions on the content and management of the dome and on transport for the dome were all taken following a review of the dome by the Government in 1997—in May, once they had taken office. It is also abundantly plain from the report that the go-ahead for the dome was given by the Prime Minister himself.

As all that is so, and as, to date, no Minister has offered to come before the House to make a statement on the report, and as no Minister has yet been honourable enough to offer a resignation, could the Leader of the House say when we will be able to debate that report in full, and can it please be before the House is prorogued?

First, the hon. Gentleman may have had the opportunity to study the report, but I do not suppose that the rest of the House has. Secondly, I am afraid that what he said about the Prime Minister's statements yesterday is entirely wrong. The hon. Gentleman cannot possibly have been listening to what the Prime Minister said—although, to be fair, there was a lot of noise, as there tends to be at Prime Minister's Question Time, so I shall be charitable and assume that he did not actually hear what the Prime Minister said.

The Prime Minister was specific and clear. On more than one occasion he said that he was at no point attempting to suggest that the full responsibility for all the events that led to the building of the dome rested with the Conservative party. He was very clear that he had expressed regret, that he had said on behalf of this Government that we recognise that errors were made and that we are perfectly willing to acknowledge that and say it to the public. However, we are not prepared to take all the blame for a project that began three or four years before the Conservative party left office.

May I draw my right hon. Friend's attention to the visit to Rome last weekend by many Members from both sides of the House to take part in the worldwide parliamentary assembly to mark the jubilee holy year? More than 1,500 parliamentarians in more than 90 delegations attended, and several important issues were discussed, including international initiatives to cancel the foreign debt of some of the world's poorest countries. It was widely recognised that Britain has played a leading role in those initiatives.

Will my right hon. Friend arrange for the Secretary of State for International Development to come to the House to receive congratulations on the work that has already been done and to report on further initiatives, particularly to bring more international pressure to bear on the International Monetary Fund and the World bank?

I know that the Catholic Fund for Overseas Development has a good record of campaigning on that matter. There is an encouraging attitude to third-world debt and its importance and to the Government's attempts to have others join us in taking the steps that we believe are necessary to help to alleviate some of the worst poverty in the world. I cannot undertake to find time on the Floor of the House for a special debate on that, although I recommend Westminster Hall to my hon. Friend, but he will know that my right hon. Friend the Secretary of State will be answering oral questions before the end of the month, and he may find an opportunity to raise the matter then.

Pursuant to the right hon. Lady's answer to my right hon. Friend the Member for North-West Hampshire (Sir G. Young) concerning substantive motions on the Liaison Committee report, does she think it reasonable for the House to regard her report as a paraphrase of her earlier quotation from President Clinton: "The Leader has spoken. It will take some time before we can work out what she has said."?

I shall be extraordinarily surprised if it turns out that anybody in the House is in any doubt as to what I said.

In view of the extremely important conference on climate change in The Hague, which will begin next week, will the Government publish their climate change strategy before entering into negotiations at The Hague on the precise mechanisms by which the Kyoto protocol will be implemented? Will my right hon. Friend assure the House that the Deputy Prime Minister will, on his return from The Hague, make a statement to the House about the decisions reached there, as well as a statement on the climate change strategy?

I certainly cannot tell my hon. Friend at the moment precisely what are our plans for publishing such information, but I shall certainly draw his remarks to the attention of my right hon. Friend the Deputy Prime Minister, who I know will take them very seriously.

The Leader of the House will recall that, on Tuesday 7 November, the Parliamentary Secretary said of the so-called "modernisation" proposals that they

should not be at the expense of proper examination of legislation.—[Official Report, 7 November 2000; Vol. 356, c. 272.]

I very much welcome that.

Will the right hon. Lady therefore give an absolute undertaking that, in the next few days and weeks, when business from another place comes here with many—in some cases several hundred—amendments attached, the House will be given enough time to, in the Parliamentary Secretary's words, examine the legislation properly? Will she further assure the House that there will be no question whatever of the Government seeking artificially to truncate or limit proper debate and scrutiny of their many amendments to legislation coming from another place?

Yes, I do recall my hon. Friend's words, and the right hon. Gentleman will know that the whole tenor and tone of that debate related to the processes that we shall use in the new Session. He will know also that the Government consider the issues that return to the House and what time can be provided for them. However, he knows that no matter how much time the Government provide, we cannot ensure that the House uses it to best effect.

Next week, on 17 November, 150 jobs are due to be lost at Biwater at Clay Cross in my constituency. The plant will then be closed at the beginning of December, when another 550 jobs will be lost. Could we have a statement from the Secretary of State for Trade and Industry about whether he will refer the matter to the Competition Commission under the powers that he has under the Fair Trading Act 1973? I assure the Leader of the House that my right hon. Friend is not short of information on which he can base that judgment.

I am aware that my hon. Friend has raised the issue with my right hon. Friends the Prime Minister and the Secretary of State for Trade and Industry. I believe that my right hon. Friend the Secretary of State will reply as soon as he can.

May we have an early debate on support for teachers who are under attack from their pupils? Given the worrying increase in the incidence of such attacks, does not the right hon. Lady agree that it is imperative that the Secretary of State for Education and Employment comes speedily to the House and introduces new guidelines on the legitimate use of physical restraint in such circumstances? Does she also agree that those guidelines should reflect the common-sense instincts of the majority of the British people, not the politically correct fetishes of the liberal establishment?

It was my understanding that fresh guidelines had recently been issued. The hon. Gentleman will know that his concern for the safety of teachers is shared throughout the House, but I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for Education and Employment.

Previously, my right hon. Friend the Leader of the House has given an assurance that there will be a full debate on the Phillips report on the BSE tragedy. Can she tell the House when that debate is likely to take place? Will she look into the possibility of incorporating in that debate an assessment of the report, just out, of the Leicestershire team that investigated the Queniborough cluster? The team included the CJD surveillance unit at Edinburgh, the Ministry of Agriculture, Fisheries and Food and Dr. Philip Monk, the team leader.

My hon. Friend makes an important point. My right hon. Friend the Minister of Agriculture, Fisheries and Food said that there would be a debate on the Phillips report, but that he wanted to give Members of Parliament and those outside enough time fully to absorb the recommendations of that very substantial report and give the matter careful thought before returning to the House. I know that my hon. Friend has on several occasions voiced the interests of his constituents, especially those at Queniborough, and I have no doubt that the results of the work there will form part of the background to the debate, but I shall certainly draw my hon. Friend's remarks to the attention of my right hon. Friend the Minister of Agriculture, Fisheries and Food.

With reference to Monday's debate on London Underground and the Government's proposed public-private partnership for it, will the Leader of the House ensure that the Deputy Prime Minister comes to answer that debate, so that he has the opportunity to justify the extraordinarily abusive personal remarks that he made about Mr. Kiley, the former boss of the New York metro who has come to advise the mayor on how the tube might be improved; and so that he can justify his disgraceful withholding from the Greater London Assembly of the necessary financial information on which it can evolve a strategy for the improvement of London's underground system?

I can certainly undertake to draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Deputy Prime Minister. As for who is to handle the debate to which he refers, I do not have that information before me.

I am sure that many hon. Members share the concerns felt by fisheries communities in Whitby and Scarborough and along the North sea coast about the meeting with marine scientists that is taking place in Europe today. Will my right hon. Friend say whether there will be an early opportunity to consider not only the environmental impact of the failure of the cod fishery in the North sea, but the socio-economic impact on communities such as Whitby, which has been in decline since 1960, but is faced with an even steeper decline in its local economy if cuts are made?

My hon. Friend takes his responsibilities to his constituents extremely seriously and is strongly interested in their concerns. He will know the importance of balancing the environmental consequences and the economic impact of any action. I fear that I cannot undertake to find time for a special debate on the matter in the near future. He, too, might want to look into the opportunities offered by Westminster Hall, but he will be aware that Agriculture questions take place next Tuesday.

Thank you, Madam—[Interruption.] I am sorry, Mr. Speaker. I will never be called by you again.

May we have an early debate on yesterday's pre-Budget statement, given that yesterday's package of fuel price reductions is larger than that which any political party has proposed? Any return to the disruption of food and fuel supplies would run the risk of provoking a significant public backlash. May we therefore have an early opportunity for all political parties—including, I hope, the Conservative party—to make clear their unequivocal opposition to any further disruption?

My hon. Friend makes an important point. I have already said that there will undoubtedly be many occasions, as further details emerge on the issues on which my right hon. Friend the Chancellor is consulting, during debates and question times when these matters can be explored. I understand my hon. Friend's suggestion. There is a great temptation to arrange a special debate so that Opposition Members can make it plain that they accept that my right hon. Friend has gone further than they intended and that they would be unlikely to be able to support any further action. However, I suspect, given past precedent, they will attempt to find a way of wriggling out of that.

With permission, Mr. Speaker, I should like to make a statement—first, on the annual uprating of benefits, and secondly, on pensions and the new pension credit.

First, on uprating, subject to the following exceptions, most national insurance benefits will rise by the retail prices index, which is 3.3 per cent., and most income-related benefits will rise by the Rossi index, which is 1.6 per cent., in the usual way. Details of the uprating will be placed in the Vote Office and will be published in the Official Report.

Secondly, the Government believe that it is right to do more to help people with disabilities and carers. We know that it is particularly hard for families on low incomes who are bringing up children with disabilities. I am therefore proposing to increase the disabled child premium by £7.40 a week, on top of the normal uprating. So as part of our drive to end child poverty, about 80,000 children will see a rise in the disabled child premium—from £22.25 a week to £30 a week, over and above their basic entitlement to benefit.

Just as we are committed to abolishing child poverty, we are determined also to provide greater security for those who are unable to work. That is why I announced in 1998 that we would introduce a disability income guarantee from April next year for people with severe disabilities. When it was first announced, we set the guarantee at £128 a week. However, today I can announce that when it is introduced in April, it will be not £128, but £142—that is £14 more a week. For couples, it will be £186.80.

Thirdly, we want to do more for carers. We all owe a debt of gratitude to people who give up so much to care for their relatives. That is why in September I announced that we would extend the invalid carer's allowance to people over 65, raise the earnings threshold and extend payments for eight weeks after the death of the person being cared for. I also announced at that time a £2 a week increase in the carer premium, which is the extra supplement for carers on income support.

Today I can go further. I have decided that the increase in the carer premium will be not £2 a week, but £10 a week on top of the normal uprating. That means that the premium will rise from £14.15 to £24.40, helping more than 200,000 carers on low incomes. In total, the Government will be spending nearly £200 million more next year on supporting carers and people with disabilities, and every year thereafter.

I now turn to pensions. I confirm that the basic state pension will rise by £5 for a single pensioner next year, and by £3 the year after. For married couples, the figures are £8 and then £4.80.

I can also tell the House that the widows and bereavement benefits, which will go to men and women equally for the first time next year, will also rise by £5 next year and £3 the year after.

For this winter, I can confirm that pensioners will start to receive their £200 winter fuel payment from Monday.

Today, I am also publishing a consultation paper on the new pension credit. Copies will be available from the Vote Office following my statement.

There is a fundamental fault in the system we inherited. Saving should be rewarded, not punished. So the pension credit will, for the first time, reward the thrift of millions of people who have worked hard to save for their retirement.

The credit builds on the long-term reforms the Government have already made. We are building, block by block, a coherent and sustainable strategy for pensions.

For tomorrow's pensioners, we are reforming the state second pension, giving greater security in retirement to 18 million people on low incomes. For moderate and higher earners, we are introducing the new stakeholder pensions from next April.

The pension credit will not only help millions of today's pensioners on modest incomes, it will also complement those long-term reforms by rewarding people for saving. The message is clear: whatever one can afford to put by, it will always pay to save.

Our aim is both to end pensioner poverty and to ensure that all pensioners share in the rising prosperity of the nation.

When we came to office, the inequality in pensioner incomes had grown dramatically under the previous Government. That means that the old approach—an across-the-board increase, whether linked to prices or earnings—is inadequate. It would not do nearly enough for the poorest pensioners, and it would not do enough to reward thrift. A new approach is required to deal with the reality of pensioner incomes today.

First, there are now many more pensioners retiring on very good pensions, thanks mainly to occupational pensions and, of course, the state earnings-related pension scheme. One in six pensioner couples are now retiring on £20,000 a year, and that proportion will grow steadily over time.

Those pensioners are sharing in the rising prosperity of the nation. For those who come within the scope of the tax system, we are determined to give them a fairer deal. We have already halved the rate of tax on savings income from April 1999 and increased pensioner tax allowances. Today, I can announce further proposals to raise those allowances.

At the moment, most pensioners have no income tax to pay, but for those who do, in 2003 the Government propose to raise the age-related allowances by £240 that year over and above indexation. On current forecasts, that will take the allowance to £6,560 a year for those aged 65 to 74, and to £6,850 for those aged 75 or more.

Throughout the remainder of this Parliament, we propose to carry on raising those allowances in line with earnings. As a result, more than 3 million pensioners will gain from that.

Secondly, we inherited a situation in Britain—the fourth largest economy in the world—in which there were too many pensioners living in poverty. Poverty has no place in a civilised society. That is why the Government were right to make ending pensioner poverty their first priority. It is also why we introduced the minimum income guarantee, which is already helping nearly 2 million pensioners.

Now we want to go further to tackle pensioner poverty. As the Chancellor announced yesterday, we are increasing the minimum income guarantee over and above the planned earnings increase, so that from next April, no single pensioner need live on less than £92.15 a week. For 285,000 of the poorest pensioners in this country, that is a rise of £14 a week between now and next April.

When we introduce the new system in 2003, the minimum income guarantee will be set not at £92 but at £100 a week—that is £22 a week more than today. For the first time, a single pensioner will be guaranteed at least £100 a week. For every subsequent year in the next Parliament, the guarantee will be raised in line with earnings.

The next stage of our reforms, however, is to help the millions of pensioners who worked hard all their lives, saved for their retirement and rightly believe that they are being punished, not rewarded, for their thrift.

All of us are familiar with pensioners who feel let down by a system that has not rewarded their thrift. A pensioner with £20 of occupational pension on top of her state pension can sometimes find herself just a pound or two better off than someone who had saved nothing. That is unfair and unjust, and it will stop. That is why we are introducing the pension credit—to help pensioners with savings or a modest income in retirement. For the first time in the history of the welfare state, saving will be rewarded, not punished.

I can confirm that when it is introduced in 2003, the credit will reward all those with weekly incomes up to £135 for single pensioners, or £200 for couples. Today I can tell the House that 5.5 million pensioners—that is, half the pensioner households in this country—will be better off as a result of the new credit.

Not only will the new system ensure that pensioners are better off when they retire, but crucially, it will ensure that the support that they get from the state will keep up with the rises in family incomes over their retirement, because not only will the minimum income guarantee rise in line with earnings, but so will the new pension credit.

Let me explain how the credit will work. First, we will guarantee a minimum income, which by 2003 will be at least £100, or £154 for couples. Secondly, on top of that, for every pound saved, pensioners will receive an additional cash credit. That will mean extra cash on top of the basic state pension: sums of between £1 and £23 a week. The amount of that reward will depend on the amount of savings and other income.

Take, for example, a pensioner in 2003 who is on the basic state pension, which we then expect to be £77, and who has income from savings or an occupational pension of, say, £20 a week—in other words, a total weekly income of £97. With the credit, her income will be raised to the minimum income guarantee of £100, but on top of that, she will receive a credit of £12 extra for her saving, so her income will be not £97, but £112. The pension credit will mean that she is £15 a week better off because of her saving.

The changes that we are making will be of particular advantage to women, because on average, women have smaller occupational pensions than men, and of course they are likely to live longer. They are therefore more at risk from the falling value of their pension income over their retirement. As a result, more than two thirds of those who will benefit from the credit are women.

The credit also allows us to make a number of other changes. First, we have always recognised the unfairness of people losing out simply because they have modest savings in a bank or building society. We have already announced that from next year, as we prepare for the pension credit, we are raising the capital limits for the first time in 10 years. As a result, 500,000 pensioners will get an average of £5 a week more, and many will find themselves entitled to extra support for the first time.

From 2003, we are going further. As part of the credit, we are scrapping the capital limits completely. Instead, we will look at the income that pensioners receive from their savings. Not only are we abolishing the capital limits, but we are getting rid of the rules on tariff income for pensioners, so we will no longer assume that pensioners can get a ludicrous 20 per cent. return on their savings.

The second change is that we will make it easier for pensioners to get the money to which they are entitled, and get rid of the weekly means test. Now, there are some who weep crocodile tears at means testing for pensioners, but who did nothing about it for 18 years. We will.

At present, we ask all taxpaying pensioners to tell us about their income just once a year, if that. However, we ask poorer pensioners to tell the benefits system about changes every week. There is no good reason for that. The credit will be based on an income assessment that is more like the tax system.

When one retires, a calculation has to be made about one's basic state pension, based on the contributions that one has paid. In the future we will be able to work out at the same time how much a pensioner is entitled to under the minimum income guarantee and the pension credit. We know that most pensioners have stable incomes, so after the initial award at retirement, adjustments will need to be made only when circumstances change significantly.

We are making it easier for pensioners to claim their entitlements, by introducing a dedicated new service for pensioners. People will be able to claim by phone, which will give pensioners the better service that they want.

Although most pensioners have stable incomes, there are pinch points during the year when they need to meet the costs of lump-sum bills. That is why pensioners have welcomed the extra help that they receive from the winter fuel payment and the free TV licences for over-75s. They constitute more help when it is most needed.

We promised to make sure that all pensioners would share fairly in this country's rising prosperity, and the measures that we have announced fulfil that promise. As a result of our reforms, all pensioners will gain. We are spending £8.5 billion more on pensioners over this Parliament—that is £5 billion more than an earnings link would provide. We promised to do more for those who most need it most. That is why, next year, the poorest third of pensioners will get five times more than they would have received under an earnings link.

We promised to do more to reward saving. That is why, under the tax changes that I have announced today, 3 million pensioners will be better off. The new pension credit means that 5.5 million pensioners will be better off.

Next week, the £200 winter fuel payment will be provided. Next April, the £5 and £8 increases in the basic state pension will be introduced, and the minimum income guarantee will increase to £92.15. The following April, a further £3 and £4.80 will be added to the basic pension, and from 2003, we will provide the guaranteed income of at least £100, the new pension credit and higher tax allowances to reward saving.

There is therefore a clear choice for the future. We are increasing the winter fuel payment, not abolishing it. We are building on the basic state pension, not undermining or privatising it. We are tackling pensioner poverty, not ignoring it, and we are rewarding saving, not penalising it.

I congratulate the Secretary of State on the scale of the proposals that he and the Chancellor have set out for the tax and benefits system in 2003.

Will the Secretary of State confirm that he will abolish the working families tax credit, which he launched only last year? Will he further confirm that he will abolish family premiums in income support, and that he will introduce a new integrated child credit, a new employment credit and, for good measure, a new pension credit? That is ambitious for a Government who recently lost 1 million tax files and cannot pay the correct pension to people who are retiring today because of the continuing problems with the national insurance computer system.

On Monday, the Minister of State, whose frankness on the subject is often refreshing, said that the benefit computers "are rubbish".

They are yours.

Order. Please let the hon. Gentleman speak.

We will accept our share of responsibility.[Interruption.] However, Labour Members should do something in return. They should reflect on the implications for the incredible set of changes that they propose to implement in the next two years. All the policies about which we have heard yesterday and today will put the tax and benefits system under yet more strain. It is no good devising fancy schemes if they are unworkable. The Minister of State's words show that they are unworkable. Even the Chancellor recognises that.

Last weekend, the Chancellor gave briefings to say that he was furious that his pension plans had been undermined by a series of administrative disasters at the DSS. Other Ministers are the poor bloody infantry, who will take the blame when things go wrong, as they surely will when the Chancellor tries to change the working families tax credit, the employment credit, the child credit, and the pension credit in one year.

When it is a matter of defending the measly 75p on the basic pension, the Prime Minister and the Chancellor are safely ensconced in a chateau miles away from their lines, while the Secretary of State and his colleagues spend a year trying to defend the indefensible. But now that headquarters has decided on a retreat or, as it calls it, special transitional measures, the Secretary of State and his colleagues get to make the announcement. All the Secretary of State is left with is his complicated pension credit, which is overburdening a system that is already far too complicated. Complexity with a purpose is used to disguise the abandonment of the Government's failed policies. We want sensible measures that reward saving, and it is no good Ministers claiming that they are helping pensioners with their savings, when the money to finance those measures and others comes from the £5 billion a year tax on pensioners' savings, which is the biggest stealth tax of the lot.

We have heard a lot about joined-up government from Ministers. Why does the Secretary of State not join up the different, inconsistent policies pursued in his own Department? May I ask him about the position of two single men aged 65 with a basic state pension? One has his pension topped up with an occupational pension of £30 a week. The other pensioner tops up his pension by doing part-time work that earns him £30 a week. He might even have been encouraged to carry on working, with all the urging from Ministers. Will the Secretary of State confirm that, after today's proposals, for the first time the net income of the man with the occupational pension will be higher than the income of the pensioner with part-time work? That is not joined-up and is not even fair. How do the Secretary of State and Labour Members defend that direct consequence of the proposals that have just been announced?

Will the Secretary of State confirm that the changes will mean a massive extension of means testing? The proportion of pensioners on means tests fell from 57 per cent. to 37 per cent. under the Conservative Government, but millions more families and pensioners now face a combined rate of tax and benefit withdrawal of 40 per cent. or even more. In tackling one grievance, the Secretary of State is creating another. We all know that pensioners do not want to have make complicated claims for means-tested benefits, even if they are given fancy new names such as the minimum income guarantee and the pension credit. Ministers are sending out 2.3 million letters to try to get more pensioners to claim the minimum income guarantee but, in spite of all their take-up campaigns, have had to admit that, so far, only 24,000 more pensioners have got the MIG. Ministers ought to learn the lessons of that failure rather than invent another complicated means-tested benefit.

How will the benefit work exactly? Will it be claimed through the tax return or through a benefit claim form? It is no good the Secretary of State saying that everything can be done on the telephone, because the experience of those making phone calls to try to claim the minimum income guarantee is that that leads to complicated paper-based transactions. We need to know how that benefit is to be claimed.

The Secretary of State talked about abolishing the capital limits and got a cheer from some of his colleagues. However, do they realise that every £1 of income from savings will now be taken into account as part of the minimum income guarantee? Does the Secretary of State agree with the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), who only in June said in a written answer that the current arrangement

provides a straightforward method of calculating the weekly contribution which people with capital in excess of the lower limit—

which the Secretary of State is abolishing—

are expected to make from those resources to help meet their normal living expenses. Because no tariff applies to savings below the lower limit, the rule is most generous to people with relatively low savings.

The Secretary of State is getting rid of that arrangement, claiming that there is a supposed 20 per cent. notional rate of interest in the current rules. However, the Under-Secretary of State said:

The system is not based on any imputed rate of return—[Official Report, 14 June 2000; Vol. 351, c. 653W.]

The Secretary of State is abolishing that and today is perpetuating the myth that the Government's problems somehow arise because they have put so much money towards helping the poorest pensioners.

Will the Secretary of State confirm that most of the money has gone not into the minimum income guarantee or the basic pension, but into complicated and indiscriminate special payments such as the winter fuel payment? Does he not realise that pensioners find these allowances patronising and intrusive? They would far rather have that money as part of their guaranteed weekly income, and that is what we offer them.

We would implement the Government's uprating and add our reforms on top.[Interruption.] Our uprating would give all pensioners under 75 an extra £9.50 a week if they are single and £13 a week if they are married. Older pensioners would receive £11.60 a week if they are single and £16.10 a week if they are married, with no extra tax and no loss of means-tested benefit. That would be financed by consolidating all the special payments and providing extra money on top, so that pensioners would be better off. [Interruption.]

Order. There is far too much shouting.

I shall quote Baroness Castle, because she understood our package. She said that

the Conservative leader, William Hague, is no fool.

She is very shrewd.

He has put forward the idea of taking the fuel allowance and the TV licence allowance and turning them into a cash increase on the basic pension. In my opinion, that would be an absolute vote winner.—[Official Report, House of Lords, 22 June 2000; Vol. 614, c. 546.]

I agree with the Secretary of State on carers: we need to do more to help them. We welcome the measures for carers that he has announced today, just as we welcomed them when he made a virtually identical announcement on 3 October. We welcome them particularly because of their striking similarity to proposals that we put forward almost a year ago. We look forward to the Secretary of State implementing other constructive proposals that we make for reforming social security.

People look to the social security system to help them through the vagaries of life. They have a choice: they can either have the Government's approach of gimmickry, upheaval and confusion, or the Conservative alternative, which is simple, straightforward and comprehensible. Today's statement shows that the Government are creating a yet more complicated tax and benefit system that is like a passable imitation of Hampton Court maze, and millions of decent families and pensioners are trapped in it.

Let me start with the point that the hon. Member for Havant (Mr. Willetts) made about carers. It is good to hear that the Conservatives support us. However, he is wrong on one aspect. The Conservatives would never have been able to promise £200 million more this year and every year afterwards, because they have never had the resources available to devote to disabled people or anyone else. It is only because we took tough decisions at the beginning of this Parliament that we now have money available to help disabled people and pensioners.

It is incredible that for the first five minutes of the hon. Gentleman's response he chose to talk not about the increase in pensions or the pension credit, but about our computer systems. He sounded as if he wanted to sell us a secondhand computer to work everything out. He has had some experience of this problem. He rightly complains about the national insurance recording system computer, but he has conveniently forgotten that the Conservative Government signed the contract for that rotten system. We are having to pick up the pieces, as we are having to do elsewhere.

There is another difference between us and the Conservative party. Again thanks to the decisions that we took at the beginning of this Parliament, we now have additional resources to replace the complete computer system for the Department of Social Security. It has been waiting for that for the past 15 or 20 years.

I shall now deal with the substance of the statement, which one would have thought the Conservatives were interested in, and that is the pension credit. It is reasonably clear from what the hon. Gentleman said that he is against the pension credit. So the Conservative party will go into the next election opposing a measure that will benefit 5.5 million pensioners. He has made it very clear that he is against the pension credit for the reasons he stated. The pension credit deals with a fundamental problem in the social security system that has existed for years. If people do what successive Governments have told them to do and save for their retirement, they are punished for doing so. The credit means that those who save for their retirement will be rewarded. That strikes me as a pretty straightforward and, dare I say it, commonsense proposition, and one that is long overdue.

The hon. Gentleman asked me a specific question about two pensioners, one with an occupational pension and one who goes out to work. Presumably he received the copy of the pension credit document that I sent him an hour or so ago, in which we make it pretty clear that we take all income in retirement into account when calculating credit. There is no discrimination in that regard.

As well as rewarding saving and thrift, the credit ensures that we can continue our drive towards eradicating pensioner poverty. The hon. Gentleman says that fewer pensioners were on means-tested benefits under the Tory Government. That is because the Tories did absolutely nothing to help the growing number of pensioners who were living in poverty. When we came to office there were millions of pensioners living in poverty, and the Tories did absolutely nothing about it. If they were returned to office, they would do nothing about it again.

The pension credit deals with two fundamental objectives: to take pensioners out of poverty both today and in the future, and to ensure that the millions of pensioners who have saved a little for their retirement—who have put a little in the bank or the building society, and have a small occupational pension—will be given additional help. We want them to be rewarded for their thrift, rather than being punished for it as they would be under the Conservative party.

The hon. Gentleman mentioned the minimum income guarantee and the Government's take-up campaign. He is right. We have written to 2.5 million people who we thought might be eligible for the guarantee. So far, we have received 600,000 responses to our comprehensive search. That suggests to me—I say this to Tory Members, and also to some of my hon. Friends—that the main problem is not reluctance to claim on the part of pensioners, many of whom are asking whether they are entitled to the guarantee. The reason why, according to our analysis of claims, only half the applicants have been successful so far is quite interesting—

How many people are involved?

Sixty thousand people are now, on average, £20 a week better off than they would otherwise have been.

In fact, there are two principal reasons for the failure of some people to qualify. One is that they have too much income; the other is that they have too much in the bank. That is precisely the difficulty with which the pension credit is designed to deal. I believe that people should be encouraged to save for their retirement—that we should encourage thrift. The credit complements the changes we have made in both the state second pension and the funded sector of stakeholder pensions. People will now be rewarded rather than punished for their saving.

The hon. Gentleman criticised the winter fuel payment, saying that it was complicated. I do not think that there is anything complicated about a payment of £200 going into every pensioner household next week—and I am evidently not the only person to think that such one-off annual payments are a good idea. Some years ago, when he was in charge of the Christmas bonus, the shadow Chancellor—responding to similar criticism—said:

The bonus is something to which the majority of the elderly look forward very much. What other people call fringe benefits are a substantial help to the poorest…in our society.

That is what the shadow Chancellor believed in 1987, and presumably it is what he believes today—unless, of course, the shadow Secretary of State for Social Security shares Lady Thatcher's—correct—view that the shadow Chancellor is confused about these matters.

The hon. Gentleman attempted to tell people that pensioners would be better off under the Tories. It is, perhaps, a sign of his desperation that he should pray in aid Lady Castle: I do not think that she has reached the conclusion that she will ever vote Tory.

Let the hon. Gentleman reflect on this. He is proposing to take away from pensioners the winter fuel payment of £200, the free television licence—which is being sent out this week—and the Christmas bonus. All those amounts will be taken away from pensioners. The hon. Gentleman proposes that they should then be returned to pensioners, and expects pensioners to be grateful. Pensioners know to beware of Tories bearing gifts because all the evidence shows that the Tories will con them again, as they did for 18 years.

It is evident that unless the hon. Gentleman makes substantial additional public expenditure available, about 1.5 million people will lose out as result of ending these direct payments because they are tax free and benefit free at the moment.[Interruption.] Let us remember that 1.5 million people do not receive either any state pension or the full state pension. If money were taken away from them and then given back, the hon. Gentleman would have to spend more money than he would have.

I am entitled to have such proposals costed, and official figures show that the hon. Gentleman would have to spend £5 billion to restore and remove the benefit and tax penalty that would otherwise exist to ensure that the poorest pensioners—those 1.5 million people—did not lose out. Of course, the shadow Chancellor has told us that there is no new money, so the hon. Gentleman could not deliver that proposal. That comes on top of the Tory proposal to begin the privatisation of the basic state pension by encouraging the under-30s to opt out; and their plans, which they keep leaking to the Daily Express and others, to cut £6 billion from housing benefit would cost those on housing benefit about £25 a week on average. People do not believe the Tories because of their previous 18 years in government, and, given today's performance, they are unlikely to believe them at the next election.

To what extent does my right hon. Friend think the pension mis-selling scandal of the 1980s has contributed to pensioner poverty, and who does he think should apologise for that?

There is no doubt that the pension mis-selling that took place in the late 1980s—largely in response to the public advertising campaign that the Tory Government ran, which encouraged people to opt out—represented a huge knock to the pensions industry. When we were elected, we spent considerable time persuading pension companies to offer redress to people who had been wrongly sold pensions—but, of course, the difference between us and them is that we have a strategy. We have the state second pension—a reform that will benefit 18 million low earners—and we are introducing the stakeholder pension and taking other action because we want people to save. Of course, under the pension credit that I am announcing today, people will be better off as a result of their saving, no matter how much they save. That reform is long overdue.

I thank the Secretary of State for his courtesy with regard to the statement. I welcome his announcement of additional support for carers and disabled people. Can he confirm that, even after his proposals, most carers receiving invalid care allowance who reach state pension age will still have that benefit taken from them because of the continuation of the overlapping benefits rule?

I also welcome the additional, above-inflation pension rises—timed to coincide with the election. Can the Secretary of State confirm that they represent rises in real terms of less than £3 next April and barely £1 the year after? On the pension increase, when will we receive the Government Actuary's report that we have been promised, which the Vote Office has just told me is not currently available?

On the pension credit, can the Secretary of State confirm that it represents a new scheme to solve a problem that is largely of his own making, given that the people with £20 of private pension savings to whom he referred would have been well clear of income support when the Government took office? It is only his policies that have dragged those people into the means test.

Finally, on pension poverty, does the Secretary of State recall that his predecessor, the right hon. Member for Camberwell and Peckham (Ms Harman), said:

one can draw only one conclusion: pensioner poverty is contributing to the toll of deaths in the winter.

We were not prepared to stand by and allow that problem to continue growing…—[Official Report, 17 July 1998; Vol. 316, c. 714.]

Can he confirm that under his stewardship that problem has continued to grow? Can he confirm that last night the Government finally released figures, which they have held for six weeks, showing record pensioner debt for last winter, when the winter fuel scheme had already existed for three years? Does he share my view that 50,000 excess winter deaths among pensioners is a disgrace?

Of course it is. The rate of mortality among elderly people is far too high, which is why we introduced the winter fuel payment. I noticed that the hon. Gentleman had nothing to say about that. From next week, starting with the poorest pensioners, every pensioner household will receive £200 a year precisely to deal with that problem so that pensioners do not have to worry about turning up the heat.

The hon. Gentleman complains that more pensioners are getting the minimum income guarantee. That is what he said: under the Government, more people are getting the minimum income guarantee. I make no apology for the fact that 2 million pensioners are now getting the minimum income guarantee, some of them getting £20 a week more than they would under the policy that he advocates.

On the subject of the policies that the Liberal Democrats advocate, why was it, if the hon. Gentleman is taking the stance that he is today, that, at the last election, the Liberal Democrats promised that the basic state pension would remain indexed to prices? I assume that the Liberal Democrats' policy in the manifesto was the same in each of the seats that they fought and that there were not the usual regional variations. They said that, in addition to ensuring that the basic state pension remained indexed to prices, there would be an additional top-up pension for pensioners with incomes below income support level. That sounds remarkably like the minimum income guarantee. I note that, on 31 August, as the hon. Gentleman shifted his policy yet again, he said that he wanted to increase the basic state pension by at least £5 a week—that sounds very familiar—yet now he says that that is not enough.

I suggest that the hon. Gentleman has a word with his party leader, who was on the radio yesterday with Jimmy Young. I do not know which one of them conducted the chat show, but they were certainly having a conversation. Mr. Young asked about pensions:

Do you think the proposed increases…are fair enough?

The Liberal Democrat leader replied:

Well, undoubtedly it's always easy in opposition to say it could be more.

How right he was. He went on:

But I think that if Gordon Brown is coming out with the kind of across the board, flat rate increases that are being talked about, that of course will be welcome.

I suggest that the hon. Gentleman have a word with his party leader before he comes to the House again.

I thank the Secretary of State for his statement. Does he note that, of all the proposals that he has announced, the two that caused the greatest cheer on the Labour Benches and the deepest gloom on the Tory Benches are the increases to the national insurance pension and the increases to the winter fuel allowance? Does he accept that increases in those universal benefits will be the easiest for us to sell on the doorstep?

I agree with my right hon. Friend. The Conservative party has now got itself into a position whereby, when Conservative Members knock on a pensioner's door next April, they will say, "Good evening, madam. I'm going to take £200 off you." Call me old fashioned, but I do not think that that makes for good politics.

The other thing that causes the Conservative party gloom is that it could never have increased spending on pensions by the extent to which we have because, throughout most of the time that it was in government, there was a deep financial crisis and it had no money to do any of those things. Conservative Members criticised us in the first two years of the Parliament when we spent considerable time and effort sorting out the mess that they had left behind, clearing up the deficit and all the debts that they had run up. Because we have made those tough choices, we can now make money available for pensioners, disabled people and others, which they could never have done.

Although my right hon. Friend did not ask about it, the other day I heard him on the radio making the point about maintaining the value of people's savings in retirement. Because it is earnings related, the pension credit will help us to do that.

Personally, I do not quarrel with the Secretary of State's proposals on pension credit. Having introduced family credit, I have long advocated an extension of that to pensioners with the aim of helping those who have saved, but who through no fault of their own have been unable to build an occupational pension.

What I do quarrel with is the Government's failure to do anything about the £5 billion a year pension tax. That is making it more difficult and more costly for people to build their own pensions and, unless we are careful, it will lead to those people requiring extra Government help in years to come.

It is right to help the pensioners of today—I make that clear—but surely we should be concerned about the price that the Government are paying. That price seems to be that we are harming the interests of pensioners tomorrow.

I thank the right hon. Gentleman for his welcome for the pension credit. He spent, I think, some six years in the job that I have. I have looked at the photographs along the hall outside my office; he seems to have been there longer than anyone else. I do not know what he did to deserve that, but he will know from his experience that one of the big problems in the social security system is that it seems to fly in the face of all logic. We want people to save and to put money by, but the system that we inherited did not encourage that. The pension credit will, for the first time in the history of the modern welfare state, reward saving. It is one of the most fundamental reforms that the system has ever seen.

I cannot agree with the right hon. Gentleman's second point. He will recall that we moved away from the advance corporation tax system because we wanted to ensure that decisions on investment were taken by managers rather than in a drive to increase dividends. It allowed us to reduce corporation tax to the lowest rate ever, which has increased company profitability, which is in turn being reflected in dividend levels; and of course, the biggest shareholders in companies are pension funds.

Now that my right hon. Friend has disposed of the Conservative party, will he dispose of the con party—the Liberal Democrats—90 per cent. of whom have not even bothered to turn up for this statement? Will he point out that their policy was a 75p increase this year with no winter fuel payment, no free television licences and wild promises of unsubstantiated increases, which they will make other taxpayers finance without even saying what the income tax increase would be?

The Liberal Democrats' pensions policy, as with all their other policies, is to say whatever they think the listener wants to hear. When we compare what they say on different policies in different parts of the country, it is not surprising that they have been Britain's third party for most of the last century and, I suspect, all of this.

I join the general welcome for the Secretary of State's announcement. I do not fully understand why people are concerned about the higher mortality rate among older people; that is the law of averages I suspect, as most of us are longing to get home by that stage.

On disability, I welcome the increase, but does the Secretary of State agree that the bureaucracy in the system sometimes hinders people's attempts to obtain benefits to which they are entitled? One of my constituents came to see me this week because he has been off work for six years following an injury. He has been taken off disability living allowance and been advised that he should have claimed incapacity benefit with income support. After claiming, he was told that he would have to wait 40 weeks before receiving any benefit. Surely there is something wrong with a system that holds people back when they should have been advised to claim much earlier.

If the hon. Gentleman writes to me about his constituent, I will look into the matter because it does not sound right to me. I am not sure that I agree with the hon. Gentleman about the mortality rate. It is self-evidently true that older people die eventually, but the mortality rate for older people in this country is far higher than one would expect when we compare ourselves with other countries. We know that fuel poverty is a real problem affecting about one third of pensioners in this country, and that is why we have introduced the winter fuel payment on top of everything else that we have done to help pensioners. I suspect that some of the poorest pensioners were most at risk in the past and that is why we are increasing the amount of the minimum income guarantee to over £92 next April.

Over the past few months I have met many pensioners in Aberdeen, South. Although they understand the Government's need to improve the lot of the poorest pensioners and to narrow the gap between rich and poor, the group who felt most aggrieved—there was a real grievance—were those just over the basic state pension level with incomes of between £80 and £200 a week. They felt that the present system discriminated against them and that they were not being rewarded for their thrift and hard work. I am sure that they will be delighted with today's announcement about the introduction of pensioner credit and the lifting of the cap on saving, which was something about which they felt strongly. I do not want to be churlish on a day of good news for pensioners, but I am sure that they will ask why it will take to 2003 before the pensioner credit can be introduced. Why not do it sooner?

It will take that time because we need primary legislation and because we have to finish the consultation period so that we get the detail right. Also, we need to change the IT system so that we can deliver the credit—[Interruption]—and we have the money to do that.

I certainly remember standing with my hon. Friend on Union street, speaking to pensioners and making precisely the point that she has just made. If I remember rightly, there was a pensioner who had about £10,000 in the bank—which is not that much—and a modest occupational pension, but felt that he was getting absolutely nothing for making those arrangements. Although he did not mind people getting the minimum income guarantee, he said, "I have done what you and successive Governments have told me to do, but I feel that I am getting nothing for it." Now, for the first time ever in the history of the social security system, people will be rewarded, not punished for doing what they believe to be right.

Will the Secretary of State explain why the Government are robbing pensioners retiring this year of their married couple's allowance—at a time in their lives when they are more financially vulnerable—but making them wait three years, until he introduces the pension credit scheme, for the bit of recompense that they might receive for the cutting of that allowance?

The £5 increase in the basic state pension is being made next April, when, for the poorest pensioners, the minimum income guarantee increases to £92. It is therefore not true to say that pensioners have to wait until 2003, which is when the credit is being introduced. As the hon. Lady supports the Conservative party, I am not completely surprised that she has failed to recognise the benefit of the credit, which I think will benefit quite a few of her constituents. Nevertheless, I am a little surprised that she is against it and, at the next general election, may be campaigning for its repeal. It is unfortunate that she does not recognise that, next year, we are giving more money to pensioners.

I congratulate my right hon. Friend on the breadth of his statement covering the disabled, pensioners and carers. It has a very broad sweep and is very welcome indeed. He will recall that the parlous state of pensioners started when the Conservative Government abolished the link between wages and pensions. He will also know that that specific matter still greatly concerns pensioners—all of whom recognise the important action that my right hon. Friend and the Government have taken in concentrating on the poorest pensioners and providing the winter fuel allowance. Nevertheless, pensioners still feel that they have paid their national insurance contributions, and, as a body, they cannot understand why they are not at least being promised that the link between wages and pensions will be restored.

The reason why we are not going to restore the earnings link is that, having regard to the current diversity of pensioner incomes—which is likely to continue in the future—it would be the wrong thing to do. As I said in my statement, our problem in the United Kingdom is that, although pensioner incomes as a whole have increased quite dramatically—the income of the top fifth of pensioners has increased by almost 50 per cent; and one in six couples is now retiring on £20,000 annually, with that proportion continuing to grow—some pensioners' incomes are very low indeed. Indeed, 1.5 million pensioners do not even receive the full pension, and some people receive no pension at all.

We have therefore decided that we must not only increase the basic state pension for everyone, but do more—far more—for the poorest pensioners. As a result of our proposals, 2 million of Britain's pensioners will have five times more than they would have had if we had only restored the earnings links. If we had implemented the earnings link rather than doing what we are doing, those poorest pensioners would be receiving about £2.35 less per week than they will receive because of our action.

Any pension policy has to take account of the situation that we have today and that we know we will have in the future. We are spending much more than it would have cost to implement the earnings link. It would have been the easiest thing in the world to restore the earnings link, but that would not have solved the problem.

An earnings link and across-the-board increases do not sort out pensioner poverty. Nor do they take account of the fact that in future, because of the success of occupational pensions and SERPs—which my hon. Friend will well remember, as it was introduced when he was an hon. Member—more people will retire on very high pensions.

The Secretary of State has said various times today that fair treatment of pensioners' savings is long overdue, and I am sure that we would all recognise that. Next week, my mother will be celebrating her 99th birthday—[HON. MEMBERS: "Hear, hear."] We come from good Cornish stock. May I suggest to the right hon. Gentleman, in answer to the point made by the hon. Member for Aberdeen, South (Miss Begg), that a much quicker way to assist those who have savings is to take more people out of the means test, rather than to put more people in? Why should my mother wait until she is 102 to benefit from his pension credit?

The problem with the solution that the hon. Gentleman proposes is that if the present system were perpetuated, we would continue to have the problem whereby a pensioner with a small occupational pension or a small sum of money in the bank will get no reward for that. There is a cliff edge in the benefit system at the moment. Those who have nothing get help, but those who do a little bit to help themselves get nothing whatsoever and those people are by no means financially well off. That is why the pension credit is so essential. I would like to introduce it before 2003, but we need primary legislation and that cannot happen overnight. We also need to change the IT system to deliver the new system, but deliver it we will. When we have made this change—one of the most fundamental, radical changes that the social security system has seen in pensions since it was set up in its present form—at long last the country will have a coherent pension system that encourages people to save. It has options for the low paid and options for middle and higher earners, so that when they save they are rewarded for it and not punished because of it.

I welcome my right hon. Friend's statement, which will bring joy to the many pensioners of Bootle and Merseyside. Will he clarify something for me in respect of the basic increases in pension that will take place next April? Will they be disregarded in the determination of benefits, such as housing benefit? That is not quite clear in my mind and I should appreciate some clarification.

I thank my hon. Friend for his welcome. He asked about housing benefit, which has been uprated along with benefits generally. As for the pension credit, we shall make sure that no one currently on housing benefit will lose out when the new credit comes in. If my hon. Friend looks at the uprating, he will see that we have dealt with the point he raises in relation to housing benefit next year.

Does the Secretary of State accept that while his goal of supporting thrifty pensioners is an excellent one, this very complicated scheme is not the best way to achieve it? What proportion of the total cost of the scheme for pensioner credit in 2003 will be spent on administration? Does he not see an echo of the working families tax credit, which has been abolished in Canada after five years of operation—a point that the Government still have not taken on board—and which is already creating huge problems for our tax and benefit offices?

When the hon. Gentleman said that the pension credit was not the best way of rewarding saving, I was hoping that he was about to tell me what he thought was the best way of doing that. It appears that the Conservative party is committed to opposing the pension credit and therefore opposing the help that is going to 5.5 million pensioners. If the Conservatives want to go into the election doing that, it is fine by me.

Clearly, administration costs will depend on the exact shape and form of the system, but the present system also costs money to administer as it is expensive to review someone's entitlement week by week. The forms and the complexity of the present system are also expensive. The simplified system that we propose will be easier to run and, because of the changes that we are making in IT, it will not be so labour intensive or convoluted as it is at present.

To return to the fundamental point, which the hon. Gentleman and his party now have to face up to, we are proposing a measure that will help 5.5 million pensioners; it will reward their saving. If the Conservatives are against that and campaign against it in the next election, they will rue the day that the hon. Gentleman committed them to that course of action.

I, too, add my congratulations to my right hon. Friend for his statement. Does he agree that, despite the churlish comments of Opposition Members, the pension credit will effectively remove the means test that so many pensioners find humiliating? Does he also agree that the measures will ensure that the Government's strategy of targeting the poorest pensioners remains, but for the first time pensioners with a few savings or an occupational pension will not be penalised by the system?

My hon. Friend is right—someone with modest savings or on a modest occupational pension will gain. Let me deal with the point about assessing people's means. That does not happen only in the social security system; we are all assessed on our means to determine how much tax we should pay. When people retire, a calculation has to be made from their contribution records of how much pension they are entitled to, and that is precisely the time to look at their income, too, as I have proposed. If they have saved—one has to disclose that to the Inland Revenue in any case, so there is nothing new in that—they will qualify for the credit. I find it odd that the Liberals are against rewarding saving—they were muttering away while my hon. Friend was speaking—but I do not find it odd in the Tories, because they have never been that bothered about poor people, let alone poor pensioners.

Does the Secretary of State agree that the greater the complexity of the benefits system, the greater the scope for administrative error? If so, will he kindly agree to investigate the harrowing circumstances of my poor constituent, who is suffering grievously, who is deeply unwell and on tranquillisers, whose husband is registered blind, but from whom an alleged overpayment, innocently received, is now being demanded back by the Benefits Agency? Does he accept that she is being driven to her wits' end by a combination of the crass incompetence and the sheer insensitivity of officials at the Benefits Agency?

If the hon. Gentleman writes to me about the case, I shall certainly investigate what has happened. On his general point, the complexity of the benefits system has been a problem, which is why we are simplifying it. The tax credit system that we are introducing is a simplification, but he and his colleagues are against it. One of the problems that bedevils social security administration is the rotten state of our computer systems, which is a direct result of no one investing in them for the past 10 or 15 years. The most modern IT systems in the DSS when we came to power were 10 years old, and they were the ones that worked the least. Some of the systems were nearly 30 years old. As a result of prudent management of the economy, we now have the resources to replace the entire system, which will make the administration an awful lot better.

I unreservedly welcome the increases in the various disability benefits that my right hon. Friend announced. My calculations on the back of an envelope suggest that the disabled child premium will go up by 35 per cent. and the carers allowance by 75 per cent. He told us that the disability income guarantee will be £142 next year. It is not only a matter of cash. The initials of the disablement income guarantee, DIG, are the first three letters of dignity. This is about dignity, independence and self-esteem for disabled people.

Those who represent disabled people, such as the Royal National Institute for Deaf People—of which I am a trustee—and who, perhaps, have not had the best of relationships with my right hon. Friend over the past couple of years, will, I am sure, spend the afternoon penning their press releases welcoming the generous figures that have been announced today.

I wait and see. I am sure that anyone who, like my hon. Friend, wants to ensure that disabled people have a decent standard of living, with security and dignity, will welcome what we have done today. In addition to what he mentioned, for which I am grateful, we have, for example, increased the amount available for severely disabled children by about £27 a week. When I became Secretary of State and looked at the amount that was paid to severely disabled people, I considered it woefully inadequate. I am glad that, this year and next, and in the years thereafter, we can begin to improve many people's standard of living and accord them the decency to which they are entitled.

Will the Secretary of State clarify his statement that the new system will have regard to the income that comes from capital, and not to the capital itself? Will that principle apply to all those in nursing and residential care who are currently forced to pay their fees out of capital, even to the extent of having to sell their homes?

I am not making any announcement today in respect of the regime governing the support of people living in residential homes. As the hon. Gentleman knows, the Government have made some changes. The proposals that I am announcing today are in relation to the pension credit alone.

I welcome my right hon. Friend's proposals. I am sure that Watford pensioners will be very interested to hear that the Conservatives propose to remove the benefits that are due to be introduced. Does he agree that, although there are obvious benefits with a pension credit, many pensioners will need to understand how the process will work and how they will be able to benefit from the changes over the next few years? What publicity and information does his Department plan to make available to pensioners to explain all the new benefits that are likely to be introduced?

We plan next year to increase public awareness of the various options and forms of help that are available. I commend to my hon. Friend the pension credit document, the annexe to which has a ready reckoner to show how much better off people will be, depending on their savings. The hon. Member for Brentwood and Ongar (Mr. Pickles) has the document. He has twigged what the Tories are committing themselves to, and they can now see how much their determination to oppose the pension credit will cost every household.

I warmly welcome the measures that my right hon. Friend has announced. Assuming that we can ignore the Opposition Front Bench—which seems a very reasonable assumption—he will have noticed that there were only six Opposition Back Benchers in the Chamber when he made his statement. That demonstrates the extent of their concern for pensioners and pensions. Can he confirm that, if we rolled up the £200 winter allowance into the basic state pension, as the Conservatives want to do—if they do not want to cancel it altogether—about 1 million pensioners would lose out? Many of those would be likely to be women pensioners, because carers and those with a broken work record, who will not qualify for a full state pension, would be the losers.

The problem that Conservative Front Benchers have overlooked is the fact that there are about 1.5 million people who either get no pension or do not get a full pension. Simply to pay them the winter fuel payment pro rata—[Interruption.] The hon. Member for Havant (Mr. Willetts) is muttering. A spending commitment is issuing from his lips even as we speak. To make good the removal of the winter fuel payment, the Christmas allowance and the free television licence would cost £5 billion—money that he does not have, because the shadow Chancellor has not let him have it.

On my hon. Friend's earlier comments, there may have been few Tory Back Benchers around, but the one who knew what he was talking about—the former Secretary of State for Social Security—welcomed our proposals, while the one who did not has committed the Tories to opposing them.

Everybody in Wales will be very ready to congratulate my right hon. Friend on his proposals for pensioners and disabled people and their families. He has mentioned for a second time the £5 billion cost of rolling up all the annual payments into the weekly pension. It is highly unlikely that the Tory party would ever find that money. Has he calculated how many pensioners would lose out by that rolling up, because of the tax loss or the benefit loss that they would sustain?

About 1.5 million pensioners would lose out. The Conservatives should remember that it is not only a matter of making good the abolition of the winter fuel payment, the Christmas bonus and the free television licence: because of their proposal to encourage everyone under the age of 30 to opt out of the national insurance system, within four or five years, if the policy worked—I assume that they want it to work—there would be another £4 billion hole in the national insurance fund, which would have to be filled either through taxing or through borrowing. This is all very reminiscent of the economic madness that drove this country into such a deep recession in the early 1990s.

Is my right hon. Friend aware that when I spoke to pensioners in my constituency about what they wanted to emerge from this statement, none said that he or she considered the winter fuel payment, the free television licence and other help to be gimmicks? Moreover, not one asked for any of them to be taken away. I can tell my right hon. Friend that they will also very much welcome the changes that he has announced to capital limits and tariff income, which for some elements of income assumed interest rates of well over 20 per cent.

Is my right hon. Friend able to consider going further, as the rules also apply to other groups of recipients? Is it possible that the changes that he has announced today could apply to other recipients, such as hard-working families?

On that last point, I have said on a number of occasions that, over time, the benefits paid to pensioners will be substantially different from the benefit regime for people of working age because benefits for pensioners are designed to enhance their security. We are making administrative changes in the Department to set up a separate pensioners organisation. I have always made it clear that pension benefits in the future will look different, and will be more generous and better than what obtained before.

My hon. Friend mentioned the winter fuel payment and the Christmas bonus. I, too, have yet to meet a pensioner who has said, "Please take away £200 from me." However, I dare say that the Tories' focus groups will have told them that there are many pensioners in the country who would want to be £200 poorer. For once, I find myself in agreement with the shadow Chancellor, who said that the benefits are a substantial help to the poorest groups in society. It appears that there is another split between members of the Tory Front Bench.

Is there any intention to abolish the capital rules in respect of disabled people? The Secretary of State wants to achieve consensus in the House on these matters, but will he say how much implementing the new tax credit will cost?

The hon. Member for Havant (Mr. Willetts) asked me about the cost of implementation. I made the point that the present system is quite expensive and cumbersome because it contains so many rules, regulations and different rates. We want to simplify the system, and the final cost of the scheme will depend on its exact shape and form.

The hon. Gentleman asked about capital rules elsewhere. I said in reply to an earlier question from a Tory Member that today's proposal relates purely to pensions and pensioners. There is a difference between what the Government want to do in that regard and what we want to do in regard to the benefits system in general.

Finally, the hon. Gentleman asked about consensus. It is very difficult to build consensus over pensions. I have announced the pension credit, but the first thing that the hon. Member for Havant, the Opposition spokesman on these matters, said was that he was against it. The Government are going to benefit 5.5 million pensioners, but the hon. Gentleman opposes that. I do not know whether he is in favour of our proposals to benefit 3 million taxpaying pensioners. He did not say that he was. Are we to assume that he opposes that, too?

However, we know that voting Tory will cost pensioners 200 quid. The Tories will take the winter fuel payment away, then give it back in another form and expect pensioners to be grateful. When people look at the announcements made today and yesterday they will see that the Government's prudent management of the economy has enabled us to give more money to pensioners. They will see, too, that the Labour party is the only one that can be trusted to ensure that pensioners are given what they need, and to implement the most radical change in the pension system over the past 50 years. We want to reward saving, not punish it.

On a point of order, Mr. Speaker. As our new Speaker, you have made it clear that you propose to make your own decisions and that you will not necessarily be bound by the decisions of Madam Speaker Boothroyd, your predecessor. However, she felt especially strongly about the requirement that hon. Members, and especially Ministers, notify other hon. Members when they are about to visit their constituencies. I hope that you will be equally firm on the matter.

I raise this point of order on behalf of myself, and of my hon. Friends the Members for Maidenhead (Mrs. May) and for Aldershot (Mr. Howarth). Yesterday, a junior civil servant working for the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food informed us by means of a mobile telephone call that the Minister proposed to visit our constituencies. That telephone call was made at a very late stage—only about half an hour before the visit was due to take place.

This morning, the excuse was given—again by telephone—that the Minister had planned only to visit the constituency of my hon. Friend the Member for Maidenhead. However, he had changed his mind at the last minute and decided to visit instead an Environment Agency building that straddles the boundary between my constituency and my hon. Friend's.

That would have been all very well, but no one had bothered to notify even my hon. Friend the Member for Maidenhead, whose constituency the Minister originally intended to visit—