Clause 5
Pensions Bill
10:30 am
Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)
Good morning, Mr Taylor. Welcome to week two of the Committee. I am sure that the time is flying by. It falls to me to respond to what in many ways has been a fascinating debate on this group of amendments. I will try to do so fairly briefly. It is worth just commenting at the outset that both the Minister and the hon. Member for Yeovil tried a little too hard to justify the fact that neither of their parties, unlike ours, fought the last election on restoring the link with earnings. I should perhaps remind the Committee that we got there first.
For the record, as the Minister seemed a bit confused about this, we remain in favour of restoring the link with earnings. We agree with the Government that it must be affordable—not a word that appears very often in the Liberal Democrat lexicon. The point was made last week, I think by the hon. Member for Yeovil, that this use of the increase of the state pension age as a kind of smokescreen for putting off the day of restoring the link seems to be a very recent addition to the Government’s armoury on this issue. We think that this is a bit of an afterthought and an excuse. I do not intend to press amendments Nos. 1 and 2 to a Division. We have made our points on those.
I was fascinated to hear what the Minister had to say about amendment No. 3 and his suggestion that it amounted to a spending commitment of £1 billion, although that is dwarfed by the amendment tabled by the hon. Member for Northampton, North which would cost £14 billion. One wonders how that figure is reached. Certainly we would take out the words “up or down” by removing the whole of that subsection, but how can the Minister look into a crystal ball and decide that this will be the cost in future? That will be determined by future changes in average earnings and the extent to which levelling up or down arises. Perhaps he was pulling my leg. I am a good sport, so I will take it in the spirit in which it was intended. In any event, it will be a relief to him and to the Chancellor that I do not intend to press amendment No. 3 to a vote either.
I am, however, minded to press amendment No. 4, and I was emboldened by what the hon. Member for Yeovil had to say on the subject. This is one of a series of amendments promoted, to give credit where credit is due, by Mr. David Yeandle of the Engineering Employers Federation, who has been very helpful on many aspects of this Bill. The Minister went to enormous lengths to deal with the points made by the hon. Member for Yeovil about putting in an alternative to “of earnings and prices”. To some extent, I understand the reason for that, but his only arguments against amendment No. 4 appeared to be the need for flexibility. Well, flexibility is very nice when one has a credit card or is going on holiday, but I doubt whether it is a key function of pensions legislation.
The Minister cited the fact that for one brief period in late 1998 and early 1999, the Office for National Statistics suspended publication of this particular index. It seems to us that he is getting over-anxious about this. If some ghastly development were to occur so that this index was no longer used, it would be a matter of a moment for that future Government to pass brief legislation to deal with the issue. The Minister said rather delphically:
“The point is that different circumstances may call for the use of different uprating measures”.
He then talked about the flexibility
“to enable us to adapt to technical changes or different approaches if we need to.”
However, he got back on track when he confirmed:
“We have made it clear that we intend to use that index”——[Official Report, Pensions Public Bill Committee, 25 January 2007; cc. 145-6.]—
that index being the earnings index set out in my amendment.
There comes a point in every Committee on every Bill at which the Minister says, “Well we intend to do that, but we do not want to put it in the Bill.” The Opposition say, “Why not put it in the Bill if that is what you intend?”. The whole ballet goes round and round in circles. Given that the Minister has confirmed his clear intention to use that particular index, we cannot see any good reason why that should not be in the Bill. I will urge hon. Members to support amendment No 4 in due course.
With all due respect, the Minister did not deal seriously with my amendment No. 78. The amendment is still valid and important. It would require the Secretary of State to make an announcement about the intention to implement the restoration of the link “on or before” 5 April 2009. I was pretty open in my purpose, which was to ensure that, prior to the most likely date for the next general election, the Government should come clean on the issue. I find it inexplicable that they would do anything else. As I said, I even think it possible that the Chancellor, in his first 100 days, might see this as one of his eye-catching initiatives. I am sure that I also speak for the hon. Member for Yeovil, but the Opposition parties will absolutely have something in their manifestos about this, so it is a bit puzzling that the governing party is not prepared to make that commitment.
For the reasons given, the debate is a bit academic, because I am sure that things will be made clear. Particularly if the Government continue to be behind in the opinion polls, they will want to say something warm and cuddly about pensions. Announcing the date of restoration of the link strikes me as something that they could not avoid doing, unless it is completely off the agenda because the economy is in such a state by then.
So, Mr. Taylor, I would like to give notice that, at the appropriate moment, I would like to press both amendments Nos. 4 and 78 to a vote.