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Lord Clinton-Davis: My Lords, is it not remarkable that the Opposition should be suffering from such acute amnesia about the practices of their own government?

Lord Bassam of Brighton: My Lords, I am drawn to the conclusion that from time to time there is amnesia in this House.

Welfare Reform and Pensions Bill

3.1 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I beg to move that the Commons amendments and reasons be now considered.

Moved, That the Commons amendments and reasons be now considered.--(Baroness Hollis of Heigham.)

On Question, Motion agreed to.

COMMONS REASONS FOR DISAGREEING TO CERTAIN LORDS AMENDMENTS, COMMONS AMENDMENTS TO THE WORDS RESTORED TO THE BILL BY THE COMMONS' DISAGREEMENT TO CERTAIN OTHER LORDS AMENDMENTS AND COMMONS AMENDMENTS IN LIEU OF CERTAIN OTHER LORDS AMENDMENTS AND MOTIONS TO BE MOVED ON CONSIDERATION OF COMMONS REASONS AND AMENDMENTS
[The page and line refer to HL Bill 62 as first printed for the Lords.]
LORDS AMENDMENT

1Before Clause 1, insert the following new clause--
("PART ZI
ADDITIONAL PENSION
ADDITIONAL PENSION FOR WIDOWS OR WIDOWERS

.--(1) The Secretary to State shall by regulations make provision for one or more of the following--
(a) to substitute, in any provision of the Contributions and Benefits Act which relates to additional pension for widows or widowers, for any sum payable by way of such pension as is derived from the contributions of a deceased spouse, such higher sum as may be prescribed;
(b) to substitute, in any such provision, for any prescribed reference to the year 2000, a reference to such later year as may be prescribed;
(c) to establish a scheme to compensate persons who are widowed after 5th April 2000 and who suffered loss as a result of any action or failure to act in reliance on incorrect information received from a Government department with respect to the reduction in the additional pension payable to them as a result of the enactment of the former section 19 of the Social Security Act 1986.

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(2) If regulations under subsection (1) are not in force on 5th April 2000, then until such time as such regulations are in force, the provisions of the Contributions and Benefits Act to which paragraph (a) of that subsection apply shall continue to have effect as in force on that date.
(3) No regulations shall be made under subsection (1) unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament.").
The Commons disagreed to this amendment but proposed the following amendments in lieu thereof--

1ABefore Clause 48, insert the following new clause--
("Additional Pensions
PRESERVATION OF RIGHTS IN RESPECT OF ADDITIONAL PENSIONS

.--(1) The Secretary of State may by regulations make such provision as is authorised by one or more of subsections (2) to (4).
(2) The regulations may provide for any prescribed provision of Part II of the Contributions and Benefits Act (contributory benefits) which relates to additional pension for widows or widowers to have effect, in relation to persons of any prescribed description, with such modifications as may be prescribed for securing--
(a) that any such additional pension, or
(b) in the case of any provision of Schedule 5 to that Act (increase of pension where entitlement is deferred), that any constituent element of an increase provided for by that Schedule,
is increased by such percentage as may be prescribed (which may be 100 per cent.).
(3) The regulations may amend (or further amend) any prescribed provision of Part II of the Contributions and Benefits Act falling within subsection (2) by substituting for any reference to the year 2000 (or any year previously substituted by virtue of this subsection) a reference to such later year as may be prescribed.
(4) The regulations may make provision for and in connection with--
(a) the establishment, for a prescribed period, of a scheme for dealing with claims made by persons on the grounds that, in reliance on any incorrect or incomplete information provided by a government department with respect to the SERPS reduction (however that information came to their knowledge), they--
(i) failed to take any, or any particular, relevant steps which they would have taken, or
(ii) took any steps which they would not have taken,
had they instead received correct and complete information with respect to that reduction; and
(b) securing that, where persons have made successful claims under the scheme, surviving spouses of those persons (or, as the case may be, those persons themselves) will not be affected by the SERPS reduction.
(5) In subsection (4) "relevant steps", in relation to a person, means steps towards safeguarding the financial position of that person's spouse in the event of the spouse becoming that person's surviving spouse or (as the case may be) towards safeguarding that person's own financial position in the event of that person becoming a surviving spouse (whether or not, in either case, that person was at any material time already married); and "the SERPS reduction" means--
(a) (in the context of subsection (4)(a)) the operation of any of--
(i) the provisions of section 19 of the Social Security Act 1986, or
(ii) the provisions of Part II of the Contributions and Benefits Act reproducing the effect of those provisions;

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(b) (in the context of subsection (4)(b)) the operation of any of the provisions of the Contributions and Benefits Act mentioned in paragraph (a)(ii) above or of section 39C(4) or 48BB(7) of that Act.
(6) Regulations under subsection (4) may, in particular, make provision--
(a) with respect to the time within which, and the manner in which, claims under the scheme are to be made;
(b) for requiring claimants--
(i) to supply such information in connection with their claims as may be prescribed or reasonably requested by any person for the purpose of dealing with their claims,
(ii) to attend interviews at such time and place as may be reasonably specified by any person for that purpose;
(c) for a claim to be disallowed where the claimant fails to comply with a requirement imposed by virtue of paragraph (a) or (b) above and does not show within the prescribed period that he had good cause for that failure;
(d) prescribing--
(i) matters which are or are not to be taken into account in determining whether a person does or does not have good cause for any failure to comply with any such requirement, or
(ii) circumstances in which a person is or is not to be regarded as having or not having good cause for any such failure;
(e) prescribing the conditions which must be satisfied in relation to any claim in order for it to be a successful claim under the scheme;
(f) with respect to--
(i) the manner in which decisions under the scheme are to be made (which may include authorising decisions of any prescribed description to be made by a computer), and
(ii) the time within which, and the manner in which, such decisions are to be notified to claimants;
(g) for provisions of Chapter II of Part I of the Social Security Act 1998 (social security decisions and appeals) to apply in relation to decisions under the scheme with such modifications as may be prescribed;
(h) for provisions of Part II of the Contributions and Benefits Act to apply in relation to--
(i) surviving spouses of persons who have made successful claims under the scheme, or
(ii) persons who have themselves made such claims,
with such modifications as may be prescribed.
(7) If no regulations under this section are in force on 6th April 2000, then until such time as any such regulations come into force--
(a) any provisions of Part II of the Contributions and Benefits Act which (whether alone or together with other provisions) would otherwise result in a reduction of one-half in the amount payable by way of additional pension in cases where a person's spouse dies after 5th April 2000 shall be taken--
(i) as not applying, or
(ii) as providing for the full amount to be payable by way of additional pension,
as the case may require; and
(b) in Schedule 5 to that Act--
(i) any provision which is expressed to apply in relation to deaths occurring after that date shall not apply, and

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(ii) any provision which (with or without any other limitation) is expressed to apply in relation to deaths occurring before 6th April 2000 shall be taken as applying also in relation to deaths occurring on or after that date.
(8) No regulations shall be made under this section unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament.
(9) In this section "prescribed" means prescribed by regulations under subsection (2), (3) or (4), as the case may be.").
1BClause 83, page 86, line 26, after ("sections") insert ("(Preservation of rights in respect of additional pensions),").

Baroness Hollis of Heigham: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1A and 1B which substitute a new clause in lieu of the clause which your Lordships inserted at Report. The new clause essentially builds on the clause introduced by the noble Lord, Lord Rix. I am sure that the entire House would like to pay tribute to the noble Lord for his amendment.

As I said at Report when I accepted his proposal, the Government agree that this Bill must make some provision for dealing with the inherited problem of SERPS for widows and widowers. We simply needed to make some further amendments to the clause to ensure: first, a legislative base for the solution on which we finally decide, and secondly to provide protection in the meantime for all those who may be affected.

The clause provides the power to introduce regulations which allow the Commons to do one or more, that is a "mix or match", of the following: to vary the percentage of inherited SERPS for some or all widows; to postpone the 50 per cent change to a specified later date, or to run a protected rights scheme--the new clause sets out, in effect, the ground rules for such a scheme.

Noble Lords can rest assured that legislation will be securely in place to enable those problems to be addressed. The regulations will be subject to the affirmative procedure so there will be opportunity to scrutinise and debate them in full.

I emphasise once more that, whatever happens, no one will see their 100 per cent SERPS entitlement reduced before arrangements are in place to protect those who were misadvised. My right honourable friend the Minister of State said in another place that we will not leave people in a situation where regulations come in overnight; there will be reasonable warning of changes which will be phased in.

As noble Lords are aware, I had hoped to be able to announce our decision as to our way forward on this matter before the Bill completed its passage through Parliament. However, I cannot yet do that. We are determined to get it right. We still need to do further work on this. We will make a further announcement soon. In the meantime, the clause as amended gives us all the powers the Government and the House might need to introduce a satisfactory solution to the problem based on the amendment tabled by the noble Lord, Lord Rix. I beg to move.

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Moved, That the House do not insist on their Amendment No. 1 to which the Commons have disagreed and do agree with the Commons in their Amendments Nos. 1A and 1B in lieu thereof.--(Baroness Hollis of Heigham.)


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