Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 140 - 159)

TUESDAY 4 DECEMBER 2001

MR GUS O'DONNELL, MR NICHOLAS HOLGATE, MR ADAM SHARPLES, MR ALEX GIBBS AND MR JOHN KINGMAN

  140. Two men?
  (Mr Holgate) Ditto.

  141. Brother and a sister?
  (Mr Holgate) The more examples you generate the more I think they might be assessed separately. We have tended in developing policy to think of single pensioners and pensioner couples. Those are the two major groups.

  142. I wonder if you could clarify these points?[3]
  (Mr Holgate) Certainly.

  143. These points are important ones in a situation in which increasingly in pensioner couples people will be drawing two single state pensions rather than a married couple's pension.
  (Mr Holgate) Yes.

  144. To be seen to be going back on the principle of independent taxation for the purposes of the calculation of Pension Credit would be very damaging to the perception of the scheme, particularly if two men and two women and a brother and sister living together can, in fact, be assessed separately.
  (Mr Holgate) Yes. My only footnote to that is that I do not think the Pension Credit challenges the principle of independent taxation. It is a different instrument.

  145. It is important to the success of the scheme that it is perceived as a more tax like thing and a less traditional means tested welfare benefits payment.
  (Mr Holgate) Certainly we wish it to be a more attractive thing to claim than its predecessors. Whether that needs to take you all the way towards taxes or not is another question.

  146. I would be grateful if you could clarify.
  (Mr Holgate) Certainly.

Chairman

  147. On the administrative burden form filling, has progress been made on that? I well remember the Secretary of State, Alistair Darling, saying that elderly people had to fill in forms which were maybe 40 pages long.
  (Mr Holgate) That is right.

  148. One of which included "Are you pregnant?"
  (Mr Holgate) That is right.

  149. Has progress been made on that?
  (Mr Holgate) Yes, that is an infamous question like the seven dollar hammer in American public spending. I believe the 40 page form has become a ten page form. As I was saying in response to Ms Mountford, we are adopting a telephone service as well which enables someone to fill in the form over the phone and, perhaps surprisingly to some of us, that is actually a very welcome innovation to some people who do not wish to go and see the person they are talking to face to face.

Kali Mountford

  150. The 0800 number was launched a month ago?
  (Mr Holgate) Yes.

  151. Are you expecting to assess the cost of that 0800 number at any point and what impact it has made on take-up?
  (Mr Holgate) Certainly we will be contemplating different ways of reaching out to pensioners. We hope we will be doing more letter writing to pensioners, for example, as well. The Department for Work and Pensions in the normal way of trying to spend their budget as effectively as possible will compare and contrast the different ways of reaching those who have not applied and could do.

Mr Cousins

  152. Could I just come back on something you said earlier. In answer to a question asked by my colleague, Kali Mountford, you said that if the basic pension was increased in line with earnings then by 2030 it would cost £30 billion?
  (Mr Holgate) £27 billion, yes.

  153. If you had the Pension Credit, and presumably it is increased in line with earnings, then by 2030 it would not cost £27 billion it would only cost £15 billion.
  (Mr Holgate) Or a bit less than that.

  154. What would the coverage across pensioner households be in 2030 on the basis of the figures you have just given?
  (Mr Holgate) Well, that is a perfectly fair question.

  155. It is.
  (Mr Holgate) What we are hoping for is growing take-up amongst those entitled to the Pension Credit.

  156. What would the take-up be? Those figures are really quite precise. What is the estimated spread across the pensioner population in 2030 going to be if the Pension Credit is increased in line with earnings?
  (Mr Holgate) The reason that we allow a degree of vagueness about these figures is it begs a lot of assumptions, not only about the take-up but also about how successful the population of working age is in saving for its own retirement. That in turn begs questions about a range of policies to do with the population of working age, whether we are able to keep them in work. That is why we allow ourselves a bit of latitude over estimating quite how much more money is needed.

Chairman

  157. I wonder if we could have a note on this for Mr Cousins?
  (Mr Holgate) Certainly.[4]

Mr Fallon

  158. Can we turn now to the two new tax credits which were announced last week. Is that still you, Mr Holgate?
  (Mr Holgate) I am afraid it is, yes.

  159. There is a Working Tax Credit and a Child Tax Credit.
  (Mr Holgate) Yes.


3   Ev 66, paragraph 11. Back

4   Ev 66, paragraph 11. Back


 
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