Pensioners
Good morning. The first item of business is a debate on motion S2M-1940, in the name of Nicola Sturgeon, on a better deal for pensioners, and four amendments to the motion.
I begin by expressing my total incredulity at the fact that, as I understand it, no Scottish Executive minister is prepared to take part in the debate. Ministers have not stood up to correct me, so I take it that that is the case.
First, the member will hear that I am preserving my voice for this afternoon's debate. Secondly, she will note that all the amendments are party amendments, so there is no Executive position in this debate.
There is no Executive position on the matter of pensioner poverty. That says absolutely everything that needs to be said.
Unless the minister has something better to say, I will let him preserve his voice.
Tackling pensioner poverty should be a priority of the Executive, because it is clearly the Executive's responsibility. Shortly before her death, Barbara Castle said that the pensions policy of the Government in London was designed to
"extend substantially the number of pensioners on means test".
When that policy is leaving many pensioners in Scotland in poverty, any Scottish Executive worth its salt would have a position on it and would have something to say about it.
I am fascinated by the tactics of the Scottish National Party. Every time that it has an Opposition debate, it chooses to debate reserved issues. In doing so, the SNP shows disrespect for the chamber and the powers of the Parliament. It would be fascinating to know whether Alex Salmond debates devolved issues at Westminster, while Nicola Sturgeon debates reserved issues here. She knows perfectly well that we will properly tackle reserved issues as a party. Let me be absolutely clear—[Interruption.]
Order.
Let me be absolutely clear. Charges have been laid at the Executive's door that I must answer.
Briefly, please.
With the greatest respect, Presiding Officer, it is taking me so long because members are shouting and I am being forced to repeat myself.
Come on.
This is a speech.
If members will stop shouting at me, I will speak and Nicola Sturgeon will be able to get on with her speech.
Please be brief.
The Executive's position is that we tackle pensioner poverty using the powers that we have. Nicola Sturgeon is talking about reserved powers. She should at least have the honesty to explain that to people.
The member may take another two to three minutes.
If Margaret Curran had wanted to speak in the debate, she should have put her name on the list of speakers. Pensions policy may be reserved, but poverty is not. The pensions policy of the Government in London causes pensioner poverty. It is outrageous that ministers have chosen to hide from today's debate. That speaks volumes for their total lack of concern about the basic living standards of many pensioners in this country. They should be ashamed of themselves.
This debate is important for today's and tomorrow's pensioners. In Scotland, as in many other countries, we face the twin challenges of tackling pensioner poverty in the here and now and securing decent living standards for future generations during their retirement years. The SNP proposal to abolish means testing and introduce a citizens pension, at an initial rate of £106 for a single pensioner and £161 for a couple, and thereafter to maintain the real value of that pension by linking it with earnings, will help to meet both those objectives.
I will not take an intervention at the moment. I may come back to the member later, after I have made some progress.
I want first to deal with the issue of pensioner poverty. One in five pensioners in Scotland lives in poverty. In 21st century, oil-rich Scotland, that is just not acceptable. One of the main causes—perhaps the main cause—of pensioner poverty is means testing. Labour derided means testing when it was in Opposition, but in Government Gordon Brown has extended it year on year. When Labour came to power in 1997, just under one third of pensioners had to rely on means-tested benefits. That figure is now more than half. As reliance on means testing has increased, the value of the basic state pension has been steadily eroded. That is what Labour has done for our pensioners. It has reduced what should be theirs by right and made them go cap in hand for it.
Of course, many pensioners do not apply for the means-tested pension top-up. Some are too proud to ask for what should be theirs as of right. Others, particularly the most elderly and vulnerable in our society, do not apply because, in the words of Help the Aged, the system is "complex and bureaucratic". In total, more than one third of pensioners in Scotland do not apply for the means-tested pension credit, which means that 145,000 pensioner households do not get what they are entitled to. Many of them live just on the basic state pension. Let us not forget that very few women qualify for the full basic state pension of £79.60 per week for a single person, but even for those on that pension it amounts to a mere 17 per cent of average earnings.
I dare say that some will argue that the solution to the problem is to improve take-up rates. However, the Government's target for take-up—presumably, the best that it thinks can be achieved—is just 73 per cent. That would leave a huge number of pensioners who were still not getting what they were entitled to. In addition, it costs 10 times as much to administer a system of means testing as it does to administer one of universal pensions. It costs £5 per pensioner to administer the basic state pension, but £54 per pensioner to process the means-tested top-up. Getting rid of means testing would save £20 million in administration costs alone—money that could be put back into the pockets of pensioners.
We welcome the SNP's adoption of our policies on this issue. The net cost of the SNP's policy of having a citizens pension for all over 65 would be about £8.8 billion for the United Kingdom. The cost of index linking to earnings would be a further £7 billion. How does the SNP intend to fund that?
If George Lyon will be patient, I will explain in great detail exactly how we will fund it, so he should listen carefully. I hope that Liberal Democrat members will support us today in starting the process of getting rid of means testing. However, their policy is to get rid of means testing only for the over-75s. We want to get rid of means testing for every pensioner in Scotland.
Getting rid of means testing and introducing a citizens pension would take thousands of pensioners out of poverty at a stroke. It would also take away a huge disincentive to younger people to save for their retirement. At a time when we should be encouraging people—perhaps even compelling them—to save for their old age, the means test sends a message to people who may be able to save only a moderate amount that it is not worth their doing so. We all know pensioners who have small private pensions or some money in the bank and who lose their entitlement to means-tested benefits as a result.
I will not give way at the moment.
The pensioners to whom I referred end up feeling no better off for having scrimped and saved throughout their lives. That sends the message to younger people that they should not bother saving. A non-means-tested citizens pension, on the other hand, would be a solid foundation on which people could build with their private savings.
Will the member answer George Lyon's question?
I must make some progress. I am sure that the Liberal Democrats will have a chance to tell us all about their policy later.
A citizens pension would be a solid, secure foundation. By restoring the link between increases in the pension and increases in average earnings, we could ensure that its value would not be eroded over time. For that reason, I am happy to support John Swinburne's amendment.
How would the member pay for the citizens pension?
I am coming to that.
It is only right that I pause to consider the Tory amendment, which also calls for the link between pensions and earnings to be restored. I have one question to ask Mary Scanlon: is her amendment a wind-up? I will read out some selected extracts. The Tories believe
"that linking the state pension to earnings would lift a million pensioners out of means-testing".
They go on to acknowledge
"that only a Conservative administration at Westminster can implement these changes for the benefit of all Scotland's pensioners."
The Tories might have short memories, but no one else in Scotland has forgotten that it was a Conservative Administration at Westminster that broke the link between pensions and earnings in the early 1980s.
The Conservatives should sit down and listen. I remind Brian Monteith of what benefit that vindictive act of the Thatcher Government delivered to Scottish pensioners. If the link had not been broken back then, every single pensioner in Scotland would be £38.75 a week better off than they are now and every pensioner couple would be £62.05 a week better off than they are now. That is what the Scottish Tories have cost Scottish pensioners.
I am pleased that Nicola Sturgeon has allowed me to explain. She is not looking at the issue of when the link was broken. When the link was broken, inflation was at a very high rate, which we inherited from the Labour Government, and it needed to be controlled. Therefore, the pension was falling behind because it was linked to wages rather than to inflation. It is true to say that that link, having been changed, should have been changed back later. We will talk about that issue, but it is clear that the link had to be broken.
I assure Brian Monteith that we will talk about that, because I know when the link was broken: it was broken when the Conservative Government broke it. That is why the Conservatives do not deserve to be given the time of day by any Scottish pensioner now or in the future.
Will the member give way?
Not just now.
I will say one more thing about our proposal for a citizens pension before I go on to explain, not only to the Liberal Democrats but for their benefit in particular, exactly how it will be paid for.
Entitlement to the citizens pension will be based on residency, not on participation in the labour market. That will end, at a stroke, the disgraceful institutional discrimination against women that characterises the current pension system. Only 13 per cent of women in this country qualify for the full basic state pension, while the rest lose out because they have taken time out of work to bring up kids or care for sick relatives. That is "a national scandal". Those are not my words, but the words of Alan Johnson, the Secretary of State for Work and Pensions in London, in a speech earlier this week.
Will the member give way?
Not just now.
I agree with Alan Johnson that it is a national scandal, but the difference between him and us is that we intend to do something about it. A citizens pension will be paid as of right to every citizen of this country. For the first time ever in this country, that will mean genuine equality between men and women.
I turn to how we would finance the citizens pension. The resources that are currently spent on the basic state pension and on the means-tested pension credit would be reinvested in the citizens pension. We would add to that the administrative savings from the abolition of the means test, which as I said would amount to £20 million. That would leave a gap of around £160 million. We would take that sum out of the amount that is currently available for pension tax relief. [Interruption.] George Lyon asked me a question and I am answering it.
A total of £1.1 billion is spent on pension tax relief in Scotland and more than half of that sum goes to the richest 10 per cent of taxpayers. We would take £160 million, or 15 per cent, of that total amount and reinvest it in a citizens pension. That would leave 85 per cent of the tax relief pot available to provide incentives for saving, although we believe that those incentives should be provided by match funding rather than by tax relief. However, £160 million would be taken from the tax breaks of the richest and paid out in pensions for the poorest. For the avoidance of doubt, that is called redistribution. Members in the Executive parties used to believe in that principle; I am proud to say that the SNP still believes in it.
Our proposals offer a better deal for the poorest pensioners in our society, a better deal for those with modest savings or small private pensions and a better deal, at long last, for women.
I am sure that there will be no shortage of members of the unionist coalition of the Labour, Liberal and Tory groups in the Parliament who will be bursting to tell us that we cannot do this because we do not have the powers.
Will the member give way?
No. I am finishing.
My answer to that point is simple. That is exactly why we need independence. We need independence so that we can get on with the job of delivering a better deal for all Scotland's pensioners.
I move,
That the Parliament agrees that Scotland must face up to the twin challenges of tackling current pensioner poverty and ensuring decent living standards for future generations of pensioners; believes that removing the pensions means test would help to achieve both of these objectives, and calls upon the Scottish Executive to bring pressure to bear on Her Majesty's Government to begin the process of replacing means-testing with a citizen's pension.
The motion that was placed before Parliament today by Nicola Sturgeon clearly demonstrates all that is wrong with the SNP. Nicola Sturgeon has not said very much about pensions before, but we will come to that.
Instead of working within the powers of the Scottish Parliament for the benefit of older people in Scotland, the SNP would rather play politics with this important issue. The SNP would rather use the issue as yet another spurious and contrived way of promoting independence.
Will the member give way?
I have just started. I will give way in a minute.
There is a contradiction inherent in the stance that the nationalists continually take. On the one hand, they claim with their best "Braveheart" bravado that they represent the true aspirations of the people of Scotland, while on the other hand they choose to ignore the overwhelming majority of Scottish people who voted for devolution and a devolved settlement and who, in election after election, fail to vote for separation.
The supposed party of the people would rather not listen to the people of Scotland on the issue. Today's debate is a perfect example of how the nationalists seek to use the Parliament not to benefit the people of Scotland, but to fight the separatist cause.
Will the member give way?
Will the member give way?
I will take an intervention from Sandra White.
If Karen Whitefield was a single person, could she live on £79.60 a week?
Can Sandra White tell me why her party has just found this dedication to pensioners? I offer the nationalists a challenge. Today's debate is long, so that should give the SNP researchers plenty time to find out what the SNP has said about pensioners in the past.
Will the member give way?
No. Sit down.
The challenge is: how many times did the SNP manifesto in 2003 mention senior citizens or pensioners? That is a tricky question, so I suggest that Nicola Sturgeon tries phoning a friend or takes the 50:50 option. In the meantime, I will give her a little help. The manifesto's first reference to pensioners is on page 25, where the SNP proposes to extend the central heating programme for pensioners as well as for other groups. That is a little late in the document, but it is a start and building on Labour policy is always the best way to begin. Surely, however, there must be much more to come. No—the manifesto's only other reference to the elderly is in relation to pensions, an area in which the Scottish Parliament has no powers. Why did the SNP include that in its manifesto for a devolved Parliament? The only answer must be that the nationalists would rather ignore all the actions that this Parliament can take to improve the lives of older people and concentrate instead on cynically using the issue for party gain.
Will the member give way?
That is the case again with Ms Sturgeon's motion. She would rather play political games than discuss heating and housing conditions for the elderly. She would rather champion independence than champion access to public transport for the elderly and she would rather have a go at Westminster than have a go at tackling antisocial behaviour, which blights the life of many of our senior citizens.
I will not participate in the nationalists' games. My amendment highlights the good work that has been done by this Labour-led Scottish Executive and briefly discusses the way ahead. I will leave detailed discussions on pensions to my colleagues at Westminster who, in case Ms Sturgeon has forgotten, were elected by the people of Scotland to deal with those very issues.
Of course, there is an issue of trust. My party trusts its colleagues at Westminster to do that job. Nicola Sturgeon's party does not trust her, which is why its members elected Alex Salmond to be their leader and hold her hand. It suffices to say that Alex Salmond and his nationalists want to scrap the targeting of resources to the pensioners who are most in need. Perhaps the SNP should take advice from one of its own members. In his book, "Building a Nation: Post-Devolution Nationalism in Scotland", Kenny MacAskill says that the responsibility of the state is to protect the vulnerable, not subsidise the wealthy. It appears that Mr MacAskill's colleagues disagree with him.
I am pleased that by targeting resources my colleagues at Westminster have taken 1.8 million pensioners out of poverty since 1997. Without prompting from the SNP, my colleagues have introduced a range of measures for pensioners, including a £200 winter fuel payment, free television licences for the over-75s and free eye tests.
I am grateful that Karen Whitefield is now participating in a debate. It is tragic that she has been told by the First Minister to raise the game and yet when we try to raise the game all that she does is denigrate us. Does she remember that when we started our campaign about fuel poverty in Scotland we were derided by the Labour Party and that it took years and years of effort to secure any concessions?
I will not take lectures from the SNP on pensioners. For 18 years the Tory party destroyed pensioners' lives in Scotland and the SNP marched through the benches to put the Tories into power—[Interruption.]
The Parliament has much to be proud of in relation to improving the lives of older people in Scotland. It has introduced a range of measures, which include free personal care for the elderly and the establishment of care standards, which mean that our senior citizens can be secure in the knowledge that they have the right to a high standard of care, regardless of their personal circumstances. Importantly, the policies respond to the views and concerns of older people and the groups that represent them. The Labour Party is committed to working with older people to develop more responsive services that are appropriate to older people's needs. To that end, the Executive has helped to establish an older people's consultative forum, which involves the main older people's organisations in regular meetings with ministers and officials—[Interruption.] SNP members should not deride a measure that involves people, gives them a say and responds to their concerns.
The Executive has introduced off-peak free bus travel for elderly groups and I am pleased that the policy will be extended to enable pensioners to travel throughout Scotland. I have discussions with local senior citizens groups, who tell me that free travel is a popular policy and is heavily used.
The warm deal initiative and the central heating programme are helping to ensure that all older people in Scotland live in warm, dry, comfortable homes. Those measures are tackling fuel poverty—we are doing something about that, rather than just talking about it. I have visited a number of constituents who have benefited from the insulation, draft proofing and advice on energy efficiency that the warm deal initiative provides. The policy has made a real difference to those people's lives. I welcome the extension of the central heating programme to provide new systems to people over 80 who have a partial or insufficient heating system. That policy is especially important to areas such as North Lanarkshire Council's area, where the central heating systems that had been installed in most of the council's stock were much in need of replacement.
On health, the Executive has adopted a range of measures to improve the lives of older people. Significant sums of money have been invested to tackle the problem of delayed discharge and have led to a reduction in the total number of patients waiting to be transferred to more appropriate settings from 3,116 in January 2002 to 1,785 in April 2004. That policy has been complemented by improvements in the provision of home care by local authorities. The elderly tell us that they want to be cared for at home.
I know from my experience at surgeries that crime and antisocial behaviour are key problems that affect many older people. We must be careful not to overstate the scale of the problem, but we cannot ignore the concerns that people raise with us all too frequently. Elderly people often feel threatened and the Antisocial Behaviour etc (Scotland) Act 2004 will ensure that the police and local authorities have the powers that they need better to protect communities from the small minority of people who act without thinking about the damaging effect of their behaviour on others.
Many members know that older people make a significant contribution to other people's lives through volunteering. Some 30 per cent of people aged 50 to 59 and 26 per cent of people aged 60 to 74 give up their time to do voluntary work. Most of my local voluntary organisations would cease to function if it were not for their volunteers over 50. I welcome the Scottish Executive's commitment to encourage and develop volunteering among the over-50s through the provision of funding to Community Service Volunteers, which is developing a project that makes good use of the wide range of skills and experiences that mature people have and harnesses those skills for the benefit of communities. The funding also supports the creation and operation of the older people's volunteering forum, which brings together agencies that have an interest in the field and promotes good practice. I am sure that more can be done to support older volunteers who want to continue to serve their communities, for example through improved and easier access to further education and training.
I spoke recently in a debate about young carers. Many carers and the people for whom they care are over 60. The Community Care and Health (Scotland) Act 2002 significantly extended the rights of carers in Scotland to an assessment of their needs. As a result of the 2002 act, carers are more likely to receive the support and respite that they need and the people for whom they care are more likely to receive a better standard of care. In enacting the 2002 act, the Scottish Parliament made a real difference for older people in Scotland, which I welcome.
Lest I be accused of picking on the nationalists, I want to say a few words about the Tories.
You have only one minute left, I am afraid.
It will take just a few minutes. The claim in the Tory amendment that
"only a Conservative administration at Westminster can implement … changes for the benefit of all Scotland's pensioners"
flies in the face of the evidence of 18 years of Tory Government. During their time in office, the Tories increased the basic pension only once and imposed VAT on fuel. When the Tories left office, one in four pensioners was living in poverty. The Tories presided over the pensions mis-selling scandal, which caused misery to millions. Pensioners will not forget that.
The Tory amendment does not tackle the real, important issues. Nor does Miss Sturgeon's motion, which uses older people and their needs to further nationalist ends.
I move amendment S2M-1940.5, to leave out from "agrees" to end and insert:
"supports the vision of a Scotland in which every older person matters and every person beyond working age has a decent quality of life; considers that older people's lives have been improved through devolution across a wide range of areas such as health, transport, housing, social justice, volunteering, lifelong learning and tackling anti-social behaviour; recognises the range of measures specifically designed to improve the quality of life of all older people in Scotland, including free personal care for the elderly, free off-peak local bus travel, the central heating programme and funding for the Warm Deal; endorses the partnership between the Scottish Executive and Her Majesty's Government to tackle pensioner poverty, and welcomes the Scottish Executive's continuing commitment to improving the lives of all of Scotland's senior citizens."
I welcome a debate on older people in Scotland. However, like Karen Whitefield, I believe that the SNP should use the Parliament to debate issues in relation to which it has powers, rather than to lodge motions that tell our colleagues at Westminster how to do their jobs. The people of Scotland elect 72 members of Parliament to debate pensions at Westminster. I think that all members of the Scottish Parliament would have something to say if Scottish MPs started telling us how to run the health service and provide education in Scotland. The SNP is undoubtedly comfortable with taking orders from Westminster, but Scottish Conservatives acknowledge the devolution settlement. We have pledged to work within the powers of the Scottish Parliament for the people of Scotland and to let Scottish MPs represent our country at Westminster.
Will the member give way?
Not yet.
The main point is that the SNP will never be in a position to implement its pension promises, especially as it lost a quarter of its MSPs last year and more SNP losses are expected at the next election. Only the Conservatives provide an alternative to Labour at Westminster.
The pensions debate cannot be addressed simply by calling for a rise in pensions; the issue is far more complex than that. An irate pensioner visited my surgery recently to tell me that she had received a £12 increase in her pension through the new pension credit system, only to have to pay out £12.75 per week more because her housing benefit and council tax benefit had been reduced. Nicola Sturgeon mentioned the briefing from Help the Aged in Scotland, which says:
"means-testing … has created a complex and bureaucratic system".
It goes on to say:
"145,000 pensioner households entitled to pension credit were not receiving it."
A pensions debate should also include a discussion of how to address the incentive to save. Help the Aged comments:
"many pensioners with moderate incomes still feel they are little better off than those who never saved. Means-testing could also dis-incentivise saving for young people."
For pensioners who want to continue working, every £1 of earnings reduces their pension credit by 40 pence, which is, in effect, a tax on the poorest pensioners at the highest rate of income tax.
The Conservatives have an eight-point action plan to address the pensions crisis, the first point of which is to restore the link between pensions and earnings and to remove the obligation to buy an annuity at 75. My colleague Bill Aitken inhabited the world of annuities in his previous life and he will address those and other pension issues.
Where is he?
I will tell members later.
There are reasons for his absence, which I know about.
There are very good reasons, and I hope that Labour members will respect that.
I will raise some issues that we can address in this Parliament from a survey that was carried out by the Highland senior citizens network, entitled "Better support for Older People in the Highlands". On chiropody services, more than 1,000 people are being taken off the national health service list in the Highlands and many more have had their appointments cut. The service is being privatised with no regard to patient need or ability to pay. If we audited the health benefits of every public pound that goes into chiropody, the service might rate the highest, as quality foot care keeps elderly people mobile and independent and less likely to fall or need home care or hospital care. Foot care from a trained and qualified podiatrist can also pick up other problems that can then be referred to other specialists. It is disappointing that not one member of the SNP managed to find the time to come to the first briefing in the Scottish Parliament from the Society of Chiropodists and Podiatrists, although Christine Grahame gave her apologies.
I find it interesting that the Conservatives are now condemning the privatisation of public services. Would Mary Scanlon care to tell us which other services that her party privatised she would now bring back into the public sector?
I am happy to talk about the privatisation of services, which we debated in Parliament and on which the Tories were open, honest, upright and accountable. I am complaining about the stealth of the privatisation that elderly people are facing in the Highlands as they are taken off NHS lists and forced to go private.
Will Mary Scanlon give way?
No, I have to get on.
Highland NHS Board has come up with some innovative solutions to the problem, including suggesting to an elderly man in Nairn that he invite his friends round for a toenail-cutting party. One of his friends was blind, another had arthritis in his hands, another had mild dementia, and one had diabetes. The gentleman said to me that, if the new Minister for Health and Community Care would like his feet attended to by the group, he would be happy to arrange it.
Government leaflets state that dental treatment is free for pensioners, but that is only the case if they can find an NHS dentist. In some areas of the Highlands, there is a four-year waiting list. One elderly person in the Highland senior citizens network's survey stated that, after four years of waiting for a dentist, they had to pay £86 for a filling, not to mention the £150 registration fee. Another respondent in the survey states that, at older than 70, he was instructed to have full dental treatment before being accepted on a private list, but he could not afford to do so. That is typical for dental care in the Highlands and the situation is rapidly spreading across Scotland.
I have heard many of those arguments before. Does Mary Scanlon accept that it is the Health and Medicines Act 1988—which was passed by a Conservative Government—that has led to the crisis in dentistry services?
No, I do not accept that. If Margaret Ewing asks pensioners in Moray and the Highlands about that, they will say that their podiatry, eye care, ear care and home care services have deteriorated in the past seven years.
On long-term care, it cannot be right that councils award themselves around £150 more per person per week for those in council-run homes than for those in independent homes. Council-run and independent homes have to meet the same standards, which are set by the Scottish Commission for the Regulation of Care, but they are funded differently. Other issues arise when someone enters a home with funding for personal care but their condition deteriorates to the point that they need nursing care. The care homes have to provide nursing care but, in some instances, the councils doggedly refuse to pay the higher rate, which brings horrendous problems for families. Of course, if an elderly person self-funds, they not only pay more for the same level of care in many homes but they can be assured that their discharge from hospital will not be delayed and that they will be placed instantly in a home of their choice. Five years into the Parliament's existence, we still have 1,932 patients in blocked beds, which is a reduction of 83 since 1999. My colleague David Davidson, who, I am pleased to see, has arrived in the chamber, will cover that issue.
In its 1999 Scottish Parliament election manifesto, the Labour Party pledged to eliminate fuel poverty over two parliamentary sessions—that is, by 2007. However, when the Executive's fuel poverty statement was issued in August 2002, the target had changed to 2016, which is a delay of nine years. Charles Gray, who has been a Glasgow councillor for 45 years, recently spoke of the consultation documents that are currently circulating on health, dental services, chiropody and digital hearing aid programmes and said that, although the intentions are good, the services become more unattainable as they get more expensive.
I move amendment S2M-1940.1, to leave out from "believes" to end and insert:
"condemns the Chancellor's promotion of the means test which acts as a major disincentive to save; believes that linking the basic state pension to earnings would lift a million pensioners out of means-testing over a four year period; calls for greater measures to encourage personal savings, and acknowledges that only a Conservative administration at Westminster can implement these changes for the benefit of all Scotland's pensioners."
I return to the question with which the SNP must deal. It is a matter of another day, another SNP debate on an issue reserved to Westminster. That is the pattern of most SNP motions, amendments and speeches. Yesterday, we had an Executive motion on education, a matter for this Parliament, on which many policy options are available to us and on which the SNP had nothing to say. Today, we have a motion on pensions, a matter that is reserved to Westminster, on which the SNP has lots of rather woolly and insubstantial things to say but over which it can exercise no influence at all.
I ask Nicola Sturgeon to let me get into my speech a bit, if she does not mind.
One wonders what the purpose of the small SNP Westminster contingent is. What, indeed, is the purpose of the SNP group in this Parliament if it cannot properly fulfil its principal function of holding the Executive to account?
In contrast, the Liberal Democrat-Labour Scottish Executive has already made a substantial difference for Scotland's older people. Using the extensive powers of this home-rule Parliament, we have made major inroads into pensioner poverty. I have frequently said that the free central heating and insulation scheme is one of the most important achievements of the Parliament. Besides that, there are the popular scheme for free off-peak bus travel and the ground-breaking introduction of free personal care for the elderly. Those are all major achievements, which make a major difference to the quality of life of many older people in Scotland.
On off-peak bus travel, does Robert Brown agree that the Parliament should at least seek to match the ambition of the National Assembly for Wales and introduce a universal scheme without any time restrictions for our elderly people?
There is a range of issues in that question, but I do not want to go into them, because we are dealing with a wider issue. As Tommy Sheridan is aware, there are proposals in the partnership agreement to extend the scheme to a national one, which will be a major achievement of the Executive's second term of office.
Liberal Democrats want to do much more and, unlike the SNP, we are able to play a leading role in the delivery of reforms, through the partnership agreement for Government in this Parliament, and to challenge the Labour Government effectively throughout the United Kingdom. We have already used that influence to secure agreement on the forthcoming review of the council tax, which will allow us to pursue our proposals for a fair local income tax, which could save pensioners somewhere between £611 and £1,600 a year.
The pensions debate will rightly be a significant issue in the forthcoming Westminster election. Pensioners are some of the poorest people in Britain, but the Labour Government, which was elected with the support and good wishes of many of them, has failed to ensure that they get the support that they need. People remember only too well the insulting and derisory 75p a week pension rise given by Labour in the previous Parliament. The Liberal Democrat campaign on that was widely credited with playing a major part in forcing the Government to deliver a larger rise of £5 a week the following year.
However, the biggest debate is about the demeaning and unworkable means tests that are the basis of the pension credit. Almost 2 million people—a quarter of those entitled—do not claim the pension credit; indeed, the Government actually budgets on the basis that 1.4 million people who are entitled will not claim. In Scotland, about 128,000 old people do not get their entitlements.
The Institute for Fiscal Studies pointed out last year that Labour and the Conservatives had switched sides in the pension debate. It said:
"In opposition, Labour argued that pensioners should no longer be subjected to means testing, but in government they extended it. Now it is the Conservatives in opposition who say means-testing should go, despite raising means-tested benefits more than universal support while they were in office."
Of course, it was the Conservatives who broke the link between pensions and earnings, which now costs a single pensioner more than £30 a week, and a couple more than £50 a week.
Robert Brown has just mentioned the earnings link. David Willetts, the Tory spokesman, said:
"I know that many campaigning pensioners would like to see the earnings link restored. It is not affordable, and would not be targeted."
What does Robert Brown say to that?
We are restoring it, and we are moving forward on a costed basis. I will come back to that point because it is an important one.
As Nicola Sturgeon touched on, we sometimes forget that the basic pension is paid on the basis of contributions made over our working life. That badly penalises many people—particularly women, who may have paid the married women's stamp or may have given up work to look after children or other family members.
Without wanting to widen the debate too much, I point out that there is a well-publicised hole in company pension schemes, private pensions and saving schemes, and a lack of a clear vision from the Labour Government about the relationship between the basic pension and second pension or other similar arrangements. In short, the Government's pensions policy is in something of a mess.
In fact, the Liberal Democrat party is the only party that is genuinely and has been consistently committed to providing an adequate and costed basic state pension; not surprising, as we are the party that introduced the pension in the first place, many years ago. It must be the first and most solid building block of an adequate retirement income. That is why we have proposed the introduction of a citizens pension, initially for those over 75, with entitlement based on residency not national insurance contributions. That would get rid of means testing for 1 million UK pensioners and would make older single pensioners £25 a week better off.
The SNP motion calls on Her Majesty's Government to begin the process of replacing means testing with a citizens pension. That sounds to me as if it is exactly in line with the Liberal Democrat position. If the Liberal Democrats' amendment is not agreed to, will Robert Brown back the SNP motion and send a clear message to Her Majesty's Government that—to use his words—its pensions policy is failing?
The matter is one for Her Majesty's Government and if a political party wants to campaign on it, it should recognise that. In addition, the debate has to be seen against the background of the SNP's proposals, the details of which are flawed and unfunded. However, since imitation is the sincerest form of flattery, I congratulate the SNP on piggybacking on the Liberal Democrats' policy.
If there is any doubt that that is what it has done, we should consider the SNP's pension paper, which is based—at least in part—on answers to parliamentary questions from Steve Webb for the Liberal Democrats in Westminster. Liberal Democrat manifesto proposals in recent years have always been rigorously costed, and our pension proposals at the most recent election, funded by a 50p tax rate on those earning more than £100,000 a year, were independently approved by the Institute of Fiscal Studies.
There is insufficient detail in the SNP pension paper to do a proper analysis, but its proposal would cost, in the UK, about £8.8 billion net at current values, without including the rising cost of the link to earnings, but after allowing for the money already used for the existing pension and the existing pension credit, as well as the administrative savings of abolishing means testing.
I could not follow Nicola Sturgeon's figures: £8.8 billion for the UK does not translate into £160 million for Scotland. There is a big hole in the SNP's figures. It is not clear whether the SNP would use the proceeds of council tax benefit, which is referred to in its paper, or what it describes as the "reform of tax relief" on private pensions, off which, in fairness, it has said that it would take 15 per cent. However, since its paper also says that it will use those savings to introduce a new scheme of state matched funding of private pensions, and since the state matched funding proposal is said to be cost neutral, it rather looks as if the SNP is creating one of those magical funding arrangements for which it was so renowned under the previous reign of Alex Salmond, the leader over the border.
The provision of a better quality of life for our older people, rightly called for in the Labour amendment, requires action on two fronts. It needs the actions of the Executive within the powers of the Parliament, which I described earlier; however, it also needs radical action on pensions, which is the preserve of Westminster. The SNP motion seems to have no concern for our actions in the Parliament, while the Labour amendment offers nothing in the realm of pensions. Liberal Democrats will be voting against both.
This is an important debate on an important matter. None of us in Scotland's Parliament can be indifferent to the quality of life of our older citizens. We must build the solutions on a sound basis, and we must be able to inspire trust in a group of people who are, after all, a mainstay of our democratic society and of whom many fought for our way of life in world wars. I ask the Parliament to support the Liberal Democrat amendment as the basis on which we can move forward.
I move amendment S2M-1940.4, to leave out from "agrees" to end and insert:
"welcomes the progress made by the Scottish Executive in ensuring a better deal for pensioners through the introduction of free personal care, a national free off-peak bus scheme and a free central heating and insulation scheme; recognises that pensions policy is reserved to the UK Government; believes that the UK Government's policy on pensions has failed as nearly 2 million pensioners are missing out on the pension credits that they are entitled to and deserve due to demeaning and unworkable means-testing, and further believes that the state pension must be reformed to ensure that everyone has a decent income in retirement by implementing the Liberal Democrat proposal for a Citizen's Pension, initially for those over 75, with entitlement based on residency and not National Insurance contributions, restoring the link between earnings and pensions, making older pensioners better off by £25 per week for single pensioners and lifting one million UK pensioners out of means-testing."
It is a long while since I have heard so much rubbish spoken in this place. For decades, I have watched in sheer disbelief as successive Governments of various political persuasions have proposed and adopted policies relating to senior citizens' pensions, all resulting in the continuation of pensioner poverty. It has become politically correct and acceptable to propose policies that are guaranteed to continue and even exacerbate the impoverishment of senior citizens, many of whom are vulnerable and frail and, quite frankly, have been shamefully let down by every governing party since the war.
Now, lo and behold, the SNP has woken up to the fact that there are a number of disillusioned grey voters out there and that, if it does not move to rectify the situation, it could cause countless senior citizens to switch off and turn away from the SNP. It is laudable that the SNP has noted that there is a problem; other parties do not even want us to talk about the problem.
I say to Gordon Brown—or Andrew Smith—that the flagship policy of pension credits has failed miserably. Due to its means testing, there has been a pathetic uptake of only 53 per cent, not the figure quoted earlier. Fifty-three per cent might have been enough to see George Bush re-elected, but I say to Gordon Brown, "Don't hold your breath."
To be impartial and fair, the same Gordon Brown has done a splendid job in bringing virtually full employment back to the UK. Nevertheless, the history books will show that he has been an abject failure with regard to pensioners' conditions. Means testing is his flagship policy, and not only has it failed miserably, but it costs a fortune to implement. Forty-seven per cent of my generation refuse to jump through hoops for a sad pittance. They proudly refuse to parade their poverty and virtually beg for the just pension that should be theirs by right.
The SNP deserves credit for proposing the abolition of means testing. However, I would advise it to get back to the drawing board because, according to the media—the figure has not been quoted here today—its target is a pension for all, initially, of £106 a week, or £5,532 per annum, without means testing. That is a benefit. The guaranteed minimum wage is £4.85 an hour, which equates to £194 a week, or £10,088 per annum. Why should a pensioner be expected to live on roughly half the guaranteed minimum wage? Age Concern commissioned a university study, which concluded that £160 a week was the minimum amount required to allow a pensioner simply to make ends meet. That princely sum would not allow them to run a car, go on holiday, smoke, drink, or have a wee flutter at the bingo or on the horses. That is the minimum amount that would allow them simply to make ends meet on a weekly basis. That is why the Scottish Senior Citizens Unity Party demands £160, index linked to earnings—or to the cost of living, whichever is the greater—to give all our senior citizens back their dignity. It is well within the capability of the fourth richest economy in the world to pay senior citizens £8,320 per annum.
Where will the money come from? The answer is easy: bring back our troops from Iraq, scrap Trident and tell Tony Blair that the cold war is over, or set aside a larger percentage of our gross domestic product. Currently, the percentage stands at 5.5 per cent, which is the second lowest of fifteen European countries. Austria allocates 14.5 per cent, Greece 12.6 per cent—this is beginning to sound like the Eurovision song contest—Germany 11.8 per cent and Sweden 9 per cent. Sadly, Gordon Brown boasts that his long-term plan is to reduce our share of GDP from 5.5 per cent to 4.4 per cent, while every other country will greatly increase its share. Other countries are planning ahead—they realise that a demographic time bomb is ticking—but Gordon Brown simply ignores the problem and hopes that it will go away.
Gordon Brown refuses to increase income tax for the mega-rich by pegging the top rate at 40 per cent, while idly watching as 2,500 senior citizens in Scotland die winter-related deaths. Our Executive has a praiseworthy free central heating scheme for the elderly, but, sadly, Gordon Brown has negated that good scheme by ensuring that all too many pensioners simply cannot afford to switch their heating on. He should get real, for goodness' sake. Members should not talk about the £200 winter allowance, by the way, which equates to just £4 per week on top of a miserable pension of about £70.
Pensioners in Shotts high-security prison enjoy facilities that many senior citizens would dearly love to have. The criminals enjoy three square meals per day, free central heating, double glazing, en suite toilet facilities, games rooms, libraries, free televisions and so on at a cost of £30,000 per annum each. Senior citizens, the vast majority of whom have never committed any crime, receive a free television licence when they reach 75 years. If they qualify for pension credit, they receive £5,460 per annum. We are the good guys and the criminals are the bad guys. Pensioners who are taken into residential care, which often falls short of the Shotts standard, might have their home sold to pay the cost of keeping them in residential care. It is not so for the murderer or rapist in Shotts high-security rest home. This is an ill-divided world.
What on earth has happened to the suffragette spirit among our opposite sex? In 1909, Lloyd George—a good Liberal—instigated the first ever old-age pension scheme. The average working wage was just over 12 shillings per week. On reaching 70, a pension of 5 shillings per week was paid to both men and women. In the 21st century, we find ourselves with men getting 100 per cent, while a spouse receives a mere 50 per cent. Thankfully, Nicola Sturgeon addressed that issue. It is high time that the rest of the ladies who rightly complain about the inferior rates that women are paid for the same work in the workplace started suffragetting once more and put an end to this inequality nonsense. The SSCUP demands £160 per week for both men and women—there are no second-class members of our party. Can any other party make the same boast?
When people reach 80, their pension rises by a massive 25p per week. That is not even enough to buy a first-class stamp to write and complain about the insult, yet these are the people who were on the beachheads on D day and who landed at Arnhem and so on—they are the heroes. Ministers will stand there in a week's time with crocodile tears running down their faces when, in far too many instances, they have pensioners in total poverty.
Politicians seem to be completely unaware of the massive problem that faces the elderly in our country. I say to politicians: neglect the elderly at your peril. They have had as much as they are prepared to take from politicians and they are starting to fight back. Uncaring political parties continue to ignore our plight at their peril; the elderly can and will strike back by putting their cross elsewhere in future. Grey power will triumph in adversity—just watch this space.
I move amendment S2M-1940.2, to insert at end:
"and restore the link, broken in 1982, between pensions and average national earnings."
There are 14 back benchers whom I want to include in the debate, so I immediately reduce the time for speeches to five minutes—and I mean five minutes; I do not want to have to reduce further the time that is allocated to members who speak later. I call Alex Neil, to be followed by Richard Baker, for a strict five minutes.
I am glad that it was Karen Whitefield who moved the Labour amendment this morning, because she reminded me of one of our forebears, the late Peggy Herbison, who was minister for pensions and national insurance in the 1964 Wilson Government. She resigned from that Government on a point of principle, which was that means testing does not work. When the Cabinet decided to introduce means testing, she did the honourable thing, as she always did, and resigned. That is the difference between old Labour and new Labour. New Labour believes in means testing and looking after its rich pals in the City. Old Labour stood up for the poor, the pensioners and those in our society who need help. Old Labour had principles but new Labour is just a bunch of chancers. I say to Karen Whitefield that she should go and read Peggy's resignation statement—she might learn a thing or two about poverty and principle.
Peggy Herbison resigned because means testing had been tried time after time. It was tried in the 1930s, when the Labour movement led the fight against it. The Tories did it again in the 1950s, the Wilson Cabinet did it in the 1960s and Heath did it in the 1970s. Now, we have Gordon Brown and Tony Blair doing the same thing. How is it that after seven years of Labour Government in London and with a Lib-Lab pact in Edinburgh 30 per cent of our pensioners still live in poverty? Surely that is proof enough that means testing does not work. The argument goes that the Government targets the poor, but if it does so successfully how are there more poor pensioners today than there were seven years ago?
What really angers pensioners, and quite rightly so, is when they draw a comparison between what new Labour is doing for the rich and what it is not doing for the poor. Gordon Brown has just introduced rules that give 40 per cent tax relief up to £1.7 million. People can build their private pensions up to that figure and get 40 per cent tax back. Our pensioners would be lucky to get 1 or 2 per cent of that figure. They get a miserable £79 per week and new Labour does not care.
Will the member take an intervention?
I will come to Robert Brown in a minute.
New Labour does not seem to understand the problems that old people face. This week alone, we heard announcements of 12 per cent and 17 per cent increases in electricity prices, which, combined with the increase in council tax, will make our pensioners even poorer. I will take Robert Brown's intervention now.
This should be a very quick intervention.
Can the member cast any light on the problem that was left after Nicola Sturgeon's speech—the hole in the SNP's proposals? It is all very well to wax lyrical on the matter, but what would the SNP do about it? What are its proposals?
Churchill used to call the Liberals mugwumps, but I think he was being unfair; they are just mugs. Robert Brown should read the policy statement and understand it. The figures are all there—I am an economist and I have checked them out. They add up much better than his figures do.
We have heard all this discussion about scoring cheap points and reserved matters. The weather is reserved, but that does not prevent us from talking about it. The Scotland Act 1998 places a responsibility on the Parliament not only to legislate on competent matters, but to stand up for the people of Scotland.
Nicola Sturgeon's motion is clear: it calls on us to put pressure on the Westminster Government to lift our pensioners out of poverty. How can anyone who cares about pensioners vote against a motion that asks us to pressurise other people to lift our pensioners out of poverty? I support the motion not because of what I heard from Karen Whitefield, but in Peggy Herbison's memory.
I welcome the opportunity that the debate presents to discuss how the Parliament is making a real difference for the better to older people's lives in Scotland. Scottish Labour's amendment focuses on what our party and our Executive are achieving for older Scots in health, transport and social justice. We are giving more older people better opportunities to enjoy a more active and healthy life and we are giving back to many older people the dignity and opportunities in retirement of which Tory Governments robbed them. We are forging a society that provides our older people with security and care.
Once again, Labour members seek to discuss issues on which the Parliament can make and is making a difference, whereas the SNP seeks to discuss matters that are outwith the Parliament's competence to affect and that are—rightly—issues that are decided in Westminster.
On what we are competent to talk about and what we are not competent to expedite, do I take it that Labour members will not talk or listen to the next group of pensioners that arrives at the Parliament to discuss its concerns?
Not at all. I am saying that we in the Parliament should focus on what we can do and on what we can make—and are making—a difference on to benefit Scotland's pensioners.
It is surprising that the SNP persists in discussing matters that are outwith the Parliament's competence when its leadership is based in Westminster. I have no doubt that it has ample opportunity to raise reserved matters there.
It will benefit Scotland to be part of a UK strategy to address the needs of future pensioners. We will of course be likely to need greater investment from the Government and from society as a whole to meet the financial challenges that the demographics not only of Scotland, but of the UK, present. The economic prosperity and stability from which Scotland benefits as a result of being part of the UK economy—especially from a long-term perspective—will be a key advantage in meeting those challenges.
In any event, I disagree with the assessment that the pension credit, which is designed to encourage saving, should be scrapped, or that we should abandon prioritising investment to provide more help to the neediest pensioners. It would be wrong to abandon the minimum income guarantee, which has been a vital financial boost to many of our most vulnerable older people.
Does Richard Baker recognise that the point is that such targeting does not reach all our pensioners? Not all the people who are in need receive the money.
Such prioritisation helps millions of older people. It is fundamentally wrong and bizarre to make take-up—which we are trying to increase—an argument for giving older millionaires a financial boost.
Of course, important points of agreement exist on meeting our older people's needs. The SNP motion talks about facing up to the challenge of pensioner poverty, which is exactly what we are doing and on which we should all be able to agree. Our Executive has done a huge amount to tackle pensioner poverty and to help our most vulnerable older people. I am angered when I hear from some members the totally misleading and misinformed accusations that the Executive has forgotten Scotland's older people and has not done enough to help pensioners. Nothing could be further from the truth. Older people have probably benefited from devolution more than any other group in our society.
When I worked at Help the Aged in Scotland, we always campaigned for a better deal for older people, but the charity—along with other older people's groups—acknowledged the progress that had been made. That progress has been made through the Executive, working in partnership with the UK Government.
Of course we have more to do, but it is vital to recognise that we have reduced the number of pensioners who live in relative poverty by a quarter since 1997 and that absolute pensioner poverty has reduced by two thirds. That means that 170,000 of our poorest pensioners are better off. That is Labour working for poorer pensioners. Fuel poverty has been halved and we have a free central heating scheme. Older people have benefited from Labour's massive investment in the NHS and from free personal care.
The list of achievements for Scotland's older people goes on and on. The Executive and Labour at Westminster have made important progress. We have more to do but, in looking to continue to improve pensioners' lives and to ensure that the older people of the future also benefit from the progress that we have made for older people today, members are wrong to reject the Government's strategy of focusing investment on the neediest older people while creating incentives to save.
Most important is that we in the Parliament should focus on what we can do for our older people. It has been made clear in the debate that Labour is doing that. That is how the Executive has made life better for older people and why we will achieve our goal of a better quality of life for all Scotland's older people.
I am glad to see a growing consensus in the Parliament that means testing does not work. That consensus goes from the right to the left—it just misses the Labour Party. It is disappointing that the Labour Party does not reflect more on the consensus, in a consensual Parliament, that means testing has failed and will continue to fail.
I welcome the growing consensus that we need a citizens pension and I am pleased to support the SNP's motion, with John Swinburne's amendment. In John Swinburne's debate on pensioner poverty back on 11 March 2004, I said:
"The radical solution that a Scottish Parliament with full powers should adopt is integration of the tax and benefits systems through the introduction of a citizens income that is available to all citizens who are over 18. A citizens income would give pensioners and others in society the flexibility to continue to work, to retire or to use the savings that they have accrued over a lifetime of work without the fear that means testing would reduce or eliminate their savings."—[Official Report, 11 March 2004; c 6517.]
We should reflect on that as we talk about pensioner poverty.
Who are the pensioners in poverty?
Will the member give way?
No. I am in the middle of making a point.
Five per cent of Scotland's pensioners are well-off, 45 per cent are comfortably off, 25 per cent live below the Government poverty line and have the option of benefits and credits to take up, but the other 25 per cent are caught in the poverty trap. The 25 per cent of pensioners who have saved a bit and put a bit aside are being hit the most by the current iniquitous means-testing system. The introduction of a citizens pension would do the most to help those pensioners.
We still occasionally hear the term "third way" from new Labour. It means something like a middle course between public provision and private provision of education, health and pensions, as if a real middle way existed. However, we do not hear about the importance of the state—of society—in providing the bedrock that allows every citizen to purchase essential goods and to have a warm home and that gives the private sector the flexibility to provide non-essential goods. Nowhere is that clearer than in pensions.
Society as a whole believes that elderly people are entitled to a minimum living standard. Beyond that is a living standard to which people have legitimately become accustomed by virtue of their earnings. Beyond that are plans that people have developed for their retirement. As it is a necessity, the first standard is best provided for by a state pension and the best and most effective way of achieving that is through a universal, non-withdrawable, flat-rate citizens pension. The second standard is best provided for by employer pension schemes or similar measures and the third standard is best provided for by private provision through savings.
That model is also useful in relation to how we should deal with wider societal income and the provision of income throughout the rest of people's adult lives. The model of a citizens pension, which the SNP has accepted, should be extended to include flat-rate, non-withdrawable benefits to all, which will bring people out of the poverty trap.
Labour and Liberal Democrat members have talked about holes in that system and have said that it will not work. I point out to them that a similar system in New Zealand works. I recommend that people read the Pensions Policy Institute report that demonstrates that a pension set at something like 25 per cent of the national average income—around £115 a week—would be affordable and sustainable.
We are talking about a vital step towards a situation in which no pensioner lives in poverty. The proposal is affordable and workable and should be the start of moves by a Scottish Parliament with full powers over our tax and benefits system to remove all poverty traps, not just those that affect pensioners.
Poverty is not a reserved matter. There are no legal or constitutional boundaries on the pain and the anger of poor pensioners. We cannot have the frustrating situation in which the job of the Scottish Parliament is to ameliorate the consequences of poverty without having the powers to tackle the root causes of that poverty. We will return to that issue time and again.
The Scottish National Party's proposal is a positive contribution to the debate. This is a real debate. This Parliament should be debating real issues and there is nothing more real than one of the biggest debates in the country, which is on the pensions crisis. We should treat the debate seriously.
We must address two issues. One relates to the problems of pensioners at present and the other relates to the pending pensions crisis. We have a debt generation of people in their 30s and 40s and, unless we sort out that crisis, people down the line will increasingly have to deal with the problems associated with the root causes of poverty. It is right that we take note of the Turner report and that all parties, whether they be in the Scottish Parliament or the UK Parliament, state their case.
There is a genuine debate to be had about targeting and universal benefits. I appreciate where those proposing more targeting are coming from in terms of their values. However, as well as the moral case against means testing, which Alex Neil set out, there is also an administrative issue. It is not efficient government to have to spend 10 times more on means testing while 25 per cent of pensioners are left out. Under our citizens pension proposals, no poor pensioner would be left out; under Labour's proposals, 25 per cent—and rising—of pensioners will be left out.
During this debate, we have asked one question consistently. The total cost of giving a citizens pension to all those over 65 is £8.8 billion at the UK level, with a further £7 billion over the lifetime of a Parliament to fund the link to earnings. The SNP has offered up only £160 million from the redistribution from tax savings and £20 million from administrative cost savings. That does not even begin to meet the cost of the proposal in Scotland. How will the SNP pay for it?
The Liberal Democrats had better be careful that, in the debate about citizens pensions, they do not start arguing against their own position. If we take the basic state pension, tax credit problems and means-testing administration costs, we can come up with a proposal that is fit for purpose and provides a citizens pension. That is what New Zealand has done and it is what the SNP wants to do.
The point about how we can encourage people to save is important. The pensions crisis will hit Scotland harder than elsewhere because of the size of our public sector. We must all face up to that. One of the ideas that lie at the heart of the citizens pension proposal is equality and fairness for all. That idea not only helps those in poverty but does something else important. As those in the Labour Party who remember the arguments for universal benefits will know, it ties society together and gives people a stake in the future.
Remember, one of the first things that Gordon Brown did after the 1997 election was to raid the pension funds and create a disincentive to save. Grandchildren watched their grandparents and realised that there was no point in investing if the money was going to be clawed back. We must address the growing dislocation in society that is characterised by those in the private pensions sector looking with envy at those in the public pensions sector. If we are to make a meaningful contribution to this debate, we must address that issue.
We have a complex and unfair pensions system. As John Swinburne said, it treats women unequally. The Scottish Parliament has one of the highest percentages of women members in the world. If we want to tackle inequalities, we must tackle the position of women in society and the citizens pension will do that.
The SNP proposals would deliver a fairer deal for pensioners, women, people on low incomes and people on modest incomes. Within the wider system of local income tax and integrated tax and benefits that we propose, we provide a vision for a positive future for pensioners and the rest of society. We must have a serious debate about the issue because that is what the people out there are debating.
The issue is not whether we agree with some of the SNP's analysis. We do. The problem is that we do not trust its finances and therefore cannot support its motion. We do not disagree with the view that the coalition Government in Scotland is making a difference. It is. The problem is that the UK Labour Government is offering a bad deal to pensioners, which means that I cannot support its position.
I agree with the key choices that are outlined in the SNP's policy paper "A Secure Retirement for All" and note that it asks questions about the retirement age, compulsion in relation to voluntary contributions, universality versus means testing and the reform of tax relief. I also agree with the paper's view that
"These proposals do not constitute a magic wand".
I am not sure when the SNP gave up its policy on magic wands, which seem to be involved with almost everything that SNP members say in the chamber, but I welcome the refreshing admission in the policy paper, which states:
"There are no easy answers. The problems facing today's—and tomorrow's—pensioners will not be solved overnight, or in isolation."
My observation is that the SNP is asking for precisely that—it is asking for isolation. It wants Scotland to be independent, with a separate pensions and tax system that is funded fundamentally from oil revenue. Nowhere to be seen in the pensions paper is any indication of how the policy would be funded.
It is interesting to see that the SNP policy paper was written in London, uses UK statistics and is based predominantly on a Liberal Democrat MP's parliamentary questions. I am not sure exactly where the Opposition's Short money goes, but it is obviously all going down to London; none of it is up here.
Only this morning, Nicola Sturgeon said that the policy would be funded through efficiency savings and a 15 per cent reduction in pensions contribution relief. However, because the paper uses only UK statistics—there is not one footnote that quotes Scottish statistics on pensions or finance—it effectively hides the fact that, given the slightly lower incidence of higher-rate tax payers in Scotland than in the rest of the UK, there is likely to be less scope to curtail contribution relief for higher-rate taxpayers alone in order to increase the basic rate pension to anything like that envisaged by the SNP. The abolition of tax relief for pensions contributions would have to be wider than simply abolishing relief at the highest rate. Even so, that would go nowhere near funding the total cost of £8.8 billion across the UK.
At a UK level, the Liberal Democrats' policy for the over-75s would cost £5 billion and would be funded by scrapping the Department of Trade and Industry and the child trust fund.
From what Robert Brown and Charles Kennedy have said, I understand that Liberal Democrat policy is that a citizens pension would initially apply to over-75s but that, eventually, it would apply to those aged 65 and over, which is a similar policy to that of the SNP. Could the member clarify the situation?
That is indeed the case. We will be approaching the general election with an honest proposal that we will set out in a costed manifesto. The old SNP, which Alex Neil represents, and the new SNP, which Jim Mather represents, are consistent in their reluctance to have a funded manifesto.
There is hypocrisy at the heart of the SNP as well as a dichotomy. The dichotomy in the SNP policy paper is that the section in which the removal of the incentive to save is proposed is followed by a section on a compulsory second pension. Despite the fact that this morning we heard the most strident performance from Nicola Sturgeon, the SNP does not have a view. Instead, it calls for
"a consensus on how to introduce greater compulsion to pension saving."
The hypocrisy is that, although the SNP calls for tax redistribution and cutting tax relief for savings, it would also cut corporation tax. Alex Neil says that all the figures are in the SNP policy paper and that they all add up. However, the paper contains no figures and those that Nicola Sturgeon outlined this morning do not add up. Instead of calling for a universal pension tagged on to earnings, the SNP would be more honest to call for a universal pension tagged on to the price of crude oil. That is the only policy approach that the SNP can claim would fund its pensions policy. The SNP is being dishonest and is offering nothing to the electorate.
If the SNP debates between now and the general election are going to propose UK policies to aid the party's fortunes in that election, I will look forward to them, because every one will have a fundamental flaw: the SNP cannot afford—and cannot put forward a budget or make any financial proposals that would fund—any of its policies.
Jeremy Purvis's speech was most interesting and enjoyable. It is a shame that Karen Whitefield is not in the chamber, because I wanted to tell her that Conservative members will take no lectures from the Labour Party on pensions and pensioners. We are talking about the party of Robert Maxwell, the darling of the Labour Party, who plundered his workers' pensions and left many in penury. We are talking about the party of Helen Liddell, who worked for and constantly defended Robert Maxwell and then—just to outdo him—as a Treasury minister presided over the removal of tax credit on pension funds, costing people who save for their pensions £5 billion a year. That cost has occurred every year for the past seven years and it will do so until next year, when we will get rid of the Labour Government.
Labour is the party of Gordon Brown, who had the hypocrisy to attack the Tories for not restoring the state pensions link with earnings, but has done nothing in the past seven years to restore that link. He is the same Labour chancellor who extended means testing so that, if someone wants to save for a pension, they will now have to have a fund worth more than £142,000 by the time they are a pensioner to be able to escape the means test. His pension tax credit makes the savings system more complicated than the Gordian knot. As Mary Scanlon said, for every pound saved, a pensioner keeps only 60p because Gordon Brown claws back 40p. I accept that we have lessons to learn, but we will take no lectures from the Labour Party. Instead, like Alexander, we shall take a sword to this Gordian knot.
Our record in government has been the subject of some debate. In 1982, 400 economists said to the Government that, although inflation was coming down, it would remain higher than earnings for the foreseeable future. At that time, a failure to break the earnings link would have meant many pensioners being worse off. The mistake that the Conservative Government made was that, after it had successfully turned round the economy and seen earnings rise above the rate of inflation, it did not recognise that that was the time to redress the situation.
The member is being a bit disingenuous. The rule was that pensions should be increased either by the increase in earnings or by the increase in inflation, whichever was higher. That link was abolished when the Tories used the lower figure.
We took the higher of the two figures, because earnings were falling behind.
Fuel poverty has been mentioned. The most important factor in attacking fuel poverty has been the privatisation of the utilities.
Nonsense.
Mr Sheridan might say "Nonsense", but since 1990 domestic energy prices in Scotland have fallen in real terms by 20 per cent for electricity and 16 per cent for gas.
Is the member willing to accept that every economic analysis of the privatisation of the two energy utilities has shown that not one price decrease has been due to privatisation? Prices would have decreased in any event. The only difference now is that we no longer get the revenue that is generated from the profits of those companies.
I do not accept that, because with privatisation came the freedom to make decisions about investment and the competitiveness that drove down the prices. The UK energy report states that the number of fuel-poor households fell by at least 0.5 million between 1991 and 1996.
The Conservatives will tackle the pensions problem in a variety of ways, of which I shall mention only three, as I do not have much time. We shall restore the link between state pensions and earnings, increasing the pension for a single pensioner by £7 and for a couple by £11. We shall introduce a lifetime savings account, similar to what some parties have been talking about today, and, using the buy-one-get-one-free principle, the Government will match savings. We shall remove the cap on total pensions contributions for senior executives, provided that all employees at a company are eligible to choose the same pension scheme. In Scotland, we shall give councils the opportunity to reduce the council tax by 35 per cent on average. That is a policy that we can deliver in Scotland that will make a difference to all pensioners.
Saving Scotland's regiments or restoring Scotland's pensions can be done only at Westminster, which is why people should trust the Conservatives.
As has been said this morning, we are here again discussing a reserved matter. The SNP has ensured that there is nothing new in that. We can do it, as Alex Neil said, and we have done it before. The difference this time is the underlying reason why we are doing so. The SNP's message this morning is that the party has accepted that it is led from London. It cannot bring Mr Salmond up from London, so it has to waste valuable debating time in this chamber massaging his ego, which can almost be seen from London. He is obviously so full of his own importance that he probably hopes to die in his own arms.
Everyone can see through the SNP's ploy. The debate shows that Mr Salmond pulls the strings from afar and has no difficulty in causing his party to hinder the business of Holyrood. In doing so, however, he exposes yet again the paucity of serious policy emanating from the SNP. As was evident from her speech, Nicola Sturgeon is clearly intent on condensing the most words into the least amount of thought. Mr Salmond was once seen in political circles as someone with genuine promise. Now he is just full of empty promises. He therefore has no qualms in demanding that the SNP impedes the discussion of matters that are genuinely appropriate to the devolved powers of Scotland in order to show that he is the boss.
One advantage of having this debate is that the SNP has exposed that it is at least consistent in failing the poor of Scotland on vital issues. Its record shows that it could not support anti-poverty measures such as the minimum wage and the working families tax credit. It would now add to that catalogue of disgrace by abolishing the pension credit that is targeted at the poorest pensioners. Of course Scotland has an aging population, but that section of society is currently benefiting from Labour policies. On average, our pensioners are £19 a week better off from having the pension credit and other measures than they would have been if an earnings link had been applied to the basic state pension from 1997.
In all honesty, does the member not think that it ill behoves him, earning more than £50,000 a year, to deny a single pensioner a basic state pension of £106 a week?
I do not want someone on my earnings to receive a bigger pension because the SNP will not make the hard decision to focus the money on the poor who need it. Unlike our time-wasting colleagues in the SNP, we have helped to reduce absolute poverty by two thirds and the number of people who are living in relative poverty by 0.5 million. In 2003-04, Scottish pensioner households were on average £1,400 better off as a result of UK measures introduced since 1997. Unlike the SNP, with its short-term vision, Labour is committed to creating a better life for older people in Scotland—permanently. We will do that by enabling older people to live healthy, independent lives and by ensuring that a long-term strategy is applied for the challenges that lie ahead.
Since Labour came to power, there have been many advances that have enriched and improved the quality of life of our aging population, boosting the overall fundamental entitlements of older people in Scotland. The SNP, having nothing to offer pensioners, is attempting to con Scotland's pensioners into giving up many of the major benefits that they have received under Labour. Through the Labour-led Scottish Executive, the UK Department for Work and Pensions, local government and voluntary organisations, the partnership against poverty working group can encourage older people to claim what they are entitled to.
It is disappointing that, instead of encouraging pensioners to claim what they are entitled to, the Lib Dems are, typically and for political point-scoring purposes, joining the SNP in finding fault. They would rather cut the benefits that are available and add the complication of a new benefit. By being part of the Scottish Executive, the Lib Dems have the benefit of the economic success of the Labour Government in London, but they want to pick away at the sensible economic basis for that success. There is no better example of people who, having been given a bar of gold, complain that there is no handle on it to help them to carry it to the bank. Robert Brown's amendment is characteristic of that attitude. The Lib Dems have no ideas about how to create the stable economy at the UK level from which pensioners in this country can gain, but they have any amount of ways to criticise the Labour Government that has delivered the success from which the Executive has benefited financially.
The SNP's proposed divorce from the rest of the UK could seriously put at risk the stability and security that have been created by Labour's economic progress to date. The Lib Dems' vacuous point scoring is little better. How can any of them help poorer pensioners in Scotland by undermining the economic benefits that are being harvested by Whitehall? If political idiocy reached the same levels as current oil prices, the SNP could pay for its spending plans by selling the drilling rights to the Lib Dems. I endorse what the Executive is doing and encourage the Parliament to support what the Executive has succeeded in doing.
I am very pleased to follow Michael McMahon's speech. One of the measures of a decent and civilised society is how well it treats its senior citizens. There is no doubt that pensioners, by and large, receive a raw deal from the Labour Government in London. According to Adair Turner, the Government's pensions guru, we have one of the least generous pensions systems in the developed world. Although the Labour Government is responsible for current pensioner poverty, the Tories cannot escape their responsibilities. As we all know, it was Mrs Thatcher who severed the link between pensions and earnings.
I have no truck whatever with the argument that is put forward by Labour politicians such as Michael McMahon that they are targeting benefits at those who are most in need. What rubbish.
By the demeaning and unworkable policy of means testing, they are deliberately ensuring that many of the poorest in society slip through the net of what should be a modern and effective welfare system.
Will the member take an intervention?
It is just not acceptable to argue that all pensioners who are in need receive pension credits—they do not. The House of Commons library estimates—
Take an intervention.
Does someone want to make an intervention?
Behind you.
You have brought that on yourself, Mr Rumbles. However, Mr Rumbles should be allowed to speak.
I will repeat that, just in case members missed it—no, I will take an intervention from Des McNulty.
Would Mike Rumbles like to confirm that means testing was invented by the Liberals?
Oh, come on. For goodness' sake. That is ridiculous. Let us get our facts right. It was the Liberals who invented the pension.
The House of Commons library estimates, using the Government's figures, that 88,000 Scottish pensioners who are entitled to pension credit do not claim it. That is worth an average £39 a week, which our needy pensioners can ill afford to lose. I heard Anne Begg, the Labour MP for Aberdeen South, on Radio Scotland this week trying pathetically to argue that we are talking only about pennies. Michael McMahon gives the same impression. That is shameful. In my view, it is a cynical attempt to justify the unjustifiable. It did not reflect well on her and does not reflect well on Michael McMahon.
Labour politicians' attack on our policies of ensuring a level playing field for all pensioners and those in need has been highlighted by the continued attacks on the Scottish Executive's policy—a Liberal Democrat policy—of free personal care for the elderly. Labour politicians such as Sam Galbraith and Lord Lipsey continue to attack one of the most successful policies to have been adopted by the Scottish Executive. Frankly, I am more than a little fed up of tackling those two political dinosaurs—and I think that we have more political dinosaurs—as they delight in misrepresenting the affordability of our policies. Free personal care for the elderly is one of the most far-reaching, progressive and successful policies that we have introduced since devolution. It is so successful that the Liberal Democrats will introduce it south of the border if and when we get the chance. Let us face it, neither the Tories nor the Labour Party will advocate that policy across the UK because, at the UK level, they are both hostile towards it. We have seen some of that hostility today.
A decent level of pension, based on residency and not on so-called national insurance contributions, coupled with real and effective health schemes for those in need, such as free personal care for the elderly, are the mark of a civilised society. It simply is not good enough for the Labour Party—not to mention the Tories at Westminster—to say that it cannot provide those things. We know that it can if it has the political will; it just does not have the political will. Our proposals, including the introduction of free personal care for the elderly, will be funded by a 50 per cent tax on all those who earn more than £100,000 a year, for example. Our plans, in contrast to those of the SNP, are clear, costed and effective.
Only the Liberal Democrats can deliver decent pensions and health care policies for the 21st century. That is why we will not support the amendments of the Tories and the Labour Party, or the SNP's motion. We have lodged our own amendment and I urge Parliament to support it.
Let us be clear about what we are talking about. Michael McMahon says that we are wasting time, but talking about pensioner poverty is not wasting time and he should be ashamed of himself for starting his speech by saying that. We are talking about thousands of elderly people, some of whom are in very vulnerable positions, who should be able—like us and like the rest of society—to enjoy their lives without having to rely on state benefits and means testing.
As has been mentioned, 145,000 pensioners in Scotland who are entitled to benefits do not take up the pension credit. They do not take it up because they feel that they are being penalised for being pensioners. We do not have to take up the credit, so why the heck should they? Twenty-two per cent of single pensioners have an income of less than £6,000 a year. That is a national scandal and a disgrace. They do not take up the credit because they feel so stigmatised and demeaned that they will not fill in the form. Sometimes, they do not even understand how to fill in the form. It is disgraceful that, in this day and age, we have to put up with that.
Labour members should be ashamed of themselves for talking about the problem in such a flippant manner and saying that we should not be allowed to speak about it in the Parliament. The vast majority of people in Scotland are of pensionable age. They are the ones who vote us in and we are here to discuss issues on their behalf, not on behalf of the Labour Party, the Liberal Democrats or the Tories.
Will the member take an intervention?
No, I am sorry. I will not take an intervention.
Let us look at the findings of some of the research that has been carried out. The Department for Work and Pensions has discovered that half of those who are entitled to attendance allowance—disabled people, who are among the most vulnerable people in society—do not take up that benefit because they find the process confusing and tiring. We must ensure that people get the support to which they are entitled. They will not get it through means testing, but they will get it in full through our citizens pension.
Will the member take an intervention?
No, I am coming to the Lib Dems.
We had a lovely wee debate between Michael McMahon, Mike Rumbles and Des McNulty—it was a kind of half war. I tell them that I am not fooled by their smokescreens. Let us have a wee look at both the Labour and the Liberal Democrat amendments. Both mention free personal care, free bus travel and the central heating programme—the amendments are practically identical. Labour and the Liberal Democrats are Executive parties—[Interruption.] Let me finish. Why did the two parties not lodge a dual amendment and be done with it? The only difference between the amendments is that the Lib Dems reminded us once again that pension policy is reserved. How marvellous is that? How typical of the Lib Dems—they are all things to all people. Let us stop kidding people on: the Liberal Democrats prop up the Labour Executive in this Parliament.
I am the convener of the cross-party group in the Scottish Parliament on older people, age and aging, and other MSPs here are members of that group. We are aware of all the issues, including pensions, that affect older people. Michael McMahon said that we need a long-term strategy. Where is that long-term strategy? In a place called Wales, which has the National Assembly for Wales, there is "The Strategy for Older People in Wales", which includes setting up a Cabinet sub-committee for older people's needs—that is a very good thing to do. There is also a national forum to advise the Assembly on what is happening with older people. Here is one for members to think about—the strategy covers the development and support of post offices in deprived and rural areas. We are told that we cannot talk about post offices in this Parliament, yet that Assembly can talk about such matters and even set up a fund—that is a strategy for Executive parties to consider. The strategy also includes free bus travel not just for pensioners but for disabled people. If an Assembly can do that, this Parliament can. Where is our strategy on that? The National Assembly for Wales plans to take
"Action to support the recruitment and retention of older people."
The Welsh will talk to the Department for Work and Pensions about an age positive initiative. What do we do in this Parliament? We do not do that.
Let us look at other matters and at housing for elderly people in particular. Where is our strategy on housing? We are supposed to have more powers than the National Assembly for Wales has and yet the Assembly has done more for its older people than we have done for ours in this Parliament. I say to the Executive parties, "Get off your knees, get to Westminster and tell them there that we want more powers in this Parliament to help our elderly people."
Over a third of the members of this Parliament believe in an independent Scotland. It is therefore perfectly legitimate when one of the Opposition parties has debating time that some of that time is devoted to arguing that some of the primary problems, chief among them pensioner poverty, will be solved only when we have an independent Scotland with the economic levers at its disposal to eliminate pensioner poverty and poverty throughout Scotland. It is ridiculous that members of those parties that believe in maintaining the British state feel that we should not discuss in Parliament getting rid of that British state, which is part of the problem and not the solution.
However, we should have consensus in the chamber on means testing. The old Tories were the champions of the means test. They broke the link between pensions and average earnings and/or prices—whichever rose the furthest—which is why Brian Monteith's points are so economically illiterate. If that link had been maintained, pensioners' incomes would have risen regardless of whether it was inflation or earnings that rose faster. Brian Monteith should try to learn that that was the link that was broken.
However, today we have the defence of the means test not by the old Tories but by the new Labour Tories. They are the ones who are breaking the consensus in the chamber today. It was interesting to read a quote from Rodney Bickerstaffe, who I believe is still a member of the Labour Party, and who is now president of the National Pensioners Convention and who used to be the leader of the largest trade union in this country. In relation to the Turner report on pensions, which highlighted the crisis that faces us, he said:
"A consensus is now emerging that we need a much bigger basic state pension for every older person, that is linked to earnings and free from means-testing."
Is it not a pity and shameful that the people who argue today to retain the means test are the Labour Party members? They are the very people who used to pride themselves on fighting against means testing, but they have now reduced themselves to defending means testing and fighting to keep the means test. That is a disgrace and a shame for which they should be exposed at the next election, and I am sure that they will be.
We must address the fundamental problem, which is not only the pathetic level of the basic state pension. John Swinburne is absolutely right in what he says about pensioner couples. We must get rid of the notion that somehow a woman pensioner should be counted as less than an individual citizen if she is in a relationship. We should be paying pensioners as pensioners and not as part of couples. The basic state pension should be a minimum of £150 a week per pensioner.
People ask, "How do you pay for things like that?" For goodness' sake, new Labour wants tax cuts for the rich and tax breaks for the wealthy but means tests for the poor and the pensioners. If only members of that party were willing to stand up to their rich friends and increase top-rate taxation—an extra 10p on salaries of £50,000 to £100,000 and an extra 20p on salaries of over £100,000 would generate more than £7 billion a year, which could easily pay for an increased pension. Why stop there? What about new Labour's other rich friends? The real scroungers in society are the Rupert Murdochs of the world; every year, his News Corporation and its 101 subsidiaries refuse to pay corporation tax in this country. Last year, they avoided paying £350 million of corporation tax and, throughout the UK, between £25 billion and £85 billion a year is lost in tax evasion. Why will Labour not take action on that? Because that would mean upsetting its rich friends.
The question that we really need to address is who owns and runs the pensions industry. Instead of that industry being owned privately and run for private profit, let us have a publicly owned pensions industry that uses the pension funds to invest in the public sector, in schools and hospitals with a guaranteed rate of return to ensure security for our pensioners instead of profit for the private owners.
I invite Des McNulty to speak and then we will see what time is left.
I thought that Tommy Sheridan won the rhetorical wars in a dead heat with Alex Neil, but neither of them contributed anything meaningful to a future debate on pensions. It is a bit disappointing that Nicola Sturgeon, who was here to kick off the debate this morning, has not spent a lot of time listening to what people have had to say.
There is a genuine debate to be had in Parliament about the important subject of older people and pensions. I am happy to have that debate, but we need to have a serious debate on pensions and one that is grounded in what can be achieved and in the financial underpinnings of the pension industry—it must not become a party-political knockabout.
Robert Brown spoke about the invention of the old age pension, which was invented by the Liberals in 1911. That was a considerable contribution in the past century to the development of our society and it established an important principle. At the same time, however, the principle was established of trying to target resources at the poorest people. If one is to get the best purchase on dealing with the problems of misery, neglect and poverty, a combination of universal and targeted benefits must be employed.
Everybody who understands poverty and how best to tackle it recognises that there must be a balance between universal and targeted benefits. We can debate how targeted benefits should be developed and managed and how they could be managed more effectively.
Will the member give way?
Sorry, but Mr Sheridan has spoken enough.
What we cannot do is wish away the choice or think that money can somehow be created to solve the pensions problem without making hard choices—they must be made. I accept what Rob Gibson said on behalf of the SNP. However, it is, frankly, ludicrous to say that a citizens pension can be introduced at a cost of £160 million. That just does not even begin to add up. That SNP proposal is even worse than that party's proposal to introduce a local income tax that, for a cost of 3p in the pound, would deliver all the things that the council tax currently does. Everybody knows that the minimum tax increase would actually be 8p in the pound.
We need honest debates in this place. That is what people out there expect. They want us to understand and take a serious approach to issues of this importance. Nicola Sturgeon's motion states that we
"must face up to the twin challenges of tackling pensioner poverty and ensuring decent living standards for future generations of pensioners".
Tommy Sheridan might well believe that putting up taxes will deliver a solution for pensioners, but I do not believe that any other political party is saying that. They are saying that the pensions system must be based on social insurance. We know that that is the case in other European countries. Every country in Europe is debating pensions because they are faced with demographic problems, taxation issues and other economic arrangements. The reality is that to deliver better pensions we must get more people to save more. Pensions cannot be delivered through taxation. A quick fix is not possible.
The serious debate that we must have in Scotland and across the UK is about how we can gradually improve the situation of pensioners by putting in place proper mechanisms to allow people, through their working lives, to make the financial resources available to deliver a decent period of retirement for themselves.
The quick-fix proposal is fundamentally dishonest. In fact, in order to deliver something that does not add up, the £160 million would create a disincentive for people to save. The SNP must provide a better answer than that. Fiona Hyslop posed good questions, but she did not come up with good answers. Every political party in the Parliament must face up to the realities, make an honest appraisal, and do what Beveridge did and come up with something that will satisfy the interests of the people of Scotland. That is our duty and that is what I believe we are here for.
There is almost no time left, so I will give one minute each for a bullet point to Margaret Ewing and Gordon Jackson.
So much to say, but so little time.
When we, as a Holyrood parliamentary group, lodged our motion, I hoped that there would be a serious debate in the chamber. Sadly, there has not been an effective debate. I heard from the unionist parties nothing but rant, the wringing of hands and, "It wisnae me. It wisnae my party that caused this problem." If we lack the drive and run away from having a vision and having the political will to implement policies here in the Parliament of Scotland, on which so many people have pinned their hopes, how can we expect the people to support the concept of the Scottish Parliament?
I was going to speak on fuel poverty, on which my views are well known. I welcome the initiative that the Minister for Communities announced earlier. I do not denigrate in any way the work that has been done by the Parliament in assisting people who live in fuel poverty, but I wonder what estimate has been made of the people who will come into fuel poverty through the obscenity of the suppliers' price hikes.
I agree with Margaret Ewing that there have been far too many opportunistic rants. Even my good friend Alex Neil was not immune to that. Des McNulty is right: this is a serious, complex issue. Targeting and means testing are always difficult. I sympathise with the view that means testing has disadvantages because it stigmatises and disincentivises and that the right approach is often the universal benefit one. However, that is not always the right approach and there must be a balance. There are occasions when we need to target the worst off and those who need help most. A system of pension credits does that. We are trying to get the balance right.
I read with great interest the Help the Aged briefing paper, which I thought was helpful and had interesting things to say. I agree with it that we must increase the pension credit take-up rate. I suspect that it is not nearly as good as it should be. Anybody who has tried to help people through the benefits system realises that it is a nightmare of bureaucracy. We need to sort that somehow. I am the first to say that that needs to be better. Perhaps we also need other ideas, such as allowing people to work a little more even when they get pension credit.
We must be imaginative, but Des McNulty is right that there is no quick fix, because the issue is complex. I am sorry that, in some ways, we have not tackled it as we might have.
I express my regret to members for the unsatisfactory way in which the timing ended up being allocated. I now have to go to the winding-up speeches. Campbell Martin is first, to close for John Swinburne's amendment.
On the basis that a change is as good as a rest, I will support the SNP motion at decision time this evening. I am sure that the SNP will be delighted to hear that. The citizens pension that the SNP proposes would be a major step in the right direction. Certainly, it would be far better than anything that is offered by the present Government. However, I have a couple of concerns about the citizens pension, which are principally to do with the level at which such a pension would initially be set and the compulsion to have a second pension.
I believe that the SNP is perfectly right to bring the pensions issue to Scotland's Parliament for debate, because the issue affects so many people across this country. Just because the unionists in the chamber accept that people in a Parliament in another country should legislate for us does not mean that we should accept that lack of ambition for Scotland. The SNP is right to bring the pensions issue to the Scottish Parliament.
The Labour amendment paints a picture of a sort of pensioner paradise that few of our pensioners will recognise out there in the real world. That is unfortunate. The Labour Party's contribution to the debate lacked any real commitment to tackling the problem of pensioner poverty in Scotland and, like the Tory and Liberal amendments, was more to do with a forthcoming Westminster election, which we will probably see next year. That was an opportunity missed and I am sure that our pensioners in Scotland will have recognised that.
It is a national disgrace that one in four pensioners in Scotland continues to live in poverty. Let us be clear that we are talking about people living in poverty and not people who could just do with a few extra bob a week. These are people who are struggling to survive and who live in deprivation in Scotland in the 21st century. That is what we should have been discussing in the debate, rather than looking forward to political seats in another Parliament at another election. Certain members have missed an opportunity by failing to raise their game and tackle the real issue.
It does not have to be like this. It does not have to be the case that one in four of our pensioners lives in poverty. They do not live in poverty by chance or as the result of an evil spell by the bad pixies. They live in poverty as a consequence of decisions that have been taken by politicians. It is politicians who set the pensions policy across the so-called United Kingdom and it is politicians who set the level of pension so low that one in four of our pensioners lives in impoverishment.
There is no excuse for the continued existence of pensioner poverty in Scotland, because Scotland is potentially a wealthy nation. If Scotland were an independent nation, we would have the powers to tackle pensioner poverty here. If this were a real Parliament, with all the powers that we need, we could take a decision today that could eradicate pensioner poverty. However, we do not have the powers in this Parliament to take such a decision. Instead, we will discuss the issue today and ask London to listen to us, they will ignore us and Scotland's pensioners will continue to live in poverty. That is the national disgrace that we are failing to tackle today.
Let us not argue about encouraging a better take-up of means-tested benefits. Let us establish the principle of the entitlement to a decent basic state pension. That is what is needed to eradicate pensioner poverty in Scotland. Pensioners in this country deserve a decent standard of living. They should not be subjected to the demeaning indignity of means testing. Let us stop arguing about repackaging and promoting means-tested support as the way forward—it is not. Let us make it clear that the most effective way of tackling pensioner poverty in Scotland is a public sector state pension that is set at a level that allows our pensioners to have a life and a decent standard of living.
Politicians have an obligation and a common responsibility for the well-being of the citizens of Scotland. To fulfil that obligation, we must ensure that the state pension is increased substantially and redress the loss that has occurred since the link with earnings was cut back in the 1980s. I do not want people to tell me that we cannot afford it. If we can afford to spend billions of pounds building and maintaining weapons of mass destruction, we can afford to look after pensioners in Scotland. If we can afford for our Chancellor of the Exchequer to sign a blank cheque to support an illegal American war in Iraq, we can afford to look after our pensioners here in Scotland. Politics is about priorities and if a political party gives a higher priority to killing weans in Iraq than to looking after pensioners in Scotland, that is the shame that that party must live with. Labour Party members in the chamber should hang their heads in shame.
The reality is that some of us who are in our 40s will be facing the same problems that today's pensioners currently face if there is not a basic state pension that is adequate to allow a decent standard of living by the time we get to pension age. The solution to that problem is the same as the solution to the current problem of pensioner poverty. We need a decent public sector state pension that is set at such a level that people can afford a decent standard of living. A well-funded universal state pension should be a right. If we were a real Parliament in a real independent country, we could address that issue today and make a decision on it today, and the lives of Scottish pensioners would be improved as of tomorrow. However, let us do what we can in this limited devolved Parliament to ensure that our pensioners have a better life.
This has been an interesting debate, and there seems to be some enjoyment and real pleasure on the coalition back benches at the dogs being let loose. I have no doubt that, before we reach the end of the debate, we shall hear from one or two others who have still to complete their part.
The Liberal Democrats believe that everyone should be entitled to dignity, security and a decent standard of living in their retirement. We believe that, to deliver that agenda, we must see the end of the demeaning and unworkable means test. It must be brought to an end because it does not deliver that vision.
Will George Lyon give way?
I need to make some progress. As you have said, Presiding Officer, time is very tight, and I am coming to Alex Neil later in my speech anyway.
Means testing is not only demeaning; it puts pensioners off claiming their due entitlement. Indeed, the UK Government, as Robert Brown said, budgets for 1.4 million pensioners each year not bothering to claim the guaranteed credit. That is an astonishing figure.
Will George Lyon take an intervention?
I shall take a quick intervention if I can get extra time to make up for it.
You do not get extra time, Mr Lyon. I call Alex Neil.
I shall be very quick.
I agree entirely with George Lyon about the problem with means testing for the pension credit. Why is it, then, that the Liberals want to maintain means testing for 65 to 75-year-olds?
I shall come to that once I get nearer to the end of my speech. I will, seriously.
Means testing also acts as a major disincentive to save. That is another fundamental point and one of the issues that Adair Turner identified in his work on addressing the pensions crisis that now faces all of us in the United Kingdom. Many hard-working pensioners save all their lives, only to find that it prevents them from receiving a decent state pension when they retire. That cannot be right.
The Liberal Democrats believe that, by offering pensioners over 75, who tend to be the poorest, a citizens pension of £105.45 for a single person or £160.95 for a couple—on top of the excellent work done by the Liberal-Labour coalition here in Scotland—we can begin to deliver our vision. The important point is that we have costed our proposals and we have been honest with people as to how we will pay for them. That is the fundamental flaw in the motion that the SNP has lodged for debate today, and it has been the fundamental flaw in all the contributions that we have heard so far from the SNP.
I turn to the other amendments before us today. The Liberal Democrats agree with the majority of the Labour amendment. The Liberal-Labour coalition has a fine track record when it comes to improving the lives of our pensioners. Where we part company from Labour members is that, if they truly believe in a vision of a Scotland where every older person matters and every person beyond working age has a decent quality of life, we believe that they must end the demeaning and unworkable means test and restore the right to a decent citizens pension. Only then will Labour deliver its vision.
We have also heard from the Tories today, and I really could not believe the Tory amendment when I read it. It is an exercise in rank hypocrisy. Who would believe that the party that broke the link between pensions and earnings back in 1980, and spent 18 years devaluing the pension, would now have the audacity to do a U-turn and call for that link to be restored? I am glad that Brian Monteith admits that the Tories were wrong not to restore the link when they were in power, but I have to say that ordinary Scots will not believe that the Tories are serious on that matter, especially when they cannot tell us how they intend to pay for it. Voters will see right through their hypocrisy, and I believe that they will gain no benefit whatsoever in the forthcoming UK general election by advocating the restoration of that link, when it was the Tory party that broke it.
I turn finally to the SNP motion, and what a woolly motion it is. I know that the SNP's pensions policy is hot off the back of an envelope, but one would think that SNP members would have the courage of their convictions and debate their proposals here today if that is what they believe their pensions policy is. However, they chose not do to that, and we can see why. There is a £1.4 billion black hole at the centre of their proposals. Nicola Sturgeon stated that the SNP intends to redistribute £160 million from tax relief and save some £20 million by scrapping means testing for pensions. Yet the cost, at UK level, of the SNP's proposals is £8.8 billion, with a further £7 billion over the lifetime of a Parliament to restore the earnings link. Pro rata for Scotland, that is a total of £1.58 billion. Where is the other £1.4 billion? We have asked every speaker so far and not one of them has attempted to address that question. Even Alex Neil, for whom I have a great deal of respect on such matters, could not answer the question and had clearly not even read the document. I have a copy here and I shall give it to Alex Neil after the debate. If he reads it, he will see that there are no figures in it.
If that is the best that SNP members can offer the people of Scotland, regardless of who leads them, their rapid decline in the past three elections is likely to continue in the next. I ask all members to support the Liberal Democrat amendment.
First, Presiding Officer, I must apologise to you and to the chamber for being delayed in getting to this morning's debate.
Today's debate seems to be a bidding war. It is about who can outbid whom on creating a pension. However, there is more to life than just a pension. There is a lot of background as to where pensions have come from and gone to. As for the historical point about the Liberal Democrats inventing the pension, they copied what Bismarck did in the 1890s, for the historians among them. Robert Brown was probably around at the time and no doubt remembers it well.
The issue is really about the totality of care for our aging population, and for the people who gave those of us who are in this chamber the start that we had and the world that we live in now. Those people deserve respect. I agree with George Lyon that they need dignity and support. They want to be in safe communities and they would like decent, affordable housing—houses that can be heated properly and are not damp. It is not just about the pension.
Brian Monteith said clearly today why we are restoring the link with earnings, yet other members are trying to take cheap shots. The point is that the only party in this chamber that has a chance of doing anything is, in fact, the Conservative party. The SNP will never be in power in Westminster in 1,000 years.
To be quite frank, it is entertaining that the final SNP speaker is a self-proclaimed pensioner, as she told us last week, so at least she will speak from a point of knowledge.
Many other issues are involved in the debate. John Swinburne talked quite rightly about means testing, the pension credit and about how someone in prison can get better care than a pensioner can. I met a young drug addict the other week who told me that it would pay him to be in prison because of the total care that he would receive once he was inside. It is shameful that we do not have a level playing field for our older people.
Few members have mentioned Gordon Brown's insult to pensioners when he increased pensions by a penny at a time when inflation was running high. Gordon Brown robbed the private pension schemes then and he continues to do so to the tune of £5 billion a year. The Labour Party in Westminster has removed all reasons to save: it created the nanny-state approach, in which it says, "Don't worry. Go out and spend your money. You don't have to save anything. If you do, it's not going to be worth anything anyway. We'll look after you at the end."
That is not the solution to any of our problems. People are not given dignity in their old age if they have to go on the dole or apply for tax credits. George Lyon was slightly wrong in the numbers that he quoted for pension credits: 1.7 million pensioners lose out on pension credits, not 1.5 million.
The key question in the debate is what the Scottish Parliament can do for our older people. Heating is one area of competence. Brian Monteith rightly said that the privatisation of the power companies created efficiencies that have brought down costs. Other members might argue, historically or philosophically—whichever way they want to go—that privatisation is not a good thing. However, anything that creates efficiencies and brings down costs in the services that pensioners have to use is a good thing.
Care is another area of competence. Given that older people need more care, how is it that I get letters from 82-year-old pensioners, for example, who tell me that they will have to wait months to get their cataract dealt with? Their letters say, "Why bother waiting? I'll probably be dead before then. I want quality of life now."
Pensioners care about heating their homes and the fact that the health service is not delivering for them. The Labour Party, which has been in power in Scotland for seven years, says that it has been trying to do things, but it has just been fiddling about. Pensioners seem to suffer long waiting times because their care is affected by bedblocking.
At this week's meeting of the Health Committee, I challenged the Minister for Health and Community Care on funding for private and voluntary sector care homes during our consideration of the draft budget. Frankly, the minister seems to have washed his hands of the issue—he is taking the Pontius Pilate approach to the problem. At least the previous minister, Malcolm Chisholm, who is at the debate today, informed the committee of his involvement. The Convention of Scottish Local Authorities is on the same side as the care homes—indeed, we all want a solution to the problem—and yet what is happening? Care homes are closing by the day because the Executive is failing to get involved. It has washed its hands of the issue.
I turn to council tax and water charges, which affect a load of pensioners too. Despite the Executive having solutions to the problem, it is not telling us about them. The lack of affordable housing is another issue that is within Executive control and yet we are not hearing anything on the subject.
That is not true.
The minister might say that it is not true, but the Executive is not doing very much about it.
Mike Rumbles referred to free personal care. My response to him is to say, "Excuse me, but the Conservative party was the first party to promote that policy nationally." Free personal care is not funded correctly—
Will the member give way?
No. The member is in his last minute.
Every council in Scotland queries what the level of care is supposed to be. Why do we not have a proper national approach to free personal care? If we did, councils would have clear guidance on the free personal care that they deliver to the elderly in their area. Frankly, at the moment, free personal care is just not happening.
You must close, Mr Davidson.
The only conclusion that could be drawn from some of the claptrap that we heard this morning is that some members do not live in the real world. The Conservative party does. Those of us in the chamber who are looking forward to retirement expect better.
It has been a good week for me. Having heard the news of the arrival of my third grandchild—mother and child are doing well—the whips gave me time off yesterday to visit wee Charlie and his mother in the maternity unit at the Royal Alexandra hospital in Paisley. I probably should have kept quiet on the name of the hospital. Having mentioned it, I can only say that—despite our campaigning—it was our only alternative.
I thought that life could not be sweeter, but the price for my time off was to attend and participate in today's debate. At the time of making the arrangement, I though that I had got myself a bargain. Even after a 6 am alarm call, a walk to the station in the rain and a two-and-a-half hour journey to get to the Parliament, the smile was still on my face. But the reality of the debate this morning made me realise that all good things have to come to an end. A price had to be paid and the whips have got their pound of flesh.
We had to endure a lecture from our former colleague Alex Neil, in which he invoked the spirit of Peggy Herbison. Alex Neil spoke about her aversion to means testing, but Peggy Herbison also despised Labour party traitors—the people who defected when the going got tough. She was also convinced that only the Labour Party could bring the lasting changes that would benefit the poorest citizens in our country. As someone who was once described as "the miner's wee sister", Peggy Herbison would have been proud of the Labour Party's delivery of £1.2 billion in compensation to retired miners.
Will the member give way?
Let me get started.
The point was well made by Karen Whitefield and others that yet again the SNP has forced us to debate reserved issues. [Interruption.] We love to hear the SNP groan. The SNP could have decided to debate their ideas on the national health service, business or transport. Admittedly, they would have been short debates, but at least Executive ministers would have been put on the spot and forced to argue their portfolio policy areas. What a wasted opportunity today's debate is. My plea to Nicola Sturgeon is for her to ask Mr Salmond if she could possibly use some of her party's time to debate something of her choosing—something relevant to the Scottish Parliament.
It was always going to be a challenge to make a silk purse of a debate out of Nicola Sturgeon's sow's ear of a motion. I am used to hearing SNP members contradict each other. I am even used to hearing them contradict themselves from one day to the next. But for an SNP member to contradict herself in the space of a single sentence is truly an achievement. I congratulate Nicola Sturgeon on raising her game to such previously unscaled heights.
The SNP motion says:
"Scotland must face up to … tackling current pensioner poverty and ensuring decent living standards for future generations of pensioners"
by—wait for it—
"removing the pensions means test".
The motion asks us to tackle pensioner poverty by stopping the targeting of money to the poorest pensioners. On what planet could that make sense? Even by nationalist standards, the proposal does not stand up.
It should never be forgotten that 80 per cent of the £2 billion that we are making available to pensioners goes to poor pensioners. The SNP attitude to the issue seems to be that all pensioners are the same.
I wanted to make the point that all pensioners are not the same. I am thinking of the quarter of eligible pensioners who do not claim the pension credit.
Could you please speak to your microphone, Mr Brown?
Duncan McNeil referred to Alex Neil's invoking of the spirit of Peggy Herbison. Her spirit lives on in Douglas Herbison, the Liberal Democrat candidate for Greenock and Inverclyde, who is Peggy Herbison's nephew. Douglas Herbison calls for the abolition of means testing.
I will ensure that a note on that point goes to the Greenock Telegraph, given its long tradition of liberal thinking.
As I said, the SNP's attitude to the issue does not acknowledge that all pensioners are not the same. We all accept that some pensioners live on the breadline, but we also have to accept that other pensioners live on the cruiseline. What is the point of taking money away from pensioners who are struggling on the margins only to give it to pensioners who are sunning themselves in Marbella? As colleagues have pointed out, snatching pension credit from our poorest pensioners would leave them £30 a week worse off. How can the SNP answer that question, even if we spend the resources that are freed from basic state pensions?
I give way to Jeremy Purvis.
The figures from the Office for National Statistics show that the poorest quarter of retired households in this country, whose income is £1,500 a year, receive non-contributory benefits of £730. The richest quarter of pensioners in the United Kingdom, whose income is £21,000, receive £1,500 from benefits. Targeting is not working, even with the current benefits system.
I will come back to that point.
You have one minute, Mr McNeil.
Targeting does work. Liars can figure and figures can lie. When asked in Parliament whether the effect of the Liberal Democrat policy would be that younger, poorer pensioners would not get the money they need, Steve Webb, their spokesman on pensions, replied, "I accept that." No argument. They accept that.
I hate to dismay the doom merchants in the chamber this morning, but the Labour Government at Westminster is well on the way to achieving our target of 3.2 million households receiving the pension credit by 2008. [Interruption.] I took the member's intervention. Now he is at it. He is quite entitled to heckle if I do not let him in, but I have given—
I have to hurry you.
Is the SNP really calling for an end to tax relief on pension contributions? How much more would the SNP need to put in its pension schemes to defuse the pensions time bomb? Will that not hammer hard-working families?
Mr McNeil, you must close now.
What about the damage to inward investment, attracting fresh talent and bridging the skills gap?
I will cut to the chase, because I have got thousands—
No, Mr McNeil, you are well over time. I have to stop you now.
David Davidson gallantly outed me as a recent pensioner, but I was going to do it myself. I am proud to join the rank and file of Scotland's 1 million pensioners, which is more than all the primary and secondary children put together. Something strange happened on 8 September. Like Harry Enfield's Kevin, I went upstairs a fairly independent woman of some intellect, and descended on 9 September with my brain cells reduced and in the lower class of the pensioner underclass that is woman pensioners.
I was introduced to the pension not by the state giving me a pension, but by the Inland Revenue sending out a form asking me what I am getting. I did not realise that I had to claim the pension. Oh yes, one does not get it, one receives the first batch of forms and applies for it. One has to send lots of documents. If someone is divorced, like me, they have to speak to their ex-husband because they are supposed to know his national insurance number. The forms are then sent off into the black hole of pension claims, and one has to wait for months. I am now in the world of forms.
I spoke to Margaret on the pension helpline. That was when I realised that I had lost some brain cells, because she put on one of those voices and asked, "How are you dear? Can I take you through the form?" When I tried to show that I was an individual, Margaret kept stoically to her script and plodded on. No wonder pensioners are angered—by the paucity of the pension and by the attitude to us when we get to the age of 60 or 65.
I tell members that poverty is not a reserved issue. It is here and now, in ill-heated pensioner households. Last year in Scotland, 2,500 people died from cold-related illnesses. Poverty is here in shopping at discount stores. Members just need to look into the shopping baskets of some pensioners and compare them with what they can buy. Poverty is in the charity shops, where pensioners buy their clothes, and it is sitting at home fretting about the iniquitous council tax, which can amount to one fifth of pensioners' weekly income. Pensioners pay their bills. They are not part of the credit community. Poverty is with us for one third of Scotland's pensioners, and for 250,000 Scots who are living in fuel poverty, many of whom are single pensioners.
Means testing has failed. I introduce members to the pension credit form, which has 19 pages of notes and 16 pages of forms. I defy anyone to complete it in the time that we have had for this debate. Members should get their pencils out and tell me all the answers to these questions:
"What type of money do I need to tell you about? …
Money from someone who rents a room in your home or who lives in part of your home …
Working Tax Credit
Money from a pension paid to victims of Nazi persecution
Royalties or money for a book registered under the Public Lending Rights Scheme
Money from your ex-partner to pay for day-to-day living costs
Social security benefits from abroad
Money from a war disablement pension or war widow's or widower's pension from abroad
Sick pay
Regular payments from a trust
Money from an equity release scheme".
It would take me a while to get through that, let alone find all the documentation. No wonder 48 per cent of Scotland's pensioners who are entitled to a pension credit do not even fill in the form, but abandon it instead.
Let us look at the examples of pensioners in the document, which are provided to help people along their weary way when filling out the form. I look forward to answers on a postcard.
"Edgar will be 60 in July 2005. He expects to stop work from 15 August 2005 and he has an endowment policy which will pay out on his 60th birthday."
This reminds me of primary school.
"He fills in his application form in June 2005.
Edgar thinks he will qualify from 15 August 2005. He must tell us about his work in Part 7 of the application form. He must … tell us"
all about other things "in Part 11". No wonder Edgar gave up. Would someone give me the answer?
Can George Lyon work it out for Edgar?
Christine Grahame has been describing one document. I have got another one—"Secure Retirement for All". It would be useful if she could explain how the SNP intends to pay for its policy, because there is a £1.4 billion black hole.
The first part of George Lyon's homework is to fill in my document for me. The second part will be to read the Official Report and to calculate the figure from there. I quote from the Pensions Policy Institute:
"A Citizen's Pension at Guarantee Credit level (what used to be called Minimum Income Guarantee, £105 per week from next April) can be afforded immediately within current government spending on pensions."
Away and read that as well.
In conclusion, I see the pension credit form not only as a barrier, but as an insult to Scotland's pensioners. It is an absolute insult and we must discard it. Let us take the form—which is 19 pages of notes and 16 pages of forms—and consign it to the dustbin of failed Labour Government policies. Let us put in its place a decent, basic citizens pension that will restore dignity to pensioners and give them their—and this is my favourite word of all—independence.
All of which demonstrates the impossibility of accurately timing a debate. This meeting is suspended until 12 noon.
Meeting suspended.
On resuming—