Clause
3
Contributions
credits for relevant parents and
carers
Lorely
Burt (Solihull) (LD): I beg to move amendment No. 26,
page 3, line 31, at end
insert—
‘(d) is in receipt
of certification by a relevant health or social care professional,
verifying that they are involved in caring for a person or persons, for
a minimum of 20 hours a week, not otherwise recognised by the
regulations.’.
The
Chairman:
With this it will be convenient to discuss the
following: Amendment No. 61, page 3, line 31, at end
insert—
‘(d) is certified by
the local social services authority as providing caring services for at
least 20 hours a week for one or more
people.’.
Amendment
No. 63, page 3, line 31, at end
insert—
‘(d) is engaged in
caring for a person or persons in receipt of the higher, medium or
lower rate care component of the Disability Living Allowance,
Attendance Allowance, Constant Attendance Allowance, higher rate of
short-term or long-term incapacity benefit, severe disablement
allowance and any means-tested benefit for which a disability premium
or addition has been added in the applicable amount for 20 hours a week
or
more.’.
New
clause 15—Report on contribution
credits—
‘The Secretary
of State shall present a report annually to the House of Commons
on—
(a) the number of
carers in receipt of contribution
credits;
(b) the number of
carers caring for 20 or more hours per week who are not in receipt of
contribution credits;
(c) the associated costs of contribution credits to
the National Insurance Fund of
(a);
(d) an estimate of the
cost of providing contribution credits to persons falling within
paragraph (b), and
(e) any
proposals he may have for reviewing eligibility for contributions
credits.’.
New
clause 17—Allocation of child benefit to the relevant
parent—
‘If child
benefit is paid into a joint account and allocated to a parent who did
not wish to accrue home responsibilities protection or contribution
credits, and the other parent wishes to have accrued home
responsibilities protection or contribution credits, the Secretary of
State must reallocate the qualifying years of home responsibilities
protection or contribution credits, as the case may be, to the parent
who wished to receive
them.’.
Lorely
Burt:
I, too, welcome you to the chairmanship this
afternoon, Mr. Taylor, and into the course of the Bill. This
morning, we were treated to a number of helpful and interesting debates
and, as often happens with Bills, the defining characteristics of the
different groups are starting to emerge.
The watchword of the
Conservatives seems to be “not a penny more for
pensioners”, to which they seem to be sticking quite rigorously.
The Minister seems to be saying on numerous occasions that the
“computer says no”. Unfortunately, when I suggested that
he might want to crack that joke, my hon. Friend the Member for Yeovil
was not quite so well up with what he calls youth culture. The Liberal
Democrats’ watchword is that we are trying to get a better deal
for pensioners. [Hon. Members:
“Money tree”.] From a sedentary position, Conservative
Members have mentioned a money tree but I would rather refer to it as a
money sapling. In my defence, on our side of the House we have
mentioned savings of £8 billion which have been identified
already. Therefore, we are not going to take any lessons from the other
parties on how to save or spend
money.
4.15
pm
Mr.
Nigel Waterson (Eastbourne) (Con): Before the hon. Lady
gets into her flow, I should point out that she referred, with a rather
broad-brush attitude, to£4 billion for scrapping
contracted-out rebates. However, the Government’s figures show
that that has now been reduced to just under £2 billion.
Therefore, she is just over £2 billion adrift from the
Treasury’s figures. Will she deal with
that?
Lorely
Burt:
My figures are taken from those presented by Help
the Aged. Notwithstanding the hon. Gentleman’s figures—or
the Government figures—they are still double what we have
proposed. [Interruption.] I should move swiftly on.
We welcome this part of the
Bill, particularly because carers do a phenomenal job. If we want to
bandy figures about, let us consider the situation if carers did not do
their job. It would cost the NHS roughly double what it currently
spends to look after people who are selflessly cared for by carers who
give their time and who also suffer financially. This Bill goes some
way to redress the situation for carers who care for 20 hours or more a
week, and it is therefore extremely welcome.
I want to
explore the situation for people who miss out. By 2010, as it stands
under this legislation, of the 160,000 carers who will be caring for 20
hours or more a week and not building entitlements to the basic state
pension, 120,000 will get credit through the carers credit. This means
that 40,000 will not be building their entitlement. We are trying to
address that.
Amendment No. 26 was suggested
by Carers UK. The Equal Opportunities Commission and Help the Aged also
support it. The type of people who would miss out on carers credits
will be those who have fluctuating conditions and who may be on and off
benefit; those who care for someone who goes into hospital long enough
to lose their benefits; those who care for someone who does not want to
claim disability benefit but the carer nevertheless sacrifices that
amount of time—very willingly, as a rule; and those who care for
more than one person but neither of them is in receipt of the right
benefits. We discussed those people on Second Reading. We propose that
a health or social care professional could
nominate—certify—that those people are in need of care
for 20 hours or more a
week.
Amendment No. 63
was, again, not our idea; it was proposed by Carers UK. It lists nearly
all disability benefits and argues that if a carer is caring for
someone in receipt of said benefits for more than 20 hours a week, they
should be eligible to accrue entitlement to the basic state pension.
The amendment is also supported by Help the Aged, Age Concern and the
Equal Opportunities Commission. At the moment, under the eligibility
criteria, someone would need to be caring for a person almost
constantly, day or night, to qualify. The extension of the list of
benefits is
important.
What the
Government have done so far is excellent, but we ask them to go the
extra mile for the 40,000 people of the 160,000 who will not benefit
for reasons that are not their fault.
Ms
Keeble:
It is a pleasure to serve under your chairmanship,
Mr. Taylor.
I tabled amendment No. 61 after
discussions with carers groups to find a way to balance the different
pressures on caring and pensions. It is important to recognise that
many carers will benefit from other changes in the Bill—in
particular, the reduction in the number of hours that have to be worked
per week to qualify for the state pension. If they do not have to work
for so many hours, it is easier for people with substantial caring
responsibilities to qualify for a state pension. That has to be
recognised.
It is
obviously important that the system should properly compensate carers
and recognise the contribution that they make. Some carers are not able
to work because of their caring responsibilities, so they cannot
qualify even on the fewer-hours basis. They therefore need credits to
count towards their
pensions.
We should not
muddle that up with the caring roles that people normally play for
their families. We have to draw the lines carefully. Otherwise,
everybody will end up being a carer and what we are trying to do will
become virtually meaningless. We have to be clear about
that.
The credits are
valuable; they are not light things. They are important, and there has
to be a proper process for deciding who qualifies and who does not.
Tagging on a long list of benefits means that people
can tick a box and get a benefit, but that does not always meet the
realities of carers’ lives. That is why, in addition to the
specified benefits, which I agree are probably not wide enough, we need
a process that allows for the person who cannot tick the boxes, but who
none the less does what amounts to a caring job. That person cannot
qualify even at the fewer-hours rate because of their caring
responsibilities. We need to find another way to recognise and assess
what is going on. The
Opposition said that that should be done by one health or social
services professional, but I do not think that that would be robust
enough. To give an example from the Home Office, the domestic violence
exemption system, in which two professionals sign, works well. That is
sensible; there is evidence from two sources. In the case that we are
discussing we could say that a doctor and social worker should sign.
However, one person with a lot going on in their lives—caring,
working, this, that and the other—would have to run around
collecting bits of paper from different professionals. Furthermore,
there would be the issue of what would happen if the doctors decided to
charge. That is a problem because there is no agreement in place with
doctors yet.
All of us
have seen the letters that professionals write in support of housing
applications, but a person advocating a patient or client is not always
in a position to make an impartial judgment, one that follows due
process or a set of criteria. They are more likely simply to say,
“This person works very hard. They look after three children,
who all have difficulties. Yes, they qualify as a carer.” An
established process for such applications might provide a way forward.
Amendment No. 61 would place a responsibility on the social services
authority to undertake the process, rather than with an individual
social worker whom people may not know. A social services authority in
any event has a responsibility for undertaking care assessments for the
different client groups; it will have family records, so the process
would look at the care needs of the people concerned. The authority
could say whether the mother looking after three children is indeed
working as a carer as stipulated in the Bill, and that she should
therefore be entitled to the carers credit.
Lorely
Burt:
We agree about the robustness of the measurement,
and we would want to have that degree of robustness in everything that
is done. Given that the hon. Lady has left out the alternative of
having a doctor advocate, would there not be circumstances in which
social services is not involved with an individual? A person may not be
on specific allowances; they may simply be very ill. Does she not
envisage circumstances in which a doctor’s letter would be the
only appropriate avenue for an individual to get pension credit without
having to get involved with social
services?
Ms
Keeble:
I do not want to go on about amendment No. 61 for
too long because it is not robustly worded, and I do not intend to
press for a Division. I am asking that my hon. Friend the
Under-Secretary have a look at the issues raised, come back, and
perhaps move a little on the measures.
There are probably no
circumstances in which a person would be seeing a doctor when they did
not also require some kind of care assessment that would go
through social services. I find such circumstances very hard to
envisage. A person may want assessments made for adaptations to their
house, or a special needs assessment for a child who is in school.
There are a range of circumstances in which, if any kind of caring, as
opposed to medical treatment, is needed, the social services authority
would be the appropriate body to provide an assessment. I am sure that
my hon. Friend will confirm whether that is the legislative
position. No doubt we
can all think of a few cases where a person will not be able even to
work the reduced hours that are needed now to qualify for the state
benefit and the reduced years. Such a person may also be looking after
a number of people with substantial needs, although not with the level
of need that entitles them to benefits. A person in such a complex
situation would effectively fulfil the requirements to get the carers
credit. The amendment might provide a way to soften the edges of what
is otherwise a tick-box
exercise.
The clause is
important and will transform things for a lot of people who are
currently left out and find themselves unable to get a pension because
they have to give up work to care for
relatives.
4.30
pm
Andrew
Selous:
This group of three amendments and two new clauses
touches on some important issues and there is a lot to say about
it.
Amendments Nos. 26
and 63, tabled by the Liberal Democrats, and amendment No. 61, tabled
by the hon. Member for Northampton, North, would allocate contribution
credits to more people from 6 April 2010 than are provided for in the
Bill and there will be public expenditure implications from 2010
onwards. Those implications will be small at first but will become
increasingly significant over time. I hope that the Minister will tell
the Committee what the costs ofthe three amendments will be,
because it is difficult for the Official Opposition to find precise
costings for them. It would be useful if we could find out what we are
talking
about.
Lorely
Burt:
The hon. Gentleman says that the additional number
of people who would be eligible for the credit would increase over
time. Would that not justify the argument that says that, because such
people are being left out, even more people will be unfairly treated
than before? I acknowledge his point about the financial
implications.
Andrew
Selous:
I actually said that the costs would increase over
time. However, the hon. Lady is right: if we are to believe some of the
estimates from some of the special interest groups that follow this
matter carefully, the number of carers is likely to increase as well.
If she will bear with me for a little while as I develop my argument,
she will see that one of the new clauses that I tabled deals
specifically with that
point.
I was saying
that the three amendments in the group have public expenditure
implications. Unlike the Liberal Democrats and the hon. Member for
Northampton, North, we in the Official Opposition take our financial
responsibilities to the taxpayer
slightly more seriously. We are not prepared to make
significant spending commitments many years ahead without considering
other demands on the Exchequer and understanding that the money to pay
for those commitments will need to be raised in a sustainable way
through increased taxes. In contrast to the other
parties, our approach in new clause 15 is to ensure that this matter,
which is important—as the hon. Members for Solihull and for
Northampton, North said—is brought before the House of Commons
annually. Because this is a significant matter, we have called for a
report to be made annually—rather than once in every Parliament
or once every five years—that would require the Secretary of
State to tell the House of Commons about the number of carers caring
for 20 hours or more and not receiving contribution credits. This
matter is disputed. I understand that the Equal Opportunities
Commission says that about 50,000 carers would be excluded from the
pension system, and I believe that Carers UK thinks that about 40,000
would not be included, even though they are caring for more
than20
hours.
I
was interested to see a number of parliamentary written questions
tabled on 7 November and 17 January by a former Work and Pensions
Minister, Baroness Hollis of Heigham. She
asked:
“What
percentage and number of those on incapacity benefit are in receipt of:
(a) lower rate disability living allowance; (b) middle rate disability
living allowance; and (c) higher rate disability living
allowance”,
and how many
of them are estimated to receive between 20 and 35 hours of care a
week. Lord Hunt of Kings Heath answered
that
“no estimates are
available for the number of incapacity benefit and disability living
allowance claimants who receive care.”—[Official
Report, House of Lords, 8 November 2006; Vol.
686,c.
WA164-166].
Mr.
Laws:
I may be intervening on the hon. Gentleman too
early, but does his new clause not run the danger of being something of
a tease? It appears to indicate that he thinks there might be a
problem, but he has not proposed so far to do anything about it. Does
he agree in principle with the concerns of the two hon. Members who
have spoken this afternoon that some people with caring
responsibilities will be excluded? Is he sympathetic in principle to
those individuals in giving the carers’
credit?
Andrew
Selous:
Of course I am sympathetic to them. The purpose of
new clause 15, specifically subsection (d), is to report annually to
the House of Commons the precise cost of increasing the scope of the
eligibility criteria. If that information is put before Parliament
annually and we are informed how many people are affected and how
severe their circumstances are, that will inform all parliamentarians
of the severity of the issue in relation to other needs and demands on
the public purse.
The
hon. Gentleman had only to turn on his radio this morning to hear of
problems in the Court Service, to give just one topical example. There
will be a demand for money to be spent on the Court Service to ensure
that the criminal justice system functions properly. You will be
pleased to hear that I do not intend to develop the analogy any
further, Mr. Taylor, other than to give that one example
from today’s news.
As responsible
parliamentarians, we all know that there are innumerable demands on the
public purse. They are worthy and important demands, but it is also
vital that we are informed of the number of people who do not qualify.
New clause 15 would put that information before the House with a clear
price tag so that it can take its place and MPs have an informed basis
for the hard decisions that we are called to take in relation to the
competing demands of special interest groups from every departmental
area.
Mr.
Laws:
The hon. Gentleman is being helpful and clear. To
avoid doubt, will he confirm that he accepts the substance and
principle of our two amendments and that, for him, it is an issue
simply of what price tag will attach to the changes when, not if, a
Conservative Government—assuming we are to see
one—introduce
them?
Andrew
Selous:
We would all like to do many things in various
areas of government on behalf of our constituents, but some of us take
seriously our responsibilities to the taxpayer and the general level of
tax that can be sustained to pay for such demands. I have said that
clearly and I have nothing more to
add.
Baroness Hollis of
Heigham tabled three questions more recently in the House of
Lords—references HL604, HL605 and HL606—seeking the
number and percentage of people on the different levels of benefit,
both included and excluded under the current eligibility criteria, who
receive more than 20 hours of care a week. I shall read parts of the
answer as it is relevant to the amendments. It
states:
“Estimates
from the Family Resources Survey (FRS) 2004-05 indicate that
approximately 100,000 people are in receipt of incapacity benefit, but
not the middle or higher rate care component of disability living
allowance, and are receiving care for 20 hours or more a
week.”
Those 100,000
people would not be eligible for contributions credits under the
eligibility criteria defined in the Bill. The answer
continues:
“These
data also suggest that approximately 300,000 people are receiving the
lower rate of disability living allowance and are receiving care for 20
hours or more a week.”—[Official Report, House of
Lords, 17 January 2007; Vol. 688, c.
WA153.]
That makes 400,000 people
in total. Their carers might be caring for 20 hours or more a week as
well as holding down a full-time job and therefore paying national
insurance contributions. I am not saying that there are 400,000 people
whose sole activity is caring and who are not part of the pensions
system by virtue of making contributions. However, unless we have a
detailed breakdown, it will be impossible for us to estimate the scale
of the problem to which the hon. Members for Yeovil and for Solihull
have rightly drawn our attention. If we do not know the size of the
problem, we do not know the price tag either. We need the basic
information to be set out annually, and I am grateful to have had the
questions asked by Baroness Hollis drawn to my attention.
As I have said, the reason why
we have called for an annual report is the importance of the issue.
Carers UK estimates that there are 6 million carers in the UK, a
quarter of whom—1.5 million—care for 50 or more hours a
week. I suspect that many of them find it extremely difficult to pay
national insurance
contributions as well, although no doubt some of them do so. As has been
mentioned, Carers UK estimates that there could be as many as 9 million
carers in the UK by 2037. We know that 1.5 million carers are more than
60 years of age and that one fifth of carers over60 report
that their health is not good. Those people face severe stress and
strain in the their everyday
lives. Any of us can be
a carer at any time. Carers are not a separate class or group of
people, detached from the rest of us, who have a caring vocation. Some
of us in the Committee may even have been carers. I had a disabled
mother when I was younger and, although I am not sure whether I would
have classed myself as a carer as such, I certainly knew what it was
like as a child to care for an adult. It will probably be the common
experience of most of us in the room to care for aged parents or
relatives in the
future.
4.45
pm
I am also
grateful to Carers UK for raising with Committee members six different
examples in which people would be excluded from the eligibility
criteria for contribution credits as specified by clause 3 or by the
related regulations. For example, there are people with mental health
issues who are advised to claim the relevant disability living
allowances, but because of their state of mind do not do so. The people
who care for the mentally ill people in that group would not qualify
for credits.
What
about someone caring for several people,none of whom is on the
prescribed benefits? The responsibility on that carer could
be—in fact, is likely to be—even greater than that on a
carer of just one person who is on the prescribed benefits. What about
those people who overturn on appeal their rates of benefit so that at
some point in the future they receive the benefits that make them
eligible for credits? When they were on the lesser benefit, their carer
would not have been entitled to contribution credits. Does the carer
have any right of eligibility to the contribution credits from those
missed years? They are all practical cases, the type of case that all
Members might have brought to them at their constituency surgery on any
given Friday of the year.
What about those people who need
significant care but do not receive disability living allowance? What
about those people with fluctuating conditions, who sometimes have
severe needs but at other times are relatively well and do not need
care? If one is a close family member who cares for them, one knows
that there is a possibility of remission and that they will need
serious care later on. It is not easy to go back into the labour market
while the person for whom one has cared is well, knowing that at any
moment they will slide down into illness and need full-time
care.
What about those
people going into hospital long enough to lose their benefits? There
are reasons for the withdrawal of benefits when one goes into hospital.
One is fed, does not have central heating bills and so on. I understand
the rationale, but again I speak from family experience. When my mother
was in hospital on various occasions, there was an acute necessity for
my sister and for other members of the family to be in close attendance
because my mother was severely
disabled. Will such carers also lose out because someone has gone into
hospital long enough to lose their benefits? I am grateful to Carers UK for
providing Committee members with those six examples. Is the
Minister’s mind still open to suggestions about how to ensure
that all carers have a better pensions safety net? He, like me,
attended a meeting of the all-party parliamentary group on ageing and
older people on 5 December. I do not know whether the minutes of that
meeting are accurate, but they certainly say that the Government were
still open to suggestions about how to ensure that all carers had a
better pensions safety net. If that is true, I shall listen with
interest to the Minister’s response.
Lorely
Burt:
I congratulate the hon. Gentleman on his clarity and
on the tremendous case he makes for the amendment tabled in my name and
that of the hon. Member for Yeovil. Why does he not support the
amendment, given that he clearly understands the injustice, and the
necessity for the amendment?
Andrew
Selous:
The hon. Lady still has difficulty understanding
the relationship between the worthiness of a cause and the price
attached to it. I am surprised that she cannot understand the link
between the two. I am sure that on a Saturday morning, when she goes
down to her local supermarket or shopping centre, she wants to buy many
items that are worthy and that would add to her life, but, like the
Government and my party which aspires to Government, she will have a
budget. This concept is no
different.
Overall, we
welcome the fact that carers will be eligible, under the criteria in
clause 3, for a full basic state pension, even though they have never
worked. That is a significant change, which the Committee should
recognise, as have Carers UK and the Equal Opportunities
Commission.
Ms
Keeble:
We must not say that carers have not worked. The
whole point is that they have worked—it is just a different type
of work. They have looked after family members. They have worked, just
like other
carers.
Andrew
Selous:
I stand duly and correctly rebuked. The hon. Lady
is quite right and I am grateful to her for picking that up. I meant to
say nothing bad about carers and I hope that, given what I have said
about them up until now, she will accept that that was a slip of the
tongue. I meant the payment of national insurance contributions. I
agree with her that parents and carers do some of the most important
work in the United Kingdom. She is quite right—that cannot be
said too strongly or often. I thank her for pulling me up on
it.
I shall move on to
new clause 17, which is in my name, that of my hon. Friend the Member
for Eastbourne and that of my hon. Friend the Member for North-East
Milton Keynes—our esteemed Whip. I confess that I wrote the new
clause, in my own hand, on Second Reading. I was prompted to do so by
the powerful and persuasive speech from the hon. Member for Burton
(Mrs. Dean). She happens to be a Labour
Member, but her point could have been made by any Opposition Member and
would have been, I hope, if such a case had been brought to one of us
by a
constituent. Briefly,
without going over the whole of the hon. Lady’s speech on Second
Reading, the case to which she drew the House’s attention
related to a Mr. and Mrs. Cartwright—she
named them so I feel free to do so—who contacted her in August
2005 about the payment of child benefit into their joint bank account.
Mrs. Cartwright was not in paid employment making national
insurance contributions, but looking after their children. However,
Mr. Cartwright’s was the first name on the joint bank
account and, therefore, their child benefit was deemed to have been
allocated to him rather than to Mrs. Cartwright. That was
despite the fact that he was making national insurance contributions
and had a paid job, and Mrs. Cartwright was at home looking
after their children.
Apparently, Mr. and
Mrs. Cartwright should have received form CH718 which, when
child benefit is being paid into a joint bank account, enables a couple
to specify to whom the child benefit should be paid, which, of course,
triggers the allocation of home responsibilities protection to the
correct member of the couple. The Cartwrights said that they never
received form CH718 which, some 20 years later, is almost impossible to
prove. The question that the hon. Lady asked is whether anyone
knowingly would waive their right to home responsibilities protection
when shehad been caring for her children and not in paid
employment earning national insurance
contributions.
I gather
that such a case is not isolated. The hon. Member for Burton is one of
your fellow Chairmen on the Chairman’s Panel, Mr.
Taylor. If I am not mistaken, I have had the pleasure of serving under
her in Committee. She went on to
say:
“Pensions
Advisory Service produced a document entitled ‘Report on Women
and Pensions Helpline’, which was theresult of a pilot
helpline available from 18 October to10 December
2004.”
It was clear that
the problem was widespread. The hon. Lady cited the report:
“Some enquiries came from
individuals where the child benefit was being paid to the working
partner rather than the partner who had given up work or was working
reduced hours to look after the couple’s
children.”—[Official Report, 16 January 2007; Vol.
455, c.721-22.]
We are
rightly gender-neutral in Committee, but there were cases when a
stay-at-home husband had not received the allocation of home
responsibilities protection. Whether it is a matter of fathers losing
out on HRP or mothers such as Mrs. Cartwright doing so, the
case is the same. We cannot really believe that anyone would willingly
lose out on £32 a week in pension entitlement, as happened to
the Cartwrights, if it had been easy to establish early on who wished
to be allocated home responsibilities
protection.
I
understand that the hon. Lady has raised the matter with the Minister.
Indeed, she has discussed the case with him. I hope that it will not
again be a matter of the computer not being able to rectify the
problem. In all seriousness, I understand the difficulties that
surround information technology. The issues are serious; I am not
making light of them. However, when there has been an administrative
mistake of such a
nature, I should have hoped that, even with a manual override, it could
be solved. Given the evidence of the Pensions Advisory Service, clearly
the problem has affected more than one couple. I hope that it has not
happened in hundreds of thousands of
cases. It should not be
beyond the wit of the Department and its staff to do something about
the problem. I am not talking about a matter that would cost the
Government any money. It is about unfairness; it is about making sure
that what happens is what should have happened and what the couple
intended to happen. It is a minor technical point, but exactly the sort
of matter that should be properly raised in Committee. I, for one, am
pleased to have been able to bring the hon. Lady’s concern
before hon.
Members.
Mark
Pritchard (The Wrekin) (Con): My hon. Friend mentioned
“staff”. Does he share my worry that, to date, the
Government have not given any details on how they will deliver all the
key fundamental changes to the pension system, given that they are
laying off hundreds, if not thousands, of staff of the Department for
Work and Pensions throughout the
nation?
The
Chairman:
Order. Will the hon. Member for South-West
Bedfordshire return to the subject of the new clause? I rule the
question out of
order.
Andrew
Selous:
I shall follow your guidance, Mr.
Taylor.
I was about to
conclude my remarks. The problem that was raised on Second Reading was
serious. My new clause, on which we shall vote in several weeks, would
be a remedy and I shall listen with great interest to what the Minister
has to say on new clause 17 as well as on the other three amendments
and new clause
15.
5
pm
James
Purnell:
This has been another important debate and I want
to respond to the many points that have been made. If I do not reply to
some, I shall be happy to write to hon. Members particularly about the
six cases that were mentioned so rapidly. I shall pick them up in
writing, if I may do
so.
I want to start on
the theoretical money grotto—rather than tree—from where
the hon. Member for Solihull was planning to fetch her money to pay for
the commitments that the Liberal Democrats are making. I am afraid that
she will be sorely disappointed if she goes there because half of the
money that she has identified is extra money that the Department would
be spending if every single person who is eligible for pension credit
took up its benefits. That is clearly not money that is sitting around
in a vault ready for the Liberal Democrats to spend—not an
uncapped source of it—but extra money.
The hon. Member for Eastbourne
was quite right to say that estimates of the contracted-out rebates
have changed since the White Paper. We set that out inthe
regulatory impact assessment—the figure was£1.6
billion. It is worth noting that the contracted-out rebate needs to be
seen in the context of the long-term spending implications of the
system, specifically long-term spending on the state second pension
that
would be incurred if more people were to contract into the system.
Therefore it is again not possible to say that we can take that money
and spend it as we
wish.
Mr.
Waterson:
I do not want to interrupt the Minister while he
is dragging the Liberal Democrats back to the real world, but will he
give an undertaking that when discussing that part of the Bill, he will
have at his fingertips an explanation for where this £2 billion
has gone? It has not been very long between the White Paper and the
drafting of the regulatory impact assessment and while these sums may
not mean a lot to the Treasury in the great scheme of things, it does
seem a lot of money to have
overstated.
James
Purnell:
I am happy to do that. It is not an overstatement
but different trends in people contracting into the system. We have
also received updated figures which we fed into our projections.
However, I do not want to test your patience, Mr. Taylor, on
the definition of the clause so I will move rapidly on to the costs of
these proposals.
Compared to the basic state
pension figures, these are relatively modest single-figure millions
because we are talking about a very small gap in the number of carers
that could be covered. However, there would be a significant long-term
cost to these proposals. On the state second pension side, we would be
accruing£400 million by 2050. The key point in looking
at individual amendments is whether they effectively target the 40,000
people who we do not think are currently covered by these
proposals.
It is worth
restating that the major part of the progress on carers is achieved by
reducing the number of qualifying years to 30. That is the change that
achieves the greatest increase in entitlement for people who are
caring. We have been consistently clear that our research suggests that
that would not, on its own, meet carers’ needs.
This provision is about a
specific proportion ofthe people who are caring. Those who
care for over35 hours a week are already entitled to carer's
allowance because they received class 1 national insurance credits.
Those who care for less than 20 hours a week appear to have similar
work patterns to the rest of the population and can therefore build up
their entitlement through their own national insurance
contributions.
However, our evidence suggests
that those who care for more than 20 hours a week do have their job
opportunities affected and therefore the carer’s credit is aimed
at that group. It is an important backstop for those who would have
less than 30 years’ contributions without it.
Information from the family
resources survey suggests that around 160,000 people will be caring for
more than 20 hours a week but not building up entitlement to the basic
state pension in 2010.
Andrew
Selous:
I apologise if I am pre-empting the Minister but I
should be grateful if he would respond to the figures from the written
answers raised by Baroness Hollis because he has already mentioned
40,000 people not being eligible but the figures
were somewhat higher in the answers received by Baroness
Hollis.
James
Purnell:
The hon. Gentleman may wish to consult the gender
impact assessment that we published, which set out the figures in
detail. The figures that were published in the May White Paper were
then updated in November. There were more people who were eligible,
again on the basis of new information that we had received. So there is
a higher overall proportion of people who we think could benefit from
the change that we are introducing.
Andrew
Selous:
The gender impact assessment is reasonably recent,
but I doubt that it is as recent as the questions raised by Baroness
Hollis on 17 January—that is really very recent
indeed.
I said that it
is entirely possible that those 400,000 people are paying some form of
national insurance contribution. We know that they are all caring for
more than 20 hours a week, but we need more detail on exactly where
they fit; whether they are in work and paying national insurance
contributions, or if they are purely carrying out a caring role. On the
basis of the definitions in the clause, they would miss out on
contribution credit. If the Minister is unable to give more information
on that issue now, perhaps he would agree to write to every member of
the Committee with a little more analysis regarding the answers
received on 17 January.
James
Purnell:
I am happy to give the hon. Gentleman that
assurance.
The measure
is precisely targeted and we have been clear all the way through that
it could still leave 40,000 carers who might not be entitled. Of
course, that does not mean that they will miss out on a full basic
state pension. Other provisions in the Bill, such as the measure
requiring 30 qualifying years, will ensure that they are more likely to
get close to the full basic state pension than they would under the
current system. Furthermore, research suggests that not all carers will
remain in that position for the whole of their working
lives.
We have not put
the definition of “caring” in the Bill. That is because
we are introducing a new credit and we believe that it is essential to
use the flexibility offered by secondary legislation so that we can
make changes if we find that the definition is not meeting the needs of
carers. However, we have set out our current plans for that definition
in the delegated powers memorandum. Our intention is to provide the
credit for someone who is caring for 20 hours or more each week for one
or more people in receipt of attendance allowance, the higher or middle
rate care component of disability living allowance, or constant
attendance
allowance.
It is
important to explain why we have chosen that option. When we were
consulting on this new credit, the lobby groups involved clearly said
to us that they did not want us to create an overly bureaucratic
system, in which people would have to demonstrate the number of hours
for which they were claiming, there would potentially be inspections of
that number of hours, and
there would be a significant amount of paperwork for
the carer. Therefore, we have sought to design a system that will be
based on self-certification. However, to ensure that there is a
safeguard against misapplication of this credit, we are requiring that
the person being cared for is claiming a benefit that would typically
require the level of care of 20 hours a week. This is not a perfect measure,
but it is a good fit with our policy objective, and balances simplicity
and targeting. It is because of the existence of the benefit being
claimed by the person being cared for that we can be flexible in the
way that the carer self-certifies, so that they can receive the
credit.
Amendment No.
63 would extend radically the range of benefits that could be
identified. I do not intend to go through each benefit that is listed,
but in most cases I do not think that significant care is a condition
for receiving the benefit. In fact, the majority of people in receipt
of the other benefits covered in the amendment will not require care
for 20 hours a week. In trying to extend coverage to the 40,000 or so
carers, the amendment would widen the eligibility to a vast number of
carers. The amendment is clearly out of proportion with the issue that
we are seeking to address.
Mr.
Laws:
It may be that the Minister was going to do this in
his speech, but can he indicate whether he is still sympathetic to the
possibility of introducing, perhaps later in the stages of the Bill,
additional amendments that seek to target those 40,000
carers,or does he feel that the Government, because of
practicalities or other reasons, have for the time being reached the
end of the line on their generosity in this
area?
James
Purnell:
I shall come to that later in my
remarks.
Although I
sympathise with the intention to ensure that as many carers as possible
are eligible for the credit, I am not at all persuaded that the blanket
approach proposed is an appropriate way
forward.
Amendments
Nos. 26 and 61 suggest that the level of and need for care should be
certified by either a health or social care professional, or local
social services authority. We are happy to explore this option. It has
the attraction that it could be effectively targeted at carers who
might fall between the gaps of the benefits that are identified in the
Bill. However, I must warn the Committee that there are significant
issues about how it would be implemented that would need to be
addressed before we could be confident that itwould work.
Those issues include whether health professionals would have the
expertise to quantify the hours of care, whether they would require
payment and how the new requirement on local authorities would fit into
our overall approach to carers. In any case, there would need to be
consultation of representatives of those who would carry out the new
duties before we could decide how to
proceed.
We are
discussing the issue with the Department of Health and will report back
before the end of the passage of the Bill through both Houses of
Parliament. The important point is that any extension of eligibility
along these lines could be done under regulations made possible by the
Bill as drafted.
New clause 15
would impose a requirement to publish an annual report on whether the
provisions to bring more carers into the state pensions system
constitute the right approach. These reforms are a coherent package and
there are a number of ways in which they benefit carers. I suspect that
the new clause is a probing one, but I urge my colleagues to resist it
if it is pressed to a vote. That is because the information is already
available from a number of sources, including the departmental report,
the Government Actuary’s Department quinquennial review and the
departmental publication “Contributions and Qualifying
Years”. I see the hon. Member for South-West Bedfordshire
stirring.
Andrew
Selous:
I do not think I can quite let the Minister get
away with that. Our debate already this afternoon has illustrated more
than amply the fact that the figures are not readily available in one
place. We need only look at the written answers that Baroness Hollis
dealt with in the House of Lords in relation to what is in the gender
impact assessment and what was said in the White Paper. The situation
is developing. I do not think that it is too much to ask for
information to be put together in a coherent form once a year by a
Department that has the statistical ability to do
so.
James
Purnell:
We produce regular reports on carers and their
position as part of our policy. I take the view that using primary
legislation to require a report on that would be slightly over the top,
but if the hon. Gentleman wants to divide the Committee on the issue,
he is obviously within his rights to do
so.
The same argument
applies to new clause 17. The hon. Gentleman was obviously very
impressed by the case made by my hon. Friend the Member for Burton, as
I was when she came to see me. She has campaigned on the issue
assiduously. I made it clear at the conclusion of the debate on Second
Reading that we were convinced of her argument and would introduce
measures in regulations made under the Bill to allow the problem to be
rectified. The hon. Gentleman is welcome to look at the end of that
debate to see that I made that clear, but I will set the position out
in some detail to give him the reassurance that he
wants.
It transpired
that, for various reasons, unusually the parent who took time out of
work to look after their children was not awarded the child benefit;
instead, it was awarded to the parent who was working. The effect was
that the parent who needed home responsibilities protection did not get
it because a person is entitled to HRP only if they have been awarded
child benefit. The new clause is designed to correct the outcome that
such inflexibility may produce.
As I said, we made it clear on
Second Reading that we intend to deal with the problem through powers
taken in the Bill, but we so not want to include in the Bill the level
of detail proposed. We intend to build an element of flexibility into
the new regulations, so that eligibility for the new credit will
continue to be linked to the award of child benefit. Where it is
evident that one member of the couple has missed out on the credits
because the other member of the couple is the child benefit payee but
does not need the new credits—for example, because they are
working—our intention is to allow the parent who has been caring
for the children to benefit from the credits.
In addition to introducing
greater flexibility through the regulation-making power in the clause,
we will work with colleagues in Her Majesty’s Revenue and
Customs to ensure that people are made aware of the new contribution
credits that will replace HRP, and consider carefully what more can be
done to increase awareness of the changes that the Bill will
bring.
5.15
pm
Andrew
Selous:
I am grateful to the Minister, but I want to be
absolutely clear. Is he saying that he will produce a statutory
instrument relatively soon to give him the power to make provision in
that area? If so, will he give us a rough idea of the time
scale?
James
Purnell:
I am saying clearly that we can deal with the
matter under regulations made under the Bill. Obviously, the Bill has
to be passed first.
The
hon. Gentleman made a point about appeals. In cases in which the
benefit is awarded retrospectively on appeal, the carer could benefit
from the credit as well. If I have not answered any of his points, I am
happy to do so in writing. I hope that I have reassured the Committee
and I urge hon. Members not to press their
amendments.
Andrew
Selous:
I understand that we will not vote now on new
clause 15, but I wish to express my intention to press it to a Division
at an appropriate
time.
Lorely
Burt:
That was an extremely helpful and interesting
exchange. The hon. Member for South-West Bedfordshire made a number of
interesting points regarding figures. He wants them to be produced
annually, to which we have no objection. That would be helpful, but it
would not solve the problem. He is sympathetic to the new clauses that
we have proposed, but he is constrained—he is not to spend any
money—so he is pushing the Government to make changes that he is
not in a position to support.
The hon. Gentleman has once
again upbraided the Liberal Democrats for their profligacy. I make the
point that if the individuals concerned do not receive pension credit,
they will end up on pensioner credit, so the Government will pay one
way or another. Of course, 20 per cent. of people who are entitled to
pension credit do not claim it, so it would be a hollow saving, as
those people would not be claiming money to which they were entitled.
The point is that such people are missing out. They are not scrounging;
they are earning the right to pension credit, but they do not meet the
criteria that the Government have set out of an understandable desire
to achieve simplicity of
application.
The hon.
Member for South-West Bedfordshire put his name to new clause 17,
following the arguments made by the hon. Member for Burton on Second
Reading. We support the new clause and we are pleased to hear
reassurances from the Minister that the issue will be
tackled.
The cost of
our proposal has been described even by the Minister as hardly huge. It
will be in the millions, certainly.
James
Purnell:
Four hundred million
pounds.
Lorely
Burt:
May I seek clarification from the Minister? He
translates the implementation of credits for 40,000 people into a cost
of £400 million. Will he confirm that that is what he
said?
James
Purnell:
I gave the hon. Lady the figures, and I am happy
to write to her setting out the details. It is the state second pension
that will create that figure; she may not have heard when I spoke about
it.
Lorely
Burt:
I am grateful. Perhaps I can reassure the Minister
that what we are proposing relates at this stage to entitlement only to
the basic state pension and not to the second state
pension.
James
Purnell:
I am afraid that that is not what her amendment
will do, so she might want to withdraw
it.
Lorely
Burt:
I am grateful to the Minister. I was about to say
that in view of the remarks he made on amendment No. 61, we find the
Government’s approach helpful and useful. I beg to ask leave to
withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Lorely
Burt:
I beg to move amendment No. 27, in
clause 3, page 3, line 40, leave
out ‘52 Class 3 contributions for each tax year’ and
insert
‘Class 3
contributions for each tax
week’.
The
Chairman:
With this it will be convenient to discuss
Government amendments Nos. 47 and
48.
Lorely
Burt:
This is a simple amendment that would apply fairly
to individuals, particularly women, who change their entitlements to
different benefits and go in and out of work within a tax year.
Currently, women who receive home responsibilities protection do so
only for full tax years during which they do not work. The amendment
would allow women to be granted the new pension credit on a much fairer
week-by-week tax basis that would reflect more closely the periods for
which they ought to be granted pension
credit.
A woman who
returns to work will lose any entitlement to home responsibilities
protection for the whole tax year unless she returns on 6 April. Our
proposed system would mean that her pension income for that tax year
would be protected at whatever point she decides to return to work. It
should not be more complicated to implement, as national insurance
contributions are calculated weekly anyway. I hope that the Minister is
prepared to reflect on it. Women’s employment tends to be a lot
more sporadic than men’s. We discussed earlier the need for
flexibility regarding times when caring is needed and when women can
return to work. I hope that the Government will agree to this small and
inexpensive adjustment to restore
fairness.
Andrew
Selous:
As the hon. Lady said, amendment No. 27 would
retrospectively convert existing home responsibilities protection
records into weekly
contributions. It would clearly be helpful to those concerned and enable
periods spent caring, either as a parent or as a carer, to be converted
into the equivalent number of weeks’ worth of contribution
credits.
We understand
what the hon. Lady is trying to achieve, but it is none the less
retrospective legislation and, like a number of Liberal Democrat
amendments, would come with a price tag. She did not say in her remarks
how much it would cost; I fear I shall have to rely on the Minister yet
again to supply a price tag for a Liberal Democrat policy proposal. It
will not be the first time, and I do not suppose that it will be the
last. I would also be interested to know from the hon. Lady how it
would be paid
for.
James
Purnell:
I thank the hon. Member for Solihull for the
amendment as it gives us an opportunity to set out our proposals for
replacing the present scheme.
We all agree that, since 1978,
home responsibilities protection has played an important role in
improving the entitlement of women and carers to the basic state
pension. However, HRP is complicated and hard to understand because,
rather than adding qualifying years, it reduces the number of years
required for a full basic state pension. Our proposals are intended to
change that. Clause 3 will replace HRP from 2010 with a simpler and
more generous system of credits for parents and carers to help them to
receive an enhanced basic state pension. Those credits will ensure that
the state pension system recognises contributions from caring on a par
with contributions from working.
It may be easier for the
Committee if I first explain Government amendments Nos. 47 and 48. They
are minor technical amendments that seek to remove any ambiguity around
the number of HRP years that will be converted to qualifying years
under the new crediting arrangements. It would be difficult to combine
a HRP system that reduced the number of qualifying years with a
reformed system of credits for parents and carers that would help
people build up qualifying years. We are proposing to convert HRP years
acquired before 2010 to qualifying years. That means that each HRP year
that someone has before 2010 would derive 52 class 3 contribution
credits. However, under the current system, a person can only get HRP
for up to half of the requisite years in their working life. That means
that a man reaching state pension age in 2010 would be able to build up
a maximum of 22 years of HRP—half the 44 qualifying years
currently needed for full basic state pension. So far, so relatively
simple, but for women the position is more complicated. A woman
reaching state pension age in 2010 would be eligible for up to 19 years
of HRP, rising to 20 between 2010 and 2012 and 22 by 2020, in line with
the equalisation of the state pension age.The Government
amendments seek to remove the ambiguity around the maximum number of
years that people can build up HRP.
Amendments Nos. 47 and 48 will
allow a maximum of 22 years of HRP acquired before 6 April 2010 to be
converted. That is more generous for women than the present upper
limit. We set the maximum at 22 years because that is the upper limit
for men and will be the upper limit for women in 2020. If we did not
set such a maximum upper limit, there might be some doubt
about the number of HRP years that could be converted into credits.
These technical amendments address that. On amendment No. 27, I hope that
the hon. Lady will be reassured by my comments. As I mentioned, HRP has
been available for complete tax years in which a person is caring and
unable to work—either because they are caring for severely
disabled people or for children. The majority of people benefiting from
HRP receive it for their parenting contributions. The hon. Lady is
right to say that many people do not get full years of HRP when they
first have a child. Part years of parenting or caring do not attract
any HRP; they are therefore not recorded as part of someone’s
contribution history. That is, of course, precisely why we are moving
to a system of weekly credits.
We have already said that we
intend to treat all years of HRP as qualifying years. The amendment
would, however, make a further transitional change to the way in which
HRP has operated by recognising part years through the new crediting
arrangements. Committee members should remember that the changes we are
making through clause 3 are being made alongside a raft of other
beneficial measures, including the introduction of a single
contribution condition through clause 1.
Those reaching state pension age
on or after 6 April 2010 will need just 30 years for a full basic state
pension. Combined with what we are doing through clause 3, that will
mean that approximately three quarters of women will reach state
pension age in 2010 with a full BSP. More than half of the remainder
will get more than 60 per cent. of the full rate—more than the
category B so-called married person’s
pension.
My key point to the hon. Lady is
that her amendment would have very little effect on top of that
significant change; the reduction to 30 years achieves her goal.
Awarding credits for part-years of HRP would have little or no extra
effect. Under the current system, most people would normally have only
two incomplete years in which they had not been covered by
HRP—one when they started caring for their child and one at the
end. The reduction in qualifying years to 30 more than makes up for
that possible gap in their contribution history.
No doubt the hon. Lady will say
that her amendment involves something marginal and ask why we do not
agree to it. The problem is that the administrative burden would be
extremely significant. What she argues for is not worth doing; her
overall goal is already achieved through the reduction to 30 years.
Accepting the amendment would create significant administrative work. A
person’s work and caring history of the past 30 years would have
to be looked into to uncover gaps in an individual’s
contribution history.
5.30
pm
Mr.
Laws:
The Minister said—and it may be
true—that the matter is not entirely simple. As a consequence,
has it been difficult for his officials to estimate what the effect of
the change would be? He said that it would be very small, but can he
quantify that in any way?
James
Purnell:
The effect would be very marginal. Given that we
would not know the individuals, we would have to go through
everyone’s contribution history to see whether there were any
gaps. Most people would go up to a full basic state pension through the
reduction to 30 years in any case. The effect would be marginal and any
benefit would be significantly outweighed by the administrative burden
of having to go through people’s individual contribution
histories.
John
Penrose (Weston-super-Mare) (Con)
rose—
James
Purnell:
I know that the hon. Gentleman wants to
intervene, but I should like to finish this section of my response; he
can come in if I have not answered his point by the
end.
The hon.
Lady’s amendment would put parents in a more advantageous
position than people who get HRP because of other caring
responsibilities, because we could use child benefit records to award
credits for each week spent parenting. That is what we would have to do
under the hon. Lady’s proposal. However, we have no similar
mechanism allowing us to identify and credit past weekly caring
activities, beyond those for which HRP had been awarded under the
current rules. We have that information for only four years, so it
would be
unfair.
John
Penrose:
I carry no brief for the hon. Lady’s
amendment, but I am intrigued by one of the Minister’s comments.
He said that people who have missing part-years tend to have just
two—one at the start and one at the end. I think that he was
basing that on the assumption that the majority of people qualifying
will be parents and that the missing part-years would be at the start
and end of parenting time.
Has he thought about how many
might be affected because they were caring for people with remitting,
relaxing or fluctuating conditions such as multiple sclerosis? Such
carers might have multiple missing part-years; I was intrigued by the
Minister’s statement that only a small number of people would be
affected.
James
Purnell:
Such people would make up a very small proportion
of the total. I think I am right in saying that 99 per cent. of HRP
years relate to carefor children; the people whom the hon.
Gentleman mentions would be a small percentage of a small
percentage.
Lorely
Burt:
I am substantially reassured by the
Minister’s comments so far. If we are talking about only a small
number of people, would it be possible for individuals not eligible for
their basic state pension by a small margin to have their cases looked
at?
James
Purnell:
I do not want to be unduly unhelpful, but the
problem is that in my experience opt-in systems for pensions end up
being expensive because people ring up and lots of inquiries can be
generated. A lot of people could ring up to find out whether they were
involved. The cost of manually going through all those cases would be
significant. It would be an unnecessary
administrative burden. My core point is that the
reduction to 30 years substantially achieves the goal; the
administrative exercise that the hon. Lady’s amendment requires
would thus not be justified. If I have reassured her, I ask her to
withdraw her amendment.
Lorely
Burt (Solihull) (LD): I am very grateful to the Minister
for his helpful comments, the majority of which I take on board. I
still have a fear and a concern for a small number of people, and it
would have been helpful to be able to investigate whether an individual
had a specific concern. However, in view of the Minister’s
comments, I beg to ask leave to withdraw the amendment.
Amendment, by leave,
withdrawn.
Amendments made: No. 47,
in page 3, line 42, at end insert
‘within the meaning of regulations
made under paragraph 5(7) of Schedule
3.
(5A) But the maximum number of tax
years for which a person can be credited with contributions under
subsection (5) above
is—
(a) in the case of a
benefit mentioned in subsection (1)(a) to (c) above,
22;
(b) in the case of a
benefit mentioned in subsection (1)(d) or (e) above, half the requisite
number of years of the person’s working
life.
(5B) The table in
paragraph 5(5) of Schedule 3 (requisite number of years of a working
life of given duration) applies for the purposes of subsection (5A)(b)
above as it applies for the purposes of the second condition set out in
paragraph 5(3) of that
Schedule.’.
No.
48, in page 3, line 43, leave out from
beginning to end of line 2 on page 4.—[James
Purnell.]
Question
proposed, That the clause, as amended, stand part of the
Bill.
Andrew
Selous:
I promise not to revisit territory that we have
already gone around in debating this clause. I know that you would not
permit it, Mr. Taylor, but I must reassure you none the
less. I would not want you to be worried on any account.
However, there is one quite
interesting issue inclause 3 that we have not debated at all,
and I would like to tease out from the Minister the departmental
thinking behind the change. If members look at proposed new section
23A(3)(a) to the Social Security Contributions and Benefits Act 1992 in
clause 3(1), they will see that it refers to the award
of
“child benefit for any
part of that week in respect of a child under the age of
12”.
That is a change of
four years from the existing law, in which home responsibilities
protection is awarded for parents who are receiving child benefits for
a child under the age of 16.
I would like to understand some
of the thinking in the Department behind that change. Is it purely
financial? Do the Government have a view on the importance of caring
for and parenting children up to the age of 12, as opposed to over that
age? I see the Minister smile at me, as we are perhaps getting into
deeper, more general philosophical waters than we have so far on the
narrower technical issues. However, that raises interesting and
important points.
Members of the Committee will
also note that proposed new section 23A(3)(b) refers to someone being
“a relevant carer” if they
are,
“a foster parent for
any part of that week”.
Having looked into that with the help of
the excellent House of Commons Library, I would be grateful if the
Minister could confirm my understanding that this will apply to
children under the age of 18 as far as foster parents are concerned.
So, within this proposed new subsection, we have children under 12
being eligible on one hand, and children under 18 being eligible on the
other.
I know that the
Government sometimes have to be careful. They have made statements in
pre-Budget reports—and elsewhere, in the associated
notes—talking of their view that adult dependency is an outdated
concept. I think that is more or less a quote from a pre-Budget report
document. A carer looking after either children or an ageing or sick
family member may by nature be a dependent relative on some other
family member who is in paid employment. So, that touches quite
important, wider social issues. It may be purely the financial cost,
which I would not say was wholly unreasonable, but the Committee need
to probe slightly to find out Government thinking on this particular
point.
John
Penrose:
This clause is an essential step towards the
righting of an essential wrong relating to the unfair treatment of
women’s pensions over many yearsand, more broadly, the
pensions of carers, who are predominantly women. It is one of the best
aspects of the Bill.
In particular, I was delighted
to see that the clause involves a degree of simplification. As the
Minister said earlier, almost everywhere else, the language of pensions
and the contributory principle is about adding years—building up
a pot of rights and contributions—and creating a sense of saving
for one’s retirement. Almost uniquely, the HRP talks of reducing
years. Not only is that a complication of language, but of
administration and systems as well. Clearly, it makes sense to put the
new equivalent to that system—I appreciate it is a like-for-like
comparison in terms of being fiscally neutral and so forth—and
related language on all fours with the rest of the pensions
world.
It also makes
sense to put across a notion of equivalence to paid employment. The
hon. Member for Northampton, North picked up on what we were saying
earlier in order to ensure that we were not talking about people who
were working, but those in paid and unpaid work. Such unpaid work is
tremendously important, and the clause not just symbolically, but
actually ensures that it is valued and put on the same basis as paid
work. For that reason alone, the clause is to be welcomed, as well as
for its simplification of the systems and processes involved,
particularly given the fact that we have one of the most complicated
pensions systems in the entire developed
world.
Mr.
Laws:
I do not want to detain the Committeefor
long, but the hon. Member for South-West Bedfordshire raised an
important point. Rather than
interrupt the Minister in mid-flow, I would like to reinforce our
interest in hearing an explanation of how the proposal relating to the
care of and responsibilities for children at particular ages ties into
other parts of the Government’s thinking on the responsibilities
of parents. Parents in the UK are allowed to remain on income support
until their youngest child is 16, without work responsibilities or
having to go on to jobseeker’s allowance. I wonder whether this
change is a precursor to wider changes in the way that the Government
interpret parents’ responsibilities towards their children and
towards
work.
James
Purnell:
To answer the specific point about foster carers,
registered foster carers are covered until the child that they are
caring for is 18 because of payments being made to them. They may have
to provide more significant care for older children than might be the
case for other families and it is not untypical for their working
patterns to be affected by their responsibilities as a foster carer.
The principle is to examine how people’s ability to work is
affected.
There is
nothing particularly theological about the age specified. I sense the
waters in which those on the Opposition Benches are tempting me to
swim, but I shall stay firmly on the shore. The clause is simply
intended to simplify the system: there were different conditions for
the basic state pension and the state second pension. We have increased
one and reduced the other. I hope that I will be able to explain how
that makes the overall system much more generous for those who care for
parents. It is not in any way a restriction on the support we give to
parents.
James
Purnell:
The hon. Gentleman looks poised to intervene
again, so I shall give
way.
Andrew
Selous:
The Minister is generous, as always, in giving
way. I said that I thought the change was purely financial, if I can
put it like that. I think that is what the Minister is saying. Perhaps
he could reassure me once more that the clause does not herald the
wider thinking of the Government on the role of parents looking after
children up to the age of 12 and
beyond.
5.45
pm
James
Purnell:
I am not heralding, if that gives the hon.
Gentleman the reassurance that he
seeks.
We have covered
the fact that the system will be much more transparent than it is now.
HRP is complicated, and one of the further complications is that it was
possible to get a basic state pension contribution for a child under
the age of 16, but with a state second pension that was possible only
for a child under the age of six. Under the proposals, a class 3
contribution will instead be credited for each week in which a person
is either awarded child benefit for a child under 12, classed as an
approved foster parent or engaged in other forms of caring, which I
shall come to later.
As has been rightly pointed out,
the age is currently 16. We have lowered that, but it is important to
note that no one will lose out from those changes, for two
reasons. First, the move to 30 qualifying years for a full basic state
pension in clause 1 more than compensates for the move to age 12.
Secondly, for the first time, through the provisions in clause 9, there
be will a credit in respect of the state second pension for those
awarded child benefit for a child aged between six and 12. Taken as a
whole, the Bill therefore improves state pension outcomes for parents
and carers. As before, foster parents will need to make a claim to
ensure that they build up entitlement to the basic state pension,
although under clause 9 they will also accrue entitlement to the state
second pension. As I
promised, I shall say a couple of words about those engaged in caring.
I assure hon. Members that the clause indeed makes provision for HRP
years acquired before 2010. As we have discussed, there will be a
maximum of 22 years, which we can convert. The clause includes a
regulation-making power, in proposed new section 23A(3) of the Social
Security Contributions and Benefits Act 1992, to prescribe those who
may be said to be engaged in caring. The reason we have done that and
resisted earlier amendments is to give ourselves flexibility, which
this debate has again demonstrated will be necessary. The goal of
helping carers to build up contributions when they cannot do so through
national insurance contributions is widely shared, but the way of doing
that might change over time. It is therefore important to give
ourselves the right
flexibility.
For
example, the regulations will allow the flexibility to ensure that
carers can continue to be awarded the credit for up to four weeks
during which such conditions are not satisfied, such as where the carer
has fallen ill. There will also be a range of other technical details
in the regulations, to allow us successfully to deliver class 3
contribution credits for those engaged in caring. Copies of the
delegated powers memorandum, which sets out further how we intend to
use the power in the clause, have been placed in the House. I therefore
propose that the clause as amended stand part of the Bill. I also thank
the hon. Member for Weston-super-Mare for his kind comments about the
clause.
Question
put and agreed to.
Clause 3, as amended, ordered
to stand part of the
Bill.
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