INCOME AND CAPITAL

HC Deb 23 May 2002 vol 386 cc462-72

Paul Holmes (Chesterfield)

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 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".

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 £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 (Bassetlaw)

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.

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. 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.

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 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 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.

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 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.