Finance Bill

If the hon. Gentleman examines the record, he will realise that I made health the No. 1 priority in the Welsh Office budget. I made considerable increases and backed several schemes to improve Welsh hospitals. I also kept smaller hospitals open—I understand that that is now more trendy with the Government after a time when they subscribed to the ““big is best? idea that closing them made sense. I shall not therefore take any lessons from the hon. Gentleman about being nice to smaller hospitals that need investment. The amendment goes on to discuss the ““U-turns on pensions policy? and the failure"““to tackle the UK’s worsening pensions crisis?." We have heard a lot already about the subject, especially from the hon. Member for Wolverhampton, South-West (Rob Marris). It would be wrong to re-enact our debate last week on that important subject. I agree with much of what the hon. Gentleman said about climate change but, in the least convincing part of his speech, he said that there were bad people around and that they had damaged pensions. However, the one ““bad person? whom he did not mention was the Chancellor of the Exchequer. I am delighted that he admitted that, if one removes £5 billion a year of tax credit from the pension funds, they are worse off. It was extraordinary last week to hear the Chancellor answering my intervention by saying that they would not be worse off and that it was fine to take £5 billion from the pension funds. I believe that he also said from a sedentary position that, if I took away 20 per cent. of his income, he would not be worse off, either. My response is, may we please take away 20 per cent. of his income and give it to the pensioners who are suffering, because they would find that valuable, even if he does not think that a fifth matters much? We cannot get away from the fact that the tax raid on pension funds did much of the damage. Actuaries and some of my hon. Friends have referred to the figure of £100 billion. That is a little more than the current accumulated deficit of the main funds, as recently stated. That symmetry is interesting. The hon. Member for Wolverhampton, South-West is right that there is good news in that people are living longer and that that has a cost for pension funds. If one takes a piggy-bank approach, the cost is taken care of by the increased contributions that companies are now making, recognising the extra longevity to which the actuaries have woken up in the case of the pension funds. One is left with the rather neat symmetry that the combined pension deficits equal the amount of money that the cumulative effect of the removal of tax credit had taken out of funds, and that the deficits are now fortunately reducing because much extra money has been put into the funds—contributions are increasing because they are, at last, being a bit better managed. Funds are now benefiting from the small increase in or stabilisation of the yield on long gilts in the past few months. When the long gilt yield was falling, the deficits continued to rise because that was the way in which the sums were calculated. It did not necessarily mean that the pension funds could not pay the pensions. The Chancellor’s success at selling billions and billions worth of Government debt on ever lower interest rates was one reason why the pension funds were so badly exposed because of the way in which the figures were calculated.