HC Deb 03 April 2000 vol 347 cc777-81

Amendment made: No. 58, in page 130, line 7, at beginning insert—

'10 & 11 Geo. 6c.24. The Naval Forces (Enforcement of Maintenance Liabilities) Act 1947. In section 1(1), paragraph (aaa).
3 & 4 Eliz. 2 c.18. The Army Act 1955. In section 150A, in subsection (2), paragraph (b) and the word "or" preceding it, and in subsection (3), the words "or cancels" and "or (as the case may be) that it has been cancelled".
3 & 4 Eliz. 2 c.19. The Air Force Act 1955. In section 150A, in subsection (2), paragraph (b) and the word "or" preceding it, and in subsection (3), the words "or cancels" and "or (as the case may be) that it has been cancelled".
1973 c.18. The Matrimonial Causes Act 1973. In section 29, in subsection (7), the words "or is cancelled", "or was cancelled" and "or, as the case may be, the date with effect from which it was cancelled"; and in subsection (8), paragraph (b) and the word "and" preceding it.
1978 c.22. The Domestic Proceedings and Magistrates' Courts Act 1978. In section 5, in subsection (7), the words "or is cancelled", "or was cancelled" and "or, as the case may be, the date with effect from which it was
cancelled; and in subsection (8), paragraph (b) and the word "and" preceding it.
1989 c.41. The Children Act 1989. In Schedule 1, in paragraph 3(7), the words "or is cancelled", "or was cancelled" and "or, as the case may be, the date with effect from which it was cancelled"; and in paragraph 3(8), paragraph (b) and the word "and" preceding it.'.

[Mr. Rooker.]

Angela Eagle

I beg to move amendment No. 90, in page 130, line 48, column 3, at end insert—

'Section 24.
Section 26(4)(c).'.

Mr. Deputy Speaker

With this it will be convenient to discuss Government amendment No. 97.

Angela Eagle

Amendment No. 97 is extremely minor and amendment No. 90 is consequential. I commend the amendments to the House.

Amendment agreed to.

Remaining Government amendments agreed to.

Order for Third Reading read.

12.46 am
Mr. Rooker

I beg to move, that the Bill be now read the Third time.

I think that I have spoken enough for today.

12.47 am
Mr. Willetts

The Minister has indeed spoken a lot this evening—it is because he has had so much trouble from Labour Members who disagree with his policies. The reason why we have only reached Third Reading at 12.45 am is that the Government have found that a significant number of their Back Benchers are unable to accept their policies.

I should like to congratulate my hon. Friends the Members for Beckenham (Mrs. Lait) and for Brentwood and Ongar (Mr. Pickles), who led for the Opposition in Committee. I also congratulate the other Conservative members of the Standing Committee: my hon. Friends the Members for New Forest, West (Mr. Swayne), for Tewkesbury (Mr. Robertson), for Bromsgrove (Miss Kirkbride) and for Gainsborough (Mr. Leigh). To our regret, the Government did not listen to the pertinent criticisms that they levelled at the Bill.

We have criticised the proposals for the Child Support Agency, especially their inflexibility. The absence of any upper limit means that, however well-off the absent parent becomes, a fixed percentage of his or her income will always be taken by the CSA—the Government will come to regret that. They will also regret their inflexibility regarding the possibility of very affluent parents with care continuing to receive maintenance from absent parents with far lower incomes. Problems will also arise from the inflexibility in respect of variations: we understand the need for a simpler formula, but if no flexibility is shown about variations, the result will be a system so rigid and inflexible that it cracks under its own weight.

We believe that the provisions relating to the Child Support Agency, as amended by the Bill, will sadly not be the final word on this difficult subject. We agree with the Government, and not with the Liberal Democrats, that child support is best delivered by administrative formula, rather than by returning the matter to the courts. That is where we and those on the Government Front Bench have made common cause. Nevertheless, we do not believe that the application of the formula will be sustainable.

The state second pension is in direct breach of a manifesto pledge to retain SERPS. Ministers claim that no one will be worse off than would have been the case under SERPS, but that is not true. Whole swathes of the population will be worse off than they would have been under SERPS.

People who have earnings from self-employment and employment in the same year will be worse off. The working families tax credit will not earn credits under the state second pension in the way that family credit earned credit under SERPS. Certain groups will be worse off as a result of the shift. Labour Members were elected on a manifesto pledge that they would keep SERPS. They have just voted to get rid of SERPS and to put in its place provision which, for many people, will not be as good.

Labour Members have also voted, for the first time, for home responsibilities protection to end when a child reaches the age of five. That is a significant change in approach, and I have been amazed at the lack of interest shown by some Labour Members. For the first time there has been a signal that if a parent—usually, but not only, a mother—chooses to stay at home when her child is above the age of five, no credits will be earned in the state second pension. When they realise the implications, Labour Members will come to regret the cavalier way in which they voted for that change.

Labour Members have voted for pensions apartheid. It will be extremely difficult for people with earnings below £9,000 to move into funded pensions. The regime under the state second pension will create a divide in pension provision in which we do not believe. We want everyone, as far as possible, to have open and free access to funded pension provision. Sadly, the state second pension will not encourage that. It will have the opposite effect.

Ministers quote apparently enormous figures as the amount that people will accrue as their rights under the state second pension. They will accrue that amount in 40 or 50 years' time. Meanwhile, there will be considerable pensioner poverty, which the state second pension does very little to address.

In an amazing speech, the Minister explained that it would not be possible to increase the basic state pension in line with earnings rather than prices because of the increasing diversity of pensioner incomes. That is an argument which we understand, and which Conservative Ministers used year after year. But when the Minister was sitting on the Opposition Benches, he did not accept it.

At the same time, the Government cavalierly announce that there is to be a universal heating addition and a universal free television licence for people aged over 75. Those can be universal. Suddenly, there is no problem with those being badly targeted. The Minister is happy to announce those policies, regardless of the income of the pensioner.

On the same day, in the same debate, we have witnessed a totally inconsistent approach to probably the most important and most difficult issue on pensions policy—whether the way forward is universal provision or through targeting and means testing. The Government cannot have it both ways. They cannot tell their own rebels that it is impossible to have universal provision in the basic pension rising more than prices, and then proudly announce that they are putting more money into other universal provision.

There are flaws in the state second pension, just as there are in the child support provisions. We regret the imposition of employers national insurance contributions on private medical insurance. Earlier, we saw the extraordinary sight of Labour Members being whipped through the Lobby in order to vote against a measure announced in the Budget. That must be some sort of first. We heard in the Budget announcement only a fortnight ago that child care provision was not to bear NICs by the employer, and we helpfully tabled a new clause to give effect to that measure. The Government had to whip through their troops to vote against it. The provision cannot be in the Finance Bill because changes to national insurance contributions cannot be made in that measure. The Government will have to introduce a measure after whipping through Labour Members to vote against a provision that the Chancellor announced only a fortnight ago. If this place is not to become the theatre of the absurd, Ministers must stop forcing their troops to participate in such shenanigans. The Government will regret many of the provisions.

12.55 am
Mr. Webb

I shall not match the Minister for brevity, but I will do my best.

I want to comment on the final stages of our proceedings. If the Conservative party had voted with us and the Labour rebels tonight, the Government would have been defeated. Opposition Members can be proud of their achievement in making the Government reconsider the adequacy of the basic state pension.

Like the hon. Member for Havant (Mr. Willetts), who thanked his hon. Friends, I want to thank my hon. Friends the Members for St. Ives (Mr. George) and for Sutton and Cheam (Mr. Burstow) for their hard work in Committee.

The Bill has three main parts and we are worried about all of them. The child support provisions will be regretted. The House once reached an agreement on child support that led to a serious mistake. The provisions will prove to be rough justice and they will not fit our constituents' circumstances. Our constituents will call for change, and change will come. The Bill is insufficiently flexible.

The state second pension is not unworthy in its intentions, but it will take almost for ever to achieve little. It is not an adequate response to the problem of pensioner poverty.

We were unsuccessful in bringing up one subject on Report, but we are sure that our hon. Friends in another place will try to draw attention to the draconian response to those who breach community service orders. That issue may well return to the House.

The Bill does not take social policy forward. We regret that it has come before the House.

12.57 am
Dr. Lynne Jones

Like other hon. Members, I want to go home, so I shall try to be as brief as possible. On Second Reading, I expressed reservations about whether the Bill would achieve the Government's intentions in regard to pension reform. I hoped that improvements would be made through scrutiny in the House. I remain worried about the Government's pensions policy and whether it will stand the test of time.

We wanted to reduce means testing, but there will be more means testing of pensioners. At best, the Bill will reduce the amount of means testing that would have occurred without the provisions. I suppose that that is at least an improvement.

Although they have not yet taken the opportunity to do so, there is still a chance for the Government to relent and improve the level of the basic state pension, and prove that we want it to be the foundation of the pensions system in this country.

The Government also want to improve take-up and encourage more people to make private provision. On Second Reading, I said that the growth in private provision had been underpinned by the basic state pension and SERPS. Unfortunately, when I re-read my speech today, I realised that Hansard had reported "undermined" rather than "underpinned". I now have an opportunity to put that right.

Many pensions commentators doubt whether there will be more private pension provision as a result of the measures. The state second pension is horrendously complicated. It has three different rates of accrual. I hope that the Government achieve their aim of informing all pensioners and people who contribute to the schemes about the exact pension that they are likely to receive when they retire. I wish them luck with that. It will be difficult, but if people do not understand the sort of schemes to which they contribute, it is doubtful whether the provisions will stand the test of time.

There is still an opportunity to improve the Bill. It would be greatly improved if the Government decided to do more to uprate the basic state pension. That would help the other provisions in the Bill.

1 am

Mr. Leigh

In summary, I oppose the Bill because its Child Support Agency provisions are too inflexible and its pension provisions undermine the contributory principle.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.