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Occupational Pensions

It is a pleasure to join in the debate, which has been an interesting one, and to follow the hon. Member for Hartlepool (Mr. Wright). I have never served on a Committee with him, but I like him a great deal and admire him enormously as a hard-working constituency Member. [Hon. Members: ““But—?] But—[Laughter.] The hon. Gentleman suggested that some form of party politics was being played. I think that holding the Chancellor to account on an issue that is of major importance to the future of the country and to so many people in it—not least those who have the least—as the handling of pensions is an entirely legitimate thing for the House to do, and that it is entirely legitimate for the Conservatives, as the party of opposition, to put that issue before the House and indeed the nation. As Members have pointed out, this debate was triggered by the revelation of information whose emergence into the public domain the Chancellor resisted for years. I consider—with respect to the hon. Member for Hartlepool, and to other Labour Members—that two main charges have been levelled at the Chancellor and his handling of pensions so far. One concerns the impact of the pension tax raid on the long-term value of pensions; but I think the stronger concerns the fact it was done in an underhand way, with no openness or transparency. Today, 10 years on, we were treated to a speech from the Chancellor that again failed to be honest about the reality of what is going on. That, more than anything else—the lack of openness, transparency and honesty—is the reason for people’s loss of confidence in the pensions system. In his first Budget, the Chancellor started as he meant to go on. He was underhand, imposed extra burdens on hard-working people, and drove millions into dependency. He did that by his removal of the tax credit on dividends, with little explanation in his Budget speech. One way of judging the decency of a society is to judge the way in which it treats older people. One way of judging the decency of a Government is to judge the way in which they support and encourage people to be financially independent in old age. Communities with a social conscience revere their elders, respecting the contributions that they have made for so many years. Those societies protect, look after and cherish those who no longer work. In Brown’s Britain, however, far from being valued as independent citizens, older people are sucked into his labyrinthine world of credits, benefits and state dependency. What does it say about the Chancellor that his legacy to Britain’s elderly is to have helped to rip away the foundations of what a Labour Minister once called"““one of the strongest pension provisions in Europe??" Terry Arthur of the Institute of Actuaries estimates that the Chancellor’s tax raid has cost at least £100,000 million from pension funds, and that"““even £150 billion may still be a conservative estimate?." This raid has betrayed Britain’s pensioners, and makes a mockery of what the Chancellor promised in 1996. I do not think it has yet been mentioned today that in 1996—when he was a wannabe Chancellor rather than the man who cannot get out of the post quickly enough—he said"““I can give this pledge—fairness to the pensioners under Labour.?" Even given the Chancellor’s rather stilted delivery, I think that that pledge was fairly clear. But is it fair that 20 per cent. of pensioners in the United Kingdom are living in poverty because of a state pension of just £84.25 a week and a humiliating means-testing system that many proud older people—as many as 1.5 million—simply refuse to enter? Was it a sense of fairness that led the Chancellor to try to prevent The Times and its readers from knowing the advice that he received 10 years ago, or that led him to release the information in a parliamentary recess and while he was abroad—in Afghanistan? Is it fair that the poorest pensioners are the hardest hit? According to the released papers, Treasury advisers told the Chancellor that his tax change would"““lead to a reduction in pension benefits to the lower paid?," and that"““quite clearly any loss of pension could be difficult for someone with a small income to cope with?." That was the advice that the Chancellor was given, and he ignored it. I would be interested to learn how those with the least have been served by the Chancellor’s tax raid.