Commons Sitting of 23 May 2002

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS

  PRIVATE BUSINESS
  LONDON DEVELOPMENT AGENCY BILL (BY ORDER)
  Order for Second Reading read.
  To be read a Second time on Thursday 13 June.

Oral Answers to Questions
  EDUCATION AND SKILLS
  The Secretary of State was asked—
  EDUCATION AND SKILLS

    Educational Maintenance Allowances
    Dr. Brian Iddon: What assessment she has made of the impact of educational maintenance allowances. [56343]
    The Parliamentary Under-Secretary of State for Education and Skills (John Healey): Independent evaluation of the educational maintenance allowances has been taking place since we introduced them in September 1999. The findings so far are encouraging and show significant increases in the rate of those staying on in full-time education among students from less well-off families. We plan to publish further evaluation reports soon.
    Dr. Iddon: According to Roy Whittle, who is the principal of Bolton sixth form college, EMAs have had a significant impact on attendance rates at his college, and therefore on retention rates. Will my hon. Friend take note of a second point that Mr. Whittle has made to me—that he believes that student participation rates would improve significantly if EMAs were paid directly to the students, and not, as at present, to the parents or guardians?
    John Healey: I thank my hon. Friend for that comment and question. He is right. His own area, Bolton, is one of the original 15 pilots. There, we are testing payments to parents, but elsewhere we are testing payments direct to students. It is part of the purpose of the pilots to work out not just how well EMAs work, but which model works best and also what impact it has in the longer term on the decisions of young people. We are examining carefully
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    what is happening in Bolton, in particular at Bolton college, and in other EMA pilot areas and in control areas, where we do not yet have EMAs.
    Mr. Phil Willis: Does the Minister agree that it is not just education maintenance allowances, but the right courses and the right settings, that will attract people to and keep them in full-time or part-time education after 16? What plans does the Minister have to implement the Labour party manifesto commitment to increase significantly the number of sixth form colleges? What effect will that have on existing further education provision, particularly in the light of the dismissive comments from his hon. Friend the Minister for Lifelong Learning about the success of further education in general colleges?
    John Healey: I reject absolutely the suggestion that the ministerial team of the Department for Education and Skills is in any way dismissive of the importance of further education colleges. The hon. Gentleman is right that educational maintenance allowances are part of what we need to put in place to ensure that a range of options is available to young people. The EMAs have a particular purpose: to support the young people most likely to drop out of full-time education, and to encourage those from the most deprived areas to continue their education, partly in further education and sixth form colleges and partly in sixth forms at schools.
    Vera Baird: May I ask my hon. Friend to make haste with further assessment of the impact of EMAs? Will he take into account the problems caused when one authority has EMAs and the neighbouring one does not? My own Redcar and Cleveland authority does not have EMAs, but the neighbouring authority in Middlesbrough does. They are both very poor areas, and of course students from Redcar go to Middlesbrough, and vice versa. For a student who does not have the allowance, sitting next to someone who does have it can act as a deterrent to taking on courses and to continuing them. Can we hurry? If the benefits are good, can they be rolled out as soon as possible?
    John Healey: We plan to publish shortly the second year's evaluation of the EMAs. I have much sympathy with my hon. and learned Friend's point about Redcar. Rotherham is also an area without EMAs, so I am conscious that we cannot continue indefinitely with EMA haves and have-nots sitting side by side in the same classroom. The emerging findings of the evaluation of the EMA programme form part of the discussions going on in Government as part of the spending review process.
    Bob Spink: May I make a plea to the Minister for the pilot to be extended to Canvey Island in my constituency, where staying-on rates are particularly low compared with other areas in my constituency and in south Essex? That might help us to increase the participation rate and the retention of students in the local sixth form college.
    John Healey: I am delighted to welcome that support from the Opposition Benches for our Labour policy and I

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    shall pass it on to my right hon. Friend the Chancellor as a spending review representation. I am sure that it will reinforce our arguments with the Treasury.
    Jeff Ennis: Given the undoubted success of EMAs in places such as Barnsley and Doncaster, is the Minister considering not only rolling out the programme throughout the rest of the country, but extending it to 19 to 24-year-olds? Might I even suggest that he consider extending the programme into higher education as well?
    John Healey: My hon. Friend is racing ahead of our current position. As he rightly says, the evaluation of EMAs and our knowledge of their impact in south Yorkshire suggests that they have a genuine role to play at the critical point at which so many of our young people, especially in poorer areas, drop out of full-time education. That is the principal policy purpose of EMAs and we are currently concentrating on evaluating it and testing its potential much more widely across the country.

    School Funding (Budget)
    Mr. James Gray: What proportion of the money announced for schools in the Budget was not previously allocated. [56344]
    The Secretary of State for Education and Skills (Estelle Morris): As was made clear at the time of the Budget, £70 million of the resource for education was new money from the capital modernisation fund. Some of that money has already been allocated to fund more centres of vocational excellence in colleges of further education. The remaining £172 million for schools was made available from existing resources in the Department.
    Mr. Gray: I thank the Secretary of State for that answer, but she will understand my cynical presumption of new Labour double counting, which has now almost become an art form on the Labour Benches. Does she agree that merely spending more money on schools is not necessarily the answer to everything that is wrong with our schools today in places such as North Wiltshire? Does she recall what she said as a junior Minister in an Adjournment debate that I secured on the subject of the SSA? I asked why £2,701 was spent every year on a secondary child in Wiltshire, while in her constituency that figure is £3,031. In the constituency of the Minister for School Standards, the figure is £3,678 a year and in Tower Hamlets it is a staggering £4,237 a year. Why should children in Wiltshire live in the second worst funded county in England and why should her constituents deserve £1,000 a year more per child than mine?
    Estelle Morris: It is slightly inconsistent for somebody who began his question by saying that putting money into schools was not everything and would not do the job then to launch a tirade about why his constituency is the second worst funded LEA. However, as I am sure that I said in the Adjournment debate to which the hon. Gentleman referred, although it is right that children in different parts of the country are financed to support their need—I am sure that he agrees that children in some circumstances need extra resources to support additional needs—the existing SSA system, which was developed by his Government, is now out of date. There are many examples
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    of unfairness, as he has illustrated. As the Secretary of State for Transport, Local Government and the Regions has said, we will announce this year the formula that will be available and will be used for the next financial year. The hon. Gentleman can celebrate the fact that the announcement that is made for this financial year will be the last to be made under the current SSA system.
    Mr. Bob Blizzard: Schools in my constituency greatly value the substantial extra resources that they have received since this Government came to power, but my right hon. Friend will know about the need to recruit teachers so that we can spend all the money that has been allocated. To encourage more students to take up teaching, will she consider in her review of student finance waiving part of their maintenance loans if they commit themselves to work in state schools for five years or so?
    Estelle Morris: I know that, as a former teacher, my hon. Friend takes a keen interest in education, so he will be delighted that in the legislation that is currently before the House of Lords, we have taken the power to write off a student loan over a 10-year period. If somebody stays in teaching for 10 years, the loan will be written off in tenths, so the policy both supports retention and is an acknowledgement of the importance of teaching today. We hope that, when the legislation takes effect, we will be able to introduce that policy from September this year. We will announce further details of how we will do so once the legislation has received Royal Assent.
    Mr. Damian Green: Will the right hon. Lady tell the House how much money has been taken away from schools by the Chancellor's increases in national insurance rates in the Budget?
    Estelle Morris: Teachers in schools and those in local authorities will, like every employer, pay a share of the increased national insurance contributions. There are two points to make about that. Everyone in schools—pupils, teachers and everyone else—will benefit from the improvements in our national health service that that increase in national insurance contributions will bring about. As the hon. Gentleman knows, that has been widely welcomed. I am absolutely confident that every school in this country has an increased budget this year, as they have under every single year of this Government, and that they will be able to find the additional resources to cover the cost of NIC increases.
    Mr. Green: I can understand why the right hon. Lady is too embarrassed to give a straight answer, because the figure is £150 million. Before she challenges that, I point out that it comes from a written answer from the Minister for School Standards. So what she has admitted in the past five minutes is that the Government gave education £70 million of new money in the Budget and took away £150 million. That £150 million will disappear year after year.
    Does she recognise that parents, teachers and governors have by now seen through her Department's constant habit of twisting the facts? Does not she see that fiddling the Budget figures does not work, and that boasting one day that exclusions are down, then announcing this morning that they are up, but that she is happy about it,

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    is simply not credible? Will she admit that her Department's obsession with managing headlines is now damaging its performance on policy, and that the real victims are children in schools, especially those in our most vulnerable inner city schools?
    Estelle Morris: That is rich coming from a Member whose party reduced funding for schools by £120 per pupil over the last five years of Tory Government. The increase in national insurance contributions actually amounts to about £15 per pupil in primary schools and £20 per pupil in secondary schools. The figure that he quoted has to be set against the £1.3 billion settlement that has gone into schools from this year. He is not comparing like with like. The money that has gone through the Budget in the standard spending assessment for this year relates to national insurance contributions that will be repaid not this year, but next year. It is the Government's settlement for education spending for schools next year. I can assure the hon. Gentleman and the House that we will continue to invest. That record of investment and expenditure, bringing about reform and results, is one to be proud of.
    Mr. Speaker: Order. Before I proceed to the next question, may I say, gently, that the question was too long and the answer was too long? I must get through the Order Paper.

    Classroom Assistants
    Tony Cunningham: If she will make a statement on the role of classroom assistants in schools. [56345]
    The Minister for School Standards (Mr. Stephen Timms): Teaching assistants play a very important role in individual support for pupils with special educational needs, in group support on literacy and numeracy needs and in specialist subject support—for example, in science and technology. We expect to consult later this year on proposals for enhancing the role that is played by teaching assistants in improving standards and reducing teacher work load.
    Tony Cunningham: I thank the Minister for that answer. I recently visited one of my local primary schools, Victoria infant school, and met the headmistress, Pauline Robertson. The school has eight teachers and nine classroom assistants. Four years ago the standard assessment tests—SATs—results were Cs and Ds; they are now A and A* grades. Much of that is due to the work of classroom assistants. Will the Minister join me in paying tribute to the work of classroom assistants, and will he reconsider their pay and conditions and job descriptions?
    Mr. Timms: I very much agree with my hon. Friend and I am glad to join him in his tribute. Since 1998, the number of teaching assistants in schools has risen by about 60 per cent., reflecting the scale of the investment that we are making in our schools and our commitment to raise standards. It is absolutely right that teaching assistants can play a very important part in raising pupil achievement and in reducing teacher work load, which is an important concern for us at the moment. We have been
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    investing heavily in training assistants and we are seeing the benefits of that. My hon. Friend is right that those improvements will have implications for the status and pay of teaching assistants, but that is of course a matter for local education authorities, which are the employers of assistants, not one that is directly for me.
    Mr. Richard Bacon: While we are on the subject of people in classrooms who are not fully qualified, will the Minister look into the case of my constituent, Mr. Christopher Read, who is sufficiently trusted by the nation to design electronic control systems for Trident nuclear submarines, but who cannot lawfully be given a secure employment contract to teach physics to 14-year-olds? Does the Minister agree that it should be possible for a school to provide secure employment that, while not obviating the requirement for the teacher to obtain fully qualified teacher status, would ensure that constituents such as Mr. Read are not put in the invidious position of having to apply for their own jobs?
    Mr. Timms: I have a great deal of sympathy with the hon. Gentleman, who makes an important point. Many people in schools do not have qualified teacher status but play an important part in raising standards. They do an excellent job. We do not want to reduce the standards and quality thresholds that are necessary in our schools. Qualified teacher status is vital for teaching, but others play an important part in schools.
    Ms Debra Shipley: Will my hon. Friend accept an invitation to address Dudley teaching assistants? The meeting is organised by my constituent, Maggie Stowe. Teaching assistants have done a fantastic job in my constituency to improve standards, but there are uncertainties about their role. Will my hon. Friend address them directly about their pay and conditions?
    Mr. Timms: I am grateful for that invitation, but I was in Dudley last week so it may be a little while before I can pay a return visit, although I would like to do that.
    Last November, my right hon. Friend the Secretary of State set out a new vision for the school work force. We are developing proposals based on that in consultation with all the teaching unions and the support staff and teaching assistants' unions. The proposals envisage a bigger role for assistants in class supervision, lunchtime administration, administering tests, providing individual support for pupils and covering for teacher absence. I am sure that my hon. Friend's constituents will be encouraged by that and I look forward to putting the proposals directly to them if the opportunity arises.
    Mr. Mark Field: I join the hon. Members for Workington (Tony Cunningham) and for Stourbridge (Ms Shipley) in praising the valuable contribution of classroom assistants. Like me, the Minister represents a central London seat and he therefore knows that there is a great teacher recruitment crisis in London. Are classroom assistants intended to replace teachers in central London or does he hope that they will contribute to ensuring that vulnerable children in central London get a first-rate education?
    Mr. Timms: No, we do not intend classroom assistants to replace teachers. It is vital to continue our successful

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    efforts to recruit more teachers in London. We shall make some announcements about that shortly. Between 1979 and 1997, the number of teachers in England declined by 48,000. Since 1997, that figure has risen by more than 20,000. Indeed, it has increased by more than 9,000 in the past year. We are therefore making genuine progress.

    Racial Tension
    Paul Flynn: What proposals she has to reduce racial tension in schools. [56346]
    The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis): From September, as part of the national curriculum, pupils in secondary schools will, for the first time, be taught about the importance of mutual respect, tolerance and understanding between people of all ethnic, religious and cultural backgrounds.
    Paul Flynn: Racial tension is remarkable for its scarcity. Most schools, such as those in my constituency, are wonderful crucibles of racial harmony, where the children play, learn and pray together. It is a joy to see an assembly where children have their hands joined together in prayer—some in the Christian tradition, and others with their hands cupped in the Muslim tradition, but all saying the same prayer. Is not it desirable to create as far as possible balanced communities in schools of mixed religions and ethnicities to ensure that we avoid creating ghettos in 10 or 20 years?
    Mr. Lewis: I agree with my hon. Friend that we should celebrate and highlight the excellent race relations that characterise so many of our schools where pupils from different backgrounds, religions and cultures are actively encouraged to work together, respect each other and learn about each other's cultures and religions. However, we should not dump on faith schools responsibility for tensions in communities. I believe that faith schools play an important part in promoting better understanding and tolerance between people of different religions and backgrounds. We should celebrate achievement and the excellent relations in most of our schools. We shall continue to build on that.
    Dr. Julian Lewis: That was a very balanced response from the Minister. Does he agree that, where there are cases in schools of persistent racial tension, perhaps involving bullying by certain pupils, persistent offenders might have to be removed from the school? If so, does he also agree that it would be unfortunate, to say the least, if the authority of a head teacher who was determined to stamp out racial tension or racial bullying in his school were to be overruled by an appeals panel reinstating someone whom the head teacher had thought fit to be removed? Will the Minister look again at this question?
    Mr. Lewis: I am not sure that being described by the hon. Gentleman as "balanced" will do me much good. On the serious point that he has made, we cannot tolerate racism—particularly racist bullying—in our schools. It is important that we support head teachers in making the decisions that are right for their school, taking account of
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    the circumstances. If a head teacher felt that racist bullying had taken place, it would be inappropriate for an appeals panel to overturn that decision.
    Fiona Mactaggart: Does the Minister agree that, where racial conflict exists in schools, it often arises from competition between neighbouring schools rather than from within an individual school? Will he help to ensure that all schools have better relations with, and a better understanding of, people in other schools in their community, so that such tensions between schools does not become the kind of racial tension that inflicts problems on our communities?
    Mr. Lewis: My hon. Friend is absolutely right. In the context of the disturbances in some of our towns during the summer months last year, we have made it clear that a fundamental part of tackling the very real issues in those communities involves schools coming together in a far more organised and systematic way, to bring together young people from different schools and communities to participate in sporting activities, for example, and involving the youth service. It is right that we should move away from an era of competition between schools, and that we should support co-operation and partnership.
    Mr. Graham Brady: Both sides of the House are united in wanting good race relations in our schools, and, as the Minister has accepted, the vast majority of schools already enjoy harmonious race relations. Is it really necessary, therefore, to require all schools, as of next week, to draft and publish a new race relations policy, and to require them to collect data and analyse pupil performance, admissions, discipline and exclusions by racial group? Is not the Minister concerned that, for good, harmonious, well-led schools, this will be yet another unnecessary bureaucratic burden, and yet another diversion from the central priority of raising education standards for all our children?
    Mr. Lewis: No, I do not accept that view. It is important to understand that we have let down far too many children for far too long, for a whole variety of reasons including background and ethnic origin, in terms of under-achievement and low aspirations. One of the fundamental reasons for maintaining those data is to measure our progress and ensure that no child in this country is left behind.
    Mr. Barry Sheerman: Does my hon. Friend realise that many of us, on both sides of the House, welcome the initiatives that he has introduced, and which the Opposition Front-Bench spokesman has just criticised? Does my hon. Friend also understand, however, that many of us are concerned about some of the changes that have taken place in our communities since last summer, and since 11 September? Would he agree to meet a group of us from particular constituencies to talk about the serious concerns that we are picking up at constituency level about race relations between pupils?
    Mr. Lewis: My hon. Friend makes an important point, and I would be delighted to meet him and other colleagues who have similar concerns. It is important to stress that Members of Parliament have an important leadership role, as do local councillors, in tackling these issues and getting

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    to grips with them at an early stage—rather than avoiding or denying them—and being a force for good in their communities.

    University Entrants
    Tony Wright: What proposals she has to broaden the social class composition of university entrants. [56348]
    The Minister for Lifelong Learning (Margaret Hodge): We are determined to encourage more young people from lower income backgrounds to enter higher education. We want to improve staying-on rates and to raise attainment levels in schools, but we have also committed more than £190 million to the excellence challenge programme, to raise the aspirations of young people in some of the most deprived areas of the country. The Higher Education Funding Council is also providing significant additional funding—about £180 million in 2002–03—for widening participation.
    Tony Wright: I am grateful for that answer, but is not the difficulty that, although participation rates as a whole have increased, participation of the poorest economic groups has actually declined? That shows that we are getting something wrong—perhaps aspects of the student finance arrangements, as the Audit Commission has pointed out. Can the Minister assure us that, when the results of the student finance review are published, that issue in particular will be tackled? Can she also confirm that the review will not be determined simply by the needs of the Treasury?
    Margaret Hodge: My hon. Friend raises a really important point that I have often alluded to in the House. Although we have increased the number of young people entering higher education, the gap between the number of entrants from higher and from lower income groups has not narrowed. If we are serious about social inclusion, we need to tackle that problem. My view has always been that there are three strands to this issue: achieving better attainment levels at school by encouraging people to stay on, getting young people to aim higher, and getting the student funding regime right. We are tackling all three strands to ensure that those from low-income families are not deterred from attending university because of debt, or the fear of debt.
    Mr. Elfyn Llwyd: May I suggest to the hon. Lady that, regardless of the results of the review, the obvious answer is to reintroduce maintenance grants? That is the problem that is holding us back.
    Margaret Hodge: That might be the hon. Gentleman's view, but mine is that the issue is much more complicated than that. Raising attainment levels and aspiration levels are difficult matters. I again draw the House's attention to a survey that showed that 44 per cent. of young people in the three lowest socio-economic groups never think of university as an option during their school years. That means that they are not encouraging themselves to aim higher, and nor are their friends, families, teachers or career advisers.
    Mr. Dennis Skinner: Does my hon. Friend agree that we must get the problem with the grant settled
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    soon? Does she also accept that, in impoverished areas such as mine, in which the pits have closed, it is very important that further education buildings are kept open? Is it not pathetic for the Tories to talk about those at the bottom of the scale, given that 10 out of the 11 members of the shadow Cabinet send their kids to public school, including the Leader of the Opposition, who, it is now revealed, sends his kid to Eton? That is not a good message, is it?
    Margaret Hodge: I certainly feel that the experience of sending one's own children to school adds hugely to one's understanding of the issue, and I must say that I would never have denied my four children the privilege of a state education. I also recognise the importance, as my hon. Friend says, of ensuring proper further education opportunities for our young people throughout the country. We will settle the issue of student funding as soon as a proper, sustainable system is in place. The issue must be seen in the context of all the things that we want to do in education—including in further education.
    Mr. Roy Beggs: Does the Minister accept that many families have no history whatever of participation in further and higher education, and that as a result no member of such families is able to act as a role model and give advice? Does she agree that more universities could adopt schools in socially deprived areas? Through the links thereby developed, they would remove apprehension and encourage youngsters with potential to realise it in full by applying for a university place.
    Margaret Hodge: The hon. Gentleman makes an extremely important and pertinent point. It is important that universities move away from their traditional practice, which was simply to wait for applications to come to them. They must go out and engage with the community, and particularly with young people who have not considered university as an option and whose parents probably did not go to university. I reassure the hon. Gentleman that through the excellence challenge programme, we are seeing a sea change in the way in which universities are responding. Every time I visit a university, I am shown the links that they are establishing with young children at school. It is never too soon—we can start at the age of 11, 12 or 13—to raise the aspirations of talented young children in our schools.
    John Cryer: My hon. Friend will be aware that the number of students studying the sciences, particularly chemistry and physics, is woefully low. Is it not plain that the abolition of maintenance grants was a disincentive to youngsters from poorer backgrounds entering higher education in the first place? If they do enter higher education, they tend to do courses that lead to higher paid jobs—it is fairly widely recognised that doing science will not lead to highly remunerated jobs. Is not the reintroduction of grants the answer?
    Margaret Hodge: There is no evidence to suggest that young people from lower income backgrounds are choosing not to go to university because of the funding system. We are proactive in this matter because we want to reduce the participation gap. Furthermore, although there is a decline in the number of people going into

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    engineering, science and related studies, the causes are far more complicated. Following the Roberts review, we are beginning to see what policies we can implement in our schools and beyond, and across gender, to encourage more young people to take up sciences in schools and go on to study them at university. It is not a question of the money they earn afterwards; they can earn plenty of money, and there are good career opportunities for them in the science-related subjects, too.
    Mr. John Wilkinson: Encouraging high aspirations on the part of poor children is laudable; no one would deny that. But is it not particularly tragic that Her Majesty's Government's education policies have militated against those children achieving their aspirations? Is it not true that abolishing the assisted places scheme and making it harder for good grammar schools to maintain selective systems have damaged the chances of poor children? Would it not be absolutely fatal if universities were to skew their admission standards from an impartial assessment of scholarship?
    Margaret Hodge: The hon. Gentleman ought to look at the facts which reveal that not many young people from working class backgrounds took advantage of the assisted places schemes. I would be happy to share that information with the hon. Gentleman if he so wishes. Since the Government have been in office, attainment levels have risen among 11-year-olds and 16-year-olds through to 18-year-olds and entry to university. The Government want to ensure that our brightest and best kids get opportunities at all universities. We are asking the universities to ensure that they have sophisticated means to hunt out the best, and many are doing this of their own accord. We want an intellectual elite, not a social elite.

    Truancy
    Caroline Flint: What measures she is proposing to tackle the problem of truancy. [56349]
    Colin Burgon: What further plans she has for helping teachers to improve discipline in schools. [56351]
    The Secretary of State for Education and Skills (Estelle Morris): It is vital that we tackle both truancy and bad behaviour in schools. In the past five years, we have invested more than £600 million to support teachers in dealing with bad behaviour and tackling truancy. Earlier this month, we allocated a further £66 million of funding to targeted local education authorities to pilot our long-term strategy on improving behaviour and attendance.
    Caroline Flint: I congratulate my right hon. Friend on the introduction of pupil referral units, which give many children who have been excluded or are frequent truants the chance of an education. However, my right hon. Friend will know that parents are part of the problem. In the Banbury case, one of the excuses used over two years about why a daughter was not in school was that a dog ate her trainers. I heard of an excuse used by a local parent after a week's half-term holiday. When the education welfare officer called round, she was confronted with the
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    excuse that the school uniform had been nicked off the washing line. I did not realise that school uniform was such a desirable fashion item.
    As we have found in Doncaster when truancy sweeps are held, many of the truants are found in the company of a parent, with no valid excuse. When visits are made to homes, parents have no valid excuse for why their child is not in school. However, the truancy teams have no powers to return a child to school if he or she is in the company of a parent. Can we strengthen the law in that regard?
    Estelle Morris: My hon. Friend is absolutely right. If we are to tackle the problem of truancy, we have to demand that parents work with schools. We cannot ask everything of teachers, nor can we blame schools for all the ills of society. The schools that have been successful have worked carefully with parents, and my hon. Friend gave good examples. She may be interested to hear that in the past four weeks we have held truancy sweeps in more than 230 places, mainly in urban areas. We funded the police to work with education welfare officers and more than 600 children were returned directly to school. For the parents who were with the other children—a sizeable number—the message was clear: "This is not on. Get your child in school and give teachers and schools a chance."
    Colin Burgon: In Tuesday's debate on discipline in schools, I was able to raise the issue of Team Teach, which is a programme that attempts to equip teachers with the necessary verbal and physical skills to confront difficult situations. Will my right hon. Friend evaluate that scheme and, if she thinks that it is of value, will she ensure that it is rolled out to all the secondary schools to which it would be applicable?
    Estelle Morris: I am interested to hear about that scheme, because I do not know about it. I will certainly evaluate it. If it proved to be a good project, we would make it available to schools so that they could choose whether to implement it. The point that my hon. Friend makes about training teachers is important. For too long, teachers could train to be teachers without any guidance on how to enforce discipline in schools. Children cannot learn unless their classroom is well ordered. Therefore, my hon. Friend will be pleased to learn that we will ensure that every teacher who completes training has had a sound grounding in how to maintain discipline in schools. Indeed, the project that he mentions could be used in initial teacher training as well for continuous professional development.
    Mr. John Baron: The latest Ofsted report has clearly stated that poor behaviour by a minority of pupils is the major reason for teachers leaving the profession, and in recent written answers the Government admitted that they do not know how many teachers and pupils are attacked by other pupils. When will the Government discover the scale of the problem so that they can deal effectively with it?
    Estelle Morris: The hon. Gentleman calls for us to collect information, and earlier in the week during the Opposition day debate, a Conservative Front Bencher said that we should collect data on children's violence against

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    children. Normally, we hear from the Opposition about the need to reduce bureaucracy and paperwork. Indeed, only this Question Time, the Conservatives have said that they do not want to collect figures on achievement by ethnic minorities, because that is added bureaucracy. They should get their message straight.
    We collect reasons for exclusion, so if the hon. Gentleman wishes to find out how many exclusions are because of violence towards teachers, he can do so. Without checking—so I am a little cautious about the figures—the number of such incidents has fallen slightly in the past year. However, I make nothing of that and I do not claim it as any improvement. It is important to collect data, as we do on exclusions, but we do not want to demand of schools that they collect data and return them to a host of organisations after every incident of child violence. We would sooner spend our resources, time and effort on supporting teachers in trying to eradicate that behaviour. That is the key to raising standards.
    Richard Younger-Ross: Will the Secretary of State look at the excellent initiative launched by Devon and Cornwall police with all the local authorities to stop truancy in the two counties? In so doing, will she hold discussions with the local authority in Devon and perhaps look at some of the work carried out in some Devon schools? Vyv Game, the deputy principal of Exmouth community college—the largest school in Devon—said:
    "If we can recognise the reasons for someone's behaviour we can try to do something about it. Prevention is better than cure."
    If the right hon. Lady agrees with that, will she tell us how depriving families of income helps in that understanding?
    Estelle Morris: My starting point is that it is crucial to get children in school and to keep them there to enable them to learn. One thing I can guarantee is that if a child from a financially deprived home truants from school, that child will not learn and attain. All that happens is that the cycle of deprivation passes into the next generation and we never, never break it.
    My starting point is that we should begin with support and cajoling; we should work with the parent and the child, try alternative forms of curriculum and as many innovative things as possible; but if, at the end of the day, the parent still does not accept their responsibility to send a child to school, we are faced with a decision. We must either turn our back, shrug and say, "There, let us condemn that child to a lifetime of poverty as well", or we take tough measures. Courts and others are right to take tough steps, but they are end of the road measures. In some recent cases, we have seen that they worked and that children are back in school and learning. At the end of the day, that is what we want.
    Mr. David Watts: May I inform my right hon. Friend that many schools in St. Helens face major discipline problems due to yobs trespassing on school premises? At present, that is not a criminal action. Will my right hon. Friend look into whether we can change the law to give our children more protection in school?
    Estelle Morris: I shall certainly look into that matter. I am not quite clear whether my hon. Friend is talking
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    about trespass during school time or out of school time. When one visits a school, one of the saddest things—although it is necessary—is to see how much has to be spent on securing buildings because of the behaviour of people in the community. The irony is that sometimes the school is the best-equipped place to serve the community, yet it is destroyed by the actions of an irresponsible few. I take my hon. Friend's point and although I am not sure what my conclusions will be, I am happy to look into it.
    Mr. Andrew Turner: The Secretary of State has loyally given a following wind to the Prime Minister's latest headline grabbing gimmick—withdrawing benefits from parents of truants—and in the debate on Tuesday her hon. Friends talked about holding consultations to work out whether that would be practical, so why was I told, when I tabled a question to her Department on the subject, that any consultation would be undertaken by the Department for Work and Pensions?
    Estelle Morris: Because child benefit is administered by the Department for Work and Pensions—the answer is quite simple. In the name of joined-up government—that is what we are—I am in close contact with my right hon. Friend the Secretary of State for Work and Pensions, and when the consultation takes place, no doubt part of it will reflect the contributions made by my Department to that debate. The important thing is that we debate and consult—I do not care two hoots about which Department that emanates from.
    Kali Mountford: Is it not the case that the presence of drugs in schools is a major impediment to overall discipline, and that young people in school who are under the influence of drugs, taking drugs or dealing in drugs are not in a condition to learn? They affect their own learning and that of others. Do not schools need to work with the police, local authorities and social and health services to deal with that matter? What are my right hon. Friend and her Department doing to help local education services and schools to tackle that particular problem?
    Estelle Morris: My hon. Friend is right. We learn quickly that we cannot protect schools from what is going on in the wider community. Often, schools are havens—well ordered and disciplined places; sometimes they are the most disciplined place in a child's life. However, we cannot always protect children from the activities of the neighbourhood so, sadly, my hon. Friend is right: there are incidents of drug taking and inappropriate behaviour in schools. There is no easy solution. That is why the Under-Secretary, my hon. Friend the Member for Bury, South (Mr. Lewis), who has responsibility for young people and learning, held a seminar this week where we could gather together those people who are beginning to develop good practice and take it forward. Without going into that matter, my hon. Friend made one important point: this has to be about all the services coming together: police, social services, the health authorities and mentors as well as the education service. If we can get the expertise from all those professionals, we may stand a chance. On top of that, we may make progress with parental support. I do not underestimate the nature of the difficulties, but progress has to be made as the problem is a barrier to real social cohesion and advancement.

    Behavioural Special Needs
    Tim Loughton: What plans she has to improve provision for children with behavioural special needs. [56350]
    The Minister for Lifelong Learning (Margaret Hodge): Our new special educational needs code of practice provides sound advice on how best to meet the needs of children with emotional and behavioural difficulties. We have also established a working group to look at the future role of special schools, including provision for children with emotional and behavioural difficulties. The group will be reporting to Ministers in the autumn.
    Tim Loughton: In autism awareness year, the incidence of reported autism among schoolchildren is at record levels and the National Autistic Society reported recently that one in 86 children have educational difficulties associated with autism or Asperger syndrome. Is the Minister aware of the Mental Health Foundation report that estimated the lifetime cost resulting from autism and associated learning disabilities at more than £2.9 million per person, of which 70 per cent. is made up of living costs and only 7 per cent. is spent on education? Is that not a false economy and should she not be doing more to redress that imbalance and to recruit specialist teachers to work in the classroom to identify the problems and intervene at an early stage to give children with autism a better chance of getting a better start as adults, thereby saving extra costs later in life?
    Margaret Hodge: I agree that we need to invest and get better at identifying children with special educational needs and those relating to autism as soon as we can. We have started the work on that. We are about to produce guidance on children from nought to two, which will ensure that we can work across departments—not only with the education services, but with social and health services—to identify children's needs earlier. We then have to ensure that we have the proper services in place to respond to those needs so that those children can develop their potential. We are at the start of developing those services. We have a lot more to do, but we are on the right track.
    Mrs. Eleanor Laing: I am pleased to hear the Minister's reply to my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), but does she realise that although that is what she says in the House, what is happening out in the real world is different? Will she admit that many parents of children with special educational needs have long and tiring struggles to enforce the terms of their child's statement simply because of the vicious triangle between the three departments—health, education and social services—which do not work together at present? Will she undertake to work more closely with other Departments and encourage that approach right down the line to the local authorities and, in so doing, will she also find out how many children are autistic and have other behavioural problems? At present, the Government do not have that information. I am pleased to hear that they are beginning work on it. Will she give the House an undertaking that
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    she will accelerate that work? If we do not know how many children will need special education in the years to come, how can we possibly plan for it?
    Margaret Hodge: Our record in government is much better than that of the Conservatives when they were in office. One only needs to consider the fivefold increase in the standards fund, the £220 million access initiative, and the extra £760 that we are going to invest in every child during these two spending review periods to realise that we are putting our money where our mouth is. I agree with the hon. Lady that there is much more to do. We need to get better data and that is why we ran the pilot in July 2001 among 200 schools to get some idea of the broad range of special educational needs. We are considering implementing that throughout the country in 2004. I also agree with her that we need to get better at working across professions.

  The Solicitor-General was asked—
  SOLICITOR-GENERAL

    Crown Prosecution Service
    Dr. Phyllis Starkey: What assessment she has made of the results of the trials under which the Crown Prosecution Service rather than the police decides on the charge against defendants. [56378]
    The Solicitor-General (Ms Harriet Harman): In his review of the criminal justice system, Sir Robin Auld proposed that the CPS should take over responsibility for charging suspects, which is currently done by the police. To identify the practical issues that would need to be addressed if that change were made, we have set up pilot schemes in five areas, and the results of those pilot schemes will be looked at this summer.
    Dr. Starkey: I thank my right hon. and learned Friend for her answer, but may I tell her that a couple of my constituents, who have had experience of the CPS either refusing to press charges or downgrading charges against defendants, have been outraged by those decisions and the total lack of adequate explanations to them, as victims of crime, as to why the CPS took those decisions? May I ask her to ensure that, in considering the trial, communicating the decision to the victim is also considered and that, if the CPS takes the decision, it should communicate its reasons for doing so to the victim and not leave that to the police, who often disagree with the decision of the CPS?
    The Solicitor-General: My hon. Friend raises a number of important points. First, she talks about charges that have been made by the police subsequently being dropped and the disappointment that that causes the victim. It is also unfair on the defendants to have charges hanging over them. One of the charging pilot schemes' objectives is to ensure that a charge should never be made in cases that are going nowhere because of insufficient evidence and that therefore it is recognised from the outset that it is not a runner. That certainly appears to be happening in those pilots.

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    As for the explanation to the victim if charges have to be dropped or changed, we want to ensure that far fewer charges are in fact dropped or changed, but in the old days a charge could be dropped and sometimes the victim would not be told and only read about it in the newspapers. My hon. Friend is absolutely right to suggest that that is quite wrong. That is why we have rolled out a national programme under which the CPS tells victims what is happening in a case and explains why it is happening.
    Norman Baker: Does the Solicitor-General accept that there is a further problem: sometimes the police second-guess the CPS and do not put evidence before it because they wrongly believe that the CPS will not prosecute, whereas it may well do so? Is that not a particular problem with sex offences, where the police perhaps conclude that, if there is no victim statement, they are unable to proceed with the case, whereas the CPS would be prepared to consider such cases on the basis of other evidence that might accrue?
    The Solicitor-General: The hon. Gentleman is right. The problem is not just that cases are charged and then dropped, but that good cases are not taken to court because the police think that the CPS would not consider that there was enough evidence. The idea of the charging pilot schemes is that the CPS should work closely with the police at the outset, give advice about the nature of the evidence needed and assess the amount of available evidence, so that it can get the charge and the evidence right and the case can proceed swiftly to court.

    Youth Justice Inspectorate
    Mr. Bill O'Brien: If she will make a statement on the progress made by the new inspectorate on youth justice issues; and if she will make a statement. [56379]
    The Solicitor-General: The inspectorates of the Crown Prosecution Service, the police and the courts carried out a joint inspection into youth justice in February last year. Today, they have published the report of their follow-up inspection, and I have placed a copy of it in the Library. The target of halving the time from arrest to sentence has been achieved, but there are still some areas of the country where further progress needs to be made.
    Mr. O'Brien: I thank my right hon. and learned Friend for that reply. Youth crime is causing a great deal of concern among many of my constituents, including the elderly and vulnerable members of our community. Street crime and the theft of mobile phones are significant among the crimes committed by young people. I am interested in the work of the inspectorate and its proposals on how to crack down on youth crime. What are its proposals on the delivery of youth justice and the successful prosecution of criminals in the courts? What help is to be given to the victims of crime?
    The Solicitor-General: My hon. Friend asks about the inspectorate, which gives me the opportunity to thank warmly the inspectorates of the courts, the police and, in particular, the CPS, which led the inspection, for the work that they have done. The combined inspectorate has gone
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    through things with a fine-toothed comb, not looking just at the police, the courts or at the prosecution, but at how the entire system is working, and it is making proposals. It has been able to identify good practice, and encourage others to build on it, as well as to note those areas where more progress needs to be made. There has been progress on our pledge to halve the time that it takes to bring a youth to justice, which is a significant achievement on which the police, the courts and the CPS should be congratulated. We are making further efforts in relation to street crime, of which the House will no doubt be aware.
    Miss Anne McIntosh: I am delighted that the Government have adopted what was effectively the content of my ten-minute Bill, albeit 10 years later, to reduce the time taken to bring young offenders to trial. Does the Solicitor-General share my concern that young offenders who are terrorising and vandalising towns such as Thirsk in the Vale of York are sometimes arrested two or three times in as many months but are simply not being prosecuted? What does she propose to do about that?
    The Solicitor-General: Our objective is to ensure that more offenders are brought to justice. The hon. Lady makes the point about youth offenders and thanks the Government for taking up her Bill. I wonder why the previous Government did not take up her Bill—[interruption.] They could easily have taken up the issue, but I shall move swiftly on.
    When we took office, the average time between the arrest and conviction of a young person was 142 days, which was too long. We are proud of the progress that has been made on that, but we are not complacent, and more needs to be done.

    Death in Custody
    Mr. Chris Bryant: What criteria are applied when deciding whether to prosecute where a death in police custody has occurred. [56380]
    The Solicitor-General: When deciding whether to prosecute, in all cases, including those in which there has been a death in a prison or a police station, the Crown Prosecution Service applies the code for Crown prosecutors. First, it considers whether there is enough evidence to provide a realistic prospect of conviction, and, secondly, whether the prosecution is in the public interest.
    Mr. Bryant: I thank my right hon. and learned Friend for that answer. I am sure that she will be delighted, as I am, that the number of deaths in custody has fallen dramatically in the last few years; indeed, it has more than halved in the last four years, which is good news. Every time there is a death in custody, however, local communities' trust in the police is undermined. How can we make sure, in any consultation process that we undergo to change the system of setting criteria, that we increase public confidence in the system to deliver justice for everyone?
    The Solicitor-General: My hon. Friend is right. People need to be absolutely confident that those who work in the criminal justice system, whether in the police or in prisons, are not above the law. The Attorney-General is well aware of the concerns that have been expressed about

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    prosecutions after deaths in custody. He has instigated a review and consulted and involved in that process not only the prisons, the police, the Crown Prosecution Service and the courts but the families of those who have died in custody. The state has a special responsibility for people in custody and we must make sure that the system for answering relatives' questions after someone has died in custody is open, fair and accountable.
    Mr. William Cash: Would the Solicitor-General comment on the remarks made by his honour Judge Gerald Butler in 1998, when reporting at the request of the then Director of Public Prosecutions on the quality of decision making by the CPS in relation to deaths in custody? He said:
    "There is a powerful public interest in the prosecution of police officers who have committed an offence of such gravity".
    Despite having the same burden of proof in both inquests and criminal trials—beyond reasonable doubt—why have verdicts of unlawful killing recorded at inquests when a person has died in police custody not led to more prosecutions of police? Would she comment on whether
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    there is a danger that, because the CPS is so closely linked to the police service, the self-interest of the police has led to the interests of justice being overridden?
    The Solicitor-General: It is very important that the Crown Prosecution Service maintain its independence, that that be recognised, and that it make independent decisions. It is also important, however, that investigations have a measure of independence so that they can command public confidence. His honour Judge Butler, to whom the hon. Gentleman referred, has been involved in the review, which is focusing on prosecutions. He has looked at the paperwork in previous cases. The Attorney-General has gone wider and has not only looked at the different agencies involved but talked to the relatives concerned.
    One of the problems is that relatives often feel left in the dark. They do not know the difference between inquest issues, they do not know what points have to be proved in a criminal court and they are, generally speaking, not told what is going on. As well as tackling delay in the system, we also look to the review to ensure that victims' relatives are kept involved in, and informed of, the process.

Business of the House
12.35 pm
Mr. Eric Forth: Will the Leader of the House tell us the business for next week?
The President of the Council and Leader of the House of Commons (Mr. Robin Cook): I am pleased to announce that we will have a busy week after the Whitsun recess. The business is as follows:
MONDAY 10 JUNE—Consideration in Committee and remaining stages of the National Insurance Contributions Bill.
TUESDAY 11 JUNE—Progress on remaining stages of the Nationality, Immigration and Asylum Bill.
WEDNESDAY 12 JUNE—Conclusion of remaining stages of the Nationality, Immigration and Asylum Bill.
THURSDAY 13 JUNE—Progress on remaining stages of the Enterprise Bill.
FRIDAY 14 JUNE—The House will not be sitting.
The provisional business for the following week will be:
MONDAY 17 JUNE—Conclusion of remaining stages of the Enterprise Bill.
TUESDAY 18 JUNE—There will be a debate on European Affairs on a motion for the Adjournment of the House.
WEDNESDAY 19 JuNE—I should like to advise the House that subject to receiving a message from the other place, the day will consist of a half-day Opposition debate until 7 o'clock, followed by a motion to concur with their Lordships on the establishment of a Joint Committee on the House of Lords.
THURSDAY 20 JUNE—There will be a debate on Energy: Towards 2050, on a motion for the Adjournment of the House.
FRIDAY 21 JUNE—Private Member's Bills.
The House will also wish to know that on Tuesday 18 June 2002, there will be a debate relating to authorisation of human and veterinary medicines in European Standing Committee C.
Details of the relevant documents will be given in the Official Report.
[Tuesday 18 June 2002:
European Standing Committee C—Relevant European Union documents: 13361/01; 14591/01: Authorisation of human and veterinary medicines; 6240/02; Authorisation of traditional herbal medicinal products. Relevant European Scrutiny Committee Reports: HC 152-xii and HC 152-xxiii (2000–01)].
Mr. Forth: I thank the Leader of the House for giving us that statement. Given his legendary ability to read documents at high speed and digest every detail of their content, may I assume that he has thoroughly absorbed document HC 844, issued by the parliamentary ombudsman? Assuming that he has, I will not need to remind him of its contents. However, with your permission, Mr. Speaker, I wish to give one quotation from the report—although I could give many. On page 16, paragraph 4.13, the ombudsman says:
"Throughout this part of my investigation I had received no direct communication from the Cabinet Office… they appeared to be withholding papers, which they readily acknowledged existed, from
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my investigation. I was deeply concerned at this development. Such a refusal strikes at the very heart of my Office's function. Together with the lack of co-operation from the Home Office it made it impossible for me to corroborate the account contained in Sir Anthony's report with respect to the information sought by Mr. M. Given this attitude, which had effectively made my investigation unsustainable, I found myself in the position of being quite unable to confirm"—
and so on.
That goes to the heart of the Government's repeated claims that they are in favour of freedom of information, open government, transparency and clarity. Will the Leader of the House therefore arrange for an urgent debate to be held on the matter, because what the ombudsman says about the Government is very serious indeed? He is making serious allegations about the attitude of Ministers—and, I am sad to say, the officials under their control—to the whole process of investigation. I hope that the Leader of the House will accept that the matter merits urgent attention by the House, because it also goes to the heart of the relationship between the House and the Government. I hope that we shall receive his assurances on that subject.
May I remind the Leader of the House of what the Prime Minister said yesterday in reply to a brief exchange? Asked whether he agreed
"with the former membership secretary in his own constituency that the Labour party has ceased to become a democratic movement and has become a centralised mail order business",
the Prime Minister replied, rather typically:
"I do not believe that he"—
that is, the former membership secretary of the Sedgefield constituency—
"would have said that at all."—[Official Report, 22 May 2002; Vol. 386, c. 291–92.]
Will the Leader of the House therefore tell us whether a journal called Renewal exists, or whether he is aware of it? If it does exist, can he confirm whether it said—this is allegedly a quote from Renewal—that the Labour party had been
"replaced by mail order politics, where everything was run from the centre"?
I raise that question because yesterday the Prime Minister stated that he did not believe the person concerned would have said that, but those words are apparently a direct quotation from that individual. In order to protect his Prime Minister, surely the Leader of the House has to make a statement as early as possible to clarify whether the Prime Minister knows about that, whether the individual said those words or whether the Prime Minister, regrettably, was unable to clarify the truth of the matter to the House.
On another matter, Lord Levy is described in a newspaper today as
"an invaluable one-man money-raising machine."
I would call Lord Levy Tony's No. 1 crony—but no matter how one characterises him, is the Leader of the House satisfied that it is credible that a committee of six people, which includes Lord Levy, can vet donations to the Labour party? That is directly connected with Ministers' oft-repeated boasts that the Labour party is clean and above board with regard to donations and financial contributions.
We need to know whether the poachers and gamekeepers are indistinguishable, and whether the Labour party is serious, as it claims, about vetting its

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donations. Surely the Leader of the House, with his reputation for integrity, wants to clear that up. Can we have a brief statement from the Government about the relationship between donations to the Labour party, the committee that has been set up, and Lord Levy's role in that committee?
Mr. Cook: Yesterday I made a speech in which I suggested that if we want to restore the respect of the public for Parliament, we should try to rise above our tribal instincts. However, the right hon. Gentleman makes it terribly difficult for me rise above my tribal instincts, and I think that today I will fail miserably.
I have had an opportunity to study the ombudsman's report; I took it off the web this morning. I know that the right hon. Gentleman has disdain for anything that smacks of the web or the internet, but I recommend it to him as an easy and convenient way of getting access to public documents. As he has quoted paragraph 4.13, I refer him to paragraph 4.20, where he will find that the ombudsman states that he found
"very little in the way of documentation"—
Mr. Forth: Exactly.
Mr. Cook: On the contrary, the ombudsman had access to all the documents in the Cabinet Office. I concede that there was a delay, for which the Cabinet Office apologised. However, he did gain access to the documents. He sets out in paragraph 4.19 and 4.18 that he saw all there was to see, and found that very little documentation had been delayed.
The ombudsman's conclusion was precisely the same as the conclusion reached by Sir Anthony Hammond. Indeed, he explicitly said that he reached the same conclusion. I see no point in wasting the time of the House in examining further a matter that has been exhaustively examined by Sir Anthony Hammond, and on which the ombudsman has reached the same conclusion. Had the conclusion been different, there might have been a point to the right hon. Gentleman's question, but as the conclusion is the same, there is no reason why the House should waste its effort and time on that.
As for the other matters raised by the right hon. Gentleman, I regret to say that I have not recently had an opportunity to hold discussions with the former membership secretary of the Prime Minister's constituency party. I am aware of Renewal. As the right hon. Gentleman is also aware of it, he may know that it recently carried a very interesting speech by myself, which it reprinted as an article.
Renewal is one of the many examples of vigorous, open, intellectual and democratic debate in the labour movement. I would have more respect for the right hon. Gentleman's concern about democracy in the Labour party if he did something about democracy in the Conservative party. For instance, perhaps he should respond to the demand of Conservative activists that they should elect officers within their party, as we elect officers in the Labour party.
I have told the House before that I believe that Lord Levy has played a valuable and useful role in British foreign policy. During my time as Foreign Secretary,
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I found him very valuable in making sure that we had access in the middle east, and that we were able to get our message across. I regret very much the fact that his being engaged in trying to find a way forward in an area of great tension, where there is the potential for a great explosion, is constantly run down by the media and by the Conservative party.
As for the vetting of donations, I think it entirely healthy and proper that we should set up a committee—and be open about the membership of that committee—to consider the implications of any donation that we take. I wish that the Conservative party would now—finally—tell us from whom it took donations when the Conservatives were in office. The Conservatives can do it—I presume that they have not burnt the files, so they are somewhere in central office. The only donations they ever owned up to were those that they were obliged to disclose after we laid a legal requirement on them.
Mr. Dennis Skinner: Ask the ombudsman.
Mr. Cook: My hon. Friend makes an interesting suggestion. I may be getting tribal again, but perhaps I should encourage the ombudsman to make an inquiry at central office and see just how long the delay is before the Conservatives finally tell us from what companies and what countries they took money when they were the Government of Great Britain.
Mr. Paul Tyler: May I express my thanks to the Leader of the House for giving us a second day on the Nationality, Immigration and Asylum Bill—time that we requested and others agreed was necessary? In the light of recent developments, it is extremely important that we discuss those issues, especially those that were not covered in Committee.
While I am in a grateful mood, may I also thank the right hon. Member for Bromley and Chislehurst (Mr. Forth) for giving added publicity to my question to the Prime Minister yesterday? I am very grateful.
I read with great interest and welcome the speech that the Leader of the House made to the Hansard Society last night, but does he agree that the House must find better ways to discuss urgent and topical issues more thoroughly? Let me give two examples. First, there is the funding of democracy and political parties, which has just been mentioned. The Prime Minister goes on television to talk about it, the chairman of the Labour party talks about it, two prominent Conservative MPs were talking about it yesterday—even the CBI is now talking about state funding of political parties. When will the Government give the House time to debate that issue properly?
Secondly, I draw the attention of the Leader of the House to the adjudication by the pensions appeal tribunal yesterday in the case of a gentleman who served this country well in the Gulf and now suffers from Gulf war syndrome. The right hon. Gentleman will know of my interest as a long-time member of the Royal British Legion, which is concerned about the matter. Does he realise that the report in today's Daily Express, which I assume is now required Government reading, given that it is clearly their favourite newspaper, not only refers to the pay-out announced for Mr. Shaun Rusting, but states that his claim was adjusted—I think that is the best way to put it—by the Ministry of Defence so that it would not

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refer specifically to Gulf war syndrome and so open the door for other applicants? May we have an urgent statement from the MOD, not only about that adjudication, but about the way in which the MOD appears to have fiddled it?
Mr. Cook: First, I thank the hon. Gentleman for what he said about the arrangements for the Report stage the week after the Whitsun recess. In the light of the representations that were made, it was right to ensure that there was adequate time for the remaining stages of that Bill. On a number of occasions since the general election the Government have listened to representations about remaining stages and provided the House with adequate time to explore important issues. We regard the Bill as a very important one, which deals with a serious issue.
I also appreciate the hon. Gentleman's comments about my speech yesterday. I fully agree with him about the importance of making sure that our proceedings are topical and deal with the public interest. I look forward to the forthcoming report from the Select Committee on Procedure, which I hope will enable us to shorten the period of notice for oral questions and thereby ensure greater topicality in those that come before the House.
I cannot promise a debate on party funding because, as the hon. Gentleman will have observed, we have a crowded schedule at this time of year. My impression is that there is a lively debate going on about party funding, and the hon. Gentleman will be aware that no step can be taken in respect of party funding without a decision of the House, and therefore a debate in the House.
I am aware of the pensions appeal tribunal's judgment with regard to Gulf war syndrome. As the hon. Gentleman knows, it is a very recent judgment, and it is right for my right hon. Friend the Secretary of State for Defence to consider it carefully and respond to it in due course. However, the hon. Gentleman can take it as read that we take what has been said by the tribunal extremely seriously.
Mr. Derek Foster: My right hon. Friend will know that the Prime Minister is making an important speech today about science and research. He will know also that the spin-off from science and research in universities in the north-east will be crucial to the future prosperity of the north-east. Can we have a debate on this issue soon—although preferably not next week—so that we can explore the best ways of improving job creation by our universities?
Mr. Cook: I think that my right hon. Friend carried the House with him when he suggested that any debate that we may have should not take place next week. I very much welcome the Prime Minister's decision to give a major speech on science, research and technology. Sometimes, because of the press pressures on us and the agenda on the front pages, we overlook what are the fundamentally important and strategically significant issues in our nation, and I welcome the fact that the Prime Minister has chosen to highlight one of those strategic questions. My right hon. Friend may be aware that there is a forthcoming debate in Westminster Hall on the report by the Committee on Science and Technology, when I am sure many of these points can be aired.
Mr. Nicholas Winterton: I hope that the Procedure Committee will not disappoint the Leader
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of the House when it produces its report on parliamentary questions, but my question to him is somewhat different. Although I strongly regret the decision of the House 10 days ago to reject the Modernisation Committee's proposals for a Committee of Nomination for appointments to Select Committees, I believe that the House could well return to the matter at a later date, no doubt on the initiative of the Liaison Committee. However, the debate 10 days ago also concerned proposals for increased facilities and resources for Select Committees. Is the Leader of the House in a position yet to indicate when he may make a statement about those additional facilities and resources to enable Select Committees to do the vital job that they perform for the House of Commons?
Mr. Cook: I share the hon. Gentleman's regret. I must say that I was intrigued by the fact that 90 Conservative Members voted against the proposal, thereby reinforcing the existing powers of the Government Whips. No doubt they have their own reasons for having supported the Government Whips—and some day we may be able to fathom them. In the meantime, I repeat that although I regret the outcome, as Leader of the House I have to respect it. The House reached a conclusion. I am not going to concede that I was wrong—I still believe that I was right—but I do concede that the House has made a decision, and it would therefore take a very compelling argument for us to revisit the issue.
We should not lose sight of the fact that last week the House approved all the many other items from the Modernisation Committee report, and as the hon. Gentleman says, those included increased resources and staff for Select Committees. I am pleased to say to the House that, having got the approval of the House last week, we are making all progress on that, and I anticipate that those resources will be put in place over the next Session.
Mrs. Alice Mahon: The Leader of the House will be aware that at the moment President Bush is in Europe and, among other things, is seeking support for possible military action against Iraq. As President Bush has already consulted the Prime Minister on this matter, when will Parliament debate any possible action? When will the Government publish the dossier proving that Iraq has acquired weapons of mass destruction? Will we, as the Foreign Secretary said recently on the Frost programme, first seek a new mandate from the United Nations before we even consider President Bush's request?
Mr. Cook: As I have said to the House on a number of occasions, no decision on that matter has been taken, and a decision may never be taken. Plainly, should a decision be taken, the House would have to be consulted and there would have to be a full debate. With respect, I think that we have proved ourselves very willing to consult the House and debate these matters in the House, as witness the six full days of debate which we gave to the use of military force in Afghanistan. As for the other matter that my hon. Friend raises, it is clear that one of our strengths in the war against terrorism in Afghanistan was the

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international coalition of support. Plainly, any action in Iraq must also look for similar international support, and the UN is a good place to build such support.
Sir Michael Spicer: Will the Leader of the House give a progress report on his deliberations with the Lord Chancellor about amending the Data Protection Act 1998 so that Members of Parliament can once again represent their constituents' interests properly?
Mr. Cook: As the House will understand, I share Members' concern that when they are approached by constituents, they cannot take action on their behalf because it might breach the Data Protection Act. Plainly, that is not a suitable way in which to work; when our constituents approach us they expect us to do something—that is why they come to us. I am pleased to tell the hon. Gentleman that we are making progress on the proposal to introduce a statutory instrument to cater for the position of Members of Parliament and other elected people in public life; I hope that next month we will be able to clear the matter up.
Mr. Gerry Steinberg: I am sure that my right hon. Friend is aware of the Government's intention to fund the nursing care of residents in care homes, so that they benefit financially. Is he also aware, however, that a significant number of care homes, including Highfield Holdings in my constituency, have raised their residential fees by the amount paid for nursing care? Highfield Holdings has raised fees by about £69 a week, which means that residents are paying exactly the same as they were before, and are not getting the financial benefit that the Government intended. That is unacceptable and morally reprehensible. Will my right hon. Friend arrange for that to be debated in the House so that Members can express their views on that disgraceful action?
Mr. Cook: My hon. Friend raises an issue of concern to many Members who have been approached by constituents, and I fully understand and share his concern. The problem is known to the Department of Health, which has written to a number of homes that are raising their prices. Ultimately, they are private commercial institutions, and pricing is under their control, but the measure was introduced as public policy to relieve pressure on residents in those homes and their families. I very much hope that the people who run those homes will recognise that residents and their relatives should benefit most from that public money.
Mr. Alex Salmond: Can we have an early debate on the state of the food processing industry, with particular reference to the Albert Fisher group, which went into receivership today, jeopardising 3,000 jobs across the country? As the Leader of the House knows, Fisher Foods is the largest private sector employer in my constituency, with 700 jobs in its Fraserburgh and Peterhead factories, and this is an extremely anxious time for the workers and their families. What role does the Leader of the House envisage for Departments in securing
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the customer base of those profitable operations and finding an alternative buyer so that we can retain those vital factories in the north-east of Scotland?
Mr. Cook: I fully understand the hon. Gentleman's concerns about the impact of that development on his constituents. As I understand it, the operations will be run as a going commercial concern by the receiver for another six weeks; I hope that that will provide an interval in which an alternative buyer and operator can be found. The plants in the hon. Gentleman's constituency have received substantial investment in the past decade, and I understand that they are profitable and have a number of high-value prestigious clients, such as Marks and Spencer and Safeway, which is a testimony to their products. In those circumstances, of course we want another buyer to come forward. I assure the hon. Gentleman that the Government and the Scottish Executive will do anything that they can to help, but ultimately this is a commercial matter.
Mr. Kevin Hughes: I welcome the announcement by my right hon. Friend that we will have a debate on energy on 20 June, and I thank him for his good offices in helping to bring that about. Does he agree that Members will have an opportunity to take part in an important debate on the nation's long-term requirements, and will have the chance to talk about things like the new generation clean-coal technology?
Mr. Cook: Given the number of times that my hon. Friend has raised that matter with me over the weeks, I would have been severely disappointed if he, at least, had not thanked me for arranging that debate. Its title implies that we will be looking at energy until 2050, which is a long perspective but a necessary one. Looking at the future of our energy needs and their impact on the environment, the issues to which my hon. Friend referred are plainly relevant and are important to our investment in an efficient, effective and reliable energy supply in Britain.
Mr. James Arbuthnot: Will the Leader of the House please find time for an early debate on the way Ministers handle their correspondence? I wrote to the Secretary of State for Health on 11 April. It may seem to some people—not to me—reasonable to wait six weeks for an answer to a letter, but that letter was dated 11 April 2001. I have written time and again to ask for an answer and nothing seems to have happened. What has become of the ministerial targets for dealing with correspondence?
Mr. Cook rose—
Hon. Members: Write to him.
Mr. Cook: I am advised to write to the right hon. Gentleman. I am not aware that there is any letter from April 2001 outstanding with me. I obviously cannot respond to the right hon. Gentleman on the detail of his case, but I will happily take it up with the Department of Health. Plainly, I would like hon. Members to receive replies on time, and by and large Government Departments provide replies timeously. There will be the occasional bad case and I will certainly pursue it.
Mr. Graham Allen: Will my right hon. Friend find time today to bask in the

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congratulations of hon. Members in many, if not all, parts of the House on his pioneering work on pre-legislative scrutiny? That started online this morning on the Joint Committee on the draft Communications Bill. Is my right hon. Friend aware that many people throughout the UK have taken the chance to look at the website and make contributions'? The website is at www.parliamentlive.tv and the e-mail address is edemocracy@lse.ac.uk. Many dozens of people have already contributed to the evidence-taking, and many hon. Members have made contributions to the debate this morning. As that has been such a success, will my right hon. Friend ensure that all future Bills go through pre-legislative scrutiny, so that not only Members of the House but every member of our electoral community can participate in our debates?
Mr. Cook: This seems a good opportunity for mutual appreciation and congratulations, so may I congratulate my hon. Friend on the indefatigable way in which he has pursued the case for online scrutiny of legislation? The system started today in respect of the draft Communications Bill, and I am glad to hear from my hon. Friend that it is proving popular and receiving much public interest. The point of pre-legislative scrutiny is to allow the public and lobby groups to join in, so that legislation is not simply a matter for debate within Westminster. As to the future, as I have said before, my ambition is to secure an outcome in which pre-legislative scrutiny will become the norm, not the exception. Because of the capacity constraints, including in relation to the parliamentary draftsmen, it will take us some years to get there, but I am convinced that that is the right way to go. If Parliament seriously wants to shape the future of Government Bills, it must see them early and in draft.
Mr. Alistair Carmichael: Will the Leader of the House make time available for an early statement by the relevant Minister from the Department for Transport, Local Government and the Regions on the figures for deaths at sea published recently by the Maritime and Coastguard Agency? The right hon. Gentleman should know that the number of deaths at sea in Scotland last year rose to 84, as opposed to 54 the previous year. He will also be aware that that is a matter of great concern in my constituency, as last year saw the closure of Pentland coastguard station in my constituency and the Oban coastguard station in the constituency of my hon. Friend the Member for Argyll and Bute (Mr. Reid). There may or may not be a link between those facts, but may we have a statement so that the issue is given a proper airing?
Mr. Cook: I am grateful to the hon. Gentleman for raising that, which I understand must be a matter of deep concern to his constituents and to other constituencies that have sea-going fleets and constituents. I believe that I am right in saying that the closure to which he refers took place following a public inquiry, and that a tug has been deployed full-time within the area. However, the figures that the hon. Gentleman quotes are disturbing and we will look closely at the recent report to see whether there is any contribution that we can make to ensure that we bring down those figures in future years.
Mr. Alan Hurst: My right hon. Friend may have read the report in Monday's Daily Mirror
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concerning the condition of the railway line from London to Colchester. That line runs through the heart of my constituency, and thousands, if not tens of thousands of people use it to commute into London every day. In the light of the serious allegations that have been raised, and the concerns that there will obviously be in the public mind, will my right hon. Friend arrange for an early debate or statement on the condition of the nation's rail way tracks?
Mr. Cook: I am aware of the report to which my hon. Friend refers, and I think that I am right in saying that the information was taken unofficially over a 10-mile stretch of rail. The DTLR and Railtrack are seeking to obtain more details on what the filming involved and what it shows, and they will study it with great care. In the meantime, I shall ensure that the Secretary of State for Transport, Local Government and the Regions writes to him giving the Department's views on the study and the extent to which it may be valid.
Mr. Mark Hoban: This morning, yet another story emerged about the technical problems at the air traffic control centre in Swanwick in my constituency. The story follows reports that the Civil Aviation Authority has rejected the increase in fees proposed by National Air Traffic Services. Will the Leader of the House ensure that when the House returns from recess next month, the Secretary of State for Transport, Local Government and the Regions comes to the Chamber to make a statement on the technical reliability and financial position of NATS?
Mr. Cook: First, with regard to this morning's claims about NATS operators misreading heights of planes and being unable to read their new displays, NATS completely rejects those allegations. It remains put out that the integrity and competence of its staff have been questioned in such a manner and it is confident that nothing has happened to put the safety of passengers at risk.
On the new displays, when a new system is installed, it is plainly right to monitor it closely to ensure that it can be improved. That is happening at the present time.
The financial integrity of NATS was fully considered by the regulator when deciding whether prices and charges should be increased; he concluded that the increase was not justified in full knowledge of the financial background.
Mr. Tony Lloyd: May I refer my right hon. Friend to the situation between India and Pakistan? I hope that he agrees that it threatens not only our nationals, as the Foreign Secretary's correct decision to downgrade staffing at our posts in Pakistan shows, but huge numbers of dual nationals. Does he agree that if any situation in the world is genuinely globally threatening it is that between India and Pakistan, which are both now nuclear powers? One of them at least has made no commitment on no first use of the weapons. The possibility of war on an horrendous scale between the two countries is a global tragedy, and the prospect of such conflict being a nuclear war can hardly be contemplated. What facilities exist in this moment of near crisis to allow Parliament to be kept in touch and to give us the opportunity to monitor the situation and have an input as it unwinds?
Mr. Cook: I am glad that my hon. Friend has raised this issue, which is of grave concern. It must be

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of especially acute concern to hon. Members whose constituencies contain large communities that have community and family ties with the Indian subcontinent. The Government deeply regret that we have had to curtail some of our diplomatic operations and services in Pakistan. The reason for that is the growing terrorist threat in Pakistan; the decision was taken solely in the light of the safety and future of our nationals who are working for the British Government inside the country. That must quite properly be one of our first concerns. We have, however, maintained our consular provision, so we can still maintain, although possibly on a reduced basis, contact with British nationals and citizens in Pakistan.
On the wider issue that my hon. Friend raises, I am sure that the whole House will share his apprehension about the possibility of armed conflict between the two countries, which cannot be in the interests of either of them. In the event of any such conflict, there would be no winner: both would be losers. That is why all of us who are friends of both Pakistan and India and wish them well must do all we can to try to avoid such an outcome, and why the Foreign Secretary will visit the region next week to try to achieve the understanding that the world outside and the international community want on the avoidance of armed conflict.
Mr. Andrew Robathan: Can I take the Leader of the House back to the obstruction of the parliamentary ombudsman by the Cabinet Office to which my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) referred? Will he ensure that there is an early debate on the relationship between this Government and the ombudsman? I refer him to the ombudsman's fourth report of November last year, in which he said:
"This is the first occasion on which a Government Department has refused to accept the conclusions of the Ombudsman on a question of disclosure of information."
Is it not time, some seven months later, for the Government to give a response to that report and not continue to ignore it?
Mr. Cook: I have to say to the hon. Gentleman that the Government fully accept the conclusions of the ombudsman in today's report, which are entirely consistent with what we have said in the past. It is indeed regrettable that over a period of three months the ombudsman's request for access to files was not granted, and the Cabinet Office secretariat has apologised for that delay. I see no policy issue here, and I certainly see no reason to turn the matter into a party political dispute.
Mr. John Lyons: Several churches in my constituency have written to me about Malawi. My right hon. Friend will have heard Malawi mentioned in the House yesterday, and the subject is raised again today in early-day motion 1375:
[That this House notes the current plight of Malawi which faces its worst food crisis in nearly 20 years; acknowledges that the country is facing an immediate shortfall of thousands of tonnes of food; recognises that warnings of this crisis appeared three months ago; and calls on the international community to act with speed and generosity to avert disaster.]
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Malawi is facing a desperate situation—probably the worst for 20 years—as regards food shortages. Does my right hon. Friend agree that we need to give the House some time to discuss how we can help Malawi?
Mr. Cook: My hon. Friend is right to draw hon. Members' attention to the grave situation in Malawi, which is life-threatening to many of its residents. That is why in the course of this year we have provided additional support for humanitarian aid and for food assistance in Malawi. Indeed, only last month we announced another £1 million for that purpose. We are keen to work with the Government of Malawi to resolve this, and we hope that they will be able to work with us on acceptable terms of transparency to ensure that our assistance is getting through to the people whom we want to assist. I assure my hon. Friend that the Government are fully aware of the crisis in Malawi, understand the British public's compassion and concern about it, and will do all that we can to be of assistance.
Mr. Roy Beggs: The greatest disappointment arising from last week's Divisions on the Select Committee motions was the House's failure to back a call to increase representation on Select Committees for the smaller minority parties such as the Ulster Unionist party. All right hon. and hon. Members have to respect decisions of the House, but can the Leader of the House assure me and my colleagues in the minority parties that this most important of issues will not simply be forgotten about?
Mr. Cook: I know most of those who voted, although I do not have the list entirely off by heart.
Mr. Forth: I bet you do.
Mr. Cook: Yes, and I have a long memory, too.
I agree with the hon. Gentleman that it was a pity that the vote on the size of Committees fell owing to a technicality, because it referred to the Committee of Nomination after that proposal had been defeated in an earlier Division. If it is the will of the House, I am not averse to considering ways in which the House can have an opportunity to reach a decision on the matter, although I see no point in revisiting the prior decision.
Alan Simpson: I support the call for a debate in the House on the importance of science policy, not least because a document that has come into my hands, apparently produced by officials in the Department for Environment, Food and Rural Affairs at the behest of the biotech industry, would severely restrict the rights of scrutiny of genetically modified crop approvals. As the Leader of the House probably knows, it is currently possible to present in hearings scientific evidence about damage to soil ecology, the wider environmental impact, genetic contamination and the impact on the feed and food chain. Under the proposals circulating in DEFRA, all those grounds of scientific objection would be removed from the scrutiny process.
I am sure that hon. Members understand that the gap between sound science and soundbite science is filled by scrutiny and liability, and it would be disastrous if Government policy were seen to become a cash crop for private gain. Will the Leader of the House assure me that

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we can have a full debate in which the House can assert the principle that the shaping of Government science policy will be driven by the precautionary, not the contributory, principle?
Mr. Cook: We apply the precautionary principle to all environmental issues. I am not familiar with the document that my hon. Friend cites, and I would like an opportunity of studying it before I comment on it. I am sure that he will welcome the fact that we are undertaking a rigorous farm-scale evaluation of the trial of GM crops. The conclusions will appear in the next six to nine months, if I remember rightly. They will form part of an informed debate on the way forward for GM crops.
Mr. Michael Jack: We have just passed the first anniversary of the creation of the Department for Environment, Food and Rural Affairs. The Curry commission on the future of food and farming has reported; the European Union is formulating its proposals for a mid-term review of the common agricultural policy; throughout the countryside, there is increasing anxiety about bovine TB, and as we have heard, further concern about GM crops. Despite all that, there has been no debate on agriculture and food-related matters in Government time in the past 12 months. Will the Leader of the House review the matter and ascertain whether we can hold such a debate before the House rises for the summer recess?
Mr. Cook: The right hon. Gentleman makes a splendid case for DEFRA, which was created to bring together all the issues that affect not only agriculture but the wider economy in the countryside, other rural issues and the environment. I am pleased to say that DEFRA has worked hard and successfully on that in its first year.
I am aware of the request for a debate on agriculture and wider countryside affairs, and I appreciate hon. Members' interest in the subject. I cannot promise a debate before the Whit recess, but I shall tuck the matter away for future reference.
Mr. James Wray: Will my right hon. Friend consider the World Health Organisation's statement that it is worried about the childhood asthma epidemic in Britain? There is an obstacle in the form of the Health and Safety at Work etc Act 1974 because although it covers children's medical needs, it does not allow for people who look after children in schools to minister to those needs.
Mr. Cook: I am well aware of the alarming increase in respiratory diseases, of which asthma is one. That is one of the reasons why the Government have placed greater emphasis on and given greater priority to public health issues. We must focus on prevention as well as the much greater resources that we have provided for more nurses, doctors and beds and the treatment of diseases. I was not aware of my hon. Friend's specific point, but I shall draw it to the attention of the Department of Health.

English National Stadium
1.17 pm
The Secretary of State for Culture, Media and Sport (Tessa Jowell): With permission, Mr. Speaker, I want to make a statement on the progress of the national stadium project. [Interruption.] The right hon. Member for Bromley and Chislehurst (Mr. Forth) must wait and see. It fulfils my commitment to the House on 7 May to update hon. Members before the Whitsun recess.
I want to deal with four main points. First, I shall consider the extent and nature of Government responsibility for the Football Association project. Secondly, I shall deal with the allegations that arise from the James and Tropus reports into the early stages of the tendering process. Thirdly, I shall update hon. Members on progress since my last statement on 7 May—perhaps it was not technically a statement, because it was made in response to a private notice question from my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). Fourthly, I want to comment on the lessons learned and the changes made consequently.
Clearly, the project is primarily a matter for the FA. It wants a national stadium at Wembley and it is prepared to pay for it. However, it is a clear principle that big infrastructure projects require some Government engagement, whether financial or facilitating. Patrick Carter's report made that clear. Government support is plainly a factor in the market's assessment of such a project. The first Wembley proposal was over-ambitious and poorly managed. The tendering process was flawed and secure bank lending was not achieved. Costs escalated and the Government's role was ambiguous. It was these weaknesses that led to delays, to the request from the FA for extra public funds, and to the Government's decision to ask Patrick Carter to carry out a full review of the project's feasibility.
The Government can decide to support the Football Association or we can walk away. If we walk away, it will almost certainly stop the project in its tracks. We cannot, should not, and will not take over the direction of the project. That remains clearly with the FA. However, when public funds are committed to a project, the Government clearly have a responsibility to ensure that proper safeguards are in place to safeguard public investment, and to secure the improvements to the management and governance of the project necessary for success. That is what we are doing.
We are insisting on best-practice public sector standards—which are higher than those that apply in the commercial sector—to protect the taxpayer and the lottery player. That should also reassure the market that this is a worthy project to invest in. Once those measures are in place, it will be appropriate for us to meet some of the non-stadium infrastructure costs, and we have identified £20 million for that purpose. Of course, we also need to stay engaged with the project to protect the public interest in the £120 million lottery grant made by Sport England.
Hon. Members will have read much in recent days about the James and Tropus reports into the procurement of the stadium project. These reports investigated alleged irregularities in the tendering and procurement processes, and weaknesses in the corporate governance of the project. The allegations applied specifically to the period from 1999 to the summer of 2000, and they make

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disturbing reading. That is why, when I saw the James report in December last year, I set clear conditions that this project had to be cleansed before any further commitment could be made by the Government. [Interruption.] We note the hoots of laughter from the Conservatives, for whom such matters of public finance are clearly irrelevant.
It is important that the allegations are now considered in the context of the progress made since my statement to the House on 19 December. The four conditions set as a result of the availability of David James's report were: a full value-for-money assessment of the construction agreement to be undertaken by an independent assessor; that Wembley National Stadium Ltd. supply a copy of the James report to the National Audit Office; that significant changes be made to corporate governance; and that legally binding agreements for the financing of the stadium, from whatever source, be concluded.
I should make it clear to the House that I do not believe that there have been any new disclosures which add to the concerns previously identified. It is important to note that David James's report did not find any evidence of criminal impropriety; nor did it recommend re-tendering the contract for rebuilding Wembley. The most important question to be answered, therefore, was whether the flaws identified by the James report in relation to procurement and tendering had irrevocably damaged the project, on grounds of cost, propriety or deliverability. The expert judgments suggest that they have not.
In December, I asked both the FA and WNSL to publish the James-Berwin Leighton Paisner report. For legal reasons, however, WNSL felt unable to do so. A publishable version has now, finally, seen the light of day. Much of what I have set out is history, but it is history from which we must learn. Changes have been made, particularly since December. I now wish to look to the future, because in many ways as much progress has been made on this project in the past five months as in the previous five years. I believe that the three conditions—assessment of value for money, consideration of the relevant papers by the National Audit Office, and the strengthening of project management and corporate governance—have broadly been met.
I will not repeat to the House what I said on these matters two weeks ago, except to say that a copy of the Sweett report—the independent value-for-money assessment—is available in the House of Commons Library for those who wish to read it in detail. It confirms that it is unlikely that re-tendering of the construction contracts would result in significant savings.
I do wish, however, to bring the House up to date on the question of the project's financing. On 7 May, I informed the House that the lead bank had agreed in outline to proceed. The FA has since said that it expects to sign a "heads of agreement" term sheet and an exclusive mandate with WestLB—the lead bank—in the next seven days, which will agree the project's overall financial structure. They have said that they expect to complete all the financial contracts at some point in the next 10 weeks. The bank is satisfied that it has access to all the information that it requires, including the James and Tropus reports. I should make it clear that I regard these time scales—which are not under my or the Government's
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control, and which relate to the contract between the FA and the relevant banks—as indicative, rather than definitive.
The prospects are good and the progress is promising, but the outcome is not yet certain: this is not yet a done deal. Accordingly, I will not give final approval to the Government's contribution to the non-stadium infrastructure until a final report on the extent to which the four tests have been met has been produced by Patrick Carter, after proper banking arrangements have been concluded and assessed.
It is clear to me—as indeed it is to the FA—that the current negotiations represent the last chance for Wembley. Should a Wembley deal not prove possible, I would expect the FA to enter into discussions with Birmingham about its proposals, as I have maintained in December and since. The FA has repeated its assurances that if Wembley fails to proceed, it will look to other options, including Birmingham. That is what it said in December, and yesterday I confirmed the position with the FA's chief executive, who also issued a statement to that effect.
The Birmingham bid, which was and is credible, has been examined by Patrick Carter and by the FA in good faith. However, the Carter report supports the view that Wembley would deliver higher revenues, hence its status as the FA's declared preference. The Birmingham bid remains only embryonic; planning permission for what is a green belt site has not been given; the detailed design has not been completed; final costings for the stadium have yet to be made; the business plan has yet to be thoroughly tested, or backed by market research; and there remains a significant funding gap to be bridged. So moving the project to Birmingham is not a straightforward process with a guarantee of success. However, if Wembley fails, Birmingham deserves the chance to make its case.
In that context, I want to clear up one matter. Some people have mistakenly assumed that a secret agreement exists between the FA and Sport England to reopen the old Wembley stadium if the new project fails. That is nothing more than a misunderstanding of the staging agreement between Sport England and the FA. It is the security obtained by Sport England for the £120 million lottery grant. It could, in theory, allow Sport England to require the FA to stage events at Wembley for 20 years in the event of the project failing. In reality—let us focus on the reality—the stadium would be very expensive to reopen, and would be increasingly sub-standard as a venue. The Carter report indicates that it would cost around £40 million for a quick fix to open the doors: a solution that would require a second, major refurbishment only five years later, costing tens of millions of pounds more.
The FA made it clear in its statement yesterday that reopening the stadium is only one of the options that might be available m the event of a failure to proceed with the new stadium; given the cost, it is an unlikely option for the FA to choose. However, it is for Sport England and the FA to decide how and—in the event of the project failing—when the grant is repaid.
I come now to the last point. Hindsight shows what a high-risk project this was. However, lottery money is not about risk avoidance. It should be much more about risk management. I believe that more work needs to be done

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with distributors on risk assessment in relation to large projects such as this. One solution that I intend to pursue is to involve the Office of Government Commerce in all high-risk lottery projects—the project has now been subjected to this process—to ensure full scrutiny of proposals before their approval. The OGC's report, in the light of the changes made and proposed, supports the stadium plans and recommends that the project should proceed to contractual close.
I intend to include this issue in the forthcoming consultation on the future of lottery distribution, which I have announced to the House and which I intend to bring before the House before the summer recess. It is important for the future of the lottery to get this issue right.
One year ago, the national stadium project was flawed, tainted and unsustainable. Since then, the efforts of the FA and other stakeholders, working with Patrick Carter and his team, have yielded results in governance, transparency and the potential to attract financial support to a much more credible project.
Because of that, the money sought from Government is still on the table. It forms part of the financial package and it will remain there while the present negotiations with the bank continue progress to a conclusion. There is some distance still to travel. If the four conditions that I have set out are met in full, the House can be assured that Government support will be given to a project that will have demonstrated that it deserves it; a project with the potential to benefit sport in England at all levels for generations.
Miss Anne McIntosh: I thank the Secretary of State for making the statement today, as she promised to do, and for an advance copy of it.
Here we are again: another day, another statement, another mess. We are told that the prospects are good and that progress is promising, but that the outcome is still not yet certain. We now have the deeply damaging contents of the Tropus report and the James report, in spite of which the Secretary of State says today that she believes that there have been no new disclosures that add to the concerns previously identified.
The House would like to know when the Secretary of State knew about the Tropus report. When did her Department have the report? Was it before 19 December 2001? Why were the FA and WNSL so slow to publish the James report? We have had sight of it only thanks to the vigilance of the Culture, Media and Sport Committee, under the skilful chairmanship of the right hon. Member for Manchester, Gorton (Mr. Kaufman).
The Secretary of State plays down the contents of the two reports, taking comfort from the fact that the James report did not find any evidence of criminal impropriety and did not recommend retendering the contract for rebuilding Wembley. She focuses on whether flaws identified had irrevocably damaged the project on the grounds of cost, propriety or deliverability. It was yet another last chance for Wembley, and the possibility still existed that FA could enter into discussions with Birmingham on its proposal.
The statement gives rise to several questions. What matters remain for negotiation on Wembley? Are they matters of principle or of detail? How much longer is the Secretary of State prepared to give Wembley, and where does that leave Birmingham? What is Coventry's position?
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Why did the Secretary of State tell the House earlier this month that
"the detail of that progress is shrouded in commercial confidentiality"?
Was she partly referring to the staging agreement? Did she know about the staging agreement giving a commitment that all football internationals and FA cup finals to be held until 2019 would be at Wembley? When precisely did she know that? Was that information made available to the other bidders?
On the position of athletics at Wembley, the Secretary of State has said that
"the Sport England report will be published shortly".—[Official Report, 7 May 2002; Vol. 385, c. 23–4.]
Where does the whole sorry saga leave Birmingham and Coventry? Would she support the reimbursement of the costs of the teams from those areas incurred in compiling their bids? What lessons are there for the lottery, and does she really think that this statement will reassure the market that the project is a worthy one to invest in? When can English sports fans expect to see a new national stadium opened? How many more drinks will Wembley enjoy in the last chance saloon?
Tessa Jowell: I do not wish to be disrespectful to the hon. Lady, but I am sure that she wishes that her senior colleague had been here, because her response to the statement that I made was pathetic.
I became aware of the James report in December last year. As the hon. Lady says, it was shrouded in commercial secrecy, because it was highly sensitive. It was made available, as I made clear to the House on 19 December, on grounds of legal privilege. That limited the number of people who saw the report and the use that could be made of it. However, it is because of that report and my insistence that it be passed to my Department and made available to the National Audit Office—and because the steps that I have reminded the House of today were followed—that the project is now in the state that it is in today, instead of the flawed, tainted, unbankable state that it was in a year ago. That is a matter of fact.
The question of whether the financial deal will now proceed to a commercial close is a matter for the FA and the banks concerned, but the indications are that the banks will be encouraged by the consistency of Government support for the project and the fact that a commercial project has been subjected to a degree of rigour and scrutiny equivalent to the standards expected in the public sector.
In my statement, I set out the position in relation to Birmingham: when the Football Association made it clear that Wembley was its preferred location, the Birmingham team agreed—rightly—that it would undertake no further work on the proposal for the time being. I have set out, as made clear by the Football Association, the further steps that would need to be taken if Wembley fails and Birmingham is then considered as an alternative.
The hon. Lady asks what I meant by "shortly" as regards publication of the athletics report. I suggest that when she gets back to her office she tell off her researcher, because the information has been in the Library, in response to a parliamentary question, for about two weeks. It is also available on the Sport England website.

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Finally, I have made very clear the lessons for the lottery and the steps I intend to initiate in order to ensure that the lottery does not become risk averse, and that where lottery money is invested in risky projects, that is done on the best known understanding of the likely effect of those risks.
The project is now moving forward. The hon. Lady's contribution shows that none of that progress has been achieved with the help of the Opposition.
Mr. Gerald Kaufman: What is pretty clear is that if a new Wembley stadium is built, it will be coated with high-gloss whitewash.
My right hon. Friend will understand that, as far as I am concerned, what matters is the House's custodianship of the expenditure of public money. Will she therefore make it absolutely clear that in no circumstances whatever will a penny above the £20 million to which she has previously referred be given by the Government for this project?
My right hon. Friend talked of the need to protect the taxpayer and the lottery payer. She will be aware that the David James report—which, like the other documents, was published only because the Select Committee forced their publication—identifies serious breaches of the lottery funding agreement and subsequently a complete failure by Sport England to do anything about it. There has been a serious dereliction of duty by Sport England, which flung £120 million at the project and did not lift a finger to monitor how the money was used.
Will my right hon. Friend hold Sport England to account? My view is that there should be sackings at Sport England—especially Mrs. Brigid Simmonds, who seems to take pride in the neglect of Sport England. Will my right hon. Friend ensure that never again, in any public project, will such negligence be allowed? Furthermore, will she ensure that my constituents' money, whether paid through lottery tickets or taxes, will be safeguarded and not used to provide a free gift of a stadium to the FA?
Tessa Jowell: If I may take my right hon. Friend's third point first, I have made it clear on the Floor of the House and before his Select Committee that there are lessons to be learned in relation to the stewardship of lottery grant. That point was also recognised in evidence to the Committee from David Moffett, now the chief executive of Sport England. I shall study carefully the Select Committee's conclusions on the specific points where it considered that Sport England had not offered proper stewardship.
Throughout this process, however, it is important to separate the allegations of negligence from the fact of negligence. Certainly, the lottery agreement has been altered and there were not proper and sufficiently close relationships between WNSL and Sport England, as evidenced by the fact that when the stadium was closed Sport England was not aware of that fact. I am entirely persuaded, therefore, of the need for some changes, but it is important to focus on fact rather than allegation.
On my right hon. Friend's second point, the House will be clear about the sources from which public money for investment in Wembley stadium will come: there will be £20 million for non-stadium infrastructure and £21 million
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from the London development agency. My right hon. Friend the Secretary of State for Transport, Local Government and the Regions recently announced the plans to upgrade Wembley Park tube station. I am clear that that is the proper limit of public investment in this project. Indeed, part of the financial deal on which Patrick Carter's advice has been taken is intended to ensure that the FA bears the risk for the project.
Finally, on my right hon. Friend's point about publication of the James report, the Tropus report to which he referred is a dossier of allegations. The James report has now been slightly amended and is in publishable form. At Christmas, I called for its publication. It has now seen the light of day and I welcome that.
Nick Harvey: I thank the right hon. Lady for her statement today, but I regret that there is not a little more progress to report. I also commend her fortitude in riding out the embarrassment that the Government should feel about the entire Wembley saga. At this stage, she is right to see this bid through to an actual conclusion one way or the other. Will she confirm that the banking arrangement is 95 per cent. agreed and that it is a process of due diligence that is now under way? Is it not time that some due diligence was shown in this project?
As the Wembley bid is nearing a conclusion, one way or another, surely it would be perverse in the extreme to exaggerate the significance of a few weeks' delay now and to favour another bid that, for understandable reasons, is not even on the starting blocks in terms of planning, costing or funding.
Finally, should the new Wembley stadium project fail for one reason or another, I urge the right hon. Lady to keep a rather more open mind than seems apparent from her statement about the possibility of breathing some new life into the old Wernbley stadium. If a new stadium is to be in Birmingham, east London or anywhere else, it will take many years to deliver and some extended life for the old Wembley might well be a useful transitional phase.
Tessa Jowell: I welcome the hon. Gentleman's practical and sensible approach to the financing of the project. I will not make any predictions about the probability, and so forth. This is a matter for negotiation between the FA and the lead bank. I have made it clear that the money that the Government have offered for non-stadium infrastructure is on the table and will remain there while the process of negotiating the deal to a close takes its course.
On the allegations, it is important to be clear that the allegations made by David James in his report became known to me and my Department in December, although there was certainly a belief before that that there had been some impropriety in the procurement of the contract—it had been known to Patrick Carter. Progress has been secured since that time. The focus on the allegations now should not cloud the progress that has been made in the intervening six months.
Finally—as I have said too many times to repeat, but I shall say it one more time—the decision on the location of the national football stadium is a matter for the FA.
Mr. Gareth R. Thomas: Will my right hon. Friend assure me that, in her future consideration of

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this issue, she will not be swayed by the anti-London hysteria that is being whipped up by Conservative Members against the Wembley option? Will she also assure me that she recognises the fundamental importance of a rebuilt, modernised Wembley stadium to many businesses in my constituency and to the wider north-west London economy? When does she expect that we can have some confidence in the FA's ability not to be completely and utterly incompetent at building national stadiums again?
Tessa Jowell: Well, first, the Opposition's attitude is opportunist, rather than particularly anti anything at all. Secondly, yes, of course the national football stadium will be a very important source of regeneration in a part of north-west London that badly needs such investment and regeneration, and I welcome that fact. As for the time scale, I have made the position clear.
Mr. Mark Francois: Several years on, there is still no real plan or clear way ahead. Is not this whole saga a classic example of the syndrome of paralysis by analysis? Now, the Secretary of State's latest wheeze appears to involve four key tests. If those four key tests are met, can we have a referendum?
Tessa Jowell: The hon. Gentleman has worked hard on that one, hasn't he? [Interruption.] I suspect he has been practising all day. There are two worlds in all this: the world of the FA, the Government trying to make things work, the lead bank negotiating on due diligence and the other stakeholders making the project happen; and there is the world of the Opposition, who are increasingly irrelevant.
Glenda Jackson: I thank my right hon. Friend for the clarity of her statement and the seriousness with which she has approached this issue of national importance, in marked contrast to the official Opposition's absurd responses. I endorse her concerns with regard to regenerating a part of north-west London that needs it and, indeed, sustaining that economy in London for the future, but when she is being firm about there being no public money in addition to that already stated, will she consider the fact that there are serious concerns about how fans would travel to Birmingham if the plan were moved to the midlands, as it would be almost exclusively car based?
Tessa Jowell: I thank my hon. Friend. Obviously, the benefits if the national stadium proceeds at Wembley will be felt by her constituents as well. I have to say with the greatest respect that, at the moment, I am more focused on how fans will travel to a national stadium at Wembley than on any of the other options, which is why I welcome the announcement of investment by London Transport and the Mayor in upgrading Wembley Park tube station. I pay tribute to my hon. Friend the Member for Brent, North (Mr. Gardiner) for his advocacy and determination in securing that improvement for his constituents.
Sir Sydney Chapman: To say that the attempt to provide a new national stadium at Wembley has been a sorry saga rather understates the case, but will the Secretary of State confirm that she said in her statement on 19 December that she had asked the FA to
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deal with four points? Those four points, which she listed in her statement today, have all been dealt with and the heads of agreement between the banks have been confirmed. Although the detail has to be sorted out, surely the only choice now is to conclude those negotiations successfully and build a new stadium at Wembley, which will come sooner than any alternative, generate more income and, in fact, be cheaper. It is now absolutely essential, after the farce of Picketts Lock, that the decisions be taken and the infrastructure put in place so that north London's economy can be regenerated.
Tessa Jowell: I welcome that unexpectedly sensible intervention from the Opposition Benches. I am not wholly satisfied that all the conditions have yet been met. I have made clear the work in progress in relation to the financing of the project, and I wait to be assured that all the corporate governance changes necessary, as identified by the James report and others who have examined the project, are in place and are secure. I will ask Patrick Carter, who has had an independent and advisory role in relation to this matter, to advise me that the four conditions have been met and that the Government can have confidence, when investing the £20 million to which I have referred, in allowing the project to proceed. That is the proper and prudent way to approach the matter, and that is what I intend to do.
Mr. Mike O'Brien: Wembley is—in my right hon. Friend's words—not yet a done deal. If the west midlands option can therefore be revived, will she confirm that the £20 million from the Government will still be on the table? What will happen to the £120 million from Sport England?
Tessa Jowell: I have, I hope, made the position absolutely clear in relation to the Birmingham bid—it is an option that the FA will consider if its preferred option of Wembley fails. I spell that out because I do not want anyone to be in any doubt about that. I made it clear in December, and it remains the case, that if the Wembley project fails I would ensure that the £20 million that would be made available for infrastructure there would be made available for the Birmingham project. I have also made it clear on several occasions that, in the event of failure in relation to Wembley, I would expect the lottery grant to be repaid. That would be a matter for further negotiation between Sport England and the Football Association, but that would be the clear expectation.
Mr. Patrick McLoughlin: May I congratulate the Secretary of State on not setting a deadline today? Is it a coincidence that she represents a London constituency, her predecessor represented a London constituency, two of the three people who have held the job of Minister for Sport represent London constituencies, and the present holder of the job represents a Sheffield constituency? Is that why Birmingham does not stand a chance? Why does she not say so?
Tessa Jowell: No.
Mr. Dennis Turner: In case the point gets lost in this debate, the majority of football supporters would welcome siting the national stadium in Birmingham. Equally, the majority of football

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clubs would welcome siting it in Birmingham. Many Labour Members are very concerned about the way in which the FA has handled this situation, for many reasons. In particular, we do not want to find, at the end of this period, that our Government cause the opprobrium and embarrassment to rest with us and not the FA.
What is the Secretary of State's or her Department's judgment of when we shall get to the end of this saga of the FA and Wembley? The negotiations continue. What is her estimate—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order.
I wonder when the hon. Gentleman might get to the end of his question. There are quite a number of other hon. Members to fit in.
Mr. Turner: What is the Secretary of State's estimate of the final outcome of these negotiations?
Tessa Jowell: I am well aware of the level of popular support and support from hon. Members on both sides—my hon. Friend made this clear—for the Birmingham option. However, as I have done on a number of occasions, I remind him that the decision about the location of the national stadium is a matter for the Football Association. It is not a matter for me.
In my opening remarks, I set out the indicative time scale that the FA has notified for the next stages in relation to banking. That is the best indication that we have. I have also made it clear to the House today that the Government's offer remains on the table while the negotiations proceed. However, I do not know by precisely what date they will conclude.
I pay warm tribute to my hon. Friend for his unfailing advocacy of the west midlands and its bid. I wish him well in his continued pursuit of his cause.
David Burnside: As a Tottenham supporter from Northern Ireland, I have not been to Wembley often enough. However, I first went to Wembley in 1966 for the match to determine third and fourth places and then to the World cup final when I supported England.
This is not a parochial issue, but it has become all about Birmingham and Coventry. As I said, I am a Tottenham supporter from Northern Ireland and, back home, there are United and Liverpool fans as well as a few Rangers and Celtic supporters. We want the national stadium to be at Wembley. We want to go to London, to go up Wembley way and to see the twin towers. Does the Secretary of State agree that, in the national interest, she should stop passing the buck, show some leadership, support Wembley and rebuild it? That is where we went in the past and it is where we want to go in the future.
Tessa Jowell: I shall be delighted to pass on the hon. Gentleman's comments to the Football Association. I can be absolutely clear to the hon. Gentleman about the practical steps that the Government have taken with the FA—I have set them out to the House—to enable the project to make progress.
Richard Burden: My right hon. Friend the Secretary of State confirmed that an
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option was agreed between the FA and Sport England in 1999 that the national stadium could remain at the current site in Wembley. However, she said that she thought that there had been a misunderstanding about the nature of that agreement. May I draw her attention to the fact that, on 4 July 2001, the chief executive of the FA wrote to the chief executive of Birmingham city council confirming that there were three—I repeat, three—options for the national stadium? The chief executive of the FA said that the options were:

"1. The current design proposal for a 90,000 stadium at Wembley,

2. A new 80,000/85,000 design for Wembley,

3. A new 80,000/85,000 design in Birmingham."

He said that he was being "completely open".
As there clearly was a further option—let us put it no stronger than that—it remains a fact that Birmingham and, I believe, the country have been misled. As a result of that, is not the FA obliged to do two things? First, if it has misled Birmingham, it should compensate Birmingham and the rest of the west midlands for the expenditure that they have already incurred. Secondly, even at this late stage, it should play fair and give Birmingham a fair deal and respond to what my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) correctly said was the choice of the fans—to bring the national stadium to Birmingham.
Tessa Jowell: I think that there was some misrepresentation of remarks made by the FA's company secretary to the Select Committee earlier this week. That led the chief executive of the FA to set out yesterday very clearly the nature of the FA's position on Birmingham and to confirm to me by telephone yesterday that nothing had changed in the FA's position on Birmingham between now and last Christmas, which is when the announcement that the FA would proceed with Wembley was made.
For my hon. Friend's information, let me quote the chief executive. He said:
"Nothing has changed since then and, as far as The F.A. is concerned, Birmingham would remain an option for the national stadium should the new Wembley not proceed. As has always been the case, this would of course be subject to discussions by all the stakeholders on how best to abort the current project and any agreements relating to it."
He finished by saying:
"I am very clear therefore that Birmingham have not been misled by either the Carter review team, government or The F. A."
Mr. Laurence Robertson: Following on from what the hon. Member for South Antrim (David Burnside) said, is the Secretary of State aware of the enormous pride in our greatest sporting triumph of 1966, which took place at Wembley stadium? Is not the present shambles regrettable in view of those memories? Has it not brought international shame on this country and on the greatest game in the world? How does she see the role of the Government, not only in the shambles, but from here on in? Is the national stadium the Government's responsibility, or is it not?
Tessa Jowell: I will not rehearse the arguments that I have already made. What I will do is send the good wishes

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from every corner of the House to the England team. I hope that they repeat their magnificent achievement of 1966 in the next few weeks.
Peter Bradley: This is obviously a game of three halves. When the Secretary of State sends her greetings to the England team, will she tell them that we are going to extend the principle of the timeless test to football matches? If players find themselves 1–0 down at full-time, the referee will not only extend the game until they score two or three goals, but suspend the offside trap and probably go around chopping off the legs of the opposition as well. That is how sponsors and supporters of the west midlands bid feel, as other hon. Members have said.
Some 69 per cent. of fans throughout the country want the stadium to be in the west midlands, as do 55 of the league clubs. Anyone with any sense wants the stadium there. The deadline of 30 April set by the FA and the Government will be passed by several months because it will be the end of July by the end of the 10-week period. When, and under what circumstances, will the Government ensure that the FA honours its undertaking to Birmingham so that its bid can be considered properly and given a fair chance in line with the views of the fans, the clubs and the game in general?
Tessa Jowell: I will provide my hon. Friend with a copy of the letter sent by the chief executive of the Football Association, to whom his comments should be addressed.
Michael Fabricant: The right hon. Lady does herself no favours by blaming the previous Secretary of State and the Football Association. However, in response to the question asked by her hon. Friend the Member for Birmingham, Northfield (Richard Burden), she said that what was said on Tuesday had been misrepresented. The transcripts of that will be available, but let me tell her that Mr. Nick Coward, the company secretary of the FA, made it clear that Birmingham was never in the running. Mr. David Moffatt, the chief executive of Sport England, speaking of the deal to return the £120 million and the fact that Binningham was never in the running, said that Birmingham looks extremely remote because of that. There was no misrepresentation.
If the Football Association has changed its mind, I welcome that. I also welcome the fact that progress has been made on Wembley, and I hope that it goes ahead. However, if it does not, and in light of the Football Association's apparent change of mind, how will the £120 million be repaid?
Tessa Jowell: The position of the Football Association on the potential Birmingham bid was clarified yesterday by Adam Crozier, the chief executive of the Football Association. I ask the House to accept that.
On the repayment of the £120 million, I am not going to speculate either on the circumstances or on the negotiations that would lead to its repayment, save to say that it is subject to a contract between the Football Association and Sport England. I think that every party to the deal understands that if Wembley fails, the money will be repaid.
Kevin Brennan: Is it not the case that, with £120 million of lottery money devoted to the scheme
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plus the £20 million additional public money pledged by my right hon. Friend, more money than it cost to build the Millennium stadium in Cardiff has been put into this project, just to cover one fifth of the overall cost? Is there not a third way available? The stadium is not needed—it is not even wanted by many England fans, who are happy to see their team travel around the country. Should we not close the roof on the deal altogether, cut our losses, and make Cardiff the permanent home of the FA cup final and the play-offs?
Tessa Jowell: No doubt my hon. Friend will suggest that to the Football Association. He never loses an opportunity—nor should he—to praise the excellent Millennium stadium in Cardiff.
Mr. Barry Gardiner: Is my right hon. Friend as fed up as I am with the moaning voices who continue to try to derail Wembley by highlighting two-year-old management defects as though they were today's current news? Will she confirm that the Sweett report has concluded that the new stadium represents good value for money, and that the independent National Audit Office and the Office of Government Commerce have said that the project is now well managed and should proceed? Will she confirm that the new Wembley stadium will bring regeneration and an estimated 20,000 jobs to my part of north-west London? In the expectation that the FA concludes the deal in the next 10 weeks, does she look forward with me to the silencing of the moaning Mancunian, extinguished once again by the Wembley roar?
Tessa Jowell: Yes to the first point, yes to the second, and yes to the third, but I am not absolutely sure how many jobs will be created as a result of the stadium. As for the fourth point, I look forward to progress on the stadium. Everyone who has played a part in the scrutiny, including my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), deserves credit.
Mr. Terry Davis: When did my right hon. Friend and her Department become aware of what she has described as a theoretical commitment by the Football Association to continue to use Wembley even if the plan for a new stadium fell through?
Tessa Jowell: That was part of the staging agreement that formed part of the lottery agreement that settled the payment of the money from Sport England to WNSL. In January 2000, the Select Committee was informed by Sport England of the existence of the staging agreement.
Miss McIntosh: When did the Secretary of State know?
Tessa Jowell: I became aware of the staging agreement when I became Secretary of State and examined the terms under which the £120 million had been paid.
Ms Debra Shipley: I draw the attention of the House to those parts of the Secretary of State's statement that deal with the FA's comments to the Select Committee. It was in response to my questions in the Select Committee, especially those addressed to Mr. Coward, that it was revealed that, in the worst-case

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scenario, the £120 million could be repaid only if the contractual agreement to FA events being held at Wembley were broken. Only if that agreement were broken could the project go to Birmingham, and the only way to get the £120 million is to honour that contractual agreement. There is therefore a conflict in the position that the FA is trying to promote. The FA is speaking with a forked tongue in suggesting simultaneously that Birmingham is in with a chance if everything else falls through, and that the money can be paid back. Both cannot happen because of the contractual agreements.
However, on a more positive note—
Mr. Deputy Speaker: Order. The hon. Lady must hurry. Her question is becoming a statement.
Ms Shipley: How will the Secretary of State, as design champion for architecture and the built environment, ensure that, wherever the stadium is built, we will have excellence?
Tessa Jowell: That is a very good question. The Foster design has attracted both support and admiration. Ultimately, the choice of architect and design is a matter for the Football Association, and it wants to stick with the Foster design for the reasons referred to by my hon. Friend.
I hope that I have made clear to the House the position regarding the staging agreement. I believe that the chief executive of the FA clarified the position in his letter yesterday. The staging agreement between Sport England and WNSL would clearly have to be renegotiated, but we must add to the fact of its existence the fact that after the agreement was settled, the stadium was closed in October 2000, and as Patrick Carter's report makes clear, it would cost an estimated £40 million to reopen it. In those circumstances it would be fit probably for about five years, after which a further substantial sum would have to be paid. Those are the sorts of complexities that would have to be addressed in the event of the Wembley project failing and the money being due for return.
Mr. Frank Doran: I welcome my right hon. Friend's statement, and I concur, probably for the first time in my life, with the hon. Member for South Antrim (David Burnside). As a Scot, I believe that Wembley is important to the whole of the UK, not just England. I also have a personal interest because for many years I have bored my family and friends with a video of me scoring a goal at Wembley, and when I start to bore my grandchildren, I want it to mean something to them.
Does the Secretary of State agree that the project is now making progress not because of the FA but in spite of it? Does she also agree that the Tropus and James reports confirmed that the FA acted in a cavalier and arrogant manner, and one of the lessons that we should learn from the whole experience is that lottery funding agreements must impose much more robust standards on the recipients of funds, and, even more importantly, that those standards must be enforced?
Tessa Jowell: Yes, I entirely accept my hon. Friend's point about lottery agreements. The terms of the
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Government's continuing support—the four tests to which I have referred—were made clear to the FA as being non-negotiable. The FA accepted that, which means that we have been able to make the progress that has undoubtedly been achieved. I hope that shortly my hon. Friend will be able to go to Wembley for his encore.
Mr. Jim Cunningham: Does my right hon. Friend agree that although there might be differences of opinion about Wembley and Birmingham, Coventry, which has been mentioned today, meets the criteria? It is a brownfield site, it has planning permission—unlike Birmingham—and it has been well costed, despite what the Secretary of State may think.
Tessa Jowell: As my hon. Friend knows, Patrick Carter, with the FA, considered the Coventry bid. The FA has decided to go to Wembley, and, as I have made clear, it is a matter for the FA. However, I know that that is a disappointment for my hon. Friend.
Mr. Tony Banks: The Secretary of State has conducted herself impeccably in the course of this difficult matter, and the fact that we are now closer to starting the construction of a new national stadium at Wembley is very much due to what she has done in the past 12 months.
Will my right hon. Friend bear it in mind that when people say that the Japanese, the South Koreans, the French, the Australians, the Spanish—
Kevin Brennan: The Welsh.
Mr. Banks: And indeed the Welsh—They have all managed to construct magnificent stadiums and to organise big international events, but it is mainly because their Governments were prepared to take over the projects and to run them. In this country we have the worst of all possible worlds for such projects: minimum Government financial contributions but maximum Government interference. On my right hon. Friend's part, of course, that has been highly constructive. It is about time that we looked at these projects and decided that the arm's length principle simply does not work. If we are going to run national projects, and the Government are going to start taking the blame for some of the things that go wrong, they should run them from the outset. I look forward to the point at which 'we can get on and stop nitpicking, so that my right hon. Friend can echo the famous words of Kenneth Wolstenholme in her next statement.
Tessa Jowell: I join my hon. Friend in saying that now, I hope, is the time to move forward. He is right that claims about the success of stadiums in other countries sometimes bear closer scrutiny. Stadiums funded by the commercial sector that fail become a burden on the taxpayer. I am determined that that will not be the case with this stadium.
Several hon. Members rose—
Mr. Deputy Speaker: Order. We must move on. I have programmed business to protect, and no doubt there will be opportunities for this matter to be aired again.

Points of Order
2.21 pm
Mrs. Theresa May: On a point of order, Mr. Deputy Speaker. Has the Speaker had any indication from the Secretary of State for Transport, Local Government and the Regions that he wishes to come to the House to make a statement to correct previous statements to the House on the timing of his decision to put Railtrack into administration? The Secretary of State has made numerous references in the House to the fact that he made that decision on 5 October. For example, on 5 November last year, he said of the decision:
"It was taken on Friday 5 October. That is the 20th time I have told the House that and it is the truth of the situation."—[Official Report, 5 November 2001; Vol. 374, c. 22.]
Yesterday and today, however, there have been reports that at a meeting with the Paddington Survivors Group on 12 September the Secretary of State referred to that decision. Pam Warren from the group said:
"He said Railtrack wouldn't be much trouble for much longer. He was to replace it with a not-for-profit company."
Another member of the group said:
"Mr. Byers said there would be an announcement around October 8 that would be very pleasing to us."
At the very least, that throws doubt on the timing of the Secretary of State's decision. Has he indicated to you, Mr. Deputy Speaker, or the Speaker that he wishes to come to the House to make a further statement? If not, could I ask for guidance on how we can ensure that he comes to the House so that Members may question him about the matter and make sure that the House has been told the truth?
Mr. Deputy Speaker (Sir Alan Haselhurst): The short answer to the hon. Lady is that Mr. Speaker has had no such indication of an impending statement. The Chair has no power to require a member of the Government to make a statement to the House. I am sure that the hon. Lady will find other ways of pursuing the matter, which she has now put on the record.
Norman Baker: On a point of order, Mr. Deputy Speaker. Following yesterday's exchange during Prime Minister's Question Time about the allocation of responsibilities and the confusion about referendums, I want to draw to your attention to another confusion and ask for guidance on how to proceed.
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When I asked how I should pursue a matter relating to a royal issue, the Table Office said that I should pose a question to the Lord Chancellor's Department. I duly did so on 15 April. On 19 April, the answer to my question on its duties in relation to royal issues came back—"None." I then asked the Prime Minister on 22 May which Department had lead responsibility for royal matters, and he answered:
"In England and Wales, the Lord Chancellor's Department has lead responsibility for these matters."-[Official Report, 22 May 2002; Vol. 386, c. 320W.],
Given that it is difficult to pursue that, as no Department is taking responsibility, will you tell me, Mr. Deputy Speaker, how best to take the matter forward and who is responsible? Is it perhaps the Transport Secretary?
Mr. Deputy Speaker: As the hon. Gentleman knows, the content of ministerial answers is not a matter for the Chair. In this particular instance, however, the Chair would feel diffident about advising the hon. Gentleman how to pursue matters through parliamentary questions, as he has some form in that respect.
Mr. John Smith: On a point of order. Mr. Deputy Speaker. May I seek your guidance on a serious matter affecting my constituency? You may be aware that there was a report this morning of alleged safety breaches at the air traffic control centre in Swanwick. As one of the affected airports—Cardiff—is in my constituency, I have sought assurances. I am afraid that I have to report that there are serious inconsistencies in the information that I have received, with different views given by the Civil Aviation Authority and the Health and Safety Executive, both of which bodies are the responsibility of the Department for Transport, Local Government and the Regions. In light of the fact that I was unable to catch Mr. Speaker's eye in business questions and that the House is going into recess tomorrow, I believe that that is a matter of great public concern. How can we now best get the Minister with responsibility for aviation to look at it and report to the House?
Mr. Deputy Speaker: The hon. Gentleman has stretched the definition of a point of order to get the matter on the record. I recognise that it is of obvious importance, but there are parliamentary means of pursuing such issues, even on an urgent basis, and I leave him to think about that, although he has now put his concern on the record.

Orders of the Day
  State Pension Credit Bill [Lords]
  As amended in the Standing Committee, considered.
  State Pension Credit Bill [Lords]
    New Clause 1

      IMPUTATION OF YEARS OF HOME RESPONSIBILITY
      (1) On making an initial claim to state pension credit, all claimants shall be asked to list the date of birth of any natural children and any other children for whom they had primary caring responsibilities in any year prior to the introduction of Home Responsibilities Protection.
      (2) The definition of primary caring responsibilities shall be set out in regulations.
      (3) For the purposes of calculation of entitlement to the guarantee credit and the savings credit, any individual may substitute for his actual rate of retirement pension an amount equal to the rate of retirement pension that he would have received if he had been entitled to a year of Home Responsibilities Protection for each year in which he was the primary carer for a child up to the age of 16 prior to the introduction of Home Responsibilities Protection.'.—[Mr. Webb.]
      Brought up, and read the First time.
      2.25 pm
      Mr. Steve Webb: I beg to move, That the clause be read a Second time.
      In pensions, women have been second-class citizens for generations. Of today's elderly pensioners, women are the poorest, and make up the bulk of the group of people approaching pension age with poor pension entitlements. With increasing reliance on private sector pensions, there is a danger that in future women will be less likely to have private sector pensions or take out stakeholder pensions; once again, they will be the poor relations in pension provision.
      New clause 1 tries to correct a feature of the Bill which is prejudicial to the interests of a particular group of women. We touched on that issue in Committee, which was constructive and non-partisan; I hope that we can carry that over to today's deliberations, and it is certainly the spirit in which the new clause has been moved. We are seeking to deal with the danger that the values of the 1940s, when bringing up children was seen as women's work, will be carried over into the 21st century in the Bill. We cannot rewrite the system of the 1940s, but we can try to make sure that those values are not enshrined in new legislation and advanced for decades to come.
      There has been confusion about the categories of women affected. There has been discussion—I have raised the matter myself—about the position of women who pay the married women's stamp, but that is not my primary focus now. I wish to focus on women whose state pension entitlement has been substantially reduced because of years spent out of the labour market bringing up children. Leaving aside the millions of women who have already retired, I wish to talk about women who are coming up to state pension age with poor pension entitlements. Recently, I received a written answer that suggested that typically women reaching 60 have a basic state pension entitlement of £58 a week, excluding the state earnings-related pension scheme and so on, compared with the full basic pension of £75 a week. That is roughly 75 per cent. of the average figure.
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      Despite the growth in women's work and the introduction of home responsibilities protection in the late 1970s, women are still reaching pension age with poor basic state pension entitlements. We are not proposing to rewrite the history of the basic state pension entitlement, and are leaving alone the fact that women will typically retire with £58 a week. However, in new clause 1, we query the carry-through of that poor basic state pension entitlement into state pension credit entitlement. Society was right in the late 1970s to value the work of bringing up children, which was predominantly undertaken by women, in home responsibilities protection and similar measures that protected women's pension entitlements during the years when they were raising their family.
      2.30 pm
      The problem is that women now reaching 60 brought up their children, by and large, in the years before home responsibilities protection was introduced. To take a simple example, if a woman who is 60 this year—in other words, who was born in 1942—had her children in her 20s, which is common, or early 30s, most of the time that she spent bringing up those children was in the 1960s and early 1970s, before home responsibilities protection came in. That woman suffers the consequences in the form of a poor basic pension, and the state pension credit system doubles the penalty. It says to the woman who has managed to do some saving—which, let us face it, was doubly difficult because of all the years that she spent bringing up the children—"You don't get a reward for that saving until you have built up from the pension that you are getting to the full basic pension, and we reward private pensions or other saving only beyond that point." Of two women, one with a full basic pension and a little saving, and one with a partial basic pension and a little saving, one gets a reward for her saving and the other does not—the infamous double whammy. A poor basic pension is the penalty for having brought up children, and a reduced savings credit is the second penalty.
      The question is how we can best respond to that. We have considered various ways in which that might be done. In Committee we proposed that home responsibilities protection on the post-1977 model might be imputed for years before 1977. The Minister responding said that one of the problems with that is that the benefits that trigger entitlement to home responsibilities protection—child benefit, invalid care and so on—did not exist at all or did not exist in the same form before 1977, so there was no simple read-over from the post-1977 to the pre-1977 system. One could not apply the new rules to the old period.
      In the new clause we propose a different way of imputing a value to the caring that those women did, for the purposes of calculating their entitlement to the state pension credit, with particular reference to the savings credit. Nothing that we propose would affect their basic pension entitlement, but it would help them with their savings credit.
      We are proposing that when a woman fills in her state pension credit form, she is asked about the children that she has ever cared for. The new clause refers to natural children and others for whom she had caring responsibilities. We have left to regulations a specific decision about the definition of caring responsibilities. We are aiming at women who spent time out of the labour

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      market because they were looking after their own children. We would like to include adopted children, foster children and so on, but those cases are on the margins of the issue that we are raising. The key point is that women should not be penalised for caring.
      When the issue has been raised in the House in the past, the Government have conflated the position—not wilfully, I am sure—of women who paid the married women's stamp and therefore saved some money and therefore had a poor pension, with women who simply brought up their own children. I shall give one instance of that.
      On Second Reading, the hon. Member for Stafford (Mr. Kidney) intervened on the Secretary of State and pointed out that
      "the savings credit will cut in only once the full basic state pension has been reached, and that those with a lesser entitlement—often women—will lose the first bit of their savings in reaching that level."
      That is the point that I have been making. The Secretary of State said in response:
      "We believe that it is right that people should first use their money to pay contributions to the basic state pension."
      Now, the women in question did not have any money. They were at home bringing up the children, so they were not making pension contributions in their own right—not by choice, not because they had the money but were not putting it into a pension, but because they had no money coming in to put into a pension. The Secretary of State went on to say:
      "It would be curious if somebody who had chosen not to pay all such contributions then asked us to apply those they had paid to a pension credit, rather than in the first instance to the basic state pension."—[Official Report, 25 March 2002; Vol. 382, c. 602.]
      But those women had not chosen not to pay contributions. The women under discussion are not the women on the married women's stamp—or rather, they may also be, but that is not the reason why, for the periods of home responsibility, they were messing up their pension record. It is because they were caring—bringing up a child. We recognise that we cannot rewrite their basic pension entitlement, but in a brand new Bill at the start of the 21st century the system should not penalise women a second time round for the fact that in the 1960s and 1970s society did not put a financial value on bringing up children.
      I shall be happy to hear the Minister's comments on the logistics of our specific recommendation. Clearly, there are issues to do with providing evidence about children who were born 20 or 30 years ago and whether or not the woman was their full-time carer. Inevitably, there will have to be some broad-brush response to those issues. Unless there are extraordinarily detailed regulations defining primary caring responsibility, there might be one or two women who would not be entitled to credits, but in general, if a mother could show that she was the natural mother of a child and if she stated on the form that she was responsible for that child—in the sense that the present child benefit system works, which is the trigger for home responsibilities protection—that should be enough. There might be the odd case where the husband challenged that, but the House would probably accept that the claim by a mother that she had cared for the children listed should be enough to trigger entitlement to the credits.
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      Speaking specifically about home responsibilities protection and about caring makes a distinction between women who did something that society now values, but did not value financially in the past—bringing up children—and women who had some financial benefit from paying the married women's stamp. That is not the issue that we are raising here. We are dealing not with women who saved some money by opting out, but with women who did not have money and whose work was not recognised then. It is time that the House valued such work.
      For too long women have been the poor relations in state pension provision. There is a danger that we carry over that relative poverty into the Bill. New clause 1 provides the House with the opportunity to make sure that we do not redouble that injustice.
      Mr. Tim Boswell: The hon. Member for Northavon (Mr. Webb) introduced his new clause with precision and moderation. He rightly said that the Committee stage had been conducted in that spirit. We even found ourselves in agreement on a number of issues, to which I may have occasion to refer this afternoon. I support the hon. Gentleman's attempt to probe the Government's intentions. There is no need to rehearse his arguments at length.
      On the technical side, it had occurred to me, and I am sure that Ministers will also say—anyone who has ever had ministerial responsibility is conscious of these things—that evidence is important. Even if Ministers wished to make a concession—we may hypothesise about that—I see the dilemma that they might face in deciding what the evidence should be. A proxy benefit that could be read back and then enhanced or treated as a credit for the present purpose would be much easier, but that is not the case.
      The hon. Member for Northavon emphasised that his new clause essentially related to the position of women, but he did not cover himself as fully as he might have done. The drafting is unisex. Indeed, at one point the legal term "he" is used, to include both men and women, but realistically, the majority of people who have an incomplete entitlement to a full state pension and therefore, by extension, under the new arrangements in the Bill, an incomplete entitlement to the state pension credit, because they have to fill up their pension first, are likely to be women. That in no sense detracts from the validity of the hon. Gentleman's argument. We share that view.
      I draw the attention of the House to the Select Committee report on the pension credit. Paragraph 29 points out that
      "17 per cent. of female pensioners (over one million women) will potentially have any private or occupational income unrewarded, compared to only 8 per cent. of male pensioners."
      There is a much greater shortfall among women. In Committee we analysed figures suggested by the Select Committee relating to
      "around 50,000 pensioner 'benefit units' who have private income for which they will see no benefit."
      The Select Committee report goes on:
      "Another 2–300,000 will be 'rewarded' for only some of their private savings."
      Those figures give the lie to the Government's assumption, which they have frequently asserted, that it always pays to save, and that the arrangements set out in

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      the Bill are uniquely favourable to women. There is still something of a black hole for a number of women. The category was rightly identified by the hon. Member for Northavon. Attempts to deal with the matter will be neither free of cost nor without difficulty. Of course, women who had home responsibility before the new arrangements were introduced in the late 1970s are not the only category of people for whom there is a shortfall.
      The Select Committee report indicated that there will always be some who have fallen short as some of their earnings were below the contribution level, while others may go abroad or break their service because of illness or whatever else. A number of people will miss out. The hon. Gentleman is not seeking to remedy all the ills of the pension system, but he is trying to tackle the problems and it is important that the Government make a substantive response.
      The position of guardians was also discussed in Committee. I am especially sorry in that respect—but not only in that respect—that the hon. Member for Stalybridge and Hyde (James Purnell) cannot be present.
      The Minister for Pensions (Mr. Ian McCartney): My hon. Friend wrote me a letter to apologise for his non-attendance, which is due to a commitment that he cannot get out of.
      Mr. Boswell: I entirely accept that; my remarks were genuine and not meant to be sarcastic. The hon. Member for Stalybridge and Hyde made some serious points in Committee and it would be nice if he could be present. As he is not here, no doubt he will read what we have said. Indeed, he may want to return to some of the issues that we are discussing. It is a tribute to the respect that I have for him and his contributions in Committee that I wanted to say that he made a perfectly fair point about people who were caring for children as foster carers and so on, but were not in receipt of child benefit and could not be in receipt of home responsibility protection. Even if such people were looking after children full time and were unable to work, they would be racking up a potential shortfall in their future pension credit because they could not contribute.
      The Minister spoke entirely in accordance with the general flavour of the Committee proceedings by responding sympathetically to that issue and saying that he would think about it. The two categories that arise are older cases involving people who had children in their care before home responsibility protection cut in or those whose contribution had been severely impaired by it, and those who currently have children in their care but are not in receipt of child benefit and therefore cannot get home responsibility protection to add to their eventual pension. Of course, the Minister may wish also to refer to other categories.
      I do not want to make any mistake on the position of the Select Committee, but I am aware that it was concerned about some wider issues relating to shortfall on the pension credit. It summed up the passage from which I have already quoted by stating:
      "We recommend that the Government should inquire into the immediate and long-term costs, benefits and affordability of extending the Pension Credit in this way and make public the results."
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      I think that that is a reasonable request. Equally, I would understand if the Government were to say that those issues were not cost-free and that we cannot simply do everything that we want to do and must set priorities. For example, those who are currently caring for children may be a higher priority than those in some of the other categories that have been mentioned.
      2.45 pm
      It would be useful if the Minister could tell us how much the various difficulties exposed by the new clause would cost to remedy and explain the policy read-across, possibly including other benefits, and the administrability of any concessions. He would help the House by taking some of those matters forward. We understand that there are difficulties and that it is not always possible to rewrite the past, but as the hon. Member for Northavon said, as we move into the new century, we would like to secure a basis for the assessment of entitlement to pensions that is as principled, constructive and modern as possible.
      Andrew Selous: I express my wholehearted support for the new clause of the hon. Member for Northavon (Mr. Webb) and I am pleased that it has been supported by my hon. Friend the Member for Daventry (Mr. Boswell) from the Opposition Front Bench.
      Women who choose to look after their children at home do not currently have a genuine choice in terms of the income that they forgo and the benefits to which they are entitled. Some of the Scandinavian countries such as Finland and Norway have excellent schemes in that regard. It would be easy for the Government to draw a line in the sand and say that the new clause seeks to rectify problems that arose a long time ago, that we should move on and that if we do anything it should be to rectify problems affecting women who currently have children. It would be enormously to their credit, however, if they were seriously to consider the new clause. That would send a powerful signal to the country that the value that the House and the Government place on women—and, indeed, on any parent who chooses to stay at home and look after their children—is the same as that which they place on parents who choose to go out to work.
      I commend the hon. Member for Northavon for tabling the new clause, I am delighted to see that it has the support of Her Majesty's official Opposition and I hope that the Minister's response will be favourable.
      Mr. McCartney: I thank the hon. Member for Northavon (Mr. Webb) for the way in which he spoke to his new clause and the hon. Members for Daventry (Mr. Boswell) and for South-West Bedfordshire (Andrew Selous) for their contributions.
      The hon. Member for Northavon said from the outset that he wanted our approach to be non-partisan, and the Committee proceedings were non-partisan in the sense that everyone put their view in a very fair and effective way. On occasions., the debate became very passionate, as there are significant differences, not least between the official Opposition and the hon. Member for Northavon, some of which may emerge in this debate. I shall be non-partisan to that extent, but it is important to be aware of all the issues. For example, the hon. Gentleman could have referred to his article in the Sunday Mirror, which we shall come to. That is what he was talking about;

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      his remarks contained little reference to the new clause and related more to his legitimate campaigning on other issues.
      The overriding issue for hon. Members in speaking to the new clause was fairness to women. We are attempting in the Bill to do a number of things. Some of them involve trying to right past wrongs and to do so effectively. The truth of the matter is that when the basic state pension was established, wonderful as it was, it had a number of flaws. Every pension system is a compromise, and one of the flaws was that the system undermined in a range of ways the position of a variety of different women in different circumstances, as the hon. Member for Northavon said.
      We are, therefore, dealing with a legacy as well as trying to establish the pension credit, the state second pension and the other changes that we are making to ensure that the mistakes of the past are not visited on women in future. There must be a balance and we must have regard to what is feasible and can practically be done in establishing arrangements for the future and designing a system that should be non-discriminatory in dealing with gender and access on retirement to income from the state.
      The hon. Member for Daventry—I am paraphrasing, so I apologise if I get anything wrong—suggested that the Bill did not extensively help women, but that is not the case.
      Mr. Boswell: We do not need to get into a silly semantic argument about it. I was merely implying, first, that some Ministers' claims that the measure helps all women went somewhat beyond what they were entitled to say and, secondly, that in a number of cases, which we sought to identify in explaining the new clause, women will not benefit at all.
      Mr. McCartney: I thank the hon. Gentleman for his volte face—I was not expecting a total U-turn. I have never said that every single woman who reaches retirement age will benefit from pension credit. We said from the outset that 5.1 million pensioners will benefit. Of those, 53 per cent. of single women and 31 per cent. of couples will benefit from pension credit, so 84 per cent. of women will experience a positive impact on their retirement income. It is nonsense to suggest that this is not a significant step forward for women—of course it is. It is not only about righting the wrongs of the past, but about being able to put in place for the future a system that is non-discriminatory towards women.
      I want to refer to the Sunday Mirror article that quoted the hon. Member for Northavon, which is entitled "The Unfairer Sex: Poverty trap for women pensioners". It is unfortunate that in a debate about the unfairer sex, as the article terms them, the only Members who have participated so far are grizzly middle-aged men. I think that we all agree, on a non-partisan basis, that we are sympathetic to the unfair way in which women have been treated in the past, but it is important to correct some of what was said in the Sunday Mirror article so that people are not misled either about a lack of entitlement to minimum income guarantee or the current level of the basic state pension.
      The hon. Member for Northavon may say that he was misquoted or that the article was edited to give average figures. I shall be kind and say that it must be the latter,
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      because the Sunday Mirror never misquotes anyone of substance. [Interruption.] I heard an hon. Member say, "That leaves the hon. Gentleman out." I was not intending to feed Labour Back Benchers; I shall not give them any red meat just yet. I want to clear this up. The last time the basic state pension was £58 was in 1984. The current basic state pension is £75.50 for single people and £120.70 for couples. More importantly, for the women to whom the hon. Member for Northavon referred the minimum income guarantee is £98.15. For couples it is £149.80. That is a significant improvement on the figures cited in last Sunday's article, and that should be acknowledged by all concerned.
      I turn to the debate in Standing Committee on 18 April this year. I want to give two short quotes that set the tone for what I am going to say next. The quotes come from columns 121 and 122 of the Official Report. That is not so much a reference for Hansard as for the Gallery writer from The Times, who unfortunately seems not to understand Glaswegian. [HON. MEMBERS: "Shame."' He wrote an article in which he did not spell anything right. He thought that I was asking for a pint of heavy, but I was talking about the pension credit. Just for the record, I shall say that it was the pension credit, not a pint of heavy—although at this moment I would prefer a pint of heavy.
      I said in Committee, in response to my hon. Friend the Member for Stalybridge and Hyde (James Purnell):
      "We appreciate the work that foster carers do and sympathise with those who, having chosen to be full-time carers, receive poorer pensions as a result."
      I went on to say:
      "I do not wish to over-egg the pudding and suggest with nods and winks that a solution is just around the corner; I am telling him openly and honestly that this is another issue that I looked at when I first became a Minister, and I decided that something must be done. We are reviewing the matter. I cannot say any more, but I hope that hon. Members will understand that I recognise the problem and that it must be resolved in an effective way".—[Official Report, Standing Committee A, 18 April 2002; c. 121–122.]
      I repeat that now to re-emphasise that that is my position as Minister. It was not said to create discussion in Committee—it is a genuinely held position. I am not surprised that the hon. Member for Northavon has returned to the matter—he has been trying to champion this lost cause, as he would call it, for some time—but I hope that he recognises the truth of what I said to my hon. Friend in Committee.
      New clause 1 would have the effect of deeming a notional amount of basic retirement pension, so that a group of pensioners—in this case, those caring for children before 1978—could make the most of the savings credit. It would increase the amount of basic state pension they have in the calculation of the savings credit, so that they have to use less of, or none of, their own savings to get their income up to the savings credit threshold of £77. It might help if I give an example. A single pensioner has a reduced basic state pension of, say, £50 because they have a deficient national insurance record. They have a second pension of £25 and no other income. Their total income of £75 would immediately be topped up to the guarantee credit of £100, but they would receive no reward for their saving because their income was below the savings threshold of £77. In other words, they would not receive any savings credit because their income was below the level of the full state pension. If they could take advantage of home responsibility protection, they might qualify for the savings credit.

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      The new clause as drafted would have two peculiar outcomes. First, it would require people to list any natural children they have ever had, regardless of whether they have ever had any caring responsibilities for them. I am not sure that the Department for Work and Pensions needs that information, nor that people would want to share it with us—nor, in some cases, with their current partners. That matters, because at this stage of parliamentary scrutiny there is no further opportunity to correct drafting.
      Mr. Webb: I do not quite understand what the Minister is saying. New clause 1 states that claimants would be
      "asked to list the date of birth of any natural children and any other children for whom they had primary caring responsibilities".
      The Minister said that they would have to list children irrespective of whether they had cared for them, but the new clause explicitly covers the matter.
      Mr. McCartney: My interpretation of the new clause is based on the advice on its wording that I have received from parliamentary counsel and our officers. It would be a legal minefield to go back for such a long period in relation to natural children who were cared for initially, but later not cared for after those looking after them had given up their caring responsibilities. It is also a potential minefield in terms of relationships with current partners.
      Secondly, the new clause would allow a person the option of replacing their actual rate of basic pension with a higher amount in the calculation of the guarantee credit. I am unclear whether this was intentional, but if a person did exercise that option, their income would decrease, not increase. That said, I think that what the new clause tries to achieve is an increase in basic state pension so that more people come nearer to the £77 threshold. It would do that in a notional way by imagining that this group of pensioners was entitled to the home responsibility protection in a time before it was invented. One cannot make law on that basis. One cannot dream up or invent a situation, then develop proposals on that basis which go back, not for two or three years or for one or two decades, but beyond even that.
      3 pm
      Home responsibility protection has been available since 1978. It covers two distinct groups of people. Those in the first group have been awarded child benefit for children under 16; those in the second have been regularly engaged for at least 35 hours a week in caring for someone who receives attendance allowance or the highest middle rates of disability living allowance for a minimum of 48 weeks a year. Entitlement to home responsibility protection depends on people undertaking the caring activities for complete tax years.
      The protection offers a reduction in the number of qualifying years for a full basic pension. For example, a woman needs 39 qualifying years of contributions or credits for a full pension. Every year of the protection reduces that number, and there is a maximum number of years that can count towards home responsibility protection: 19 for women and 24 for men. The different periods reflect the current arrangements whereby men need five more qualifying years to earn a full basic state pension.
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      The new clause tries to provide home responsibility protection as if it existed before 1978 to those who would have been entitled to child benefit if it had existed before then. The new clause would achieve that by asking all new claimants for the pension credit to list the dates of birth of their children if they cared for them before the introduction of home responsibility protection. The hon. Member for Northa von wisely does not try to apply the new clause to carers of the sick and disabled. The provision is confined to parents; he does not propose its extension because he knows that that would be unworkable. Trying to prove a caring relationship that fulfilled the criteria for home responsibility protection would be impossible after so many years. He nods, so I am right about his intentions.
      The new clause would be impossible to put into effect. We could be stretching back as far as the 1920s. That is at the heart of the problem, and why in practice and in principle, Governments cannot generally go back that far. We cannot replicate current provisions with ease or certainty. If we try to do that, we create a form of injustice for someone else. For those reasons, we must reject the new clause. However, I do not want hon. Members to be left with the impression that refusal to accept it means a significant gap in provision. It does not.
      Those who are disadvantaged because they do not have access to home responsibility protection are likely to be few. Many of them and the larger group of carers who are already covered by the protection will be married women. Most will have the benefit of a full married woman's pension. Any pension in excess of that, private or state, will be rewarded. Many of the women will now be widows. On widowhood, the combination of their national insurance contributions and those of their late husbands will have brought the income of most of them up to the basic state pension.
      Andrew Selous: Are not the Government correctly righting a wrong through considering the underpayment of women who worked in colliery canteens in the 1950s? I know from one of my constituents that that is happening. That is absolutely just, but does not that mean that the Government have already established the principle of righting past wrongs?
      Mr. McCartney: The hon. Gentleman is not technically correct. The issue not only involves the former National Coal Board, but applies to employers in the public and private sectors who took contributions for women but treated them in a discriminatory way within the rules of their pension funds. A European ruling has been made, and the tribunal system is now considering its implementation so that it can make good that discrimination. It is an entirely different proposition from new clause 1.
      I understand the hon. Gentleman's point, but we are acknowledging that discrimination occurred by introducing the minimum income guarantee and modernising the pension credit through the Bill. We are already ensuring that women against whom the state system discriminated benefit significantly. We are therefore able to go back in an effective, honest and transparent way to establish incomes for those women. Without those arrangements, they would fall foul of their backgrounds and languish below the basic state pension line. The Bill will bring their incomes up to it, and in many cases, above it.

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      Those who are not in that position will continue to be entitled to the guaranteed credit. Our investment in MIG and other measures such as winter fuel payments mean that all MIG households are at least £20 a week or £1,000 a year better off than in 1997. That is a real terms increase in living standards of 23 per cent. Pensioners who have, until now, been the most disadvantaged can depend on a decent income in retirement.
      We do not know about the whereabouts of the hon. Member for Northavon since 1984. The Sunday Mirror article finishes by stating:
      "The Liberal Democrat plan is to raise pensions by targeting the money at those who need it most."
      I accept the hon. Gentleman's flattery; he is obviously trying to imitate what the Government are already doing in the Bill, which reflects our achievements with MIG. Since coming to power in 1997, we have gone out of our way to right the wrongs of the past and to ensure that those pensioners in poverty are taken out of it, not only now but in the future through the pension credit. I therefore ask the hon. Gentleman to withdraw the new clause.
      Mr. Webb: I am grateful to the hon. Members for Daventry (Mr. Boswell) and for South-West Bedfordshire (Andrew Selous) for their support for the principle of the new clause and disappointed with the Government's response. It was argued that there are drafting problems, and although I do not understand them, I would happily withdraw the new clause if the Government accepted its substance. We can argue about the drafting and if there is a problem, I am happy not to pursue the new clause as long as the Government accept the principle.
      The Minister rightly said that we have not tried to recreate the rules for people who care for the long-term sick and disabled. Trying to do that for 20 or 30 years ago would probably be unworkable. However, trying to establish whether someone had a child and would, under current rules, be entitled to something akin to child benefit is straightforward.
      I am sure that the Minister was not implying that those who apply for pension credit would wilfully mislead. There would be no penalty in those few cases in which people did not want to reveal that they had had a child. It is not like missing something off a benefit form, for which people are penalised; it is an option. If it is embarrassing for a woman to reveal that she has had a child because, for example, the husband does not know about it, there is no obligation to do that. However, most mothers would like the opportunity that the new clause would provide.
      The Minister said that we could be considering events in the 1920s. He also said that when husbands die, many women move on to the full basic pension through widows' pensions rules. However, most of the women whom we are considering have yet to retire or have recently retired. In most cases, their husbands have not reached 65 or died. Although I do not regard myself as gnarled or middle aged, the period that we are discussing—the 1960s and 1970s—is in living memory. It is not therefore implausible to ask people whether they were looking after children in the 1960s and 1970s. I believe that we could take their word for it. That is not an unreasonable basis on which to proceed.
      In the benefits system, we impute all sorts of things that are not so. If people blow all their money to reduce their income to get more benefit, the benefits system treats
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      them as though they still had the money. If people defer a pension and do not draw it when they are 65, the system means-tests them as if they had drawn it because they should not be rewarded for not drawing it. The benefits system uses the "as if" principle all the time. All we want is for people to be treated as if current values attached to bringing up children applied before 1977.
      The Minister kindly drew attention to the press coverage for our campaign for justice in women's pensions. Every time I open my mail, more women throughout the country are joining the campaign because of their sense of injustice about issues such as the subject of our debate. Nothing that the Minister said this afternoon implies that the Government will respond to that. He said that not many people were affected, but the £58 figure is a Government figure. It is the average for newly retired women. We are not considering 90-year-old women who lived and worked in a previous generation, but those who are approaching pension age. If they only have private savings on top of the £58, they do not get rewarded up to £75. We can argue about the number of people who are affected, but we support the principle that they should not be penalised a second time.
      We are not simply considering rules that will apply next year. When the system is up and running, it will apply to a 60-year-old woman for the rest of her life. In other words, we are talking about the rate that she will get not only next year but in 2020, and perhaps 2030. Would it not be extraordinary if, in 2030, we were still paying a lower rate to someone because of caring that they did in the 1960s? It seems extraordinary to perpetuate this discrimination against women.
      I have one more response to the points that the Minister made. If we were to use the imputation system for the guaranteed credit, there would be an issue about reducing entitlement, because we would be imputing a higher basic pension. A better version of new clause 1 might remove references to the guaranteed credit altogether. I take that point, because we are primarily concerned about the savings credit.
      For the avoidance of doubt on the drafting, and because new clause 1 is primarily concerned with the savings credit, as the Minister understood, while observing that I do not feel that the principle of this matter has been addressed by the Government, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 5

      REPORT ON INCENTIVES ETC.
      '( ) The Secretary of State shall as soon as practicable after the end of the financial year 2004–05 and annually thereafter lay before Parliament a report containing an assessment of the effect of the savings credit on the propensity of individuals of working age to save for their retirement; and may invite the Social Security Advisory Committee to comment thereon and make recommendations for any change to structures or benefits which seem to them to be appropriate.'.—[Mr. Clappison.]
      Brought up, and read the First time.
      Mr. James Clappison: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss the following amendments: No. 6, in clause 1, page 1, line 5, after "credit", insert—
      'calculated in accordance with section 2'.
      No. 7, in page 1, line 9, leave out from "2" to end of line 10.
      No. 8, in page 1, line 11, leave out subsection (3).
      No. 9, in page 1, line 18, leave out "and (3) are" and insert "is".
      No. 10, in clause 2, page 2, line 10, leave out "a guarantee" and insert "state pension".
      No. 11, in page 2, line 11, leave out "guarantee" and insert "state pension".
      No. 12, in page 2, line 13, leave out "guarantee" and insert "state pension".
      No. 4, in page 2, line 36, at end insert—
      '(8A) For the purposes of this section, where the client has attained the age of 65 or is a member of a married or unmarried couple the other member of which has attained that age, there shall be disregarded in the calculation of the claimant's income a prescribed percentage of the amount, if any, by which his qualifying income (after deducting such part of his income, if any, as lies between the standard minimum guarantee and the appropriate minimum guarantee) exceeds a prescribed amount (the savings disregard threshold).
      (8B) Regulations may make provision as to income which is, and income which is not, to be treated as qualifying income for the purposes of this section.'.
      No. 5, in page 2, line 40, leave out Clause 3.
      No. 1, in clause 3, page 2, line 42, leave out "age of 65" and insert "qualifying age".
      No. 2, in page 3, line 26, at end insert—
      '(6A) In the case of men aged under 65, such regulations shall provide that the calculation of qualifying income shall include an amount equal to the amount of retirement pension that the claimant is forecast by the Secretary of State to be entitled to at the age of 65. This forecast shall be revised on each anniversary of the initial claim until the claimant reaches the age of 65.'.
      Mr. Clappison: New clause 5 would require the Secretary of State to prepare a report on the effect of the savings credit on savings behaviour, and to invite the Social Security Advisory Committee to comment on that report and to consider recommending change. We have been over this ground before, but I make no apologies for coming back to it, because the effect of the pension credit on the incentive to save, and the amounts actually saved, are matters of real concern, and have been identified as such by many experts and organisations that have looked at the Bill, including those who looked at it when it was being considered by the Select Committee. Their concerns about the effects of the Bill on incentives to save are reflected in their many submissions to the Committee.
      We are holding this debate on new clause 5 against the background of the salutary fact that, as a nation, we are simply not saving enough. The savings ratio is now at its lowest for 40 years, and we hear tell in the media and elsewhere of estimates of a £27 billion savings gap. Against that background, it is important that people should save more, particularly those on modest incomes, and we need to consider the effect of the pension credit on this problem.
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      Will the credit make matters better or worse? The new clause would go some way towards enabling us to find out, because it would require the Secretary of State to prepare a report. We need to remember, when considering this question, that the pension credit follows in the wake of the minimum income guarantee. One of the obvious features of the MIG that was much commented on is that it leaves pensioners on modest incomes with savings in no better position than those without. For those who could see 100 per cent. of the value of their savings coming from the benefits that they received, there would therefore be no incentive to save.
      3.15 pm
      We acknowledge that the Bill seeks to change matters through the introduction of the savings credit. That much is obvious, but what effect will that, and the way in which it is being introduced, have on incentives? Will there be an incentive to save, when what is saved now will, in effect, be subject to a 40p in the pound tax on retirement? That is what this measure will mean for those involved.
      The views of the expert authorities submitted to the Select Committee were decidedly mixed. Andrew Dilnot of the Institute for Fiscal Studies, when questioned by the Select Committee on incentives to save, said that the Government were on "a difficult wicket". Difficult wickets invite spin—I am sure that you know that as well as anyone, Mr. Deputy Speaker—and no doubt we shall be told in due course that the savings credit is an innovative and imaginative way of rewarding saving, as the Secretary of State suggested on Second Reading, when he said:
      "The important point is that the pension credit removes for the first time-this has been widely recognised-the disincentive in the present system whereby someone with moderate savings can find that they are no better off than somebody who has made no effort whatsoever."—[Official Report, 25 March 2002; Vol. 382, c. 600.]
      That raises the question of who introduced the minimum income guarantee and linked it to earnings in such a way that it would be likely to bring more and more people into its ambit, but there we are.
      What will be the effect of these measures? Under the Bill, pensioners will, in one sense, derive benefit from having saved, and no doubt the Minister will take us back to that point. By the time people become pensioners, they will be better off through having saved, compared with those who have not, because they will have the benefit of 60p in the pound for every pound of their savings.
      That, however, is not the question. The question that Ministers must address, and have so far failed to address, is: will it be worth while for workers to save earlier in their lives, when their savings will be subject to an effective 40 per cent. rate of tax later on? What will be the effect on their incentive to save, and on their savings behaviour, at that point in their lives?
      The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): Does the hon. Gentleman accept that the reasoned amendment that he tabled on Second Reading would have left the minimum income guarantee as it is, with a cliff edge, a 100 per cent. marginal withdrawal rate?
      Mr. Clappison: We set out what we proposed to do. I do not accept the hon. Lady's analysis, but she cannot get away from the question of the incentive to save, which is rather a different matter.
      Mr. McCartney: Middle stump!
      Mr. Clappison: I think that I am dealing with the spin rather well.
      Mr. McCartney: Out!
      Mr. Clappison: The right hon. Gentleman says, "Out". I might say that his judgment is as good as some other recent umpiring decisions—but we shall not go into that, Mr. Deputy Speaker. He is absolutely wrong. Neither he nor the hon. Lady will face up to the question of what the effect of this measure will be on the incentive to save. That is the question that I put to them. When one is referred back to other subjects by Ministers, one knows that one is getting somewhere with one's bowling, so let us take this a bit further.
      Bob Spink: I am grateful to my hon. Friend for allowing me to intervene. May I give him a bit of fast bowling from Age Concern on that wicket? A briefing dated today, on just this subject, says:
      "we believe that the pension credit will fail to provide sufficient incentive for younger people to save for their retirement."
      Mr. Clappison: That is very much to the point and very accurate, as fast bowling often is.
      Mr. McCartney: It's wide!
      Mr. Clappison: I hear the Minister saying that the ball was a wide. Perhaps he will try this—
      Mr. McCartney: No ball!
      Mr. Clappison: Before the Minister says "No ball", I must point out that I have not even got as far as the crease. That says much about the quality of his umpiring. Perhaps he will do me the courtesy of allowing me to get that far before he proclaims a no ball.
      Perhaps the right hon. Gentleman will umpire the views of the Association of British Insurers, which has sought to measure the economic benefit of saving. It has found that under these proposals, someone saving £50 a month would have to save for 10 years before they would see any economic benefit from having saved. The association believes that for W years, there would be a negative implied rate of return from saving £50 a month. Less value will be received in increased retirement income than will be paid in through contributions. Perhaps we will get an honest stroke from Ministers in response to that.
      What is Ministers' reaction to the views of the Institute for Public Policy Research—on which the Government look favourably in other circumstances—on this matter? Further to the opinion of Age Concern cited by my hon. Friend the Member for Castle Point (Bob Spink), the IPPR, of all things, says:
      "It would be very hard to argue that the Pension Credit has been designed to generate incentives for current workers to save."
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      What do Ministers say to the National Pensioners Convention, which states:
      "People of working age, deciding how much to save for their retirement will need to take into account the very real possibility—for some a strong probability—of any additional retirement income being taxed at 40 per cent."?
      Ministers may argue—as some of their colleagues have argued in other forums—that people simply will not understand what may happen with the pension credit. They may argue that there will be no disincentive to save, because people will not look into the future and make those calculations, and even that if they do, they will not understand the pension credit. That is one view, but it was disposed of by, among others, Andrew Dilnot, of the Institute for Fiscal Studies, in his comments to the Select Committee. Ministers may not agree with him, but if so they would do well to heed the following warning from the National Pensioners Convention:
      "It is tempting to assume that only a small minority of financially well-informed people will be aware of these facts and that the disincentive effect on saving will therefore be small. It seems to us, however, that financial advisers and providers of pension schemes will have a duty to inform people about such a major factor affecting the outcome of their investment decisions. Even if that were not so, it would be difficult to justify a policy which rested on the assumption that most of those affected by it would be deliberately kept in ignorance of its implication for their future well-being."
      We do not want people to be in ignorance of what these important decisions mean for their future well-being. Ministers need to come clean, and to answer now the question of whether the provision amounts to a disincentive to save. The new clause simply asks that Ministers provide information for a report in due course. If they maintain that there is no disincentive to save, perhaps they could be brave and allow the report to state as much.
      Mr. Graham Brady: I am concerned by the nature of the defence that Ministers appear to be deploying. Is it not true that the perception that the whole savings environment is very complex, off-putting and difficult to engage with already acts as a major disincentive to younger people making proper provision for their retirement? We need a simple approach to promoting saving, not added complexity.
      Mr. Clappison: With the best will in the world, it is not entirely self-evident that the provisions of the pension credit will simplify future pension provision.
      Amendments Nos. 4 to 12 attempt to achieve the simplicity to which my hon. Friend refers. [Interruption.] Ministers may laugh, but that is no easy task. They are drafting amendments designed to make the Bill more straightforward, and to achieve the Bill's original effect, rather than to alter it. You will be pleased to hear, Mr. Deputy Speaker, that I shall not take the House through their precise nature, although the Minister may well choose to do so. If they do not find favour, I do not intend to press them to a vote, given that the simplicity of this issue is not entirely self-evident.
      New clause 5 could not be more straightforward. Let us have an open debate about incentives to save, and access to all the relevant information. I hope that Ministers will respond positively, because I cannot imagine that there is anything they want to keep covered up. Let us be transparent, and bring everything out into the open.
      Mr. Webb: I have a lot of sympathy with where the hon. Member for Hertsmere (Mr. Clappison) is coming

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      from on this issue. I have been advised not to remark on his reputation for googlies, so I shall not do so at this juncture.
      The hon. Gentleman's point about the effect of the provision is critical. Beneath the rhetoric, the state pension credit is actually the minimum income guarantee, plus a boost for those who have saved. If we did not have the additional savings credit the Bill would not be necessary, because the MIG already exists. In essence, the Bill merely adds the new savings credit and tidies up the link between it and the MIG.
      Under new clause 5, I would want any report to consider the effect on people's propensity to save not of the savings credit, but of the whole of Government policy on income in old age. The savings credit might arguably be regarded as the cavalry: it comes along when the Government have completely messed up the incentive to save, and restores it. The Government and the Minister for Pensions are fond of saying that they are the first Government to reward people for saving, but in fact they are the first to have completely trashed the incentive to save. In a sense, they are penitent sinners on this point, but only partially.
      When the Government came to power in 1997, the gap between the basic pension and the MIG—or income support, as it was then known—was about £7 a week. For anyone who could save more than £7 a week, it therefore paid to save. Those who saved £8 a week got the first £7 at the 100 per cent. marginal rate, so they were better off by the extra £1. [Interruption.] Ministers may disagree, but those are the facts. The eighth, ninth or tenth extra pounds all constituted a complete benefit, beyond the scope of the means-tested benefit system. In other words, it paid to save anything more than seven quid.
      When the MIG and the other provisions are introduced next year, the pension will be £77 and the MIG £100, so taking the MIG into account, it will not pay to save £23. When the Government took office, someone who saved £23 a week was £16 a week better off for having done so, but under the proposed rates, such a person will be no better off. The Government merely say, "Whoops"—
      Maria Eagle: The hon. Gentleman seems to be arguing that alleviating pensioner poverty today is providing such a disincentive to save for the pensioners of tomorrow that it should not be done.
      Mr. Webb: As the hon. Lady knows, there are two ways to target pensioner poverty. One is using complicated means-tested mechanisms such as that in the Bill and—dare I say it—in amendments Nos. 4 to 12. The other is using age as a proxy for poverty, because the basic state pension is a guaranteed way of getting money to poor pensioners. Given that the majority of poor pensioners—particularly the poorest in the land, who are entitled to means-tested benefits but do not get them—are older pensioners, pensioner poverty can be targeted by raising their pension, rather than by using complex means-tested benefits. The right hon. Member for Birkenhead (Mr. Field), the former Minister with responsibility for welfare reform, the hon. Member for Hertsmere and I all agree with that view.
      David Cairns: The hon. Gentleman says that there are two separate approaches to
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      alleviating pensioner poverty: complex means testing, with which he disagrees, and targeting by means of age, which he advocates. He will accept that even if we focus on age, in certain circumstances pensioners aged between 65 and 70 will not benefit, even though their incomes are low. For such people a means-tested element would still be necessary, even under his proposal to target by age. The difference is that he is proposing means-testing for the poor only, which increases its stigma.
      Mr. Webb: I was with the hon. Gentleman until his final sentence, which I am not sure that I understood.
      Our view is that—to echo a new Labour phrase—means-testing should be for the few, not the many. That is the distinction. Under our proposal, "the few" would be those under the age of 75 who are residually poor. On average, the majority of those under that age tend to be better off, whereas the majority over that age tend to be poorer. One helps the poor in a universal way by helping the old. It is true that some better-off people would benefit, but it is predominantly poorer people who would benefit. If such people are sufficiently well-off to pay tax on the benefit, they would do so. The Government use the language of guarantees, but the MIG is guaranteed to no one unless they claim it. Some 500,000 pensioners—predominantly older pensioners—do not claim it, but they all claim the basic state pension.
      3.30 pm
      David Cairns: The hon. Gentleman will deliver eloquent diatribes against means-testing in debates on the amendments and on Third Reading. However, for the pensioners who are interested in this debate, will he clarify the fact that under his policy, means-testing will still exist, primarily for pensioners between 65 and 70 who are poor, which increases the stigma of means-testing?
      Mr. Webb: For the avoidance of doubt, the answer to the first part of the hon. Gentleman's question is yes. The question is whether we means-test half or two thirds of the pensioner population, which is the Government's strategy, or whether we have a residual safety net—
      David Cairns: For the poor.
      Mr. Webb: Absolutely. We want the vast majority of people in old age to have a guaranteed income that lifts them clear of the need for top-ups. What the hon. Gentleman and I will want in our old age is a decent pension—whether from this place, the state or anywhere else—so that we do not have to claim a top-up every year. Our strategy would reduce the number of pensioners who need to claim top-ups at all to a relatively low level.
      Mr. Boswell: As the hon. Gentleman will know from our earlier debates, I am very much on his side on such matters. Is not the logic of the position of the hon. Member for Greenock and Inverclyde that the only way to make means-testing acceptable is to put so many people into it that somehow the effect is diluted? The hon. Member for Northavon is arguing for a safety net for the few that is not spread across the whole pensioner population.
      Mr. Webb: That is right. In all such arrangements, we are dealing with a continuum and a trade-off. There is

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      no perfect solution. The Government's mass means-testing solution leaves hundreds of thousands—on the Government's own figures—not getting a penny of what they are entitled to and living below the poverty line. The hon. Member for Greenock and Inverclyde may frown, but the Government estimate that roughly 500,000 pensioners do not claim the minimum income guarantee to which they are entitled. Therefore they are below the poverty line. That is a simple statement of fact, based on the Government's own figures. Paying the money through the pension would mean that everyone in the age category was guaranteed to get it.
      Mr. McCartney: The determinant for older people is not age but income; that is the case whether they are 60, 85 or 90. Significantly, the hon. Gentleman is saying that the Liberal Democrats' proposals for pensions—far from helping the very women for whom he says he is campaigning—will result in the vast majority of those now coming up to pension age getting no benefit whatever. Indeed, they would have to stay on the old-fashioned minimum income guarantee with no commitment that they would be made up to the basic state pension. That is not a small group of women, or of pensioners. It is almost equivalent to the current number of pensioners whom we have taken out of poverty in the first four years of the Labour Government—and kept out of poverty.
      Under the hon. Gentleman's proposals, nearly 2 million people would be left on an old-fashioned minimum income guarantee, an old-fashioned means test. He argues that his proposals are about getting rid of poverty, but he would be making sure that poverty remained not just for this generation, but for every generation thereafter. He is talking economic nonsense.
      Mr. Webb: The Minister is talking complete nonsense himself. The group coming up to pension age have many historic problems in their accumulated pension rights, including the married woman's stamp. We have a range of proposals in our campaign for justice in women's pensions that will address those points to ensure that as few of them as possible have to depend on a means-tested top-up when they reach old age.
      To come back to the perfectly reasonable point made by the hon. Member for Greenock and Inverclyde, there will be some residual role for means-testing. There are aspects of the pension credit that make the minimum income guarantee more humane, and I am entirely in favour of those. For example, sending people a claim form when they apply for a pension is eminently sensible. It is not a case of throwing the baby out with the bathwater; there are administrative aspects of the Bill that I heartily endorse. But the strategy of mass means-testing is not one of them.
      Maria Eagle: The hon. Gentleman just said that his schemes would leave a residual role for means-testing. How many people would remain on the means test under his proposals?
      Mr. Webb: That would depend on exactly how much we could increase the basic state pension by. I do not have an exact figure. The Minister will know that before the means-tested benefits system kicks in, the majority of poor pensioners are women and older pensioners.
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      By loading the increases for older people on to pensioners, we will do the most to get people off the means test altogether.
      The majority of the newly retired are couples, and couples tend on average—partly because one of them is a man—to have higher incomes, so the incidence of means-testing among that age group is much smaller. We are focusing the money where the means-testing is most intense and on the group that is, on average, substantially poorer, and we are guaranteeing take-up with no savings disincentive. That is a powerful combination.
      Annabelle Ewing: On the extension of mass means-testing, can I remind the hon. Gentleman that in new Labour's 1997 election manifesto, there was a pledge to reduce means-testing for pensioners? Perhaps the comments made by Labour Members should be viewed in the context of that pledge.
      Mr. Webb: I do not recall the exact wording of the manifesto, but we all recall the Chancellor talking about an end to means-testing for our pensioners. The semantic hoops through which Labour Members jump to try to get out of that, result in their saying that what is proposed is not means-testing—but I suspect that to the recipients, it will feel very much like it.
      Mr. Clappison: With the benefit of some extra spin, we now know that what the Chancellor really meant was an end to "old-fashioned" means-testing.
      Mr. Webb: I am sure that that is right.
      To return to the amendments, we are interested in the effect of the Government's strategy on the incentive to save, and a report such as that proposed in new clause 5 would have the potential to add something. I have suggested that the scope of the report should be broader than just the effects of the savings credit; it ought to look at the whole strategy. The savings credit is applied to a system in which the 100 per cent. tax rate has been vastly extended in scope and gives a bit back.
      Even the Financial Services Authority produced a report—only last week—which said on page 24, paragraph 4.33:
      "the implied 40 per cent. deduction rate will inevitably be a disincentive to save for some now at work."
      That is the FSA, not some extreme organisation opposed to Government policy. The FSA is, almost certainly, run by the Government.
      Everybody seems to agree that the overall strategy is undermining the incentive to save. That is the beauty of targeting by age; we give people more money in their old age for being old and their savings are theirs to keep on top of that, because they are clear of the means test. The more people we can get clear of the means test, the less we will need complicated savings credits, because they will get to keep the money anyway.
      The gist of what we are saying is that the Government are trying to claim credit for solving a problem that they have made themselves. That is why an assessment of the effect on the incentive to save, as proposed in new clause 5, would be welcome.
      The hon. Member for Hertsmere said that amendments Nos. 4 to 12 were so complicated he would not take us through them in detail, but that they were not complicated

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      compared with the Government's complicated scheme. I wrestled with the amendments for several minutes and they are indicative of the problem of trying to write any such schemes down; they are inherently complex. A simple system with a good basic pension—particularly for older pensioners—and a savings incentive so that they get to keep their own money, is the simplest and neatest of the lot.
      Amendments Nos. 1 and 2 seek to remove yet another respect in which the Bill discriminates against a group of women. The House may feel that I am warming to a theme this afternoon, but there are various ways in which the Bill penalises particular groups of women. There will be women up and down the land who hang on to every word that the Secretary of State says. They will have heard him say, "It will pay to save" and that "pensioners"—the term is unqualified—"will for the first time be rewarded for their savings."
      What the Secretary of State has not said is that women aged 60 to 64 do not count; they do not qualify. He did not qualify any of his statements to that effect. I challenge Ministers to give me any instance of an occasion when the Secretary of State, having made those sweeping statements, has qualified them by saying explicitly that women aged 60 to 64 will be excluded. I would be happy to take an intervention to hear about a time when he has done that. The Secretary of State has failed to point that out. Obviously, those who read Bills and follow the small print will know it, but women aged 60 to 64 are missing out.
      Those women may feel that they are pensioners who have saved. Why can they not be rewarded? The Government's answer concerns equalisation; they have to equalise somewhere because of equal opportunities requirements. However, they have equalised at 60 for the guaranteed credit element of the pension credit. Within the Bill, we have equalisation at 60. When the Government have been forced to equalise, whether on winter fuel payments or concessionary travel for older people, they have equalised at 60, not 65, even though that brings in men aged 60 to 64, who are not state retirement pensioners. Therefore, the precedents exist. There is even a precedent in the Bill for equalising at 60.
      When we raised the issue in Committee and came up with a proposal for achieving our aims, the Minister said that it would not work because men of, say, 63 had not had the opportunity of living to 65 to receive a full pension and being assessed on that basis. It was, the Minister argued, discriminatory to assess men at 63 on the basis of the pension that they had accrued up to that point.
      Amendment No. 2 therefore proposes an alternative strategy. Instead of assessing those people on the basis of the pension accrued to that point, they would be assessed on the pension that the Department forecast that they would receive at 65. Each year, as men approached 65, the calculation would be done afresh. Such calculations are done all the time by the Government, and we have all seen pension forecast statements. It would not be complicated to provide such forecasts for men aged 60 to 64.
      Amendment No. 2 would be non-discriminatory, because the message for women over 60 would be, "You have had your full working life to build up a pension, and
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      we will assess on the basis of that pension." The message to men would be, "We will assess you on the basis of the pension that we expect you to get at the end of your full working life." That deals with the point about discrimination, which was the Minister's principal objection, and it would bring into the scheme women aged 60 to 64, who are another group of second-class citizens under the Bill.
      The issue of incentives to save is important. I welcome the spirit of new clause 5, if not the detailed string of amendments that go with it. In our view, a related aspect is that women aged 60 to 64 who have saved should not be excluded. If they were included, the Government would have to agree that the new clause would provide an additional incentive for women to save. Therefore, the Government should welcome our amendments.
      Bob Spink: The encouragement of saving is a key area in which the Bill falls seriously short. The pension credit might even depress the savings ratio, which is already dangerously low. New clause 5 is an important addition because it would focus attention on the Bill's impact on the encouragement of young people to save for their retirement. The Bill should not discourage people from saving for their retirement, but it may have that impact.
      The Bill should provide an incentive for younger people to change their behaviour. It should encourage them to save more for their retirement and to consider more carefully their post-retirement income and lifestyles. In short, it should encourage them to be prudent. New clause 5 would facilitate the measurement of the Bill's success in achieving that increase in prudence, although we believe that the Bill may discourage prudence. New clause 5 is, therefore, an essential part of the necessary control mechanism for the Bill, without which it would be less effective.
      The Government should have no problem accepting new clause 5 as a simple, common-sense feedback mechanism that would illuminate the performance of the savings credit measure and enable the legislators to make any necessary changes in that light. The only reason for the Government to resist this common-sense addition to the Bill is if they lack confidence in the potential effectiveness of their savings credit measure and would be embarrassed to have light thrown on its performance.
      David Cairns: I appreciate that the hon. Gentleman is making a narrow argument about new clause 5 merely adding the requirement to submit a report. However, he has made several comments about the need to encourage prudence. Can he outline exactly what his party's policy is on encouraging prudence and getting people to save for their old age?
      Bob Spink: I should be delighted to do as the hon. Gentleman suggests, but I am sure that if I did so, you would immediately call me to order, Madam Deputy Speaker, because we are debating new clause 5. What do the Government have to be afraid of if more light is shed on the matter, which is all that new clause 5 seeks to do?
      We should all be concerned about today's pensioners, because they have had a raw deal from the Government—[HON. MEMBERS: "Oh!"] They certainly have. The proportion of national income taken by pensioners today is lower than it was under John Major's Government

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      in 1997, and that is disgraceful. We should also be concerned for the well-being of tomorrow's pensioners. Only around half of people below state retirement age are currently saving for their retirement. That is a chilling and frightening statistic that we should do something to correct. We should increase the number of people who save for their pensions, but the Bill will not do that. The new clause would illuminate that point and I therefore commend my Opposition colleagues for tabling it. I urge the House to accept it because it would enable us to monitor what is happening to savings and to change the operation of benefits to encourage greater prudence.
      3.45 pm
      Mr. Paul Goodman: I, too, wish to speak in support of new clause 5. It is important to lay out clearly exactly what the new clause says. It falls into two parts. The first would invite the Secretary of State to lay before Parliament annually
      "an assessment of the effect of the savings credit on the propensity of individuals of working age to save for their retirement".
      The second would allow the Secretary of State to invite the Social Security Advisory Committee—a neutral and fair-minded body—to comment on the report and
      "make recommendations for any change to structures or benefits which seem to them to be appropriate."
      I serve with my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) on the Work and Pensions Committee, and in the course of our inquiry into the pension credit we heard much evidence about what expert individuals and bodies believed would be its effect on future saving. The Norwich Union, for example, declared that the incentive to save is "insufficient". The Institute of Actuaries said that it would become
      "impossible to provide savings advice to those on low to medium incomes".
      The IPPR—a body associated not with the Conservative party, but with the Labour party—[Interruption.] My hon. Friend the Member for Daventry (Mr. Boswell) says, "Not yet." We shall see. The IPPR said that the credit was
      "a highly opaque means of generating the right incentives: it is extremely difficult for individuals to know what to expect from it".
      Andrew Dilnot of the Institute for Fiscal Studies said that in connection with the incentive to save, the Government were
      "on a much more difficult wicket."
      That has given rise to the various cricket metaphors that have been thrown around the Chamber.
      Kali Mountford: I applaud the hon. Gentleman for returning the attention of the House to the work of the Work and Pensions Committee, but is he not ably demonstrating that the Committee had no trouble at all in taking evidence from the Social Security Advisory Committee? From his work on the Work and Pensions Committee, is he not aware of the annual report of the Department to the House that already exists? Would not the new clause simply duplicate matters?
      Mr. Goodman: In a sense the hon. Lady is making my case for me, although I am sure that she will not agree. I see no reason why the Committee would not be able to supplement its work with a report of the kind envisaged by my Front-Bench colleagues. I shall cap the evidence
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      to the Committee that I have quoted with what Age Concern has said about the pension credit, which has already been mentioned this afternoon. It said, baldly and clearly, that it believes
      "that the pension credit will fail to provide sufficient incentive to younger people to save for their retirement."
      David Cairns: The hon. Gentleman cites many esteemed experts to support his case, but of course he omits the comments made by Lord Fowler in the other place. Lord Fowler, while welcoming the measure, said that his only regret was that his Government had not introduced it when they had the chance.
      Mr. Goodman: I am glad that the hon. Gentleman mentioned the comments of Lord Fowler, because if there was an annual report of the type to which my hon. Friends have referred, we should be able to see whether all those who gave evidence to the Select Committee—and indeed Lord Fowler—were right or wrong. The hon. Gentleman, too, is helping my case.
      Finally, I quote from the conclusion of the Select Committee itself. The Committee is made up of many more Labour than Conservative Members, but it is a fair-minded Committee. On incentives to save, the Committee stated:
      "We have concluded that, whilst the Pension Credit will enable today's pensioners to see a reward for saving"—
      I include that phrase because I want to be sure that I quote from the Committee's report in a way that is fair to the Government—
      "there is no clear evidence that it will actually increase younger individuals' savings."
      I return to my starting point. In essence, the new clause seeks only to test the claims that have been made by the Labour Members who intervened during my contribution: it would make an independent assessment of whether the Government are right or wrong to say that the pension credit will increase incentives to save.
      All the expert advice of which I am aware is that the pension credit will decrease the incentive to save. The Government believe the opposite. If they believe that my hon. Friends on the Front Bench and I are wrong, they need only produce a report, as the new clause proposes, and let a fair-minded and independent body comment and arbitrate on it. I urge the House to accept the new clause.
      Annabelle Ewing: I rise to support the basic premise of new clause 5. I do not understand why the Government are afraid of having to produce a report. They maintain that, inter alia, the Bill will act as an incentive to save. If that is their objective and if they are keen to ensure that the Bill is indeed an incentive to save, they should be willing to do everything that they can to achieve that objective. The preparation of a report—supplementary to other reports produced by the Department for Work and Pensions—would be a reasonable way of assisting the Government in securing their stated objective.
      As we have already heard, various third-party bodies have expressed concern as to whether the measure will really act as an incentive to save. I do not want to go over the same ground by repeating those concerns. The key question is: how will the Bill act as an incentive to save when individuals do not have sufficient financial information early in their life to assess, or predict,

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      the likely value of their savings many decades down the line? That is an important issue that could be discussed in a report. It should certainly be given further consideration.
      Maria Eagle: The hon. Lady has made a good point. One of the best ways to ensure that people save more for their retirement is to give them information about what their retirement income would look like in the light of their current provision. In that respect, the Government are promoting joint pension forecasts, so that individuals receive a document annually that shows what they would be likely to receive from their private and state pensions. Does the hon. Lady not agree that such information would be much more useful than a general report to Parliament?
      Annabelle Ewing: The two are not mutually exclusive. It is helpful to learn that there will be some Government-assisted prediction of the likely pension.
      Mr. Clappison: May I interject a bipartisan, consensual note? Does the hon. Lady agree that it would be useful if those pension forecasts included details of how much the Government will take from people's pensions through the pensions tax that the Chancellor introduced in 1997?
      Annabelle Ewing: The hon. Gentleman has made his point and I do not want to go down that road today; to do so might be to detain the House much longer than anticipated.
      Let me return to the Minister's point. The prediction would be very general because the financial information would not be accurate enough; for example, we would not know the value of the guaranteed income 20 years down the line. It would thus be difficult to make a meaningful prediction of the value of someone's savings. In any event, the two elements are not mutually exclusive and I do not understand what it is the Government are so afraid of.
      The hon. Member for Northavon (Mr. Webb) felt that the amendment was too restrictive and that we should consider the overall effect of the Government's policy on savings. I agree with him. I share many of his concerns about the situation faced by pensioners at present. I wonder whether the Bill will really make much difference as regards lifting pensioners out of poverty.
      In Scotland, we face a disgraceful situation: one in four pensioners live in poverty. That is unacceptable and I am not convinced that the Bill would do much more than tinker at the edges. If it helped even one pensioner, I would certainly support it, but it represents a missed opportunity to deal with pensioner poverty.
      I turn briefly to the amendments. I confess that I was a bit puzzled about amendments Nos. 6 to 12, especially Nos. 4 and 5. Could we have some further elucidation of them?
      I support the position of the hon. Member for Northavon on amendments Nos. 1 and 2. As he said earlier, there is discrimination against women and the Government are doing nothing to end it. The amendments are a reasonable way of tackling that unacceptable discrimination. The point that there is a contradiction in the Bill was well made: although the Government accept
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      that the problem can be dealt with vis-à-vis the income guarantee element, they seem to take a different view on the savings credit element. Perhaps that will be clarified. I look forward to the Minister's comments.
      Andrew Selous: I, too, speak as a member of the Select Committee on Work and Pensions. Sadly, I note that only Conservative members of the Committee are in the Chamber for the debate.
      The Committee's excellent Chairman, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), frequently reminds us that, as Committee members, we are simple seekers after truth. That splendid phrase encapsulates the intention of new clause 5, which would cost the Government nothing; the expense for the Department for Work and Pensions would be negligible.
      It is excellent that the Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle), has confirmed that there will be annual statements for pensioners of future provision from both their private and public pensions. I very much welcome that; the information will be extremely useful for individual pensioners. However, when, as a nation, we are looking at a £27 billion savings gap, we need aggregate information, covering the whole country, to guide experts in the field and to advise the Government as to what should be done.
      The hon. Member for Colne Valley (Kali Mountford) asked why the Select Committee could not examine the matter annually and provide the information. I must point out to the hon. Lady that the scope of the Committee's inquiries is extremely wide. Only yesterday, we considered the Child Support Agency. We also look into the whole field of work. It is not always possible or practical to expect a Select Committee annually to provide information, as she suggests, given the range of the Department's activities—the Department spends £110 billion a year.
      I commend the new clause to the House. It will cost the Government nothing and it could shed some useful light on this extremely pressing matter.
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      Mr. Brady: I shall be brief. I have listened with interest to the comments of my hon. Friends and hon. Members from other parties.
      On amendments Nos. 1 and 2, about which the hon. Member for Northavon (Mr. Webb) spoke, I was interested to hear that the Government's response has entirely concerned the discrimination that they believe would result in favour of women aged 60 to 64. Will the hon. Gentleman or the Minister comment on the viability of such an argument, given that the transitional arrangement is in itself clearly discriminatory? Ministers have accepted that that arrangement is appropriate. I cannot therefore see why they should not also accept some other measures that try to incorporate greater fairness.
      On new clause 5, we must take into account the context in which we are trying to deal with the problem. My hon. Friend the Member for Hertsmere (Mr. Clappison) described the massive damage that the Government have already done to the savings ratio. Hon. Members on both sides of the House are acutely aware of the difficulties that so many pension schemes are facing—whether those

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      are the problems of Equitable Life or of the increasing number of people who will no longer be covered by final salary pension schemes. We are very much aware of the damage that has been done to pension funds by the Chancellor's £5 billion tax on those funds.
      Against that backdrop and given that young people are not saving sufficiently, the new clause is a modest but important attempt to improve the situation. Young people are deterred from saving because they feel that the system is too complicated, is not worth it, does not apply to them and is not relevant and, tragically, by the knowledge that they will not benefit fully if they take responsible action and try to provide for themselves.
      The Minister must reflect on one crucial question. We would not be here today dealing with this new clause and the amendments, or indeed with the Bill that will introduce the pension credit and the savings credit, had the Government got it right in the first place and had they not created a problem with the introduction of the minimum income guarantee. Had that guarantee been accompanied by such a requirement to produce an annual report on the savings behaviour of the nation, the Government would have understood the crisis sooner and the seriousness—
      Maria Eagle: Did I hear the hon. Gentleman say that the minimum income guarantee is a problem? It is a poverty alleviation measure of which the Government are proud.
      Mr. Brady: I think that the Minister can do better than that. We all accept that there are problems—even the Government clearly accept it—with people's willingness to save and to make proper pension provision for themselves. Frankly, the hon. Lady's point was rather facile given that hon. Members on both sides of the House accept that something needs to be done.
      Mr. Goodman: Did the Minister for Pensions not refer earlier in the debate to some of the problems caused by what he called the "old-fashioned MIG", making it clear that he thought that the pension credit was needed to alleviate some of those problems, which is what my hon. Friend was referring to?
      Mr. McCartney rose—
      Mr. Brady: I think that the Minister wishes to intervene immediately.
      Mr. McCartney: We are talking about old-fashioned income support. Perhaps the hon. Gentleman would like to offer an apology for encouraging young people to come out of their pension schemes and go for personal pensions, which led to millions of such pensions being mis-sold. The Labour Government have had to clear up that mess.
      Mr. Brady: Ministers are now competing with each other to make silly and irrelevant points, which they are doing rather well. I am sure that I heard the Minister refer to the "old-fashioned MIG". In some of his more red flag-waving moments I think he thought of something else as being an old-fashioned MIG not so long ago. He was
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      referring to the minimum income guarantee and not income support. Perhaps the record will now be hastily corrected, but that was indeed what he said. He referred to the minimum income guarantee as the "old-fashioned MIG". Perhaps it was a Freudian slip, but it was a clear acceptance that the Government have created problems.
      If the Government had been prepared to incorporate a proper review procedure such as the one that we seek today, they might have arrived sooner at the conclusion that they now appear to have reached that something needs to be done to "fine-tune", the Minister may say, but certainly to ameliorate the situation.
      If the Minister is going to be open minded and try to do the best job he can with the legislation before us, he should accept new clause 5 without any reservation.
      Maria Eagle: The debate on this group has been very lively. I hope to be able to answer as many questions as I can get through without testing the patience of the House too much. The hon. Member for Altrincham and Sale, West (Mr. Brady) has just been talking about the minimum income guarantee. We know that the Conservative party dislikes it and thinks that it is a problem. Indeed, the Leader of the Opposition said in March 1999, when we were discussing the MIG in the House:
      "That is a huge rise in spending…I can think of nothing to recommend it."—[Official Report, 15 March 1999; Vol. 327, c. 740.]
      The Conservatives have never liked the minimum income guarantee because they do not like alleviating the poverty that they caused pensioners.
      Mr. Brady: If the Minister likes the MIG so much, why is she legislating to remove it?
      Maria Eagle: That is a wide long hop, to return to the cricket analogies that we were using earlier. The minimum income guarantee is based on income support rules. The fastest way we could introduce the scheme to alleviate poverty was to use the existing rules. We are now changing those rules to make them much simpler and to make the scheme better, so I have no problem in dispatching that comment to the boundary. The hon. Gentleman will have to try harder, although I probably should not have reintroduced cricket. I get the feeling that I may regret it at some point this afternoon.
      Annabelle Ewing: Retaining the nice humour that we seem to be enjoying in this interlude in hostilities, could the Minister give me a glossary of terms, as I am getting a little lost with all these cricket analogies?
      Maria Eagle: I am sorry to hear that the hon. Lady is not as familiar as some hon. Members with cricketing terminology, because Scotland has rather a good cricket team. I would have expected her to have watched their games occasionally. I cannot promise to give her a glossary at this moment as I am sure that Madam Deputy Speaker would bring me to order straight away, but I can point her to the section in the Library that contains "Wisden". She will no doubt find a good glossary of cricketing terms there. However, I must get on if I am to have any chance of dealing with the meat of the debate on this group, which has been very interesting.

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      New clause 5 was moved by the hon. Member for Hertsmere (Mr. Clappison) at some length and supported by most if not all Conservative Members present and also by some hon. Members from other parties here present. The purpose of the new clause is to ensure that an annual parliamentary reporting mechanism is in place on the effect of the pension credit on an individual's incentive to save for retirement. I do not think that anyone would object to the House and the Government, or anyone who is considering these matters, having as much information as possible about the effect of policies on people's behaviour. Information is a good thing. The Government try to base their policies on evidence, and I am sure that most hon. Members would agree that that was a good thing.
      The new clause would, however, require the Secretary of State to lay an annual report before Parliament setting out the effect of the pension credit on the individual's incentive to save, and would give the Secretary of State the authority to invite the Social Security Advisory Committee to comment on that report and make recommendations for changes to the structure of benefits that seemed to it to be important.
      The new clause is not necessary because the Secretary of State already has the power to ask the Social Security Advisory Committee for advice on any social security matter. In fact, if Opposition Members look at paragraph 20 of schedule 2, they will see that it will amend section 170(5) of the Social Security Administration Act 1992, so that the Bill, when enacted, will become a relevant enactment, which will bring pension credit into the existing SSAC framework. The SSAC may give advice and assistance to the Secretary of State in connection with the discharge of his functions under those enactments, which will include the Bill. Of course, under section 170(3) of the 1992 Act, he may refer to the committee for consideration and advice such questions relating to the operation of any relevant enactment as he thinks fit. In that sense, the power already exists in the Bill for the Secretary of State to make references to the SSAC if he wishes to do so. So the new clause is not necessary; nor would it add anything to the existing powers.
      Of course Ministers are accountable to the House for the introduction and monitoring of any new policy. That is how things should be done. I am sure that Opposition Members will continue to seek Adjournment debates and ask parliamentary questions to discover how the Bill is working if it is enacted. That is the right way to deal with things, and new clause 5 would add nothing.
      It is technically very difficult to produce a report that specifically separates the effects of pension credit from other impacts and policies designed to promote incentives to save for retirement. It would be particularly difficult to produce a report that isolated whatever the incentive, or disincentive, effect of the Bill may be on the propensity to save, as the new clause puts it, so there could be rather more confusion.
      I hope that I shall not be unfair to the hon. Member for Hertsmere if I say that he probably tabled the new clause to promote a debate about incentives to save. It would probably be fair to say, having listened to the debate, that he certainly managed to have such a debate.
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      [Interruption.] He is chuntering away, and I hope that I can hear what he is saying. I am talking about new clause 5 and trying to deal with the points that he made.
      Mr. Clappison: There is no mystery about new clause 5, because it refers to
      "the effect of the savings credit on the propensity of individuals of working age to save for their retirement".
      That is precisely what the phrase "incentives to save" means.
      Maria Eagle: The point that I am trying to make, although obviously not clearly enough for the hon. Gentleman, is that it is quite difficult to disentangle the incentive of one policy from all the other incentives or disincentives that are flying around. That is the problem with the new clause.
      The hon. Gentleman was trying to promote a debate about incentives to save, and in that respect I want to answer some of the points that he made. He rightly said that many people of working age are not saving enough for their retirement. No one would disagree with that. Ministers have said at the Dispatch Box that people are not saving enough. He also referred to the alleged £27 billion savings gap, as did some of his colleagues. He made the point that, if the Bill were implemented in that way, it would act as a disincentive to save for people of working age, rather than rewarding savings, which is what we think it would do.
      A tension inevitably exists between the need to ensure that there is a floor below which pensioner incomes do not fall and the need to ensure that today's workers have a clear incentive to save. The Bill provides a mechanism for doing both, by ensuring that we can tackle poverty among today's pensioners. May I say gently to Conservative Members that, after their 18 years in power, our priority when we came to power in 1997 had to be to do something, as part of a decent pensions policy, to alleviate the pensioner poverty with which they left us?
      Things have not got worse. The claims made by the hon. Member for Castle Point (Bob Spink) were complete nonsense, and I do not recognise any of the points that he made as being based on any kind of fact whatever. If he could point out his source for the claims that he made, I should be very interested to see it.
      4.15 pm
      Mr. Goodman: Will the Minister not acknowledge that even the pension credit's supporters recognise that the difficulty with the Government's approach is the extensive reliance on means-testing, that up to roughly a fifth of those entitled to the MIG do not take it up, and that there is no evidence at all to show that take-up will increase under the pension credit?
      Maria Eagle: I shall come to some of the points that the hon. Gentleman makes later. Take-up is obviously important. We want to promote take-up to ensure that those who are entitled to benefits take them up. One of the ways in which pension credit represents an improvement in that regard is that the so-called means test—the information that people will have to provide us with—is much simpler and much more straightforward. The weekly means test that currently exists for income support and the MIG will disappear, and people will

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      normally only have to make a claim once every five years. That will lead to a considerable improvement in take-up, which is what we aim to achieve.
      The hon. Member for Hertsmere suggested that the Bill will involve a disincentive to save, but the pension credit is about fairness; it will reward thrift instead of penalising it. For the first time, those who have saved a modest amount for their retirement will be rewarded for doing so by receiving the savings credit. That has not been the case in the past. So the Bill will remove a disincentive to save for people who were likely to qualify for the MIG. Instead of losing benefit pound for pound, as happens under the old income support and the MIG systems, they will receive a 60p a week reward for every pound saved in the target income band. That is not a disincentive to save; it is a reward for saving.
      No hon. Member has so far mentioned that the capital rule changes that we are making in pension credit are very beneficial. We shall treat capital five times more generously than it is treated under the old income support and MIG-type rules. We have designed pension credit to promote saving in respect of the capital rules. We will abolish the current rule that excludes pensioners with £12,000 or more in savings from any help at all.
      Income from savings below £6,000 will be ignored. For savings above £6,000, a notional rate of income, set at half the current MIG rate, will be assumed. Those improvements ought to encourage people and those who have been excluded in the past because of their capital to benefit from the savings reward. All those things are an incentive to save, rather than a disincentive, because they will explicitly provide a reward for savings. That is one of the Bill's main aims, and I contend that that is exactly what the Bill will do.
      Of course Opposition Members needed to support their assertions. In doing so, they read out comments made to the Select Committee during the evidence that it took, as well as other sources—briefings and so on—that have been circulated while we have been considering the Bill. However, they did not read out all the quotes from all the organisations—not that I am shocked about that—and there are some other quotes from respectable organisations in the pensions world that agree with the Government that the pension credit will provide an incentive save.
      For example, the Association of British Insurers said:
      "The ABI welcomes the Government's proposals for a Pension Credit as an important step in addressing the issues which may currently discourage those on moderate incomes from saving for their retirement."
      The National Association of Pension Funds said:
      "The NAPF welcomes the concept of the Pension Credit and believes that it will go some way to rewarding low income pensioners for their thrift during their working lifetime. It will also assist in creating the right environment for today's workers on low or modest incomes to be able to justify making a commitment to a long term pension saving vehicle."
      Legal and General said:
      "Legal and General is confident that the pension credit has the potential to be a powerful encouragement to save for low or middle income groups."
      I could read out many more. Obviously, Opposition Members read out the quotes that supported them and they will not be surprised that I have read out some of the quotes that support the Government's position, but Opposition
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      Members ought at least to accept the fact that the professional view is not all one way. Many professionals in the industry believe, as do the Government, that pension credit will provide an incentive to save. I would not therefore accept the Conservative party's claim that our proposals are disincentives to save.
      Mr. Goodman: The hon. Lady is being very fair. Rightly, she says that Conservative Members have a propensity to quote those organisations that believe that the pension credit does not provide an incentive to save. She has just read out quotes from bodies that say that it is an incentive to save. Why will she not therefore support the new clause, which would allow a neutral body to make the judgment?
      Maria Eagle: If the hon. Gentleman were to be fair, he would accept that I have said that the powers already exist to enable the Government to do as the new clause suggests. Therefore—
      Mr. Brady: Will the Minister give way?
      Maria Eagle: If the hon. Gentleman gives me a chance to finish, I might consider giving way to him, as long as he does not throw a cricketing analogy at me.
      The Government already have the power and authority to do as the new clause suggests. I have made it clear that we believe in evidence-based policy making and that the House has the power and the duty to hold the Government to account, as I am sure it will.
      Mr. Brady: I promise no cricketing analogies. The Minister says that the new clause is not necessary because the Government already have the power that it would provide. I know that my hon. Friend the Member for Daventry (Mr. Boswell) is eminently reasonable, and if she were to give an undertaking that the Government would use those powers and commission a report on an annual basis, we might be persuaded to consider withdrawing the new clause.
      Mr. Boswell: Tempting.
      Maria Eagle: It might be tempting to give such short answers, as the hon. Member for Daventry (Mr. Boswell) suggests, but it is usually foolish for Ministers to give in to that temptation. We are committed to evidence-based policy and we have the power to find out and do all the research that we need to do to evaluate our policies, and we shall do so. There are some technical problems in respect of isolating propensity to save in relation to one policy, as opposed to everything else that is going on. The point that I am trying to get across is that I am not hostile to the idea of evaluating policy—we are in favour of that but the new clause is a flawed way of doing it.
      David Cairns: Would my hon. Friend not agree that the reason why we are having so much debate and so many speeches by Conservatives Members on the issue of reporting is that, when it comes to substantial policies for making the lives of Britain's pensioners better, they have absolutely no alternatives?
      Andrew Selous: At the moment.
      Maria Eagle: The hon. Member for South-West Bedfordshire (Andrew Selous) is a very honest man. My hon. Friend has received his reply.

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      I do not want to try the patience of the House. I hope that I have dealt with the issues in relation to new clause 5 in detail and that Conservative Members, although they may not like what I have said, will accept that I have at least attempted to answer their points.
      Interestingly, when the hon. Member for Hertsmere referred to amendments Nos. 4 to 12—he did not technically move them, of course—he mumbled something about them reducing complexity. He went on to say that they were so complex that he could not and would not deal with explaining to the House what they meant. I was hoping that he would do so, because, on giving them a close look after they had been tabled, I hoped that I would receive a little guidance in his opening remarks.
      Mr. Clappison: I am tempted.
      Maria Eagle: Oh, the hon. Gentleman is feeling tempted now. I shall not tempt him too much. Given that he did not set out clearly precisely what the amendments were about and what he was about—one wonders how they got written, given that nobody is quite sure what they are about—I must crave the indulgence of the House and deal with them in relation to my interpretation of them rather than the interpretation of the Members who tabled them.
      Mr. Boswell: Perhaps I can assist the Minister, as my name is also attached to these amendments, although, for technical reasons, I did not move them. Indeed, it would take a long time to explain them. They are, as it were, derivatives of amendments moved in another place by the late and sincerely lamented Baroness Castle. They are intended to be entirely neutral in effect. The reason they are more complex than the amendments moved by her and Baroness Turner in the other place is that they have been upgraded to take account of at least two of the objections made by the Minister's colleague Baroness Hollis, and we felt that her third objection could have been dealt with in another way. They therefore have a degree of commonality of pedigree, even if the Minister is not prepared to accept them.
      Mr. Brady: Middle stump.
      Maria Eagle: We are back to cricket again. I agree that, given that explanation, the amendments have a degree of pedigree behind them. On reading them, it was apparent that there was a great deal of ingenuity behind them—I have even written "ingenuity" on my notes. Even though I thought that they were tabled by the Conservative party, I was about to concede that they were ingenious, which they are. If we accept the new clause and amendments at face value as an attempt to improve the Bill, I have some points to make about their faults.
      Clearly, clause 3 is a complex piece of work, and it was recognised in Committee that it was not the clearest drafting that we have ever seen. When one tries to set out a mathematical calculation in words, one is already at a disadvantage—that is why we have mathematics—but that is what the parliamentary draftsman who produced clause 3 had to do. The calculation of the pension credit
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      in the Bill has two parts. First, a single pensioner who has an income below £100 will receive 60p a week for every £1 of savings that they have over £77, building to a maximum of £3.80 a week for someone whose weekly income from pensions and savings is £100. Secondly, if a single pensioner's income is above £100, the weekly maximum savings credit of £13.80 starts to reduce by 40p for every £1 of original income. That is the basic calculation.
      To achieve the same end, the new clause and amendments introduce an income disregard. The way they work is quite clever, because it seems that the calculation that they introduce works across the entire income range to produce the same figures as the calculation in the Bill. That is why I use the word "ingenious"; they are ingenious. I am not absolutely sure, however, that the calculation is any more transparent than the one in the Bill. In addition, there is a flaw. The current Bill distinguishes between the two components of the pension credit—the guarantee credit and the savings credit—whereas, effectively, the new clause and amendments do the calculation in a different way, which brings everybody's income below the guarantee level using disregards. That was put forward as more simple because, I presume, there is one element instead of two. I hope that I am getting it right.
      Mr. Boswell: You are.
      Maria Eagle: Good. The problem with that is that the guarantee credit is a poverty alleviation measure and a passport to other benefits, receipt of which is dependent on receipt of guarantee credit. Without guarantee credit, below which everybody's income is reduced before being topped up, there is a difficulty in how to identify those who might be eligible, by passporting to other elements of income support—for example, severe disability premium and carers premium. That is one set of problems with the proposals.
      Another defect is that the new clause would exclude pensioners with a downrated guarantee credit, because they were in hospital for more than 13 weeks, from benefiting from the savings credit. As the House knows, or at least, as Members on the Committee know, savings credit should not be downrated. Were we to adopt the proposed formulation and calculation, we would be prevented from being able to differentiate those who had guarantee credit and savings credit, and which one should be downrated.
      Mr. Boswell: I had, in a sense, already trailed the Minister's objection to one point about the passporting of benefits. If we had gone on at length about the approach that we would have taken, we would have said that only people with incomes not exceeding the appropriate minimum guarantee would be passported. Although I have not considered the point in detail, I think that it would equally have been possible to have maintained the savings credit about which she has also expressed concerns.
      4.30 pm
      Maria Eagle: That is interesting, but it still prompts the question: why bother doing the calculation in a different way if it means taking a different route to exactly

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      the same place? What is the benefit of doing that? We need two elements of the pension credit, because they are essential to enable us both to support the income of pensioners by way of the guaranteed credit and to make transparent—this is a main policy aim of the Bill—the fact that there will be a reward for saving. The hon. Gentleman's approach would remove that clarity, because it would not be clear that a specific element of the pension credit would be a reward for savings. That would have an impact on incentives. I know that Opposition Members do not always accept our point of view, but we believe that their approach would be bad in that regard.
      I hope that I have dealt with the amendments tabled by Conservative Members, so I shall move on to some of the points made by the hon. Member for Northavon (Mr. Webb). I intervened in his speech when he appeared to complain about our proposals for the alleviation of poverty. He suggested that, by increasing the amount of the minimum income guarantee—soon to be guaranteed credit—we would create a problem. However, I believe that we are helping to alleviate poverty. I would have thought that Liberal Democrats were in favour of that—they used to be.
      Perhaps the hon. Gentleman is moving a bit closer to the main Opposition party in saying that he is not really in favour of alleviating poverty even though we inherited from the Conservative party, when it left office after 18 years, a far wider income disparity than existed when they came to office. We were very keen to do something about that.
      Mr. Webb: I am never entirely sure whether the Minister is wilfully misrepresenting my position. I made it absolutely clear that we believe that there are two strategies for tackling pensioner poverty: the mass means-testing route or targeting by age. Each has strengths and weaknesses and each involves trade-offs. I made it perfectly clear that we did not oppose attacking poverty but that we thought that the Government's approach had damaged savings, and missed the people who do not claim under the complicated schemes. We think that there are better ways of alleviating poverty, and that is clearly what I said. We do not disagree about the fact that there should be a strategy for dealing with poverty.
      Maria Eagle: The approach that the Liberal Democrats have chosen would not achieve that aim, whereas our policies will.
      I assure the hon. Gentleman that I am not in the business of wilfully misrepresenting him. Perhaps he is in the business of not being quite as clear as he might be. I listened to him carefully and he basically said that targeting could be achieved without any form of means-testing—[Interruption]—without a form of mass means-testing is the phrase I think he used. He referred to using age as a proxy for poverty and signed up to the reasoned amendment on Second Reading that made that point. That is why I see a lessening gap between the policy of the official Opposition and the Liberal Democrats.
      Both parties have referred to age additions as targeting without means-testing. The hon. Gentleman said that the biggest income gaps could be proxied by age, and therefore that age additions were a way of dealing with
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      the problem without resorting to mass mean-testing, as he put it. However, the family resources survey shows that the biggest income gaps are between people in the same age groups, not between people in different age groups. So his point is simply not true.
      The hon. Gentleman proposes to give extra money to people such as Baroness Thatcher. Whatever one thinks of her, she is a wealthy woman and has been rewarded for her work. He would give extra money to Baroness Thatcher because she is over 75 but not to a poor pensioner who is 60. If he really is suggesting that that is a way of targeting poverty, he has got it very wrong.
      The hon. Member for Northavon suggests that we should pay the £2 billion that the pension credit will cost to the over-75s, but that would still leave three quarters of that group short of the current MIG level. When I asked him for his calculations for those who would be still on the MIG under his scheme, he was not able to provide them and he did not give his figures for what he might raise the pension to. However, if we were to raise the basic state pension to the current MIG level, which is probably higher than he would suggest, that would cost £9.7 billion net and it would not target the poorest pensioners. In fact, the poorest pensioners would have their benefit reduced pound for pound because of the income support rules and the 100 per cent. marginal rate of deduction. That would still leave 1.6 million pensioners entitled to the MIG. His policy would not even achieve his aims or deal with the problems with which the pension credit deals.
      On amendments Nos. 1 and 2, points were made about those aged between 60 and 64. As we discovered in Committee, it is a difficult issue. The hon. Member for Northavon has also been fairly ingenious in coming up with a different way of achieving what the amendments he tabled in Committee tried to achieve. Amendments Nos. 1 and 2 seek to rectify the anomaly, as he sees it, of restricting the savings credit for men and women over 65 by making it available to both men and women from the same age as for the guaranteed credit, which is currently 60.
      The amendments would set the minimum age for the savings credit at the qualifying age rather than the age of 65. The hon. Gentleman has used that device, and the qualifying age would apply to the guaranteed credit and to the savings credit. Under the Bill, the qualifying age is different for the guaranteed credit and the savings credit.
      The problem with the hon. Gentleman's approach is that we still do not have equality in pension provision. I tried to make the point to him in Committee that his proposal would not work because we will not have equality in the basic state pension and pension provision by the state until 2020. The House will recall that the Pensions Act 1995 tackled the issue of gender inequality in pensions, but it recognised that the problems could not be dealt with overnight because pension saving does not operate in that way. Therefore, a provision was made that, between 2010 and 2020, the basic state pension age for women would rise over that time until it is equal to that for men. Until that happens, we will not be able to apply the Bill's provisions in a way that can avoid anomalies. That is the basic problem.
      The amendments are slightly different from the ones that the hon. Gentleman tabled in Committee, but they still create the same problems. That is why I ask the House to reject them. They would still leave inequalities

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      between men and women at different ages even though they are in identical circumstances. Despite his ingenuity, the effects are the same. The Government cannot accept them because they would produce anomalous results such as the one that I referred to in Committee. Under his amendments, men between 60 and 64 might receive the pension credit but, once they hit 65, they would have it taken off them. We do not want our policy to create such anomalies.
      I give the hon. Gentleman every credit for his ingenuity, but the basic problem is the current inequality in state pension provision. We cannot overcome the problem until we have the equality that will take time to achieve. Try as he might and try as we did, we cannot do any better than to have the savings credit come into effect at age 65. It is regrettable that some people will lose out because of that, but there is nothing that we can do to put matters right unless we bring forward the age of equality between the genders. And we cannot do that.
      I realise that I have been speaking for some time. I do not want to try the patience of the House too much, and I hope that I have dealt with the points raised. I also hope that the hon. Member for Hertsmere is not falling asleep as a result of my droning on, and that having heard my argument, he will withdraw the motion.
      Mr. Clappison: I would not be so ungallant as to accuse the hon. Lady of droning on. Indeed, I listened to her carefully considered arguments with great interest. However, I am not as convinced as I should like to be to withdraw the motion.
      I am grateful for the support given to the new clause by my hon. Friends and from other quarters, reflecting the widespread concern about the crisis in saving and the lack of saving for the future. I remind the hon. Lady, as my hon. Friends did, that this modest amendment only requires the Government to prepare a report. The case for the new clause, which was already strong, now looks even stronger.
      The hon. Lady was brave enough to argue that the new clause is unnecessary because the Secretary of State already has the power to require a report. However, when pressed on that, she gave no hint that the Secretary of State has contemplated such a step. That is unsatisfactory. The subject is important and we want the fullest possible information on it.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 99, Noes 220.

      Division No. 253]

      [4.41 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Brooke, Mrs Annette L

      Amess, David

      Burnside, David

      Arbuthnot, Rt Hon James

      Burstow, Paul

      Atkinson, David (Bour'mth E)

      Campbell, Rt Hon Menzies (NE Fife)

      Bacon, Richard

      Baron, John

      Carmichael, Alistair

      Barrett, John

      Cash, William

      Beggs, Roy

      Chapman, Sir Sydney (Chipping Barnet)

      Beith, Rt Hon A J

      Bercow, John

      Clappison, James

      Boswell, Tim

      Clifton—Brown, Geoffrey

      Bottomley, Peter (Worthing W)

      Conway, Derek

      Brady, Graham

      Cotter, Brian

      454

      Davey, Edward (Kingston)

      Öpik, Lembit

      Duncan, Alan (Rutland & Melton)

      Osborne, George (Tatton)

      Evans, Nigel

      Paice, James

      Ewing, Annabelle

      Price, Adam

      Fabricant, Michael

      Randall, John

      Field, Mark (Cities of London)

      Rendel, David

      Forth, Rt Hon Eric

      Robathan, Andrew

      Foster, Don (Bath)

      Roe, Mrs Marion

      Francois, Mark

      Rosindell, Andrew

      Gale, Roger

      Ruffley, David

      Garnier, Edward

      Russell, Bob (Colchester)

      Gillan, Mrs Cheryl

      Selous, Andrew

      Goodman, Paul

      Shepherd, Richard

      Gray, James

      Smith, Sir Robert (W Ab'd'ns)

      Green, Matthew (Ludlow)

      Spicer, Sir Michael

      Gummer, Rt Hon John

      Spink, Bob

      Harris, Dr Evan (Oxford W)

      Steen, Anthony

      Harvey, Nick

      Stunell, Andrew

      Hawkins, Nick

      Swire, Hugo

      Hendry, Charles

      Thomas, Simon (Ceredigion)

      Hoban, Mark

      Tonge, Dr Jenny

      Holmes, Paul

      Tredinnick, David

      Horam, John

      Turner, Andrew (Isle of Wight)

      Howard, Rt Hon Michael

      Tyler, Paul

      Jack, Rt Hon Michael

      Viggers, Peter

      Jackson, Robert (Wantage)

      Webb, Steve

      Weir, Michael

      Johnson, Boris (Henley)

      Whittingdale, John

      Laing, Mrs Eleanor

      Wiggin, Bill

      Lamb, Norman

      Williams, Hywel (Caemarfon)

      Laws, David

      Williams, Roger (Brecon)

      Lewis, Dr Julian (New Forest E)

      Winterton, Mrs Ann (Congleton)

      Luff, Peter

      Winterton, Nicholas (Macclesfield)

      McIntosh, Miss Anne

      Wishart, Pete

      Maples, John

      Young, Rt Hon Sir George

      Marsden, Paul (Shrewsbury)

      Younger—Ross, Richard

      Mates, Michael

      Mitchell, Andrew (Sutton Coldfield)

      Tellers for the Ayes:

      Murrison, Dr Andrew

      Mr. Julian Brazier and

      Oaten, Mark

      Mr. Laurence Robertson.

      NOES

      Ainsworth, Bob (Cov'try NE)

      Challen, Colin

      Allen, Graham

      Chapman, Ben (Wirral S)

      Anderson, Rt Hon Donald (Swansea E)

      Clapham, Michael

      Clark, Paul (Gillingham)

      Anderson, Janet (Rossendale)

      Clarke, Rt Hon Charles (Norwich S)

      Armstrong, Rt Hon Ms Hilary

      Atkins, Charlotte

      Clarke, Tony (Northampton S)

      Austin, John

      Clelland, David

      Bailey, Adrian

      Clwyd, Ann

      Banks, Tony

      Coaker, vernon

      Barnes, Harry

      Cohen, Harry

      Barron, Kevin

      Coleman, Iain

      Bayley, Hugh

      Colman, Tony

      Beard, Nigel

      Connarty, Michael

      Beckett, Rt Hon Margaret

      Cook, Rt Hon Robin (Livingston)

      Berry, Roger

      Cooper, Yvette

      Best, Harold

      Corston, Jean

      Betts, Clive

      Cousins, Jim

      Blackman, Liz

      Cranston, Ross

      Blears, Ms Hazel

      Cruddas, Jon

      Blizzard, Bob

      Cryer, John (Hornchurch)

      Blunkett, Rt Hon David

      Davey, Valerie (Bristol W)

      Bradley, Peter (The Wrekin)

      Davidson, Ian

      Brown, Russell (Dumfries)

      Davis, Rt Hon Terry (B'ham Hodge H)

      Browne, Desmond

      Bryant, Chris

      Denham, Rt Hon John

      Buck, Ms Karen

      Dismore, Andrew

      Burden, Richard

      Dobbin, Jim

      Burgon, Colin

      Doran, Frank

      Cairns, David

      Dowd, Jim

      Campbell, Mrs Anne (C'bridge)

      Drown, Ms Julia

      Caplin, Ivor

      Dunwoody, Mrs Gwyneth

      Casale, Roger

      Eagle, Angela (Wallasey)

      Caton, Martin

      Eagle, Maria (L 'pool Garston)

      455

      Edwards, Huw

      Marris, Rob

      Efford, Clive

      Marsden, Gordon (Blackpool S)

      Ennis, Jeff

      Marshall—Andrews, Robert

      Etherington, Bill

      Martlew, Eric

      Fitzpatrick, Jim

      Meacher, Rt Hon Michael

      Flynn, Paul

      Merron, Gillian

      Follett, Barbara

      Michael, Rt Hon Alun

      Foster, Michael (Worcester)

      Milburn, Rt Hon Alan

      Foster, Michael Jabez (Hastings)

      Moffatt, Laura

      Galloway, George

      Moran, Margaret

      Gapes, Mike

      Morgan, Julie

      Gardiner, Barry

      Mountford, Kali

      George, Rt Hon Bruce (Walsall S)

      Mullin, Chris

      Gerrard, Neil

      Munn, Ms Meg

      Griffiths, Jane (Reading E)

      Murphy, Jim (Eastwood)

      Grogan, John

      Naysmith, Dr Doug

      Hall, Patrick (Bedford)

      Norris, Dan

      Hamilton, David (Midlothian)

      O'Brien, Mike (N Warks)

      Healey, John

      Olner, Bill

      Henderson, Ivan (Harwich)

      O'Neill, Martin

      Heppell, John

      Organ, Diana

      Heyes, David

      Palmer, Dr Nick

      Hill, Keith

      Pearson, Ian

      Hoey, Kate

      Perham, Linda

      Hoon, Rt Hon Geoffrey

      Pickthall, Colin

      Hope, Phil

      Pike, Peter

      Hopkins, Kelvin

      Plaskitt, James

      Howarth, Rt Hon Alan (Newport E)

      Pollard, Kerry

      Hughes, Kevin (Doncaster N)

      Pond, Chris

      Hurst, Alan

      Prentice, Ms Bridget (Lewisham E)

      Hutton, Rt Hon John

      Prosser, Gwyn

      Iddon, Dr Brian

      Purchase, Ken

      Ingram, Rt Hon Adam

      Rammell, Bill

      Irranca-Davies, Huw

      Reed, Andy (Loughborough)

      Jackson, Glenda (Hampstead)

      Reid, Rt Hon Dr John (Hamilton N)

      Jackson, Helen (Hillsborough)

      Roche, Mrs Barbara

      Jamieson, David

      Roy, Frank

      Jenkins, Brian

      Ruddock, Joan

      Johnson, Alan (Hull W & Hessle)

      Ryan, Joan

      Jones. Kevan (N Durham)

      Salter, Martin

      Jones, Martyn (Clwyd S)

      Sarwar, Mohammad

      Joyce, Eric

      Savidge, Malcolm

      Kaufman, Rt Hon Gerald

      Shipley, Ms Debra

      Kelly, Ruth

      Simon, Siôn

      Kemp, Fraser

      Skinner, Dennis

      Khabra, Piara S

      Smith, Angela (Basildon)

      Kidney, David

      Smith, Rt Hon Chris (Islington S)

      King, Ms Oona (Bethnal Green)

      Smith, Llew (Blaenau Gwent)

      Ladyman, Dr Stephen

      Soley, Clive

      Lammy, David

      Squire, Rachel

      Leslie, Christopher

      Stevenson, George

      Levitt, Tom

      Stewart, Ian (Eccles)

      Lewis, Ivan (Bury S)

      Stinchcombe, Paul

      Linton, Martin

      Strang, Rt Hon Dr Gavin

      Lloyd, Tony

      Stringer, Graham

      Love, Andrew

      Sutcliffe, Gerry

      Lucas, Ian

      Taylor, Rt Hon Ann (Dewsbury)

      Luke, Iain

      Taylor, Ms Dari (Stockton S)

      Lyons, John

      Taylor, David (NW Leics)

      McAvoy, Thomas

      Thomas, Gareth R (Harrow W)

      McCafferty, Chris

      Tipping, Paddy

      McCartney, Rt Hon Ian

      Trickett, Jon

      McDonagh, Siobhain

      Truswell, Paul

      MacDonald, Calum

      Turner, Dennis (Wolverh'ton SE)

      McDonnell, John

      Turner, Neil (Wigan)

      McFall, John

      Twigg, Stephen (Enfield)

      McGuire, Mrs Anne

      Wareing, Robert N

      McIsaac, Shona

      White, Brian

      MacShane, Denis

      Whitehead, Dr Alan

      Mactaggart, Fiona

      Wicks, Malcolm

      McWalter, Tony

      Williams, Rt Hon Alan (Swansea W)

      McWilliam, John

      Mahmood, Khalid

      Williams, Mrs Betty (Conwy)

      Mahon, Mrs Alice

      Wills, Michael

      Mandelson, Rt Hon Peter

      Winnick, David

      Mann, John

      Wood, Mike

      456

      Woolas, Phil

      Tellers for the Noes:

      Wright, Anthony D (Gt Yarmouth)

      Wright, David (Telford)

      Mr. Tony McNulty and

      Wright, Tony (Cannock)

      Mr. Nick Ainger.

      Question accordingly negatived.

    Clause 9

      DURATION OF ASSESSED INCOME PERIOD
      Mr. Boswell: I beg to move amendment No. 13, in page 6, line 28, at end insert—
      '(1A) The Secretary of State may provide by regulation for the assessed income period to be continued for a period not exceeding five years notwithstanding that the payment of benefit during that period has been terminated under regulations made under section 1(5) or section 2(6) of this Act, and may make provision for the restoration of benefit on the same basis of assessment as has previously applied when the conditions giving rise to the termination of that benefit no longer apply.'.
      Even those of us who do not habitually indulge in immoderate language or high political grandstanding are entitled to do so from time to time. I seem to remember on one occasion during consideration of the Bill that became the Learning and Skills Act 2000 becoming extremely excited with the Secretary of State and threatening at about midnight to divide the House. Although I make no such threat at this point, which might be a comfort to some hon. Members, who knows what will happen? As ever, it depends on the Minister's response. There is a serious and important point that needs to be dealt with. We discussed it at some length in Committee, but I do not feel that it has been satisfactorily answered yet, although I realise that it might be resolved at a later stage through appropriate regulations.
      The whole business arises from the Government's shift to an assessed income period of a maximum of five years, compared with what might be regarded as a traditional measure of weekly income for means-tested benefits, or annual income for tax. My argument is not that that shift should not have happened. We all know that for practical reasons the purity of the doctrine of the weekly basis for the payment of means-tested benefits has become somewhat attenuated in recent years—for example, in the qualifications for jobseeker's allowance and the linking rules that apply to people who are returning to work—but the House would not forgive us were we to dilate on those issues today. However, we face an extraordinary and unprecedented position in which, at up to five years, the assessment period for a means-tested benefit—the savings credit—is to extend for considerably longer than the annual period of assessment for tax or the period used in respect of any other benefit.
      We are not arguing in the amendment that that concept should be removed from the legislation—there are immensely important practical reasons why it should stand. However, unlike some pensioners' organisations, the Government do not appear to have fully grasped the dramatic administrative implications of trying to run a means-tested benefit for approximately 5.5 million pensioners—half the total number. It is clearly sensible to make the assessment period as long as reasonably practicable, but the implications of doing so must be addressed.
      There are basic inequities that will be difficult to eliminate in applying assessment over a long period. When we asked Ministers about that in Committee,

      457
      their reply was, in effect, that if something happens to a pensioner's income and it falls, they can apply for reassessment, or they will receive an annual reminder and then apply for reassessment. In short, the matter can be picked up, and they can be reassessed and their credits adjusted appropriately. That appears wholly reasonable. However, there will be other cases in which a pensioner's income will rise for some reason—for example, they might come into some money. That might make them no longer eligible for benefit if they are new claimants; conversely, if they have had an assessment, which lasts for five years, they will not be required to report their windfall or to have their means-tested benefit reduced. There could be inequity between people with the same level of income, or assumed income, according to whether or not they were assessed for five years. That also applies to circumstances in which there may have been a discontinuity in their benefit, and those are addressed in the amendment.
      5 pm
      In Committee, when we asked Ministers about such circumstances, they said that if it would be better for pensioners to reapply, they could reapply. However, we pointed out that if continuity for pension credit had been broken and a new assessment was required, pensioners would need to reapply but would receive a lower benefit than someone in exactly the same circumstances who had maintained their benefit for five years.
      We need to discuss the circumstances in which that problem might arise. I should make it clear to the House that we are not talking here about what might be termed genuine changes in circumstances arising, largely, from voluntary decisions. If a pensioner chooses to marry or has a child, clearly there is a material change in their circumstances, but those factors have always been recognised in the benefits system. We are concerned here with what I might call contingent changes of circumstance whereby pensioners go through a hoop and then have to reapply on a new basis, as a consequence of which they may lose out, as against pensioners with exactly the same income circumstances who can maintain their vested rights to an assessment for five years.
      The circumstances that may arise range, if I may put it this way, in order of diminishing acceptability, from the entirely reasonable to the more questionable. First, a pensioner may spend time abroad. It is envisaged in the explanatory notes to the Bill that, on the analogy of jobseeker's allowance, a pensioner who goes abroad for four weeks will be able to maintain their benefit, and after that it will cease. That period will be extended to eight weeks, as I understand it, in cases where a pensioner has to go abroad to support a child who is receiving medical treatment. No one wishes to cavil at that. If it is necessary to have a distinction, that seems to be an acceptable one.
      We need to consider the situation of pensioners who normally go abroad for longer than four weeks. For example, they might want to go abroad to receive medical treatment. It could even be that they had been referred by the NHS to a hospital in another country, paid for by the British taxpayer. If they could not get the operation that they needed in the UK, they might be sent abroad for it, and they might need to be away for more than four weeks,
      458
      although medicine now tends to achieve quicker turnaround times. In that circumstance, which arises from a deficiency in NHS provision, they might say, " I accept that I must have treatment abroad, and I am going at the public expense, although I don't object to that." However, they might come back to find that their pension credit entitlement had ceased. In that case, they would have to make a new application, and they might get less.
      That would be the extreme case, and Ministers understand that not everything can be tailored to the needs of the hard case, but there is a point of much wider application, for example, to anybody who wanted to go away to the Costa Brava for a winter holiday. Unless I have completely misunderstood the Bill, after four weeks, the assessment that they had previously enjoyed would be lost, and on coming back they would have to reapply and be assessed on a new basis, which might be less favourable than the original.
      I leave aside, because it will complicate the issue, concerns about the administrative arrangements for reactivating the benefit, although those will clearly be important. I leave aside also concerns about cases in which the pensioner had, in good faith, nipped off for a holiday, perhaps at short notice, and forgotten to inform the Pension Service. By doing so they would have committed a technical offence or perhaps even a substantive one.
      Pensioners with an entitlement to benefit which is fixed for five years—it is not reassessed weekly—who take a holiday in another state of the European Union or beyond and are penalised may feel that they are harshly treated as against those who take their holiday in the UK and are not penalised. That may well attract the attention of European jurisprudence in due course. I mentioned that in Committee, and I do so again because there is a barrier to the free movement of persons if some disadvantage arises out of a contingent movement to another EU state. Anyway, in the real world, it is perfectly reasonable for a pensioner to say, "I want to take six weeks' holiday in the Costa Brava this year. I feel that I've earned it. Why am I being messed about on my benefit?"
      As the Minister will remember, other cases may arise. I hope that when he replies he will not caricature such cases. One, which we did not talk through enough in Committee, is that of hospital downrating. That issue is separate from whether or not persons are sent abroad for treatment that is paid for by the NHS. It would be appropriate to ask whether, if a person was sent abroad by the NHS, and the period of treatment or hospitalisation exceeded 13 weeks, they would be subject to downrating on their basic pension as well. It would be useful to get that on the record.
      There is also the question of the entitlement to savings credit. The Under-Secretary, who responded to the previous debate, confirmed that savings credit will not be lost even if hospital downrating takes place. It would be useful to get that back on the record. I am concerned about the re-entry into benefit when hospitalisation finishes, and I should like ministerial confirmation that the assessed income period that already applies will be maintained—that is, unless and until it is more favourable for the claimant to be assessed on a different period.
      The final issues that I wish to raise are the perhaps less worthy ones that we debated and kicked around in Committee. They concern people who enter religious

      459
      orders, some of whom are represented in the Chamber this afternoon. I do not imagine that people would do so for a short period, so my query is hypothetical, but it also concerns individuals detained at Her Majesty's pleasure. I have said that there is a problem with double provision. Clearly it is wrong to pay someone pension credit while they are inside and being maintained at Her Majesty's expense—and very expensive that is, as we all know. On the other hand, should they lose satisfactory pension credit arrangements?
      The intention and effect of the amendment is to suspend the assessment period, then reactivate it later. There should be no question about paying benefit while someone is abroad and perhaps, if we want to complete the provision, in the subsidiary example in which someone is in prison or some other state of disqualification from benefit. Rather than just simply having a mechanism that enables the system to regenerate a claim and get someone back on benefit, it would be more sensible to have a system in which the benefit is deemed to be suspended, then reactivated when those circumstances no longer apply. We have tried to draft the amendment in that way.
      I urge the Minister to accept that I tabled the amendment with good will. The issue is difficult. The problem may not be as extensive as I have stated but, if I were him, I would make provision for it—if not now, then perhaps in the regulations that will no doubt flow from the Bill—so that, if necessary, benefit can be reassessed and looked at afresh. In addition, in certain cases it may be administratively easier and fairer for the benefit to be suspended, then reinstated when certain conditions no longer apply. Our amendment is tailored to do that.
      Mr. McCartney: I hope that we can dispose of this item reasonably quickly, as we debated it for a considerable time in Committee. The next group of amendments, dare I say, contain more meat and are of a higher quality. At the risk of upsetting the hon. Member for Daventry (Mr. Boswell), his amendment has no merit, but I shall come to that in a moment.
      The hon. Gentleman first raised these issues in Committee, when he said that convicted prisoners should continue to get the benefit of pension credit. We therefore nicknamed his amendment the Ronnie Biggs amendment. Such was the embarrassment of the Conservative party that it quickly dropped that argument and had to find another reason for tabling such an amendment. It has now found one, and has introduced the Costa del Sol amendment, which I shall deal with quickly.
      In Committee, the hon. Gentleman gave me an A for the clarity of my explanation of why the amendment was not only unnecessary, but worked against pensioners, but I only got a C for its acceptability. Having listened to his contribution today, I have to give him a triple X for acceptability, as I am even less persuaded by it than I was by his argument in Committee.
      The main effect of the amendment would be to allow a person who went abroad for more than four weeks and had his claim for pension credit closed to pick up where he left off. Any remaining assessed income period from his previous claim would be restored upon reclaiming, so changes in his circumstances would be ignored. The amendment would have the same result when someone lost entitlement to pension credit on going to prison or, in certain circumstances, as a consequence of hospital downrating.
      460
      The hon. Gentleman perceives an unfairness in our proposals because he believes that pensioners who can travel abroad may be inhibited from doing so. To use one of his examples, a person may receive a windfall, perhaps after the death of an elderly relative, which makes them much richer. They may continue to live in the United Kingdom and benefit from both pension credit and the windfall gain for up to five years. He contrasted that with someone who goes to another country and, upon their return, finds that they are no longer entitled to pension credit.
      Opposition Members have tunnel vision, and need to look at the bigger picture. We are not ignoring lottery wins and other windfalls during the assessed income period because we think people in such a position need pension credit. We are doing so because we want to reduce intrusiveness for all recipients of pension credit. We can live with ignoring individuals' good fortune for the sake of simplifying the system for the overwhelming majority of pensioners, but we should not extend that generous treatment to people who reclaim pension credit because their previous claim rightly ended, whether as a result of going abroad or for some other reason. We must ask questions anyway, if only to be sure that the claimant is who they say they are, rather than an imposter taking advantage of someone's absence.
      5.15 pm
      I know what the answer would be if one asked a typical pensioner in the street whether he would like to retain the weekly means test, in order to avoid some perceived hardship to a handful of pensioners who had had a windfall and who could afford to travel abroad for months or even years at a time. The answer from the vast majority of pensioners would be a resounding no.
      In any case, it is more likely that a person who has been abroad for some time will have a lower income stream, having used up savings, rather than a higher income from, say, winning the lottery. That is where the hon. Gentleman's case falls down. When people go on holiday, they are using their capital, so it is more than likely that they will come back with less income. Having paid for their holiday and taken their spending money with them, they are eating up their capital all the time that they are away. They have, presumably, not gone to Spain or any other country to work, but to enjoy themselves. It is therefore in the pensioner's interest that a reassessment is carried out.
      As I said in Committee, it may be in the claimant's interest for a full assessment to be carried out on his return from a protracted absence, as people are more likely to win than to lose out. People who have been abroad for some time are more likely to have a lower income stream because they have used up part of their savings than they are to have won the lottery in Spain. I do not know what the odds are for winning—
      Mr. Boswell: Fourteen million to one.
      Mr. McCartney: The hon. Gentleman has obviously played the lottery in Spain; I have never been able to, although I understand that one can now play it in the United Kingdom. That is being advertised.

      461
      In Committee, the hon. Member for Daventry, referring to me, said:
      "He says—he may be right; I do not contest that—that many people who return from protracted absences abroad may have spent themselves out, and might be better off with a new assessment"— [Official Report, Standing Committee A, 23 April 2002; c. 185.]
      At that point, I thought that the hon. Gentleman would have sat down and forgotten about the matter, but he is back again.
      The hon. Gentleman did not dispute my assertion that people who have been abroad for some time are more likely to gain from a full assessment than to lose out. The only people who stand to gain from the amendment are those who have some unforeseen increase in their finances, such as a lottery win or some other windfall, since their pension credit award and who go abroad for more than four weeks. It is not clear why this group so concerns Conservative Members.
      As I explained in Committee, we intend to limit strictly the number of changes in circumstance that will require reassessment of income, but we believe that protracted absence abroad is one such instance. We also think it right that where a pension credit claim closes, it closes. It is entirely consistent to undertake a full assessment on a new, fresh claim.
      It must be right that while simplifying the system for the benefit of pensioners, wherever possible we simplify administration too. I do not see how one can reconcile this important factor with holding closed claims in some kind of suspended animation, to be re-awakened at some unspecified future time, which may or may not occur.
      The same arguments apply with regard to loss of entitlement to pension credit as a consequence of hospital downrating. I remind the House that it was the present Government who increased from six weeks to 13 weeks the period for which a person may be in hospital before having his benefit downrated. People in receipt of the pension credit will be able to retain entitlement to up to eight weeks on temporary absence abroad, as the hon. Gentleman said, for children's treatment.
      People who travel abroad to receive national health service treatment will be considered still to be in Great Britain for the duration of that medical care. Ministers recently agreed that people who receive pension credit, income support and jobseeker's allowance who travel abroad for NHS-funded medical treatment will not be subject to the time restrictions on temporary absence from Great Britain. I hope that that helps the hon. Gentleman and will enable him to withdraw his amendment.
      Mr. Boswell: I am grateful to the Minister for that reassurance at the end, which represents some progress. I was disappointed by some of his earlier remarks. When he started attributing to me the title of the amendment—the "Ronnie Biggs amendment"—which he himself had used to ridicule it, I knew that we were in for trouble and some lack of understanding.
      In arguing for the amendment, I was making the point that there is an inherent inequity between a person who travels abroad and receives a windfall and is then reassessed for pension credit or disqualified, and somebody who remains in the UK, receives the same or even a larger windfall and is untroubled. The Minister explained why that is the case, but the inequity remains.
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      I am even more troubled by the possibility that a person may feel inhibited, or there may be accusations that a person feels inhibited, from travelling round the European Union by the structure of the benefits system and the disqualification from certain benefits. That does not fully honour the spirit of mutuality of benefits that is beginning to be introduced in Europe.
      However, these are complex issues and the Minister has tossed me a very small bone in relation to downrating, which is helpful. I do not want to be churlish and I shall not seek to press the amendment to a Division. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 15

      INCOME AND CAPITAL
      Paul Holmes: I beg to move amendment No. 3, in page 9, line 7, after "earnings", insert—
      ', except that that part of a claimant's hourly earnings that is equal to the rate of the National Minimum Wage shall be disregarded'.
      Madam Deputy Speaker (Sylvia Heal): With this it will be convenient to discuss the following amendments: No. 14, in page 9, line 18, at end insert—
      'but shall in no circumstances include income derived from or calculated as income implied by any compensation fund (whether or not written in trust) administered for the benefit of any claimant for state pension credit in connection with a settlement of a claim on behalf of that person arising from industrial injuries or medical negligence.'.
      No. 15, in page 9, line 22, at end insert—
      'but shall exclude any income derived from PEPs, TESSAs or ISAs.'.
      No. 16, in page 9, line 24, at end insert—
      'but subject to the restriction that the income implied by any capital holding shall not exceed the current Bank of England minimum lending rate plus two percentage points, to be averaged over a twelve month period prescribed in the regulations.'.
      Paul Holmes: I want to discuss the apparent contradiction in Government policy in relation to encouraging people to continue in some degree of employment after reaching the legal age of retirement—a contradiction that has already been discussed in the Select and Standing Committees.
      The Cabinet Office report "Winning the Generation Game" stated that older workers should be encouraged to stay in work and that more flexibility should be available in terms of retirement. The Government have often said that they are keen to maintain and even improve the ratio of workers to pensioners, but their pension credit proposals have been widely criticised as effectively discouraging people from doing part-time work after retirement.
      It is widely accepted that encouraging older people to continue in at least part-time work if they wish to do so is a desirable aim. With an increasing proportion of elderly people in the population at large, it makes economic sense for the nation to retain for longer the work contribution, skills and expertise that are based on the years of expertise that older people have. It also makes financial and personal sense for many individuals to continue working for at least part of the week after

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      reaching legal retirement age. Many older people would value the potential benefit of extra financial income on top of an inadequate basic state pension, but they would also value very much the opportunity to maintain a lively and active personal contribution to and involvement in society through the opportunities, experiences and interests that work can offer.
      Despite the widespread agreement on those views in all quarters and the Government's stated intention of encouraging more pensioners to continue in work, Government policy on pension credits seems designed to achieve precisely the opposite effect. The Select Committee made that point clearly in its second report of 2001–02, which pointed out that the Government's proposals on pension credits disregard only the first £5 of earnings. After that, the equivalent of 40p in the pound is clawed back, effectively imposing a top rate of income tax on pensioners' part-time earnings. The Committee made this observation:
      "Many of those who submitted to evidence to our inquiry were highly critical of this aspect of the Credit's calculation. They argue that it offers little, if any, incentive for pensioners to continue working or to seek new employment opportunities. Part-time work is one of the few, simple, methods for a pensioner to increase their retirement income".
      As the National Pensioners Convention stressed in its evidence to the Committee,
      "part-time earnings could have a significant impact on pensioner poverty."
      The Industrial Society made this comment in its evidence:
      "B y discouraging part-time work after retirement, the Government seem to be giving us an example of un-joined-up Government at its worst."
      David Cairns: I have been listening with genuine interest to the case that the hon. Gentleman is making. For those of us who are weighing up the merits of his amendment, will he explain what assessment and research was done into how much more cost would be incurred if, for example, 10 per cent. of pensioners were to carry on working? Can he give us some figures?
      Paul Holmes: If more pensioners were to continue working, the Government would benefit in the long run in terms of their poverty strategy. I shall deal with cost later in my speech.
      The Select Committee also pointed out in its summary of the evidence that the three charities representing pensioners which gave oral evidence to the inquiry agreed that
      "a disregard of around £40 of earnings would be a very productive measure."
      Sally West of Age Concern suggested that that would allow the equivalent of
      "a day's work without it disrupting the administration of the system".
      She said that it would encourage people
      "to keep active in work if that is what they wish to do."
      In the light of that, the Committee reported:
      "We agree with this view and were disappointed that the Secretary of State could hold out 'no hope' of a change in the rules."
      It went on to say:
      "We urge the Government to reconsider its policy on the Credit's treatment of earnings".
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      In the face of those united views from the Select Committee, Age Concern, the National Pensioners Convention, the Industrial Society and many others, the Government's response was simply to make no change at all through its contradictory and self-defeating pension credit proposals. Various groups suggested alternatives designed to remedy the disincentive to work that is contained in the Bill. For example, the Select Committee and Age Concern suggested a fixed level disregard of around £30 to £40 a week, compared with the very low £5 disregard contained in the Bill.
      Our amendment offers a simple and clear method of meeting those aims by disregarding those parts of a claimant's hourly earnings that are equivalent to the rate of the national minimum wage. That would achieve two things. First, it would encourage flexible retirement instead of discouraging it, as does the Bill. Secondly, it would provide a real cash incentive to people who wish to continue working after reaching state pension age. As those are supposed to be the stated aims of Government policy, I hope that the Minister will be able to accept the amendment. Or are the Government telling pensioners that they are not prepared to allow them to earn even at the level of the national minimum wage without seeking to impose on them the equivalent of the higher rate of income tax?
      Mr. Clappison: I want to speak to amendments Nos. 14, 15 and 16, which deal with three different issues arising out of the definition of income and capital in clause 15.
      The first of those is the treatment of compensation funds in cases of industrial injury or medical negligence. How will the Bill deal with income from such funds as regards the pension credit? It is fair to say that this subject generated considerable interest in Committee, not only from my hon. Friend the Member for Daventry (Mr. Boswell), but from the hon. Member for Bassetlaw (John Mann), who drew our attention to the cases of several of his constituents who would be very interested in these provisions. Those cases are deserving of consideration by the House. It is important to revisit the issue, and we await the Minister's response with interest.
      Amendment No. 15 deals with income derived from PEPs, TESSAs or ISAs, which is another matter that we raised in Committee. Hon. Members may have heard sufficient of my views on the generality of savings, but this issue falls within that generality. How will those important savings vehicles be dealt with? We are conscious of their general position within the policies of this and previous Governments.
      Amendment No. 16 covers the treatment of income from capital. In respect of savings above £6,000, a notional rate of income will be set at around 10 per cent. after that disregard of £6,000. There has been a development since we considered the matter in Committee. The Government had said that well over 80 per cent. of pensioners have savings that fall below the £6,000 disregard. Indeed, the Secretary of State told the Select Committee:
      "What we are doing is we are disregarding the first £6000 worth of savings and that covers 84z per cent. of pensioners. Now, 84 per cent. of pensioners today do not have £6000."
      Since then, my hon. Friend the Member for Havant (Mr. Willetts) received a written reply from the Minister, saying that 60 per cent. of pensioners have less than

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      £6,000 in savings. Obviously, 40 per cent. therefore have more than £6,000. The matter is more extensive than we were led to believe.
      Against that background, we believe that matters now have a different complexion. We need to hear more about it and, as my hon. Friend the Member for Daventry said in Committee, one would be struggling nowadays to find something that produced a 10 per cent. return on capital. Indeed, a substantial number of pensioners have savings of more than £12,000. The Government's proposals for the treatment of savings assume that they earn between 5 per cent. and 10 per cent. on their savings. We want to hear more ministerial comments on that and I am sure that savers want to hear more from the Minister about the treatment of their income from capital under the Bill.
      5.30 pm
      John Mann: I reiterate briefly comments made in Committee about industrial injuries. I pay tribute to the hon. Member for Daventry (Mr. Boswell) for adding medical negligence to that in Committee.
      Industrial injuries are disproportionately important in the coalfields. The recent judgment and the roll-out of compensation in the next year or so mean that many retired miners will receive compensation for bronchitis, emphysema and vibration white finger. In the majority of cases, the compensation will exceed the capital limit of £6,000.
      David Cairns: I ask my hon. Friend to take account of constituents who are suffering from asbestosis and asbestos-related illnesses. Thanks to the excellent decision in another place, many of my constituents will receive the compensation that my hon. Friend mentioned. That is extremely important for shipbuilding constituencies such as mine and former mining constituencies such as that of my hon. Friend. We want the Minister's reassurance about that.
      John Mann: I endorse my hon. Friend's comments. Indeed, I was about to mention asbestosis and the landmark judgment, which has an impact on my constituency and many others throughout the country. Sadly, compensation for mesothelioma comes too late for many of my constituents. However, the principle is important, and it is vital for the families.
      Although there is a disproportionate impact on some communities, the benefit should be perceived as a good thing. The money is owed and is due. It is due to negligence for various reasons, which include bad employer practice and lack of medical understanding of the issues in the past. Whatever the reasons, the money is due to those people and it would be grossly unfair if they lost any pension credit for receiving money that is long overdue.
      I know that my hon. Friend the Minister is highly knowledgeable about such issues and I trust that he will give us some good news.
      Mr. McCartney: The amendments would affect clause 15, which deals with the treatment of income and capital through credit income assessment. The details will be set out in regulations, which will be laid before the House in due course.
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      In Committee I provided much detail about the treatment of income. I do not therefore want to go through that again, but I shall repeat some of it. The debate offers an opportunity to be even more explicit about some of our proposals. As Baroness Hollis said in another place last December, we propose to ignore completely compensation received for personal injury. No income from that, whether actual income or assumed income from the capital sum, will be taken into account.
      A pensioner who is attacked and seriously injured need not fear that we will stop her pension credit when she receives compensation, as happens with income support at the moment. Nor will we withdraw pension credit from, say, a miner because he receives compensation for damage done to his health. I will come back to that in a moment. Our proposals go significantly further than the amendment does. That is not a criticism; this gives us an opportunity to open up the debate.
      The hon. Member for Hertsmere (Mr. Clappison) mentioned my answer to a parliamentary question. I do not have the question here, but if I remember rightly it was in two parts, and said that 60 per cent. of all pensioners have less than £6,000 capital. Some of them have second pensions and other income. In fact, 85 per cent. of pensioners are entitled to the pension credit because they have less than £6,000. I think that I answered the hon. Gentleman's question on that basis. There is, therefore, not a chink of light between me and my right hon. Friend the Secretary of State; nor am I saying one thing and my right hon. Friend another.
      All I can say to the hon. Gentleman is that that was a nice try, but in cricketing terms, it was a bit of a no ball. I promise my hon. Friends not to make any more cricket jokes. I was just trying to make the point that as a Scot, I know just as much about cricket as the English do. It is just a pity about the football team at the moment.
      Amendment No. 3 relates to the earnings disregard. No one would disagree with the general sentiments of the hon. Member for Northavon (Mr. Webb). This country depends on older workers, and with demographic changes, that dependency will grow. Fifty per cent. of men and 25 per cent. of women aged 60 to 64 work. A further 800,000 people aged 65 and over are at work. This is not just about ensuring a steady flow of human resources. It is about experience, handing on skills, and promoting intergenerational understanding. For many pensioners, work is a key part of active ageing and social inclusion. We want to promote opportunities for older workers and allow them to be rewarded for earning.
      Amendment No. 3 would disregard earnings by linking the disregard to the level of the national minimum wage. The hon. Member for Northavon wants to do this for everybody over the age of 60. A pensioner working one day a week could therefore expect a disregard of about £35, and an older worker or pensioner working a full week could expect a disregard of about £175. This would represent an added cost of £1 billion on the pension credit. Earlier, the hon. Gentleman committed something like £9.7 billion for another proposal. When we asked him how he was going to pay for that, we discovered that far from being a little short on detail, he refused to provide us with any at all. Now he has now clocked up a total of £10.7 billion.
      In the Liberal Democrats' alternative Budget proposals they have further targeted arrangements for people over 75, which would cost an extra £1.2 billion.

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      Those provisions, however, would end up giving the poorest pensioners an average increase of only £2 a week. Under their proposals, money is not being targeted or given directly to poor pensioners.
      Mr. Webb: Will the Minister give way?
      Mr. McCartney: I hope that if I give way to the hon. Gentleman, he will not try to give us the third way of explaining his pension policy. On at least two occasions during the debate, he changed both the policy and the track that he was taking, and never gave us an answer about how any of his proposals were to be funded. Nor did he acknowledge the very important point that his party will not accept the overwhelming evidence that poverty relates to income, not to whether someone is 60, 70, 75, 80 or 85. That is the major flaw in his proposals. I hope that when he talks to women who are approaching pension age, he does not tell them that he is going to do something for them, because they would have to wait until they were 75 to get even an extra penny out of the Liberals.
      Mr. Webb: Will the Minister confirm that the figures that he has just quoted on the effects of our proposals are based on the assumption that 100 per cent. of those who are entitled to claim means-tested benefits will do so? Will he also confirm that that is a false assumption, and therefore a false assessment?
      Mr. McCartney: The hon. Gentleman's argument is dead and buried. The assumption is not wrong—he merely wants to change it. I have costed his proposals for him. He refuses to do so not because he is incapable, but because he does not want the British people to know what he is up to. He wants to travel around Britain parading his conscience to pensioners, saying to every woman, "I am on your side, I am your saviour." However, the reality is that to get a penny off him, they would have to survive in poverty until the age of 75. It does not matter how we add it up: the people who will qualify under our proposals would get nothing under those of the Liberal Democrats, which would be a bitter pill and a bitter blow.
      Having exposed such opportunism, I want to point out something else. In speaking to his amendments, the hon. Gentleman showed how clever he is. He is clever because he has done a lot of reading recently. He is both a campaigner and well and truly in opposition, and he has read the Liberal Democrat document entitled, "How to be an effective opposition: a guide for campaigners". It offers the following advice: to
      "act shamelessly, stir endlessly, and embarrass the administration…don't be afraid to exaggerate."
      [HON. MEMBERS: "Ah!"] It continues:
      "why court the unpopularity that goes with the responsibility of power?"
      Liberal Democrats have to act shamelessly and exaggerate in all circumstances. If they are talking to a Conservative voter, they are told to be anti-Labour, but if they are talking to a Labour voter, they should be anti-Tory.
      There we have it. I have never read a better explanation of Liberal Democrat pension policy. It has been set out in the document, and in the hon. Gentleman's comments, so we shall not take him seriously—for the moment. I make those points because he is trying to con poor pensioners into believing that he is on their side. That is what we are taking seriously.
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      It is unclear how the hon. Gentleman would fund his proposals, and he is not prepared to tell us. We believe that the working tax credit, the abolition from the pension credit of the rule excluding people from working more than 16 hours a week, the disregards, and the savings credit for those over 65, are the best way to promote active ageing and reward earnings. I shall give the hon. Gentleman just two examples of how that will work in practice, and illustrate the real gains.
      Let us consider a single pensioner—"John", aged 67—who works one day a week at a local DIY store, receiving a minimum wage of £35. He has a full basic retirement pension of £77 and no other income. After taking into account the disregard, his relevant earnings are £30. John's combined income of £77 and £30 takes him above the guarantee credit level of £100. However, John is entitled to a savings credit, as his earnings count as qualifying income. His savings credit is £11. Under these proposals, John is therefore better off by £572 a year. That is not pie in the sky and invented figures; it is the reality of this Government's policies for such older people.
      Let us consider the second example of a couple aged 68 and 65 respectively. The woman—"Sylvia"—works two days a week as a cleaner at the minimum wage, earning £65. They receive the full rate retirement pension of £123 and have no other income. They are entitled to a £10 disregard on Sylvia's earnings, so the sum of £55 is relevant to the pension credit assessment. Their combined income of £123 basic pension and £55 earnings takes them above the guarantee level of £154. However, they are entitled to a savings credit of £9, as Sylvia's earnings count as qualifying income. That additional £9 shows how we are providing basic benefits for couples, as well as individuals. These are not exaggerated figures; they are the combined effect of the Government's proposals.
      Looking at amendment No. 14, I am encouraged that Opposition Members have found a new cause, but it intrigues me that it has come so late in the day. I can think of campaigns in which we have been involved over the years—not just in mining communities, but throughout the country—over the inequities that can occur when people, quite rightly, are compensated for injuries. They have to fight to get compensation in the first place; sometimes courts take it from them or affect their ability to claim compensation. I will not go into the recent House of Lords ruling that at least reversed a terrible decision that was made in the past. All Labour Members have been closely monitoring these issues, but I am pleased that the Opposition recognise that there is potential for doing something about the matter.
      5.45 pm
      On 18 December, on Second Reading in the other place, Baroness Hollis, when asked about such compensation, said:
      "any personal injury payments, which are taken into account in various ways at present, will be ignored"—[Official Report, House of Lords, 18 December 2001; Vol. 630, c. 188.]
      In social policy terms, the outcome of a person's misfortune is more relevant than the event that caused the misfortune. For instance, let us compare a motorist who is paralysed after an accident while driving to work with someone who happened to be driving while working. Under the amendment, the driver in the second case would gain from the disregard, but the driver in the first case

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      would gain nothing. A person who receives compensation following a terrible medical accident would gain, but an old lady who receives compensation after being the victim of a savage assault would not.
      We have consistently put the case that the pension credit is an entitlement; we do not want to dig into people's lives, and we do not want to record every possible circumstance in which people find themselves. We want to get rid of as many of the old exclusions as we can. The proposals that I announced today will mean that, from October 2003, any pensioner who has received financial compensation for personal injures will be told that we will ignore this income. Whether it is actual or assumed, it will not be taken into account. This will be welcome across Britain, and in particular, across many of the communities of the former British coalfields.
      I pay tribute to right hon. and hon. Friends individually and collectively, as well as to trade union groups, mining groups and others who have maintained solidarity over the issue for a long time. I was pleased to make the announcement today. I did so with the support of my right hon. Friend the Secretary of State, and I wish to record his tremendous support for the change.
      The current arrangements are complex; mainly because of the different ways in which compensation can be paid and invested. I will write to hon. Members to give further information and place the letter in the Library.
      As for amendment 15, I am almost astonished at the uncharacteristic bravery involved in making such a significant commitment, in both expenditure and strategy terms. The amendment would cost perhaps £1 billion in the long term. Is this part of the strategy of the hon. Member for Hertsmere to prove that his party looks after the poor? That is a bit rich coming from the hon. Gentleman, given some of the policies he supported in previous Parliaments.
      The same amendments were tabled in Committee and on Third Reading in another place. We believed that those earlier versions were probing. Now it seems that the Opposition are serious in their proposals, although I cannot understand why, because of the potential costs. Perhaps the hon. Member for Hertsmere will explain how his party leader will pay for the proposal, particularly when the right hon. Gentleman is totally opposed to the introduction of pension credit.
      Bob Spink: Will the Minister give way?
      Mr. McCartney: If I must.
      Bob Spink: The Minister is a delightful character and I am delighted that he has given way. He takes a narrow view of the costs. Will he comment on the wider impact that improving savings and the savings ratio will have on our economy? Surely that would not be a net cost, but a net saving to the economy, and would provide a great benefit.
      Mr. McCartney: I do not take a narrow view of pension credit. The hon. Gentleman's party does not just take a narrow view, it is totally opposed to pension credit. But the Conservatives are not prepared to say, either in Committee or today, whether they are prepared to repeal
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      the measure. I do not know whether they will vote against the Bill today. Perhaps they will let us know. Would they repeal it?
      I am getting old and I must be getting deaf, because I hear no reply. My hon. Friend the Member for Bolsover (Mr. Skinner) is smiling at me and perhaps he is telling me that the Conservatives have gone silent. I could ask the Liberal Democrats, and they would be just as silent.
      Mr. Clappison: The right hon. Gentleman has been a Member of Parliament for some time and he will remember the long period in opposition that his party experienced. I certainly remember the long period after the 1997 election when Labour Minister after Labour Minister recanted what they had said in opposition. I will give the right hon. Gentleman a long list of specific examples to peruse at his leisure. So we take no lessons from the Labour party, on this or anything else.
      Mr. McCartney: We always get one who will get up when he has no argument to make at all. That was not an argument, it was a whinge. I could give the hon. Gentleman pages of commitments given by shadow spokespersons from the Dispatch Box, including on the minimum wage, tackling pensioner poverty and doing something about Tory mis-selling of pensions.
      Mr. Goodman rose—
      Mr. McCartney: We have another one. I shall give way.
      Mr. Goodman: Does the right hon. Gentleman recall the pledge made by the Chancellor, when he was in opposition, to abolish means-testing for our elderly people?
      Mr. McCartney: I remember that the Labour party and the Chancellor made it clear—as we have continued to do—that tackling pensioner poverty would be our No. 1 priority. Unlike the Tory party, we have not introduced means-testing to stop people having access to income. Our proposals are inclusive. We are providing people with a chance to obtain additional access to income. We are not targeting pensioners, we are targeting poverty that the Conservatives created in the first place.
      Conservative Members have tried to distract me from the amendments and the nonsense that they contain, but I shall return to the notes that have kindly been provided for me by the machine. I shall repeat some of the points that the Minister made in the other place, because she was giving a direct response to similar amendments.
      Clause 15 will abolish the rules that exclude pensioners with £12,000 or more of savings from any help, so for the first time there will be no automatic cut-off. Instead we will apply a notional rate of return of 10 per cent.—half the present rate—on any capital sum over the first £6,000, which we will disregard. That figure will be £10,000 for people in residential care and nursing homes. That means that 95 per cent. of pensioners entitled to pension credit will have any income they receive from their savings ignored entirely. Ignoring the first £6,000 of savings helps all pensioners, including the better-off. For example, only pensioners with capital above £12,000 will face effective assumed rates of return greater than 5 per cent.

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      Amendment No. 15 seems to discount the fact that the Government's proposals take no account of actual income from PEPs, TESSAs and ISAs. Instead, we intend to apply the same notional rate of £1 in £500 that will be applied to any other capital holding. If we were not to do that, it would influence people to save more in ISAs—PEPs and TESSAs are no longer available for new savers—than in any other forms of savings, including pensions products. The immediate costs would be £400 million.
      The ultimate effect on pension saving could be startling. It could increase the cost of pension credit by £1 billion a year in the long run, but the money would not reach those with little or no savings. The redistribution would go to those higher up the income scale. People who chose to put all their money into, say, an ISA would get full pension credit no matter how much they had saved.
      That would skew the savings market towards such methods of saving and, as people moved their savings, eligibility for pension credit would expand further up the income distribution. So the reach of pension credit and the cost to the state would expand while private pension saving would fall. Let us remember that the amendment comes from a party that has spent this afternoon criticising the Government for not giving people incentives to save in the private sector.
      A person who has already saved in a PEP, TESSA or ISA has already been advantaged because they have benefited from tax relief. Treating PEPs, TESSAs and ISAs differently would doubly advantage them, for no apparent good reason and at the expense of the taxpayer. I could go on and give a range of examples, but I shall write to the hon. Member for Northavon (Mr. Webb) and put some practical examples of my remarks in the Library, if that would be helpful.
      I am surprised that amendment No. 16 was tabled. The treatment of capital was discussed throughout the Bill's passage in both Houses. The amendment would restrict the assumed income from capital to a rate that is more or less what people would get from their savings. That would be achieved by applying the base rate plus 2 per cent. to pensioners' capital.
      Opposition Members did not listen to our arguments. Our decision was reached only after the most careful consideration of the representations made to us on the issue. In our original consultation document we proposed taking actual income into account. However, Age Concern, among others, told us of its real anxiety that that would make the treatment of capital in pension credit more complicated than in income support.
      Examples were cited of the difficulties pensioners would experience in recording information about actual income. We listened to those real concerns. It was clear that the tariff-type regime in income support offered the most straightforward way of calculating income from capital. We actually did what older people asked us to do: we held consultations and we listened. The Opposition have consulted nobody and listened to nobody.
      Once we had the method of calculation we turned to the other element in the treatment of capital: how much to factor into the calculation. There are two parts to that: the disregard and the rate of return. Setting the right level of disregard—the lower capital limit—was critical. We had to consider costs. We also had to consider how to reduce the intrusion into pensioners' lives that inquiries
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      into their capital represent. The level of disregard that we have set— £6,000—means that 85 per cent. of pensioners entitled to the credit have no need to tell us about their capital at all.
      The second consideration was the rate of return. Looking at the rates of return available in the High street was not appropriate: what investment would return nothing on the first £6,000 and something on top of that? That is why the amendment, with its bogus resonance with the commercial world, is so badly focused.
      A further element had also to be considered. We received representations from the Financial Services Authority and the Association of British Insurers. Their concern was that if we failed to get the balance right between the disregard and the rate of return we would alter the balance between saving to build capital and saving to build a pension.
      The view of the Financial Services Authority was that a rate of return of 10 per cent., after taking account of the £6,000 disregard, was the right balance to strike in considering the two methods of investing for retirement. Again, we listened to the expert advice and took it. The Opposition proposals completely ignore the fact that there is no rate of return on the first £6,000 of capital. That would cost an additional £350 million.
      I hope that I have explained why we cannot accept the amendments. I have also tried to explain the difference between our policies, the policies of the Conservative party and those of the Liberal party—all three of them. I ask the hon. Member for Chesterfield (Paul Holmes) to withdraw the amendment.
      Paul Holmes: I am sure that other hon. Members, like me, welcome the statement by the Minister for Pensions about disregarding compensation for industrial injuries. Many industrial workers in my constituency come to me with problems such as vibration white finger and asbestosis, so I am especially aware of the importance of that statement.
      On amendment No. 3, however, I am disappointed that the right hon. Gentleman is still not prepared to listen to the almost universal advice of those whom he has consulted and from whom he has received comments. In particular, I note that he says that what the Labour-dominated Select Committee told him was completely wrong. I also note that Ministers cite the comments of Age Concern when it suits them—as they did twice today—but ignore its comments when they do not suit them.
      All the advice received by the Government is that the measure will act as a disincentive to pensioners seeking work after retirement age. That is a serious issue, and I hope that they will come back to it with new proposals. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 17

      OTHER INTERPRETATION PROVISIONS
      Dr. Evan Harris: I beg to move amendment No. 17, in page 12, line 6, leave out from "means" to end of line 8 and insert—
      'two people, who are not married, (whether of different sexes or the same sex) living as partners in an enduring family relationship,

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      not including two people one of whom is the other's parent, grandparent, sister, brother, aunt or uncle, and where references to these relationships—

      (a) are to relationships of the full blood or half blood or, in the case of an adopted person, such of those relationships as would exist but for the adoption, and

      (b) include the relationship of a child with his adoptive, or former adoptive, parents,

      but do not include any other adoptive relationships.'.
      The Bill does not allow the provision to apply to unmarried couples who are not heterosexual, which creates four problems. First, it is unequal. Secondly, it costs the taxpayer money, which is a concern to the Minister for Pensions. Thirdly, it is not compatible with the Human Rights Act 1998 to discriminate in that way against heterosexual couples, who will lose out on extra money that same-sex couples would get, because they are treated separately. Indeed, the House recently passed legislation that recognised the right to equality—
      It being Six o'clock, MR. DEPUTY SPEAKER interrupted the proceedings, pursuant to Order [25 March].
      Dr. Harris: On a point of order, Mr. Deputy Speaker. I wish to put amendment No. 17 to the vote.
      Mr. Deputy Speaker (Sir Michael Lord): Order. If the Question has not been proposed from the Chair, there cannot be a vote.
      Order for Third Reading read.
      6 pm
      Mr. McCartney: I beg to move, That the Bill be now read the Third time.
      The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), will send the hon. Member for Oxford, West and Abingdon (Dr. Harris) a detailed reply on his amendment No. 17, if that will help him.
      During the passage of this Bill we have heard much from Opposition Members about it extending means-testing. Obviously, they have not had first-hand, or sometimes even second-hand, experience of reliance on means-tested benefits. If they had, they would know that what we are proposing in the Bill is light years removed from the means-testing applied under the Poor Law and the assistance Acts before the war, and the National Assistance Act 1948 after it.
      As my hon. Friend the Member for Hamilton, South (Mr. Tynan) reminded us so clearly on Second Reading when he recalled his childhood, means-testing was used in the 1930s to exclude people from income to ensure that they stayed poor. The purpose of the pension credit claim process is the exact opposite. It is about inclusion, to ensure that people qualify for the income to which they are entitled.
      We will ask pensioners only for the information that we need to know to work out their combined income. For example, we will only need to know about their savings if they are over £6,000. Let us compare that to claiming assistance in the 1930s, when every penny had to be disclosed and, as a consequence, many households did not receive the support that they needed for food, household expenses and children and whole areas of the country were in abject poverty.
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      This is a landmark piece of social security legislation that will end centuries of unfairness, going back to the Poor Laws of 1598 and 1601. It will remove once and for all the disincentive to save for retirement. When it is introduced in October 2003, people with modest savings will see a reward for their efforts.
      The Bill also marks another, although less obvious, break with the past. We are abolishing the criminal offence that could mean pensioners being punished for "wilful neglect" to maintain themselves. The origins of that provision go back centuries to the Vagrancy Acts and further. Those Acts enabled the courts to imprison a person who failed by his own neglect to maintain himself, or anyone he was liable to maintain, with a resulting charge to public funds. That offence dates back to 1713.
      The 1948 Act repealed the Poor Laws. However, the interdepartmental committee that reported on the break-up of the Poor Laws in 1946 considered it necessary to retain the offence of failure to maintain. Although the Conservative party had two chances to repeal it—with the Social Security Acts 1986 and 1992—it remains to this day, albeit seldom used, in the shape of section 105 of the Social Security Administration Act 1992.
      That offence will not be carried forward in the Bill. Along with the ending of the weekly means test, it sends out an important message to pensioners, to this effect: "pension credit is not a benefit of last resort or public charity; it is your income entitlement."
      The Bill is an essential part of our pensions reforms—it will ensure that it will pay to have saved. Our ambition is for all pensioners to share in the nation's rising prosperity. We set out our plans for pensions reform in the 1998 Green Paper, which established a new framework for reforming both state and private pensions. The first stage was tackling pensioner poverty by introducing the minimum income guarantee to ensure that pensioners could enjoy a decent income in retirement. There are 1.1 million fewer pensioners below 60 per cent. median income than in 1996–97 and there are encouraging signs that we are reversing the trend of numbers of pensioners with relatively low incomes.
      However, too many pensioners have not had the opportunity to build up a second pension, so our second stage concentrated on reform of the basic structure of pensions to make it possible for more people to save. For those who could not save, we introduced the state second pension. The state earnings-related pension scheme did not provide enough support for people on low earnings or for people with broken records. For those who could save, we have improved and extended the options for doing so through stakeholder pensions.
      The third stage is to ensure that even those with modest savings will be able to see a reward for their thrift and effort through the pension credit. We are now beginning a fourth stage to deal with the complexity in private pensions, and we shall be consulting on those matters in the autumn. As I said, the third stage will make further inroads towards our objective of tackling pensioner poverty. Through pension credit, we can correct a fundamental flaw in the pension system that leaves people with modest savings no better off than those who have no savings.
      The savings credit element of the Bill will ensure that, from the age of 65, pensioners will no longer lose a pound in their income for every pound of pensions or other

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      savings that they have built up. The Bill will give people a guaranteed income from the age of 60, so that they need not live on less than £100 a week at the commencement of pension credit. More than 5 million pensioners will be eligible. On average, they stand to gain about £400 a year.
      We know that Opposition Members have other ideas about spending the £2 billion that we have set aside for pension credit. Some have argued that all pensioners really want is an increase in their basic state pension. The basic state pension will remain a key building block of state pension provision. Restoring the link with earnings or diverting the money that we have set aside for the pension credit would not achieve our objective of helping all those pensioners who lost out because of the flaws in the current system, and those flaws would continue.
      The simple truth is that the poorest pensioners would lose out if we took any of the routes proposed by Opposition Members, while pensioners with higher incomes would receive the greatest gains. We have decided to redistribute in favour of the poor and those pensioners with modest income or savings. Who said that socialism was dead on the Labour Benches?
      Mr. Goodman: The Prime Minister.
      Mr. McCartney: Oh, no. I hope that that will appear in Hansard.
      My right hon. Friend the Secretary of State for Work and Pensions put this question plainly on Second Reading and I will do so again now: will Opposition Members oppose the Bill? Would they repeal this legislation? Hansard cannot record silences, so if I say the words "total silence" people will get the meaning.
      I should like to remind hon. Members of the comments made on Second Reading in another place. Lord Fowler was one of those responsible for the fact that pensioners were left poverty-stricken under the Conservative Government, but he has repented: he has been on the road to Damascus and stopped off in search of victuals at the House of Lords. While he was there he said:
      "To be frank, I should have preferred it if my government had introduced the pension credit. I have no intention of jumping overboard just because that proposal comes from … the current Government."—[0fficial Report, House of Lords, 18 December 2001; Vol. 630, c. 165.]
      So even those who were responsible for the poverty left to the Labour Government recognise that these proposals are a significant step forward.
      The alternative route that we are taking is more difficult, but we believe it is the right one. It will target more help on those who need it, and we are doing that in a fairer, simpler way that does not intrude on pensioners' lives and encourages people to take up what they are entitled to.
      Other hon. Members want contribute to the debate, so I shall soon end my speech, but it is important for the benefit of every pensioner in Britain that we put on record the truth about the proposals. Under pension credit, we will not need to ask pensioners reams of intrusive questions and we will not require them to notify us constantly if their income fluctuates. Of course, if their income goes down, they will be entitled to claim an increase.
      When was a system ever devised in which people were invited to come along to ask for an increase if they thought that their income had gone down? That is the
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      beauty of this system. It is not intrusive and it will give pensioners the opportunity to approach us for a recalculation if their life circumstances change on the basis that they are entitled to more income, not less.
      Means-testing is about stopping people getting access. The hon. Member for Northavon (Mr. Webb) refuses to accept that fundamental difference. We are not proposing an old-fashioned means test, although the Liberal Democrats continue to parrot on about that. The hon. Gentleman is the one who wants to continue the old-fashioned means test because he cannot provide for poor pensioners under 75.
      The Pension Service, however, will deliver services to pensioners in a totally new way: dedicated and sensitive to their needs, and putting more dignity into the way in which pensioners are treated. Better than that, our staff will be trained to be advocates on behalf of older people—no longer doorkeepers who prevent them having access to income services but trained to watch over and befriend older people and to be responsible for managing them through the process. That is a radically different way in which civil and public servants work with citizens—on this occasion, pensioners.
      Some detail will be in regulations that I hope we will debate in the near future. I promise to share that detail with Members before that debate. Although, in Committee, Members usefully probed the Government's intentions, there have been no significant or even minor changes to a Bill that allows us greatly to improve the situation for pensioners. It will be simpler—for example, 85 per cent. of pensioners will not need to report their level of capital because of the disregard and the lack of an upper limit. Most pensioners over 65 will only have to report changes in their savings and pension income once every five years. We will fully protect those on housing benefit and council tax benefit—another very important innovation—by increasing the guaranteed elements of those benefits by £13.80, or £18.60 for couples. That will ensure that those pensioners maintain their current entitlement as well as benefiting from more generous income and savings rules, as in pension credit.
      That is so important, How many pensioners currently get no access to council tax benefit or housing benefit because they are 1p over the limit? We do not intend, through the introduction of pension credit, to give with one hand and take away with the other. These changes are therefore vital. Because we have also changed the income and savings rules, a further 700,000 pensioner households which will not receive pension credit itself will gain from the changes to the treatment of capital and will access housing benefit and council tax benefit for the first time. We are not just protecting those on pension credit—we recognise that there will always be people who are just above the line, whatever it is, and they should not lose out either. A substantial number of people-700,000 households—who do not currently get access to housing benefit and council tax benefit will gain from these measures.
      On Second Reading, my right hon. Friend the Secretary of State—I think we know who he was talking about—said:
      "When someone claims to have a simple solution to pensions, people should watch their wallet."—[Official Report, 25 March 2002; Vol. 382, c. 607.]
      That has been shown in spades today. The problem is that, in truth and in practice—I shall keep repeating this, as people need to know—the Liberals are not interested in

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      poor people from the age of 60 onwards. Their proposals are so flawed that, despite what they are saying, large numbers of people—1.7 million plus—will have to rely on a traditional means test. How can the hon. Member for Northavon say that his proposals compare in any way with the Government's? I expect nothing from the Conservatives, but at least we know where we stand with them, and we know where they are coming from. We know that they are opposed to all these measures. Despite what they are saying about a campaign, we know that they do not mean it, that they cannot sustain it, and that the public do not believe a word they say.
      The hon. Member for Northavon is different. He parades himself as the human shield for Britain's pensioners. That shield is not only dented: it does not exist. As I heard it said from the Benches behind me, when it comes to looking after the interests of pensioners, he is as much use as a chocolate fireguard.
      A simplification of the income process is vital. We are reducing the complexity inherent in the current system. It will be a straightforward process—a single gateway access to all state retirement income. People approaching retirement will be contacted by the Pension Service to give them information about their basic state pension, based on the contributions that they made during their working lives. At the same time, we will inform pensioners that they may be entitled to extra help through pension credit. The complexity of the current claims process is at the heart of pensioners' uneasiness in dealing with the state. The new service will transform that relationship, and pension credit is the foundation for that change.
      In the past, the system has been intrusive and bureaucratic and, crucially, pensioners do not like it. We are tackling that. Our proposals will significantly reduce the intrusion and complexity, marking a radical change from the current system. Quite simply, people with weekly incomes up to about £135 to £200 for pensioner couples—can get extra income through pension credit. Or looking at it another way, if capital was the only source of income over and above the basic state pension, a single person would need at least £35,000 of capital and a couple would need at least £44,500 before they failed to be entitled to pension credit. The figures show just how radical our policy is. Pension credit is a complementary source of income alongside the basic state pension, and it is like the tax allowances that not one of us would refuse.
      To conclude, I wish to return to the point made so effectively on Second Reading by my hon. Friend the Member for Hamilton, South. With pension credit, we are finally leaving behind the detested historical images of the means tests that stripped people of their dignity and robbed them of their pride. Yet even though we have moved on from the dole queues of the 1920s and the unemployment assistance boards of the 1930s, our collective memory does not dwindle. It has lived on through the generations, and it continued to live on through the Tories' Social Security Act 1986. It is currently dragged up each time someone talks about pension credit using the language of pre-war social policies.
      Pension credit is not about old-fashioned means-testing. Means-testing was about excluding people from income to keep them poor. Pension credit is about inclusion,
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      taking people out of poverty and making sure that they do not slip into poverty in the first place. We will make sure that, for the first time, people who have worked hard and managed to put modest amounts away for their retirement get the income they are entitled to and see a real reward for their efforts.
      The passage of this Bill will ensure that the old images of means-testing will not live on in pension credit. As with the National Minimum Wage Act 1998, I am deeply proud not only to have introduced the Bill to the House but to be the Minister who will ensure that it reaches the statute book.
      6.17 pm
      Mr. Boswell: I wish to express my thanks to my hon. Friend the Member for Hertsmere (Mr. Clappison). His wise advice and acuity immensely impressed me and other members of the Committee that considered the Bill.
      We are used to fireworks from the Minister for Pensions. Although we have also had some measured contemplation and a helpful announcement today, I wish to refer to the fireworks. I was fascinated by his distinction between the means-testing of old and what is being introduced now. There are two characteristics of the Minister's proposal for means-testing. It is apparently all right if it is introduced by new Labour and if it is inclusive and means that nearly every pensioner will be involved. That argument will not wash, because there are serious problems with the proposal.
      The Minister is impetuous and determined to get decisions out of us, but it is rather unreasonable to ask us to judge the effects of the Bill—they will be apparent not too far off, but in a year or two—before it is even passed. With regard to our decision on Third Reading, we will listen to the rest of the debate before coming to a conclusion. However, the House will not have to wait too long for that.
      Our concerns remain those that were set out in the reasoned amendment to Second Reading. I have underlined our five cardinal points and they relate to mass means-testing, the complexity of the system—despite what the Minister said—the fact that many pensioners will miss out on their entitlements, the erosion of incentives and our belief, which the Liberal Democrats have been consistent in supporting, that expenditure would have been better directed towards the basic state pension, in particular for older pensioners. The argument is not about whether we should help pensioners, but about whether any additional money is being spent to best effect.
      As the Minister conceded, the Bill is essentially unchanged. However, it would be churlish and inappropriate not to acknowledge the two substantial changes that Ministers made. It is often the case that if there is a consensus of opinion across the House, it acts as a good catalyst for change. In fairness, we managed to make one change in each House. First, the Government made a significant concession on hospital downrating, and we should remain grateful for that. Secondly, the Minister made a statement today on compensation payments, which will be thoroughly welcomed by hon. Members on both sides of the House. He also repeated his concerns about foster carers for children, so we can anticipate how we might benefit their position. Those are all welcome concessions and reflect the way in which we should make progress when we discuss Bills.

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      I also hope that Ministers and their officials picked up from the Committee some detailed points for consideration as we get close to making regulations. They may also have spotted some pitfalls relating to the equity of, and the ability to administer, the legislation, which will stand or fall on the regulations and the way in which they are administered.
      Frankly, Conservative Members remain worried about extending means-tested benefits to 5 million pensioners. Age Concern is also worried about that. In its general briefing for the debate, it refers specifically to the difficulties of securing take-up of means-tested benefits and the large number—about 5 million—of possible claimants. It goes on to say:
      "we believe that the most important issue will be the level of take-up."
      That is the cardinal test of whether the Minister's wishes are fulfilled. Whatever else happens, means-testing will put a great premium on the performance of the Pension Service, which for technical reasons we have not been able to discuss in detail today.
      We remain concerned about excessive reliance on 26 call centres and a telephone system. We believe, as I think do other hon. Members, that people still need access to a local service within a reasonable time. More generally, the Select Committee said:
      "The Department for Work and Pensions must ensure that the Pension Service has the necessary resources and expertise to deal with the challenges that the Pension Credit poses."
      Those remain serious challenges. Whatever the Minister may wish to happen, he and his colleagues have still to ensure that it does happen.
      We need to reflect on how the Bill came about. The Minister is occasionally long on rhetoric, but the plain fact is that in trying to solve the poverty problem, the Government have widened the gap between the state basic pension and the minimum income guarantee. They are now having to bridge that gap, but the gap is of their making. That was well set out in the written answer that I received from the Minister on 7 May. He gave a detailed response to my request to give the historic levels of the minimum income guarantee and its precursors, supplementary benefit and income support, and of the basic state pension for the past 30 years. I also asked him to give the ratio between them.
      It is interesting that for a long period the differences between the two were small, not generally exceeding 5 per cent. In some cases, they were negative. However, the levels began to climb slightly and in the latter years of the Conservative Government, the income support level was roughly 10 per cent. above the basic state pension. However, since the introduction of the minimum income guarantee, the figures have sharply diverged, and they now show a 30 per cent. disparity. We remain concerned about filling that gap and about the pensions and savings implications to which my hon. Friend the Member for Hertsmere.
      We will not resolve those issues today. The Minister and his colleagues have produced what I am sure they want to describe as good news for pensioners, and we do not want to challenge benefits to pensioners. However, we will ask whether the money is being used to best effect, whether it could have been better spent, and whether there will be consequences in the long run.
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      We are genuinely concerned that the long-term disincentives to save that are built into the system will have a depressing effect on the savings of young people.
      Ministers say, and they have done so again today, that they want to produce an annual pension statement that includes both state benefits and private sector benefits, so that people know where they stand. May I float the suggestion at this late stage that what they need to do is get hold of people like my youngest daughter, who is in her early 20s and just starting her career? It should be made clear to young people where they will stand if they do not get down to saving, and what will be provided by their company pension scheme if—like my daughter—they are still fortunate enough to have one. They should be asked to think seriously about the issue, and made to realise that they are part of the £27 billion savings gap.
      Will the pension credit act as a disincentive because its long-term effects and benefits will be unclear?
      Mr. McCartney: I am more than happy to help the hon. Gentleman's daughter, who I believe is a solicitor or a barrister. Small practices and chambers rarely provide in-work benefits such as defined benefit schemes or even defined contribution schemes. That is why we introduced stakeholders. His daughter can start now to save for her retirement through a stakeholder scheme, and as she succeeds and moves from one practice or chamber to another in what I am sure will be an upward career trajectory, she can take her pension with her and suffer no loss. We have made the preparations; all the hon. Gentleman need do is persuade his daughter that she should get involved.
      Mr. Boswell: The Minister is, if I may put it this way, very seductive, but unfortunately he has identified the wrong target. I have more than one daughter. One is employed by the civil service to look into the sorts of problems posed by person such as myself, or those who decide to litigate against Government Departments. The daughter in question has transferred from a personal pension into a company savings scheme.
      To the Minister I say in all fairness and friendliness that the current take-up of stakeholder pensions is worrying, if not to him, then to many people in the sector.
      Mr. McCartney: That is propaganda. Stakeholder schemes are very important. In the year after their introduction, 800,000 people who previously had no access or any chance of access to a savings product for their pension got one, and about 85 per cent. of companies that had not provided access registered to do so. That is a significant step forward. The hon. Gentleman is right, in that there is a lot more to do, but let us be clear: we are all in favour of people saving earlier in their lives, so it is in all our interests not to belittle stakeholder schemes, but instead to encourage people to take one out.
      Mr. Boswell: I have absolutely no intention of belittling stakeholder pensions, but I should in all fairness point out that they are currently striking only 2 per cent. of the target group. Of the 800,000 already taken out, a significant number—174,000, if memory serves—have been through the transfer of the construction industry pension scheme. The position is generally regarded as not being as promising as the Minister and I would hope for.

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      It would be inappropriate to widen a Third Reading debate to cover such issues, but it is relevant to the debate and to the provisions we debated and voted on earlier this afternoon to point out that the price of success in pensions policy is eternal vigilance. We need to keep revisiting the subject to see whether the proposals are working. We have reservations about stakeholder pensions, and we still have serious reservations about the long-term effect of the pension credit on the incentive to save and, if there is no long-term private saving, about the future affordability of the pension credit programme. That rolls on a long way ahead.
      This is not just a matter of today's pensioners, important as they are; it is a matter of tomorrow's pensioners and the arrangements that we need to set down now to meet their needs in the future. I have a feeling that when we have finished debating this Bill and when we are no longer around to be drawing our own pensions, today's young people may be paying the price for some of the decisions that we are about to take.
      6.30 pm
      David Cairns: At the outset of his remarks the hon. Member for Daventry (Mr. Boswell) said that he would listen to the rest of the debate before deciding whether to oppose Third Reading. As I think I am the only Member on the Government Benches seeking to speak, I will assume that if he does not divide the House, it will be entirely due to the persuasive force of my argument. Of course, if he changes his mind and decides to divide the House, I will take it equally personally.
      I had hoped that after the brilliant speech by the Minister we would hear no more of the scaremongering nonsense about mass means-testing. Alas, the hon. Member for Daventry continued, as if he had heard nothing of what my right hon. Friend said, to perpetuate that nonsense, and although I do not want to prejudge the contribution of the hon. Member for Northavon (Mr. Webb), I suspect that he will do the same. I assume, however, that if the hon. Member for Daventry does not divide the House, it will he a principled decision and not the result of incompetence such as we saw a few minutes ago on the last group of amendments.
      I want briefly to address a couple of canards from the debate. The first is the extraordinary allegation that the Bill has been introduced to clear up a mess made by the minimum income guarantee. It is quite ludicrous to assert that the Government should or could achieve all their social policy on pensioners in one Bill, and that one cannot begin, as we did, by focusing on alleviating the appalling legacy left to the poorest pensioners in this country.
      Not only did we have to spend considerable sums alleviating the dire poverty of the poorest pensioners, but we had to ensure that significant sums and a great deal of parliamentary time were taken up sorting out the scandal of pension mis-selling which we inherited from the previous Conservative Government. We make no apology for focusing first and foremost on the poorest pensioners, as we did with the minimum income guarantee. We also ensured, through the winter fuel payment and other universal benefits such as free eye tests, that all pensioners who had lost out were receiving additional benefits. We were right to do all that.
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      What we are doing now is not an academic exercise. The remarks made earlier by the hon. Member for Northavon, when he said that giving an extra pound to someone with savings of £6 was better than giving that person £23 through the minimum income guarantee but nothing extra for savings, were like something that Alice might have found through the looking glass. The Government are being extraordinarily generous to our poorest pensioners, and rightly so, because they deserve nothing less.
      We are addressing a pressing need that every single Member has heard expressed on the doorstep time after time. People say, "What about me? I have a small second pension and a few savings, and I'm no better off than the person down the road who smoked and drank all his life and didn't bother." The Government are addressing that real need in the Bill, so I hope, although I am not optimistic, that we will hear no more nonsense about the Bill clearing up a mess. We have laid excellent foundations, and the Bill builds on them, and I am very proud of that.
      Let us keep our eye on the bigger picture when considering what the measure is seeking to achieve. Pensioners will be more than £400 a year better off on average, and in constituencies like mine and those of my hon. Friends, where people are poorer because their incomes are below the national average, they will be even better off. That goes a long way towards righting an historic wrong; people should not be penalised for thrift and prudence.
      The other theme running through our four hours of debate has been the scaremongering about means-testing. After Second Reading, I decided that I wanted to look into the subject in depth, so I turned to what the Library told me was the definitive history of the means test, "Reserved for the Poor: The Means Test in British Social Policy" by Deacon and Bradshaw, which I am sure the hon. Member for Northavon has lectured on. Referring to the 1950s, Deacon and Bradshaw say:
      "Sometimes insurance was increased by more than assistance—at which point the Government claimed that it was reducing the role of means testing and the opposition claimed that help was not going to those who needed it most. On other occasions assistance was increased more, and then exactly the same debate was had in reverse, with the Government extolling the virtues of selectivity and the opposition complaining about the means test".
      A sterile debate has been taking place since the inception of the welfare state, but the Bill takes us past that. The Government are prepared to go beyond the sterile debate about mass means-testing, but the Opposition want to drag us back to it.
      Deacon and Bradshaw also write about the reality of the means test under the National Assistance Board in the 1940s and 50s. They say that it was
      "one thing for a claimant to have to tell the Board that he or she needed extra money for clothes or bedding when friends and neighbours were in a similar position and when the cause of need was so obviously beyond the control of any one person. It was quite another to have to show worn clothing to a visiting officer when everyone else had 'never had it so good'".
      That was the reality of the means test, which my right hon. Friend the Minister said was designed not to lift people out of poverty but to ensure that they were given just enough to keep them in poverty. Heaven forbid that the Governments of the 1950s would give people enough money to lift them out of poverty and float them beyond range of the means test.

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      The Bill is quantitatively and qualitatively different. We are not talking about weekly assessments or people from the National Assistance Board coming round demanding to see people's sheets, clothing and ornaments that might have been pawned. We abhor such means-testing. We are talking about one phone call every five years, with a request for the bare minimum of information so that claimants get what they deserve to lift them out of poverty. It is an extraordinary perversion to equate the means-testing of the National Assistance Board with the income assessment in the Bill. The hon. Gentlemen on the Opposition Benches—and they are all hon. Gentlemen—know full well that those are completely dissimilar beasts, yet they are willing to perpetuate that myth for one reason alone: scaremongering.
      My right hon. Friend has said on more than one occasion that, as soon as the legislation allows, he intends to publicise and promote the credit; every Labour Member will make sure that every pensioner knows about it. We will hold the Minister responsible for ensuring that the Pension Service is as proactive as he promised. I guarantee to my right hon. Friend that if I suspect that the Pension Service is not proactive and does not provide a localised service I will, to coin a Scottish phrase, be in his face. He knows that, and he knows that every Labour Member feels exactly the same way.
      Our approach is completely different from the scaremongering of Opposition Members, who have only one aim in mind—to depress take-up. They will prevent people applying for the credit by telling elderly and poor pensioners, "It's the old means test. It's the humiliation and embarrassment that your parents had to endure." It is no such thing. A glimmer of recognition on the part of the Opposition that the Bill is entirely different from that sort of means-testing would be very welcome.
      I commend the Government for introducing the measure. It addresses a real need, it is generous and it is clear. The complexity will be dealt with by the civil servants, not the claimants. All the claimants need to know is whether they have £135 a week coming in. If they can answer yes or no to that question, the system will do the rest. The Bill is a good measure. It is positive, redistributive and progressive, and I warmly support it.
      6.40 pm
      Mr. Webb: The contributions of the hon. Member for Greenock and Inverclyde (David Cairns) are passionate and well researched. They are fundamentally misconceived, but none the less entertaining for that.
      As a parent—I am sure that there are many parents in the House—if I come home and discover that my child has made a mess of the kitchen floor but has begun to clean it up, I would applaud them for the fact that they had started to clean it up, but I might ever so gently suggest to them that they should not have made the mess in the first place: That is how we view the Bill.
      The hon. Member for Greenock and Inverclyde mentioned the familiar cry of the person who finds that their neighbour has the same living standards as they have, even though they have saved. That very problem has been made worse by the Government over the past four or five years. A person with £20 a week of savings this year is no better off than their next-door neighbour, whereas in 1997 a person with £20 of savings would have been better off than their neighbour. In terms of dealing with the resentment felt by people who have saved, the Government have made the matter worse and are only partially remedying it through the Bill.
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      The hon. Gentleman says that what is proposed is not the same as the means-testing of the 1930s. I agree; however, I am not contrasting what is proposed with the 1930s but with the means-testing of the 1990s—the system from which the Bill takes over. The non-take-up rate, not under the system where claimants have to show that their sheets are worn through, but under the system operated now in modern-day Britain, is one in three. Forget about the national assistance board in the 1930s—the means-testing that does not work is the means-testing that is done now.
      The hon. Gentleman's noble Friend Baroness Hollis, told Members in another place that the non-take-up rate for the shiny new-fangled benefit credit would be one in three. He can check—it is on the record. The non-take-up rate for the new pension credit would be one in three. Baroness Hollis hopes that that will build up as time goes by, but what I want to know—
      Mr. McCartney rose—
      Mr. Webb: No. I will not give way. I did not intervene.—[Horn. MEMBERS: "Go on."] No.
      Mr. Deputy Speaker: Order.
      Mr. Webb: Baroness Hollis said that when the new system came in, one person in three who were entitled to it would fail to take up their entitlement. If the system is so good, so different and so simple, and if it requires just one phone call, why will one person in three not take it up?
      Maria Eagle rose—
      Mr. Webb: No. I will not give way. I did not intervene on the Minister.
      We were told in Committee that the Government would allow a year from October 2003 for people to claim their entitlement and backdate it to 2003. That is entirely welcome, but why must they leave a year for people to claim it? The Minister said that the Government had done away with complexity. The Government must leave a year for people to claim the pension credit because it is so complicated they do not believe that they can get the money to people. The system is not simple; it is still extremely complicated, as the Bill clearly shows.
      In his earlier remarks, the Minister said that pensioners would no longer lose, pound for pound, as though he had not been listening to what we have been saying this afternoon. Which pensioners will no longer lose, pound for pound? Women aged 60 to 64 will lose, pound for pound. Women with poor contribution records will lose, pound for pound. In the propaganda that we got on Third Reading, that is all brushed under the carpet.
      The prejudice against women in aspects of the Bill explains why our campaign for justice in women's pensions is sorely needed. The fact that the Government sweep all these things under the carpet and deal in generalisations does a disservice to people's understanding of how the system will work. It is fiendishly complicated. That is why the Government assume that one in three will not take up their entitlement.
      The Minister of State rightly says that the Bill is historic. It is. It will be seen as an historic turning point at which Government policy was set in the direction of

      485
      mass—I am not to call it means-testing, apparently—targeting and mass attempts to identify the poorer half or the poorer two thirds. In our old age, we will not want to have to report our changes in circumstances or know—or, more to the point, care—about tapers, thresholds and credits. We will want to know that we have state pension and some sort of second pension, and that we can budget on the basis of that income for the rest of our lives. That is what we will want in our old age. None of us would prefer to depend on a pension credit, but that is what we will have imposed on two thirds of our fellow citizens by the time people of my age reach pension age.
      It is correct to say that when the Government came to power, they could not achieve all their social policy objectives in one go and it was important to tackle pensioner poverty, but who were the poorest pensioners in the land when they took office? It was not the people getting income support and so on who were poorest, but those who were entitled to that support but not receiving it. The Government's figures tell us that there were 500,000 such people. I have a feeling that the Labour party manifesto referred to a much bigger number; it may even have said that there were 1 million such people. None the less, the Government's figures tell us that 500,000 pensioners were not getting income support, and they did not get a penny from the MIG.
      Labour Members who talk about their compassion for the poorest pensioners should be aware that the statistics that Ministers cite are based on simulation models from the Department that assume that everybody gets their money—but they do not. As long as the Government continue arguing about the effects of their policies on the assumption that everyone gets their money, they will continue to give a misleading impression, as one of the fatal flaws of their strategy is that a lot of people do not get it. The trade-off is not between a system that gives money only to the poor—let us call it targeting for shorthand—and our proposal of giving to the old, some of whom are not poor; it is between giving to some of the poor and completely ignoring the poorest, although most of the poorest, such as the elderly who miss out on their benefits, get their income through the basic pension.
      The Government did have an alternative. The Bill could be called the culmination of their failure to think laterally. Some of the policies mentioned by the Minister, such as relaxation of the capital rules, are not dealt with in the Bill. We did not need the Bill to relax the capital rules. The suggestion that the pension credit is the only way in which such proposals could have been implemented is therefore wrong. It could have been done on day one or at any time.
      Mr. McCartney rose—
      Mr. Webb: I shall not give way, as other hon. Members still want to contribute in the short time that remains.
      All that work could have been done without the Bill. The only thing that the Bill adds, while introducing some streamlining of the means-testing process, with which I have no problem, is the savings credit, which partly undoes the saving disincentive that the Government have created. If we are to applaud them for partly undoing the damage that they have done, the applause will be pretty limited.
      486
      I think that our goal should be bigger. The Minister tried to sound visionary and put some passion into his contribution, but my vision is much bigger than that of ensuring that two thirds of pensioners have to report their circumstances and receive top-ups. My vision is to ensure that as many people as possible are independent of the state. That is the sort of goal for which we should be striving and it is a bigger vision than that contained in the Bill.
      6.48 pm
      Bob Spink: British pensioners are right to feel betrayed by this Labour Government. They do not want yet more gimmicks or means-testing, whether it is old-fashioned means-testing or the new fangled type that Labour is currently trying to spin. They simply want a decent, universal and honest basic state pension so that they can live with the dignity that they deserve. They want decent Members of Parliament who can stand up in this House and represent their interests.
      I should like to give the House a quote:
      "The concept of the Pensions Credit is … far too complex and over-elaborate … It inevitably draws more pensioners into means testing, which many will resent … We need a system which is simple, understandable, and which accords a proper dignity to pensioners."
      Those are not my words, but those of Mervyn Köhler, head of public affairs at Help the Aged, in his press notice of 9 November last year. We would do well to listen to Help the Aged, and the proof of his words is clearly evident. Of the 2.5 million pensioners who qualify for the MIG, only 1.7 million take it up. That take-up is pitifully low because of the complexity of the MIG and the stigma of means-testing. Yet the measure before us tonight is if anything more complex than MIG and extends the scope of pensioner means-testing, notwithstanding the fact that the Labour manifesto pledged to end it—yet another broken Labour promise. As a result, take-up may fall even below the miserable level of MIG take-up, but I doubt whether that worries the Government, because they do not care about pensioners.
      I will give the Bill some credit. The Government claim that it will help more than 5 million pensioners, which is greatly to be welcomed, and it is right to target the poorest pensioners. But I challenge their estimate that the Bill will increase benefit expenditure by £2 billion in a full year of operation, because if take-up is only 70 per cent. or 75 per cent.—around the same level as MIG take-up—there would be little or no increase in overall expenditure. That is why I say that low take-up owing to high complexity will not worry the Government.
      Mr. McCartney: Will the hon. Gentleman give way?
      Bob Spink: No, I will not. Other Members wish to speak, and the right hon. Gentleman has spent an inordinate length of time at the Dispatch Box today.
      The 1997 manifesto on which the Government were elected, "New Labour because Britain deserves better", said:
      "We believe that all pensioners should share fairly in the increasing prosperity of the nation … Everyone is entitled to dignity in retirement."
      Those are fine words, and we can all agree with them. However, under this Government the proportion of national wealth that goes to pensioners has fallen, even

      487
      after fully accounting for all the gimmicks such as free television licences for over-75s, the winter fuel payment and other concessions.
      Quite simply, the Government have failed pensioners. As always, the Prime Minister was long on aspiration and warm words and short on delivery. Pensioners made this country what it is. They created its wealth and established its infrastructure and enterprise base. They gave their blood, sweat and tears—some gave their lives—so that we could be a free nation enjoying prosperity and improved standards of living, yet they are denied a fair share of the very prosperity that they created through their efforts.
      Let me be perfectly balanced and fair in what I say. On balance, during the 1980s and 1990s, Conservative Governments improved the lot of pensioners—although, to be honest, we did not do enough—but under this Labour Administration many pensioners have become worse off. Just as they are worse off under Labour as regards health, transport and street crime, they are worse off financially. So what is the Government's response to current levels of pensioner poverty? First, to introduce more, not less, complexity; secondly, to introduce more, not less, means-testing; and, thirdly, to create a long-term disincentive to saving. That will lead to lower pensioner take-up of their hard-earned entitlements and more, not less, pensioner poverty. In short, Labour has failed pensioners, and the Bill may compound the Government's failure by leading to an increased dependency culture. As the Minister said, socialism still lives on those Benches.
      6.53 pm
      Mr. Goodman: It was interesting that the Minister devoted so much of his summing up to means-testing. It was no accident that, of all the various elements in the Bill, he chose to concentrate on that one, because it is at the heart of new Labour thinking on this matter. Old Tory means-testing is apparently bad, but new Labour means-testing is apparently good.
      At this point, hon. Members should remember who is, as it were, the "onlie begetter" of the Bill. It is not the Minister, nor even the Secretary of State, but the Chancellor of the Exchequer, who is absolutely confident that, by extending these credits both through his Department and—I hope that the Minister will not be embarrassed by this—his proxies in the Department for Work and Pensions he will be able to raise the living standards of poorer pensioners. I believe that it is widely acknowledged in and outside the House that the Minister is an admirer of the Chancellor. I am sure that the Under-Secretary, who is sitting next to the Minister, will not mind my putting that on the record.
      There is a difficulty with the Chancellor's approach. According to the Government's figures, 2.5 million pensioners are entitled to the MIG, but only 1.7 million have taken it up. Some of us find it hard to distinguish between old and apparently wicked Tory means-testing and new, wonderfully effective Labour means-testing. As the hon. Member for Northavon (Mr. Webb) ably pointed out, between a fifth and a third—the latter was his figure—do not get a penny of the MIG.
      The Government have presented no evidence that the take-up for the pension credit will be higher. I acknowledge that the Government hope that it will be higher, but they cannot reassure any hon. Member about that. The fundamental flaw in the Government's approach,
      488
      which the Chancellor masterminded, is becoming clearer as time goes on. The Minister placed great stress on means-testing in his summing up because he is so worried about the failure of new, apparently effective Labour means-testing that he wants to meet the point head on. However, he cannot guarantee that the take-up will be higher. He is naturally unwilling to listen to criticism from the wicked Tories, but perhaps he should take account of the concluding paragraph of the report by the Labour-dominated Select Committee on Work and Pensions. It states
      "Most importantly, it"—
      that is, the Government—
      "will need to ensure that the levels of take-up for the Credit increase dramatically from those currently seen with the MIG, and that the poorest pensioners benefit in full from its provisions."
      That acknowledges that the poorest pensioners do not benefit in large numbers from the MIG and that they may not benefit from the provisions of the pension credit.
      In short, we know that those who take up the pension credit will be better off, but the system is gradually becoming increasingly complex. It is not so easy for my elderly constituents, especially those who are of an ethnic minority, to pick up the telephone, as the hon. Member for Greenock and Inverclyde (David Cairns) suggested, and get their benefit, as Tommy Cooper would have said, just like that. The Select Committee believes that, in practice, it is enormously difficult for many pensioners to cope with the complexity of the forms and take up the benefit as the Government want.
      The Select Committee report concluded:
      "the Pension Credit unquestionably adds further complexity to an already byzantine system of retirement provision, which is causing confusion for pensioners, pension providers and those saving for their old age. In particular, the Credit throws the role, and indeed future, of the State Second Pension into serious question."
      By placing so much stress on means-testing, the Government introduce a fundamental weakness into their plans that affects the country's poorest pensioners. I believe that they will pay dearly for it in the long run.
      6.58 pm
      Mr. McCartney: I simply want to place on record my thanks to my Front-Bench and Back-Bench colleagues who have taken the Bill through its stages. I also want to thank the hon. Member for Daventry (Mr. Boswell) and his colleagues and the hon. Member for Northavon (Mr. Webb). They have battled and put their cases with rigour. I hope that, at the end of our debates, the Bill is stronger and that many pensioners will receive a clear signal that, for the first time in their lives, they have a Government on their side, who will represent their interests. On income, social care, health care, transport or any public service, the Government are on the pensioners' side.
      Question put and agreed to.
      Bill accordingly read the Third time, and passed, with amendments.

      OTHER INTERPRETATION PROVISIONS

        EUROPEAN SCRUTINY
        Ordered,
        That Mr. Laurence Robertson be discharged from the European Scrutiny Committee and Angela Watkinson be added to the Committee. [Mrs. McGuire.]

        STATUTORY INSTRUMENTS (JOINT COMMITTEE)
        Ordered,
        That Mr. Jonathan Djanogly be discharged from the Select Committee appointed to join with a Committee of the Lords as the Joint Committee on Statutory Instruments and Andrew Rosindell be added. [Mrs. McGuire.]

  PETITION

    Woodley town centre
    7 pm
    Jane Griffiths: I would like to present a petition from 4,356 concerned residents of Woodley in the Reading, East constituency. The petition states that
    they are concerned at the levels of crime and nuisance experienced in Woodley shopping centre, and believe that the installation of CCTV in Woodley town centre would lead to a reduction of these levels.
    The petitioners therefore request that the House of Commons inform the Secretary of State for the Home Department to take note of the concerns of the people of Woodley and to ensure that appropriate resources are made available to enable the installation of CCTV in Woodley Town Centre;
    And the petitioners remain, etc.
    To lie upon the Table.

  Throckmorton Asylum Centre
  Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]
  7.1 pm
  Mr. Peter Luff: I am grateful to the Speaker for this opportunity to raise a matter that is of extreme importance to my constituents. My hon. Friend the Member for Banbury (Tony Baldry) and my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) wish to associate themselves with many of my remarks, but constituency engagements prevent them from being here tonight. I am particularly grateful to my hon. Friends the Members for Woking (Mr. Malins) and for West Worcestershire (Sir Michael Spicer) for informing me in advance of their interest in this debate and for their presence here this evening.
  I should also like to express my gratitude to the Home Secretary, who recently wrote me a very generous letter congratulating me—and, implicitly, the local residents around the Throckmorton site proposed for the asylum accommodation centre—on the anti-racist nature of our campaign. I admire the way in which the local community has organised itself against this proposal, and those who have organised the protest group Protest at Asylum Centre at Throckmorton—PACT—also deserve to be congratulated on the splendid way in, for example, which Sunday's mass rally of 1,000 local residents was organised.
  We need to acknowledge that asylum and economic migration issues are becoming some of the most pressing and difficult problems facing the world today. It is a challenge for any Government to help the vulnerable, to deal fairly with economic migrants, and to be tough on crime and terrorism, which are often the unattractive side-effects of the issues with which we are dealing here. I have great respect for the Minister who will be replying to this debate, and for her noble Friend Lord Rooker, and I am grateful for the way in which they have kept me informed about developments; they have been very unwelcome developments, but the Ministers have kept me informed none the less.
  The Under-Secretary of State, the hon. Member for Wallasey (Angela Eagle), said in Standing Committee on the Nationality, Immigration and Asylum Bill on 7 May:
  "All decent and reasonable politicians must try to calm people's fears rather than make them worse. We must ensure that reason rather than blind emotion is the order of the day."—[Official Report, Standing Committee E, 7 May 2002; c. 83.]
  I certainly want to associate myself with those remarks.
  So why are we having this debate? First, I am seeking specific assurances on aspects of the way in which the Government are approaching issues as diverse as police resources and compensation for those living nearest to the proposed site. More importantly, I just hope that I might be able to persuade the Minister, even now, that she is wrong, and that the Government's policy is wrong. As Oliver Cromwell famously said to the general assembly of the Kirk of Scotland in August 1650:
  "I beseech you, in the bowels of Christ, think it possible you may be mistaken."
  To put that more prosaically, "If you're in a hole, stop digging." Those of us who are looking at these developments from the outside think that Government policy on asylum looks like a dangerous mix of back-of-the-envelope calculations and panic.

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  There are three key arguments against the proposed asylum accommodation centre. First, it is unfair on the asylum seekers themselves to place them there; secondly, it is unfair on the local community to ask them to bear even more burdens for the sake of the rest of us; and, thirdly, it is contrary to planning policy. I ask the Minister to take one urgent action: please will she do more to help the residents whose lives have been blighted, at least until the public inquiry that will flow from this application by the Government issues its report?
  I understand that the Minister will not be able to deal with all my questions tonight, and I shall welcome letters from her subsequently.
  My first question concerns the worrying rumours that contractors have been told that the site will open in March. It is our understanding that the public inquiry is unlikely to report until about March, so which is right—what has been said to the contractors, or what we understand from the planning process? Importantly, will Wychavon district council have 16 weeks to respond to the planning notification submission, as Home Office officials and consultants solemnly promised at a private meeting in Wychavon, or will it have eight weeks, as last week's notification letter states?
  Throckmorton is a remote rural community, consisting of about 150 people and the additional nearby small hamlets of Tilesford and Hill. There are no appreciable services or facilities. The four neighbouring parishes have a combined population of little more than 2,000. The airfield is about 8 miles from Worcester and 6 miles from Evesham. Pershore is about 3 miles to the south, with Bredon Hill beyond that. During the second world war, the base was an important facility for training and the so-called 1,000 bomber raids. In the 1960s, the runway was extended to enable Valiants from Strike Command to be based there on permanent standby. The airfield is now home to QinetiQ—formerly known as the Defence Evaluation and Research Agency—other research and training activities, and, of course, 130,000 animal carcases from last year's foot and mouth disease outbreak.
  I shall deal with the three central points in turn. The first concerns the unfairness on asylum seekers. All refugee organisations, charities and Churches agree that the policy of locating 750-bed asylum centres in remote rural areas is wrong. Nick Hardwick, chief executive of the Refugee Council said:
  "We are very concerned about the proposed accommodation centres. The experience of similar centres on the continent, which are away from urban centres and where everything is provided on site is that the asylum seekers become very isolated and institutionalised and those who are allowed to stay have huge problems properly integrating."
  The Immigration Advisory Service said many things in response to the White Paper, but in essence it took the same view. It considers that,
  "in line with the experience of reception centres in other European Union countries, a size of no more than 200–300 residents is desirable. Such smaller centres than those proposed could also be sited more easily and less obtrusively in urban areas with greater community facilities."
  The Refugee Children's Consortium—consisting of Barnardos, British Agencies for Adoption and Fostering, the National Children's Bureau, the Children's Rights Alliance for England, the Children's Society, the Medical Foundation for the Care of Victims of Torture, the National Society for the Prevention of Cruelty to
  492
  Children, the Refugee Council, Save the Children, and UNICEF—is opposed to the inclusion of children and their families in the piloting of accommodation centres. I urge the Minister to reflect on the wisdom of including families in a population that is 80 per cent. single and economically active. That is an error of judgment that the Minister should seriously reconsider.
  The diocese of Worcester has also echoed such concern. Last week, the Bishop of Dudley, the Right Reverend David Walker, said:
  "The churches have a fundamental role to play in welcoming asylum seekers and befriending them during their stay in the UK. The Church of England has a specific responsibility to recognise and respond to the spiritual needs of all who dwell in our parishes."
  The bishop expressed opposition, however, to the principles that the Government propose, and to the chosen site. He was particularly disappointed that such remoteness will mean that Churches cannot play their part in making asylum seekers feel welcome in our community.
  Perhaps most tellingly of all, Gurbux Singh, chairman of the Commission for Racial Equality said last week:
  "Placing asylum seekers in principally rural environments again removed from our mainstream communities is not a terribly sensible way of ensuring that newcomers are integrated into the society."
  Mr. Humfrey Malins: My hon. Friend argues his case with great conviction, but is he aware that those who object to the great size and rural location of such centres include several Labour Back Benchers, such as the much respected hon. Member for Walthamstow (Mr. Gerrard)?
  Mr. Luff: The hon. Member for Walthamstow (Mr. Gerrard) is one of many individuals whom I intended to quote, had time permitted. Nevertheless, I am grateful to my hon. Friend for making that point.
  The simple truth is that these large accommodation centres are a recipe for tension, and a trial that is doomed to fail. The larger the centre, the harder it is to manage. Located in remote rural areas, such centres are like prisons without walls.
  Serious practical problems also arise, such as the proximity of the foot and mouth disease burial site. Wychavon district council feels that it has insufficient information on the health consequences of that particular location. Proposing to dump asylum seekers 350 yards from such a burial site sends an odd signal to the wider world about our attitude to them. Given the use to which the airfield was previously put, serious environmental issues also need to be addressed. In undertaking their environmental impact assessment, I hope that the Government will listen carefully to what Wychavon district council has to say about the scope of that assessment. The question of what might be lurking on that airfield is a serious one.
  Wychavon district council's planning officer, Jack Hegarty, told me:
  "We have significant concerns about placing residential uses close to the burial site. In simple terms we would ask ourselves whether we would contemplate allocating the site for residential use and I doubt very much that we would, purely in terms of residential amenity."
  In other words, it is not good enough for British citizens, but it is good enough for asylum seekers.

  493
  There are also serious recruitment issues. The Government say that the project will create 300 jobs, but these are all in shortage areas. We cannot find teachers or social workers; it is an area, I am happy to say, of full employment. Quite how the Government will find people to work here, I do not know, and I worry about that.
  Dumping asylum seekers miles from any of the nearest towns means that they will be locked in. The noble Lord Rooker said that residents would be given "pocket money" for bus fares, but there are no buses; there is nowhere they can go.
  The proposal is very unfair on the local community. Lord Rooker suggested that it was time for rural England to take its share of the responsibility. This corner of rural England has already done more than most and should be left in peace. The area's major landfill site—actually a land rise site—is massive. Its hills look rather like a lunar landscape, or the scene after a nuclear attack, with hundreds of seagulls wheeling overhead. Local roads already take 500 lorry movements a day to service this huge rubbish tip. Also, there is a foot and mouth disease burial site.
  Throckmorton accepted its responsibility willingly last year, despite the devastating impact that it had on local residents' lives. A decent Government would say that enough was enough and promise never to impose another burden on these people, who are not Nimbys; the truth is that their backyard is full. There are also serious implications for police, fire, health, education and social services.
  Sir Michael Spicer: Can I draw my hon. Friend's attention to an answer that I received from the Department of Health, which said that no assessment had been made in respect of any additional health or social care needs? Does that not show, first, that there will be such additional needs and, secondly, that the Government do not have a clue how much they will cost?
  Mr. Luff: I share my hon. Friend's concerns and I am grateful for the close way in which he has worked with me on this important issue.
  In Committee, the Under-Secretary said:
  "We have made it clear that we intend to provide accommodation centres in non-urban areas because of the pressure that has built up on local services in urban areas."
  I find it difficult to reconcile these comments with the Government's assurances that these will be free-standing centres making no demand whatsoever on local services.
  There have been meetings with the local health authority and the local police service, and they anticipate demands on these services. Worcestershire is at the bottom of every funding table there is. Where are the resources to come from to meet these additional demands? The only police presence in the community at present is PC Charlie Cavendish. We will certainly need a lot more than him to cope with the implications of the centre.
  Is it true that some police authorities have declined to police these centres, or to provide the protection necessary? Who will be liable if there is a fire, such as that at Yarl's Wood? Who will insure this centre in the
  494
  event of a similar disturbance? Is it not time to re-examine the Riot (Damages) Act 1886, which I think puts the responsibility for damage on the police?
  Serious criminals were moved from prison to Yarl's Wood; what reassurances do we have that there will be no such people at this centre? How will we know exactly who is there? Will the local police be better informed by the Home Office than Bedfordshire police clearly were? How will the Government assess the risk of the individuals put there? Will the emergency services be fully involved in the planning and design of the centre? They certainly should be; failing to plan is planning to fail.
  The proposal is contrary to planning policy. No one could get away with trying to build a residential development on this site except the Government. At the examination in public into the structure plan in 2000, the panel said of a proposed new village that
  "in our view a site would need to be on the edge of an urban area and well served by public transport in order to be considered for housing development."
  The panel went on to say that growth on any scale on that site would be likely to be unsustainable, would impact on the surrounding settlements and could not be said to satisfy Government policy.
  The Government have gone through a bizarre site selection process, in which proximity to an airport was one of the criteria; I suppose one cannot get much closer than a disused airfield.
  I do not want to play pass the parcel, but why is Defence Estates advertising a major site in the Liverpool area in this week's Estates Gazette? Was this site—Deysbrook barracks—ever considered? Somehow I doubt it. A team that did not know that one of the sites that they had chosen had been built on already—it is a car factory—and that another was adjacent to an oil refinery would not know about 33 acres of land, described by Defence Estates as "an outstanding development opportunity", which has outline planning approval for mixed-use development.
  Many local people say that it is no coincidence that the three sites put forward by the Government are all in Conservative constituencies. I have dismissed those concerns, because the fourth site is likely to be in a Labour or Liberal Democrat seat. However, I would like the Minister to give an absolute assurance on that point now, because many people do not believe that the location is not motivated by party politics.
  Can the Minister also assure us that the Home Office's money, which will boost the value of QinetiQ's site on the old airfield, is not being used to boost the value of QinetiQ before its privatisation? Home Office money will be used to build the road up to the site and that could give QinetiQ a direct cash boost. It is a bit strange that the privatisation of QinetiQ is imminent.
  The property market in Throckmorton has been decimated by the decision. Houses in the village can no longer be sold. At the rally on Sunday, I met a woman in tears because her house sale had fallen through. People cannot sell their houses for one simple reason: the Government have taken the decision to locate two sites there—a foot and mouth disease burial site and an asylum centre. That is the Government's fault and no one else's. I accept that it is not the Home Office's fault or DEFRA's fault alone. Liability does not fall strictly to either of those two Departments, but it does fall to the Government.

  495
  That is why I wrote to the Prime Minister yesterday urging him to intervene and buy the houses of those people who want to move. He will be able to sell them again when the property market recovers, as it will, but at the moment people's lives are being ruined by the blight that the Government have put on their houses.
  Where is the consultation that we were promised on this issue? We have had three public meetings, with the Home Office nowhere in sight. The Minister said in Committee that
  "public meetings will be held notifications are submitted."—[Official Report, Standing Committee E, 7 May 2002; c. 83–88.]
  I hope that that will happen soon. I have written to Lord Rooker, inviting him to a public meeting in my constituency.
  This matter is very serious. People's lives are being ruined and any asylum seeker placed in a centre in Throckmorton would also be seriously jeopardised and prejudiced by that location. The more I think about the policy, the more worried I become, not just for Throckmorton and Worcestershire, but for any community unfortunate enough to be near an asylum centre, and for any asylum seeker sent to one. I urge the Minister to reconsider the whole policy.
  7.16 pm
  The Parliamentary Under-Secretary of State for the Home Department (Angela Eagle): I congratulate the hon. Member for Mid-Worcestershire (Mr. Luff) on securing this debate and also on the way in which he has put his case. I thank him for citing the debate that I am having in Committee with the hon. Member for Woking (Mr. Malins), who is in his place, in which I talked about the duty of national and local politicians to deal responsibly with issues that are, by their essence, emotive. I hope that we can continue in that vein, but that does not mean that the constituents of the hon. Member for Mid-Worcestershire do not have important views on, or emotional reactions to, something that affects them as much as he has explained tonight.
  I wish to take this opportunity to dispel some of the myths about the Home Office's intentions on planning procedures. Accommodation centres are supported by hon. Members on both sides of the House, although we disagree with Conservative Front Benchers about the size and location of the centres. The proposals in the White Paper were welcomed as an effort to secure a more effective and faster procedure for obtaining final decisions than we manage at the moment with the dispersal policy and the current arrangements for asylum applications. It is important that we put that on record, because if we are to pilot such sites, they have to be located somewhere. Different people have different opinions on where they should be, but it is important to put on record the general agreement on both sides of the House that the proposals are worth pursuing.
  I do not accept that we will be "dumping" asylum seekers, and that is a pejorative word to use. Asylum seekers need a better, more supportive environment while we proceed with their asylum claims. Instead of being left in dispersal areas, often in strange places with no real support services—which is the experience of many asylum seekers now—they would be placed in a cluster centre, where we could have training, language tuition,
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  other education, access to primary health services and legal services available. We could then pursue the claims more effectively and efficiently while guaranteeing asylum seekers a safe environment in which to wait. That is a beneficial approach, and we all think so. So I do not accept that we will dump asylum seekers, but I do accept that the parties disagree about the size and location of the centres.
  It is argued that the burden will fall unfairly on certain areas, and the party political point is made that all the current sites are in Conservative seats. That is purely a coincidence. We are searching for sites and shall continue to do so. Those sites will be anywhere that we think appropriate. Clearly, Throckmorton is on the radar at present, as the hon. Gentleman knows. I thank him for welcoming the fact that we have kept him and other hon. Members informed.
  Currently, just over 40,000 asylum seekers are in cluster areas—the vast majority in urban areas and in cities where political representation is overwhelmingly Labour or Liberal Democrat. We need to put that point on record. I understand that people might think that the sites should not be in their area. Those concerns can be dealt with through the planning system.
  It is highly optimistic to think that the site—or any site—will open in March. The first accommodation centre will probably open towards the middle of next year. I should not like people to think that the process will be sudden.
  The hon. Gentleman asks how long there will be for replies. I can confirm that there were discussions between Wychavon district council and Home Office officials about the environmental impact assessment, under which 16 weeks are allowed. There were some disingenuous comments from the local authority to the effect that the Government never intended to use the normal planning processes; but, as the hon. Gentleman knows, because we are the Government we cannot use the normal planning processes—we have to use circular 18/84. However, we are following the eight-week process—not the speeded-up one provided for in the circular. We are allowing additional time for the environmental impact assessment, so there will be 16 weeks. In effect, we are mirroring the ordinary planning process in the only way that we can. As it is a Government application, there are special circumstances.
  Mr. Luff: We are grateful to the Minister for dropping the original idea of using the special urgency provisions. Wychavon district council was concerned about that. Is the hon. Lady saying that the period will definitely be 16 weeks? Last week, a letter to the council from her Department stated that it would be only eight weeks.
  Angela Eagle: It is my understanding that the local authority and Home Office officials have agreed to include the environmental impact assessment in the process, so that implies 16 weeks.
  We never intended to use the fast-track process. That is a myth. Many such myths have grown up in all the areas where there may be detention sites or accommodation sites—but they are only myths. We want to pursue the planning process as closely as we would if this were not a Government issue.
  The hon. Gentleman asked about policing. I confirm that we are holding discussions with the West Mercia police, but we have not yet submitted the planning

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  application. It will be with the council shortly and the hon. Gentleman will be given warning of its dispatch. He should understand that our discussions are at an extremely early stage. However, we shall hold consultations with all those who may be affected by the proposals so that we can make a proper assessment of the implications.
  Mr. Luff: May I draw the Minister's attention to the answer that she gave me on 13 February? She stated that:
  "The Home Office does intend to apply the special urgency provisions in paragraph 22 of Circular 18184."—[Official Report, 13 February 2002; Vol. 380, c. 460W.]
  I am grateful that the hon. Lady has backed down, but it was not a myth—it was the Government's policy.
  Angela Eagle: It was a policy that we considered because it is allowed by the circular. However, we have tried to be open with hon. Members who represent areas where we may build detention or accommodation centres. We are trying to mirror the ordinary planning application process.
  The Government have to balance many things. Many people are urging us to deal with asylum matters—not least Conservative Front-Bench Members. At one turn, we are asked to get on with things quickly; at another, we are asked to slow things down. Clearly, there is a tension there, but the important thing is to reassure the hon. Gentleman's constituents and those of Labour Members who represent neighbouring constituencies that this is a process that is transparent, open and above board and that will involve ordinary planning issues.
  On health and assessments, discussions are taking place on the effect of having an accommodation centre in the area. The intention is that accommodation centres will have as many services as possible on site and available—certainly, access to primary health care, education for the children, training, language training and legal advice. We are considering whether adjudicators could be based at the centres to speed up the process for people who have lost a first-stage appeal and wish to continue their appeals.
  That is the intention behind the accommodation-centre model and providing such services on site would minimise the effects on local services. Clearly, if someone had complex health needs that could not be dealt with on site, there might be an implication for acute services outside. We will, however, consult and work with local authorities in the areas concerned to ensure that the implications will be manageable for services in the area.
  It is not true that some police services are refusing to police areas where accommodation centres may be based. Clearly, the police have a duty to ensure that any policing needs are met. We will be discussing—as we are with the West Mercia police—the implications of such a development.
  Yarl's Wood is a detention centre where people were moved prior to removal from the country, because we did not know their identity, or because they were thought
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  likely to abscond. If an asylum seeker is in the country and has a serious criminal background, we may well not know about it. It is not envisaged that accommodation centres will be used as prisons. They will be open. People will not be locked up or detained in them. Indeed, we will ensure that if they need to go off site to have access in the first stages to appeal hearings before we co-locate, that will be arranged. They will not be waiting for local buses. Services will be made available to facilitate that process.
  On serious criminals, it would be wrong and alarmist for people to make the connection between asylum seekers and criminality that is anything out of the ordinary compared with what one might find in the local population. Certainly, the centres will not be used as proxies for detention centres, which are a different issue.
  On planning and whether the centres are against local planning rules, clearly that will be a matter for the planning process. The hon. Gentleman will not expect me to express any opinion on that tonight.
  I understand how difficult these issues are for the hon. Members concerned. Organisational issues are involved in dealing with asylum seekers and their needs, whether in a cluster area or in an accommodation centre. I am pleased that we have consensus across the House that piloting accommodation centres is a way forward that we ought to consider. I understand that there is a difference of opinion about size and location, which we will no doubt discuss at greater length when we consider the Nationality, Immigration and Asylum Bill.
  We will keep the hon. Gentleman in touch with developments. The planning process will be a proper one and, in terms of what we are intending for Throckmorton, there is no intention of suddenly doing something underhand that will circumvent the due process. I hope that with those reassurances—
  Mr. Luff: What about property?
  Angela Eagle: The hon. Gentleman will know that in an answer to a parliamentary question, I said that compensation would not be appropriate in these circumstances. Again, the hon. Gentleman will understand the implications for all sorts of things that the Government might wish to do if such offers were made.
  Finally, when the hon. Gentleman was not quoting Cromwell—I suspect that we share an interest there—he mentioned that the site was a former RAF base. At peak capacity in 1976, 1,500 people were based there, so there is evidence to show that that number of people can be absorbed into the local area and accommodated there. We are only expecting 1,000 people if it is a site of 750 people plus the 250 in local jobs. I simply leave the hon. Gentleman with that thought, and I look forward to having a continuing dialogue on those important issues.
  Question put and agreed to.
  Adjourned accordingly at half-past Seven o'clock.