Finance Bill

I would not want the hon. Gentleman, or the House, to think that I am suggesting that everything is rosy for pensioners. I am trying to draw a contrast between the situation for pensioners today and that in 1997. Pensioner inflation has been higher, and one hopes that that will lessen markedly, with gas prices coming down by 16 per cent. Sadly, the energy companies are occasionally a little slow to feed those decreases through to domestic customers. I am not saying that all problems are solved for pensioners, or that pensioners are living in a land of milk and honey. Many pensioners in my constituency, however, have said to me that life now for pensioners is not nearly as bad, bleak and grim as it was when they had to sit at home in one room, in a woolly hat, with a one-bar half-kilowatt electric fire on for half the day. Far too many pensioners found themselves in that situation in 1997. The situation for pensioners has improved. In that context it is not right to talk about a pensions crisis—and it is bit rich coming from the official Opposition. The situation of the category of pensioner that I delineated—those who were prospective pensioners in 1996, but who are now pensioners—is undoubtedly grim. Pension schemes have gone bust at the British Shoe Corporation, Allied Steel and Wire in south Wales and Chart Heat Exchangers, at which establishment some of my constituents worked, in the constituency of my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) who is in his place. The situation of pension schemes in the private sector today, however, was not simply caused by the Chancellor’s tax changes in 1997, as some—but, to their credit, not all—Opposition Members would seek to suggest. I agree that those tax changes, taken by themselves, had an adverse effect on private pension funds—[Hon. Members: ““Ah.?] I hear ““Ahs ? from the Conservative Benches, but I do not hear them from the Liberal Benches, because there is only the hon. Member for Falmouth and Camborne sitting there. There was a change to corporation tax at the same time, however, which more than made up for other changes in the tax regime, such as those in advance corporation tax. Another factor in the difficulties in which private pension funds found themselves from 1997 onwards was the dotcom bubble. Some of them thought that it was like the South Sea bubble, but they did not realise that it was a bubble. Whether one looks at Kondratiev waves or other cycles in the economy, things go up and down, and the stock market vastly overvalued dotcom companies.