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New Clause 13

Finance Bill – in a Public Bill Committee at 5:30 pm on 19th June 2008.

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Report on impact of Finance Bill on older people

‘It shall be the duty of the Treasury to prepare and lay before the House of Commons, at the time of publication of each Finance Bill, a report on the impact on individuals aged 60 and over of the measures contained in that Finance Bill.’.—[Mr. Hammond.]

Brought up, and read the First time.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

I beg to move, That the clause be read a Second time.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

With this it will be convenient to discuss

New clause 14—Report on impact of Finance Bill on people on low incomes—

‘It shall be the duty of the Treasury to prepare and lay before the House of Commons, at the time of publication of each Finance Bill, a report on the impact on individuals in the lowest income decile of the population of the measures contained in that Finance Bill.’.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

New clause 13 would require the Treasury to lay before Parliament every year, when the Finance Bill was published, an assessment of its impact on people aged over 60, and new clause 14 would place a similar requirement in respect of people in the lowest income decile.

New clauses or amendments requiring the laying of a report are often simply devices for holding a debate. In this case, it is entirely substantive to suggest that it would be convenient for Members of the House of Commons if the Government were to table reports detailing these issues at the time that the Finance Bill is published. We have had probably as good a reminder as one could conceivably devise of the need to understand the impact of a measure on different groups in our society over the course of the last six months with the debate on the 10p rate—more of which in a moment.

Older people are amongst the most vulnerable citizens in our society and any Government have a duty to ensure that they are not unfairly treated. That means, alongside the panoply of positive measures to try to address the issues that particularly face pensioners, we need to ensure that none of the general measures that we are introducing—we are looking particularly at taxation measures introduced in Finance Acts—have the effect, either inadvertently or otherwise, of worsening the situation that those people find themselves in. At the very least, we ought to ensure that Members of Parliament scrutinising proposed legislation and debating these issues, do so with their eyes open, so that if they introduce a measure that may impact adversely on groups such as the over-60s—there may be occasions when sadly, for fiscal or other reasons, it is necessary to do so—they do so with their eyes open and in full knowledge and understanding of the effects and implications of the legislation that  they are passing. In other words, we should not introduce measures that have unintended consequences that then have to be unravelled after a political furore.

Older people, of course, face some very severe pressures at the moment, which makes the introduction of this new clause, with effect for all future Finance Bills, particularly pertinent. The soaring price—I might say, without wishing to resort to hyperbole—of fuel and food, while it affects all of us, even those who are relatively well-off, clearly has a devastating and disproportionate effect on those living on fixed incomes, and a significant proportion of those living on fixed incomes will be pensioners.

I hope that the Minister will accept that the purpose of both of these new clauses is to avoid unforeseen circumstances and to ensure that Parliament, commentators and the public debate are well informed. As I think she will be among the first to acknowledge, unforeseen consequences of measures in Finance Bills can have political as well as economic impact. The Government would be wise to look at what is being proposed here and consider whether this would not be a measure that could avoid future pitfalls from unintended consequences of measures introduced in Finance Bills.

I must give credit to the right hon. Member for Birkenhead (Mr. Field), who during consideration of last year’s Finance Bill tabled a provision that was a little too restrictive for the taste of the official Opposition. It would have required the Government to assess the impact of measures in the Finance Bill on those at the bottom of the income scale and, as I understand it, it would have prevented such measures from being introduced unless and until offsetting mitigation measures were also included. It would have severely restricted the Treasury’s ability to propose fiscal measures. As I have acknowledged—I am sure the Financial Secretary will agree—none of us would choose fiscal measures that disproportionately burden the poorest and most vulnerable. The Treasury needs flexibility to deal with the fiscal situation that it is in, which frankly is not good and, from figures published today, does not seem to be heading in a positive direction. The right hon. Gentleman’s proposal was a useful and helpful measure, as it would have drawn attention to and clearly set out the likely impact of the measures in the Finance Bill on those most vulnerable groups.

As originally published, the Finance Bill contained a measure announced in the 2007 Budget that would have left 5.3 million households worse off—the abolition of the 10p tax rate. A significant number of those households, at least 700,000, would have been people between the ages of 60 and 64. I say “would have been”, because the Government have subsequently changed tack and, rather humiliatingly, introduced a mini-Budget to announce further changes that reduce the number of people placed at a net disadvantage by the measure. I am sure that the Government would have preferred not to have needed to do that. I am sure that Labour MPs—many of whom, to their credit, identified and vocalised their concerns between the Budget and the Committee of the whole House—would have preferred the potential impacts of the measure to have been set out and understood earlier. They could have made their feelings known discreetly to Ministers, who would then have understood the scale of the feeling across the House on those issues and something could have been done earlier with much  less fuss and bother for everyone, especially the Government. I hope that the Minister is appreciative of my concern to spare the Government embarrassment wherever possible.

Even after the compensation package, 300,000 60 to 64-year-olds will still be worse off as a result of a 10p rate cut. An unfortunate fact, inconvenient to hon. Members on both sides of the Committee, is that the Government do not routinely provide any distributional impact information on the measures as part of the Budget process. Although the new clause talks of publishing such a report not later than the time of publication of the Finance Bill, we envisage that a distributional impact analysis could be published at the time of the Budget that introduced the measure—that is something that I hope will become practice if the new clauses are accepted.

In practice, it is left to organisations such as the Institute for Fiscal Studies to go through the small print and publish an attempt at distributional analysis, which sometimes the Government decline to endorse. On other occasions—this year was one of them—the Government broadly endorsed the analysis of the IFS of the distributional impact of the measure. The Treasury Committee also takes evidence on issues including distributional impact and ultimately publishes a report on the Budget measures which includes such an analysis and its comments thereon, although that is usually some time after the critical point.

We are arguing for transparency. It is crucial that Members of Parliament have the necessary information to scrutinise legislation properly. The Financial Secretary will remember, and members of the Committee will have very firmly in their minds, that no less a person than the Prime Minister, at the beginning of his term of office, stated quite clearly his intention to reinforce the role of Parliament in scrutinising the Executive. If Parliament has an important role in scrutinising the Executive, it is nowhere more important than in relation to the Finance Bill, the premier piece of legislation in the Government’s programme each year. This new clause is designed to reinforce that scrutiny process and thus to reinforce the Prime Minister’s desire to give more teeth to Parliament in its scrutiny and oversight of the working of the Executive.

Pensioners are currently struggling with higher food and fuel bills. Frankly, most of them do not see much light at the end of the tunnel. They are looking for some sign of relief from the Government. At the very least, they are looking for a recognition that their specific vulnerability should be taken into account when general revenue raising measures are introduced in the Finance Bill so that mitigation can be put in place if that is appropriate, or that the general measures can be tempered in recognition of the impact that they will have on older people.

The number of pensioners going bankrupt has more than doubled in the last five years from just 900 in 2002 to 7,900 in 2007. That looks like more than doubling to me. It is up nearly tenfold in those five years. That is partly a result of the complexity of the means-tested pension credit system. That is not just my analysis, but the analysis in an independent report on why so many  pensioners miss out on the benefits to which they are entitled, published by Wilkins Kennedy under the title “Proportion of Retired Bankrupts Rising” on 27 September 2007.

More people are reaching retirement age in debt. Perhaps that simply reflects the tendency in recent years for people to treat their homes as a sort of piggy bank out of which they can draw equity when they find life getting difficult. Many people have been tempted to do that. Borrowers in their late 50s and early 60s owe four times as much as they did a decade ago, according to a study by Barclays and Help the Aged.

This 10p fiasco is not the first time that pensioners have been adversely affected by measures in a Finance Bill. It is not the first time that measures that would have an impact on pensioners have gone initially unnoticed, or at least with their significance unacknowledged. I remind the Committee that as long ago as the Labour party conference of October 1996, the now Prime Minister gave a pledge of

“fairness to the pensioners under Labour.”

The truth is that various fiscal measures that he has taken over the past 10 years when he was Chancellor of the Exchequer have adversely affected British pensioners and reduced security in retirement, often in a way that is not clear at the time. Sometimes that has been inadvertent, and sometimes it has been the result of a stealth measure. This Government’s first welfare reform Minister, the right hon. Member for Birkenhead, summarised the Government’s record by saying that

“when Labour came to office we had one of the strongest pension provisions in Europe and now probably we have some of the weakest”.

I want to talk about a matter on which this new clause 13 would have a specific impact: the decision taken in 1997, and implemented in the Finance Act 1997, to abolish the tax credit on dividends, costing occupational pension schemes billions of pounds and undermining the retirement security of millions of people. That measure, which has cost pension funds an estimated £5 billion a year since it was introduced in 1997, has eroded confidence in pension savings and, according to actuaries, has reduced the capital value of pension funds by at least £100 billion.

Yet the truth is that none of us—even those who were looking for the undeclared consequences of Government announcements and legislative proposals back in 1997—spotted the significance of the abolition of dividend credits. Those lobbying for pensioner and pension fund interests did not make the case loudly at the time. I accept that that is partly due to the fact that, back in the heady days of 1997, the concept of stealth taxes was an entirely new one. The convention had always been that changes in taxes were announced in the Budget and then enacted in the Finance Bill. At that time, we had not yet got used to sifting through the small print, looking for the changes that were unannounced but nevertheless of major significance. The truth is that even if that measure had been announced later, when we understood the concept of stealth taxes, it would have been difficult to identify its significance, and certainly difficult to quantify its significance and its impact on people aged over 60.

The new clause would require the Government to bring out into the open the distributional impacts of measures in the Budget, so that there would never again  be an opportunity for a Government to sneak in a measure like the dividend tax credit abolition without explaining and accounting to Parliament for the impact it would have on this particularly vulnerable group: people over the age of 60.

You will know, Sir Nicholas, some of the statistics around the situation affecting pensioners. Five sixths of final salary pension schemes have closed since 2007, “under our watch”, as the right hon. Member for Birkenhead put it. Only a third of final salary pension schemes are still open to new members. You will remember, Sir Nicholas, the papers released under the Freedom of Information Act 2000, after a long battle by the Treasury to prevent their release, which showed that the then Chancellor, the current Prime Minister, was advised in very precise terms in 1997 of the damage that the abolition of dividend tax credit would do to pension funds. It is not the case that these were unidentified consequences.

Clearly, if new clause 13 had been in effect at the time of the Finance Act 1997—I think it was Finance Act No. 2, since we had just had a general election—the Government would have had to set out in very clear black and white terms the impact of this measure on pension funds and pensioners, particularly poor pensioners. It was very clear, and the Chancellor was advised very clearly, that the poorest pensioners would be hit hardest.

We are trying to get the argument into the public domain in a way that is conducive to good governance. At the time of the 1997 events, various things were said. The current Secretary of State for Children, Schools and Families claimed that the changes were

“the best thing for the long-term investment of the UK economy.”

However, Derek Scott, who was an economics adviser to No. 10 at the time, thought differently. He said:

“I thought it was a crackers thing to do. The policy came out of the Treasury and I thought it was a mad thing to do and said so at the time. The idea that it helps investment by hitting pension funds is ludicrous.”

So we have these tensions inside the broader Government machine, but we do not get them out into the open. We need the facts set out in the open, we need all the information out there, and we need the distributional impacts fully spelled out so that we can understand them, discuss them openly and scrutinise what the Government are doing.

Photo of Stephen Hesford Stephen Hesford PPS (Vera Baird QC, Solicitor General), Law Officers' Department, PPS (Mr Michael Wills, Minister of State), Ministry of Justice 5:45 pm, 19th June 2008

The hon. Gentleman is making an entirely bogus case. He knows that the pensions industry did not suffer because of the reasons he suggests. There were reasons why the pensions industry did suffer, but they had absolutely nothing to do with what the then Chancellor, now the Prime Minister, did in the Finance Act to which he refers. There were a number of reasons why the pensions industry suffered, and I will ask him to ponder on three indications.

First, around 2000, there was the dotcom bust, which caused investments to go down. That was one part of the story. Secondly, there was a miscalculation by the actuaries about people’ longevity, so such pension provision became unsupportable and expensive and therefore unfashionable. Thirdly, there was a miscalculation about  pension holidays—contribution holidays—and the catch-up became too expensive. It was nothing to do with the then Chancellor.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

The hon. Gentleman makes his point, but it will not surprise him to hear that I disagree entirely. It is difficult to understand how anyone could think that £5 billion per year could be taken out of pension funds, making a £5 billion hit on their income, not once, but every year, without that having a negative impact on the value of those funds and the future security of retirees who depend on them.

Photo of Stephen Hesford Stephen Hesford PPS (Vera Baird QC, Solicitor General), Law Officers' Department, PPS (Mr Michael Wills, Minister of State), Ministry of Justice

The hon. Gentleman knows that this is not the first time that the House has debated this bogus issue.

Photo of Stephen Hesford Stephen Hesford PPS (Vera Baird QC, Solicitor General), Law Officers' Department, PPS (Mr Michael Wills, Minister of State), Ministry of Justice

It is a bogus issue. On one of the last occasions that the matter was debated, it became clear that the policy—the withdrawal that the then Chancellor, now Prime Minister, continued—was started under the Conservative Government. The reason that it was started under the Conservative Government was that it was thought to be—and was, based on the knowledge at the time the decisions were taken—affordable.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

The problem with the hon. Gentleman’s argument is that it is very clear now, but was not clear then, in 1997, that Treasury officials identified the problems that would be caused to pension funds, the Chancellor was advised of them, and the suggestion that the measure was expected to be positive is itself bogus. We saw that when eventually, after a two-year legal battle fought with public money, the freedom of information request made by The Times was finally acceded to. However, I suspect, Sir Nicholas, you would not want me to divert into a debate that, as the hon. Gentleman rightly says, we have had before in this House. Indeed, I had the privilege of winding up a debate on the disclosures under the Freedom of Information Act to The Times last April or May. We had a very good debate on that occasion.

The point that the hon. Gentleman would not disagree with me about, given the disclosures that have now been made, is this: there were impacts on pensioners, people over 60, as a result of that measure. Those impacts were not well understood at the time. We did not understand them. He and I were both brand new Members at the time, and I do not think that he understood them either. If we had a principle that when measures were proposed in the Finance Act, the distribution of the impact on different groups of the population, particularly vulnerable groups, would be set out in a report to Parliament then the debate would be informed and hon. Members representing constituents who were to be disadvantaged, as with the 10p changes, would hear the views of those constituents and could in turn make those views known, either through unofficial contact with Ministers and the Treasury or through open debate in Parliament. That would be a good thing.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster 6:00 pm, 19th June 2008

My hon. Friend is making some sensible points. Does he agree that it is also a salutary lesson that any incoming Government should not restrict their room for manoeuvre? To a large extent, what happened in 1997 was that the Government came in—

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Order. I really do not want to go back over history. Can hon. Members please deal with the Finance Bill that is in front of us, not what happened in 1997?

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

The only reason I am raising the events of 1997 is to show that there are cases—we had one last year, we had one in 1997 and there have been others of a less significant nature—where the absence of a requirement to report to Parliament on the distributional impact of a measure means that it goes unnoticed.

Photo of Justine Greening Justine Greening Shadow Minister (Treasury), Vice-Chair (Youth), Conservative Party

I certainly know the impact of there not being such an obligation on the Government. I have been trying for nearly six weeks to find out what the impact of vehicle excise duty is on those on a low income, many of whom will be elderly, and I have singularly failed to get one parliamentary question answered that I tabled at the beginning of May. I have written specifically to the Ministers on this and had no response yet, so I know well why the new clause is needed.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

I was just going to refer to my hon. Friend’s difficulty as another example. The vehicle excise duty debate, which we have already had, is another example—

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Order. I am sorry, but I really must ask the Opposition to deal with the Bill, and not vehicle excise duty, which is not relevant to this particular debate.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

With respect, Sir Nicholas, this debate is about a new clause that would require the Treasury to report on the distributional impact of any measure included in the Finance Bill. If new clause 13 were in effect now, the proposals in the Bill on vehicle excise duty would have been reported on in terms of their distributional impact on people over the age of 60 and, under the terms of new clause 14, their impact on people in the lowest income decile. My hon. Friend has been seeking that information from the Government for some time, through parliamentary questions, which is the only route available to us, and the Government simply ignored her request for information. As we do not have such information about the impact on particular groups, it is impossible for us to make the case fully against measures that we believe are extremely unhelpful and wrong in the current environment. That is why the new clause has been tabled.

Figures released only last week show that pensioner poverty has risen by 300,000 both before and after housing costs. The need to address the concerns and problems of people over the age of 60 is therefore even more acute. As they face the rising pressure of price increases from which we all suffer, and some of the burden of the taxation changes that the Government are making, it is incumbent on us in the House to ensure that the impacts on that vulnerable group of  people are known to us, are manageable and are not excessive. The number of pensioners living in poverty now stands at 2.5 million before housing costs, and 2.1 million after housing costs, and we all share the objective of ensuring that those numbers do not increase. We must keep a close handle on such matters.

I have dealt with pensioners under new clause 13, and I shall speak now about new clause 14 and explain why it is important for us to have an analysis of the impact on those in the lowest income groups. We have phrased the new clause in terms of people in the bottom income decile, but I should be happy to consider a suggestion from the Government that it might be targeted differently. The right hon. Member for Birkenhead sought in his amendment to the Finance Act 2007 to look at the impact on the lowest quintile of the income spectrum, and it would be perfectly legitimate for us to debate which group we need to focus on given the position today.

We are in a shocking situation. The United Kingdom has a higher proportion of its children living in workless households than any other EU country. The poorest fifth of households in the UK pay a higher proportion of their income in taxes than any other group. Surely that in itself is a reason why we must study carefully the distributional impact of taxation measures proposed under the Finance Bill.

Social mobility in this country is the lowest of any country in the developed world. It has declined to the extent that a poor child born in Britain in 1970 is less likely to escape the poverty of its upbringing than one born in Britain in 1958. That is partly because of the Government’s insistence on tackling poverty by attacking the symptoms rather than by attacking the causes, which are largely social and family breakdown, addiction, debt and worklessness.

Why focus on the need to identify the impact now? Again, in this year’s Finance Bill, the interests of the poor were sacrificed on the altar of political expediency. It was a shameful attempt, and it ultimately backfired on the Government. Clearly, when the now Prime Minister announced his measures in the 2007 Budget, he expected to have had the general election before the impact of the abolition of the 10p tax rate became apparent to people. If new clause 14 had been in effect, he would have had to set out precisely what the impact was and explain the measures, so that low-income families would have seen the impact and made their concerns known to their Members of Parliament. Those worries would have been transmitted back, and we might not have had all the problems that we have had subsequently.

The case for considering the impact on those groups makes itself. The Select Committee on the Treasury, in its report on the 2008 Budget, said that

“the group of main losers from the abolition of the 10 pence rate of income tax seem an unreasonable target for raising additional tax revenues to fund these and other initiatives.”

We all know that the parliamentary Labour party agreed with the Committee’s view. I could—but I will not—give you innumerable quotes on the issue, Sir Nicholas, from people of undoubted stature who understand the importance of considering the impact of such measures in general, and this measure in particular, on those at the bottom of the income scale.

I say to the Financial Secretary that even after the Government’s volte-face, when they rewrote the Budget after telling us that they could not rewrite it and found  £2.7 billion after telling us in the run-up to the Crewe and Nantwich by-election that they had no money—not that it did them much good; the cost was £213,000 per vote cast—1.1 million households are still worse off as a result of the measure. We know who they are now, but only because of work done by organisations such as the Institute for Fiscal Studies, not because of official analysis by the Government.

We still do not know whether the measures announced by the Chancellor a few weeks ago to mitigate the impact on the 4 million adversely affected are temporary and for this year only or permanent. If the Financial Secretary can throw any light on that, it will be enormously helpful—mainly, I suspect, to those members of the Committee from her own party. It will prevent such a situation from ever arising again. It will prevent people such as the hon. Member for Blyth Valley (Mr. Campbell) from having to pop up and say things such as:

“I don’t know where we’re going hitting the working man at every corner”, or the hon. Member for Great Grimsby (Mr. Mitchell) from having to say, as he did on the BBC news on 27 May:

“It is a bombshell that will explode when it comes into force. We are warning this will hit people and will hit the Government.”

That is what happens when people discover after the event, and after the opportunity for them to have their say has passed, that measures will negatively affect ultra-vulnerable groups in a way that they did not anticipate when those measures were first announced. In an effort to be helpful, I am skipping some points that I wanted to make, but I realise that the hour is pressing, so I shall not detain the Committee for much longer.

I understand fully that the Minister may not accept the new clauses. She may argue against accepting them. That is fine, but it is difficult to see in principle how one can make a case against a transparent official analysis of the distributional impact of proposed legislative measures. I believe that it is normal practice in many other jurisdictions. We are considering measures to change how we make tax law. We have announced a review under the chairmanship of Lord Howe to look at how we make and scrutinise tax law in the House. There is a widespread feeling, and not only on the Opposition Benches, that the Finance Bill and the supply estimates, which are important parts of the machinery of government, are not properly or adequately scrutinised. They are at the heart of what we do in Parliament, and a necessary part of ensuring that they are properly scrutinised is to make adequate information available to all Members of the House—information that can be relied upon and quoted in debate, because it is official information.

I would like to ask the Financial Secretary a specific question. Whether she chooses to accept the new clauses, and whether she accepts the case for the publication of the distributional impact of tax measures, will she at least assure the Committee that the Treasury makes such a distributional impact assessment? It is one thing to understand that the Treasury has done the work but chooses not to share it with Parliament, so that Parliament cannot scrutinise the Bill properly, but wholly another to suggest that the Treasury has not done the work at all.

In the debate on the abolition of the 10p tax rate—perhaps I should call it the doubling of the 10p rate—I think that we got an acknowledgement from the Treasury that it had done the analysis and identified the number of people who would be losers, and how that total number broke down into various sub-groups such as couples without children, young people on low earnings, and people between the ages of 60 and 64 who were not able to benefit from pension credit. However, it would be useful to be reassured that the Treasury does the work. Therefore, we are asking, through the new clauses, for the publication of information that is already held in the Treasury, not for additional work or costs to the public purse. We want that information to be placed in the public domain so that Parliament has the opportunity to hold the Executive to account.

You may not agree with me on everything, Sir Nicholas, or even on much, but I am sure that you will agree that it is our basic duty in this place to hold the Government to account, and that we can do so only if we are provided with the proper information and tools. It is not acceptable, in the 21st century, with a Prime Minister who says that he wants to strengthen the power of Parliament, for analysis to be made in the Treasury and kept there so that Parliament has to guess. The evidence of history is that Parliament, on all sides, sometimes fails to identify the impact of measures on those groups that most need our protection, most look to us to defend their interests, and most need us to identify and protest about measures that have a negative impact on them and their families.

I look forward to hearing what the Financial Secretary has to say. If she feels that the principle is acceptable, but the precise definition of income groups targeted in new clause 14 is wrong, we have no philosophical commitment to the lowest income decile—it could be a wider group that she feels is important. When she rises to respond, perhaps she will bear this in mind: opposition is difficult, whether from the Government Back Benches or from the official Opposition. Perhaps the lesson of what has happened over the past six months is that sometimes, what the opponents of a measure have to say, whether on the Government side or the other side, has value and validity. She might think about how difficult opposition is, because she might have the opportunity to practise it some time in the not-too-distant future.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield 6:15 pm, 19th June 2008

Before I ask the Minister to reply, I wish to say that I am gravely concerned about the way in which the proceedings are being carried forward today. I am conscious that, in the Chair, I have a responsibility to hon. Members on both sides of the Committee. We have already lost the Scottish National party Member, who has had to return to Scotland. I am conscious of the position of the hon. Member for South-East Cornwall, who needs to get back to the west country. Looking at the Government side of the Committee, I see hon. Members who need to get back to the north-west of England and the west midlands. I was given a fairly clear undertaking by the Whips on both sides of the Committee that we would be able to conclude our deliberations on the Bill at a reasonable time today, and I mean at about 4 o’clock.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Yes indeed. I am sorry. The hon. Gentleman was not here a lot earlier this week, and I am afraid the understanding that I had was that we would reach the conclusion of our debates at a reasonable time. That will clearly not be the case. How the hon. Gentleman can utter from a sedentary position what he has done, when he has just spoken for 50 minutes on only one new clause, I fail to understand. I have a responsibility to hon. Members on both sides of the Committee and I am deeply concerned. I give notice that I intend to suspend the Committee for a supper break at approximately half-past 7. We have another nine debates on new clauses. That could take us until 11 o’clock tonight. That is not the way in which I believe the Committee should proceed.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

On a point of order, Sir Nicholas, you have referred to my comment from a sedentary position specifically. It was my understanding that it is not usual to refer to discussions through the usual channels, but as you have done so, I would like to say something about the discussions that I have had. We on this side understand that the Government’s requirement is that the Committee stage of the Bill be completed today and we have given the Government an undertaking that we will allow that to happen. We have not at any stage, as far as I am aware, given any commitment about the hour at which that will occur, and I have not been asked by any Member on the Government side to give a commitment as to the hour. It was merely that, for the convenience of the Government’s management of the business of the House, it was necessary to have the Bill out of Committee today, and I repeat our commitment to achieving that.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

If that is the case, the spokesman for Her Majesty’s Opposition might have had the courtesy to advise the Chairman accordingly. I have sought to liaise with the Opposition Whip and the Government Whip and I was led to believe on Tuesday that we would complete our deliberations at a reasonable hour today. Clearly, I am a servant of the Committee and I will remain here as long as is necessary, but I give an indication that I have responsibilities. I also have to have a meal. We have already instructed the House authorities to keep the Tea Room open, so considerable costs are involved in what is going on. I personally look in a rather bad light at a gentleman member of the Committee speaking for 50 minutes on a new clause, however important the subject.

Photo of Brooks Newmark Brooks Newmark Opposition Whip (Commons)

On a point of order, Sir Nicholas, you have alluded to the fact that we said that we would finish at 4. I just want to repeat the point that my hon. Friend the Member for Runnymede and Weybridge made: we did not say that we would finish at 4. Also, as you are well aware, we suggested, and agreed to stay for, extra time on Tuesday, but that option was not taken up by the Government. We gave the option. We gave an undertaking to give an extra 45 minutes at least on Tuesday, but it was not taken up.

Photo of Bob Blizzard Bob Blizzard Assistant Whip

Further to that point of order, Sir Nicholas. Forty-five minutes was offered, not 45 minutes “at least”.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

We have had enough recriminations. I can only say that I am very saddened by what has happened. Previously, there has been a constructive attitude and a very happy and genuine mood across the Committee, but that has certainly been undermined. I think that it has disappeared today and I deeply regret it. I call the Financial Secretary.

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

I, too, am disappointed that after seven weeks of what I believe has been good-natured debate, in which we have covered many serious and detailed topics, we have hit the rocks at the last minute. I certainly recall the hon. Member for Runnymede and Weybridge saying to me at 10.25 on Tuesday morning that the Committee would not sit beyond 7 o’clock on Tuesday whatever else happened. However, we shall return to new clauses 13 and 14.

My hon. Friend the Member for Wirral, West is absolutely right about what happened to pensions. The most significant downward effect on the health of pension funds came from stock market falls during the boom and bust years, which we were subjected to when the Conservative party was in power; from decisions by many firms to take a contributions holiday, despite facing a rise in liabilities; and from rapid increases in life expectancy.

We have a strong record of helping pensioners, with spending around £12 billion more on pensioners than if all we had done was uprate the policies in place in 1997. Half of that additional spend goes to the poorest third of pensioners. Both the PBR and Budget documents already provide full details on measures that impact on pensioners. Another document would only repeat those details.

I shall move on to new clause 14. Our strategy since 1997 has focused on getting as many people back into work as possible. We believe that work is the best route out of poverty and being a Labour Minister for work is the best job in the Government. We are committed to making work pay, through improving financial incentives to work.

As for requiring reports on impacts, the Chancellor’s statement of 13 May, which increased the personal allowances for 22 million basic rate taxpayers in 2008-09 and reduced the number of households that lost out from the Budget 2007, made clear that our aim was to continue the sustained support for those on lower incomes in the future. That is what we will be returning to—

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

I will not give way because I think that we have heard quite enough of the hon. Gentleman during the debate.

Producing a report would add little benefit to the aim of supporting those on the lowest incomes. The new clauses would merely require the Government to duplicate what we already produce. The hon. Gentleman can have had no reasonable expectation that his new clauses would have been accepted. On that basis, I finish my comments.

Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury

The Minister did not reply substantively at all, which is her privilege. She did not answer the question as to whether the distributional analysis is  available and undertaken by the Treasury, and the Committee will note that accordingly. Of course, we cannot force her to give us an answer unless we pursue it with written questions or a freedom of information request, but it would have been helpful if we had known the answer. Having listened to the Minister’s response, and in view of the hour, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.