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Baroness Barker: The hour is late and I shall not delay the House for very long. I wish simply to add to the arguments that have already been deployed. Throughout the Bill there has been a great deal of discussion about the assumptions on which the pension credit is based. There have been a great many misgivings about some of those assumptions. But in what I hope the Minister will accept has been a very constructive debate, there has been a large degree of consensus that we should seek to take the Minister and her department at their word.

Members of the Committee who have already spoken are absolutely right. In many respects this is a theoretical construct. I return to a point that I made at Second Reading: one of the tests of this measure will be the extent to which it fits in with the lives of older people. On that I believe that a great deal has yet to be proved. A measure of this kind, which will take so many pensioners within its scope, has within it a great deal of potential to go wrong. It may not; I hope that it does not.

However, I believe that not only will the proposals be informative for the purposes of this and future social security legislation but they will perhaps have a profound effect upon tax legislation, other benefits legislation and, in particular, legislation which comes increasingly from the Department of Health. Given that so much decentralisation is taking place in that department, its legislation is extraordinarily difficult to fathom. For all those reasons, which go beyond the scope of the Bill, I believe that the measures are important. I hope that the noble Baroness will accept them.

Baroness Hollis of Heigham: I was fascinated to listen to the point made by the noble Lord, Lord Fowler, about pre and post-legislative scrutiny. In terms of, on the one hand, the use of pilots so that one has a learning loop before one extends possible policy nation-wide and, on the other, the amount of what I call "tracker research", in which we try to check the implications of our policy for the individuals concerned and thus again to have a learning loop, and in terms of all the legislation in which we have been involved since 1997, I should have thought that a person like the noble Lord who had followed the developments of social security over the past few years would recognise that we have tried very hard to build

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that in where appropriate. It is absolutely right that not only should there be pre-legislative scrutiny; there should also be post-legislative scrutiny. I hope that the noble Lord will accept that we have a fairly honourable record in that respect and in many ways have broken new ground.

I turn to the amendments. Amendment No. 103 would require an annual report on the performance of the Pension Service to be laid before Parliament. Amendment No. 104 would require an annual report on the planned service levels and past performance of the Pension Service to be laid before Parliament.

The amendments would ensure accountability and transparency for the service that we provide to our pensioner customers and clients. I wholeheartedly support that objective. I believe it is inconceivable that we would not report publicly on all aspects of the Pension Service in exactly the same way as we do in relation to the Child Support Agency, and so on. But this reporting should not be limited to the areas listed in the amendment. These areas are indicative and I am sure are not meant to be exhaustive.

I can assure the Committee that the arrangements we have in place for reporting on the performance of the Department for Work and Pensions should provide Parliament with a comprehensive assessment of the performance of the Pension Service. The precise nature is still being developed, but we shall have arrangements in place which clearly detail the performance of the Pension Service each year and which are robust enough to more than meet parliamentary reporting standards.

A range of service and performance targets and indicators are well established within the Benefits Agency, the unit with operational responsibility for delivering services to pensioners at present. They include how many times a telephone rings before one answers. My complaint on performance indicators is that if one is not careful, one ends up assessing the things one can count and not the things one cannot count, which are qualitative. We then sometimes think that the quantitative is more important than the qualitative. There are issues about how we turn customer service into things which can be assessed and not just mechanically assessed; for example, how quickly one answers the telephone. None the less, we are currently developing proposals for performance indicators that will apply to the Pension Service. They will be reflected in the final route for reporting on performance of service.

It may be helpful if I remind the Committee of the reporting requirements that apply to the Department for Work and Pensions as a whole. The department will continue to present its annual departmental report to Parliament. That provides a comprehensive picture of performance across the whole department. The departmental report provides an account of departmental performance against its public service agreement objectives. It also provides an account of how the department has expended money voted to it by Parliament. That covers the cost to the department of administration for each customer group, including pensioners.

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On the question of administration costs, the primary route for the majority of customers to apply for their pension credit entitlement will be via the telephone, building on the model that has become well established for minimum income guarantee. The costs for administering pension credit are expected to be broadly the same, or slightly less, than for the current telephone-based costs for assessing minimum income guarantee. That will be the result of streamlining the administration and simplifying the rules. However, until the pension credit design is finalised, that can be only an estimate.

I turn to other specific items that are listed for inclusion in any annual reporting. I, too, think it important that we focus on securing maximum take-up of pension credit and we expect the number of successful claimants to build up over time. As I said earlier, we are putting in place arrangements to ensure that everyone who is entitled to pension credit knows in good time what they need to do to take up their entitlement.

Estimates of take-up of income-related benefits are currently published annually. However, DSS Research Report No. 100, entitled, Overcoming Barriers: Older People and Income Support, provided evidence of significant under-reporting of capital by pensioners responding to the Family Resource Survey. They failed to mention it and made it even more difficult for the department confidently to estimate take-up among pensioners. In order to tackle that problem, we have commissioned large-scale research from the Office for National Statistics and the National Centre for Social Research, which will enable us to improve the accuracy of the information we use to estimate take-up in future. If noble Lords wish to know what that research will look at, I am happy to write to them or to put a note in the Library.

Amendment No. 103 refers to the position of pensioners who have a reduced state pension because of their deficient national insurance contribution records. I think that the noble Lord and I simply disagree on how we respond to this. I think that those who have made a full contribution should have that reflected. For those who have a less than full contribution, any private money should be first set against that before they then move into the pension credit system.

The Government are committed to the evaluation of pension credit. We shall ensure that we have completed necessary baseline studies before the introduction of pension credit and will put in place processes to monitor the effects of the policy over time. The Department for Work and Pensions already has in place much of the data we need to provide an accurate baseline. As I have mentioned, we have commissioned major new research to help us to understand more about the many pensioners who will become newly entitled to pension credit in 2003. The information provided by that research will help us to understand and overcome potential barriers to take-up and assist in the marketing of pension credit when it is launched.

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We are committed to maintaining effective arrangements for monitoring performance and reporting to Parliament. I can assure the Committee that the arrangements we have in place will deliver much more information than is required by the amendment. I therefore hope and believe that noble Lords will accept that the amendments we are considering are unnecessary. In the light of that I hope that the noble Lord will withdraw the amendment.

Lord Fowler: Before the noble Baroness sits down, perhaps I may say that I have listened to her and she has used a great many words. Can I ask her straight whether she is setting her mind and her face entirely against any idea of there being an annual report to this House as far as concerns pension credit?

Baroness Hollis of Heigham: No, Members of Committee, certainly not. I said that it is inconceivable that the pension agency will not be reporting annually. We need to explore whether it reports in a separate report or whether that report on the pension service is embodied in the annual report of the Department for Work and Pensions.

Our position is that we are not only deeply committed to pension credit but proud—I repeat, proud—of what we are seeking to do through the Pension Service. That will produce, for the first time, a service tailored to the needs of pensioners. In advancing that it is inconceivable that we should not want to draw the Chamber and the wider public's attention to our objectives and the degree to which we are able to meet them, including our public service level agreements. The only question is whether we end up with a ring-fenced report on the Pension Service and therefore the pension credit, or whether it is incorporated in the departmental report. We can pursue that matter on another occasion if Members of the Committee want.

The notion that we should not want to bring full information to Parliament, to the voluntary organisations and to pensioners about their entitlement and the degree to which we can encourage them to take up their entitlement and the level of service that we can now offer for the first time, is inconceivable.

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