Mr Speaker,

One likes to be proud of the institutions to which one belongs – whether it is one's country, one's alma mater or one's political party. The first two of these have taken a bit of a knocking over the weekend with Wales' narrow 50-10 defeat at Twickenham and the revelation that my old college – and that of my Hon. Old Friend the Member for Liverpool Garston – have been selling places for £300,000. I can only assure Hon. Members that neither she nor I read Law at Pembroke College… and that our working class backgrounds would have generated potential bribes of no more than a fiver at most… But I am pleased that my Party is honouring its pledge to introduce this measure which meets the twin objectives of continuing to help the poorest pensioners whilst rewarding thrift.

Tomorrow when I meet with the Ely Healthy, Wealthy and Wise Project in my constituency – whose other name is GREY POWER _ I will be delighted to stand up and outline the government's record for pensioners – including the State Pension Credit proposed in this Bill.

Because, Mr Speaker, this Bill addresses the issue which many of us – perhaps all of us will have encountered it on the doorstep – and which I certainly came across whilst canvassing at the general Election: the complaint that it was simply not with having a modest occupational pension because it left you no better off than someone with no pension – and that there was no incentive to save.

I was able to say, as a candidate to parliament for the first time, that my party would do something about it if re-elected and that I would do all that I could to support that – so it is in fulfillment of that personal pledge that I stand here in support of this Bill at Second Reading – despite the traumatic blows to college and country of the last weekend.

Mr Speaker. I suppose this measure – even though I have traditionally taken the view that the best way to deal with the State Pension is to link it to earnings, so that the stigma of the means test is eradicated and all pensioners automatically share in economic prosperity. After all, most of today's generation of pensioners believed that the State pension would provide an adequate support without recourse to the indignity of the means test.

They were, after all, the generation which sacrificed so much so that we might benefit from peace and democracy. And they are the ones – and I think here of people like my father, an Irish navy as a young man – who built the physical infrastructure on which our current prosperity is based. Elsewhere, they have been called the ‘greatest generation'… But they are also the generation which remembers the dreaded means test – and I think here of my mother, a miner's daughter from Nantyglo in South Wales – and the stories of the harshness of the means test at the depth of the great depression on the 1930s.

Therefore Mr Speaker, I am still attracted emotionally and philosophically to the earnings related argument – BUT I have to give credit (if you excuse the pun) to the government for the ingenious approach that this proposal represents – and the way that it is consistent with other areas of tax and benefit reform which aim for integration and to reward work and thrift.

In particular I think that the government should be congratulated for meeting the accusation that this approach represents an extension of the means test – by ensuring that once a pensioner's position has been established there is not the weekly means test of support but a five yearly review of circumstances – with the minimum circumstance reporting for pensioners in keeping with protecting public finances.

Any comparison of this with the means test of the 1930s – or even with the post-war National Assistance Board, which poked its nose onto every detail of a pensioner's personal circumstances – is an insult to those people who had to suffer the indignity of that era. I hope, Mr Speaker, that there will not be scaremongering of that kind from those who rightly wish to exercise scrutiny or opposition to this Bill.

There is, however, a case to perhaps consider whether or not in practice the name – Pension Credit – is the best way to describe this change. Pensioners Groups have expressed concern about this, as the term ‘credit' is associated for many pensioners with debt. I can understand the government's desire to retain the term – as it now applies to several flag ship initiatives – but there may be a case in regulation to provide another term to be used in publicity – I would suggest PENSION TOP UP (ENHANCEMENT) or perhaps PENSION PLUS – to make it clear this is not a loan which has to be paid back – this would help to quell the culture of fear of the means test.

The Bill will bring real and direct benefit: e.g. an elderly widow with a £100 pension – half her deceased husband's perhaps – gains no benefit from the occupational pension. She will now keep 60 per cent of it, gaining £60 a month.

This is in addition to the other benefits she will have gained since Labour came to power – a free TV license for the over 75s; a £200 winter fuel allowance (the equivalent of £15 a month tax free) – and if she lives in Wales, from next week free local bus travel – a result of the policies of the Labour led Assembly.

Contrast that with the approach of the last Tory Government.