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Clause 38

Preservation of rights in respect of additional pensions

Lords amendment: No. 17, in page 34, line 22, at end insert--
("(4B) The regulations shall be based on the presumption that claimants have received incorrect or incomplete information unless the Secretary of State provides proof that the information the claimant received was correct and complete.")

Mr. Rooker: I beg to move, That this House disagrees with the Lords in the said amendment.

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The amendment relates to inherited SERPS, and I have to say that I do not believe that it is appropriate to have a debate on the issue at this point. I do not think that any hon. Member could accept the other place tabling amendments that could lead to substantial additional spending of public money running into billions of pounds, which is the implication of the Lords amendment. However, I accept why the Lords did that. We made an announcement about inherited SERPS and explained what we planned to try to do, following reports from the Parliamentary Commissioner for Administration and the National Audit Office. As I said before, the matter is probably the single greatest example of public maladministration since the war and is a major problem. We accept that putting it right, however one chooses to do so, will cost billions of pounds.

Since we made the announcement in March, we have not been able to put any more flesh on our plans. Indeed, we said that we would not and explained that we hoped to come back before the end of the year with proposals for regulations for an inherited SERPS scheme. People are working on the issue, and the Social Security Advisory Committee has issued a consultation paper, responses to which are due in August. We shall examine those responses carefully. The Select Committee on Social Security and the Select Committee on Public Administration have taken evidence on the issue as well, so we have to have draft regulations for them to consider. In the meantime, many people at the Benefits Agency headquarters in Leeds are working to prepare the scheme.

We have to look at all kinds of matters, such as how many people might apply. We do not know whether there will be 50,000, 5 million or 10 million applications, or even more. When we do not know how many people will apply, it takes an awful lot of background work to work out the parameters of the scheme so that it will have the capacity to deal with telephone and other inquiries. Just because we have not given any details does not mean that we are not doing anything about the situation. For example, we have to cover an issue raised in the other place, which is what kind of appeals will be processed. For instance, how do we deal with people with a severe mental disability, who may have started to suffer from dementia since making an inquiry about SERPS? We have to deal with all those matters before we introduce a scheme.

The House of Lords wanted to give the Government a nudge to remind them that they had not fallen asleep, and to ensure that the inherited SERPS scheme worked and that the Government were doing something. All that I can say is that, with the best will in the world, we intend to introduce proposals for a practical scheme that meets the original criteria that we set out regarding those people who had been, or felt they had been, misinformed, with the burden of proof being the Government's responsibility, as the ombudsman said. However, it is far too early to curtail and corral the Government in the way that the amendment seeks to do. In effect, the amendment completely wrecks anything that we plan to do with the inherited SERPS scheme, so I urge the House to disagree with the Lords.

Mr. Pickles: Strangely enough, I agree with most of what the Minister said, but I do not agree that the amendment wrecks the Government's intentions. They

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have made very clear how they will deal with the inheritance rules on SERPS. The amendment would prevent any backsliding on their commitment.

The right hon. Gentleman is right to say that this is the biggest incident of maladministration since the second world war, and I, for one, certainly accept responsibility on behalf of the previous two Conservative Governments. The present Government cannot escape responsibility because we knew less than a year ago that benefits offices were giving duff information to people making inquiries, and we know even now that things are not right.

We are fortunate to have several excellent reports on the subject. I draw the attention of the House to the report of the National Audit Office and the Department of Social Security's internal audit service to the permanent secretary at the Department. Page 1 says that

in view of the extensive consideration in 1999 given to the issue of misleading information, we are concerned that from November 1999 to 10 January 2000 contradictory lines were taken in official correspondence and other sources of information about the legal position after 5 April 2000.

Even now, we do not have a complete grip on the problem.

No Member of the House can feel smug about their involvement in this issue. The House singularly failed to check the Executive on these important measures. However, I suppose the time must come when the blame game has to end. I am pleased that the right hon. Gentleman sought to deal practically with the problems. Guidelines have been issued and Ministers have given clear assurances in Committee, in this House and in another place.

We also have the NAO's recommendations and the ombudsman's report. It is to the Government's credit that they accepted the ombudsman's report. As my noble Friend Lord Higgins has said several times in another place, generally there are no clear recommendations in that report. However, it makes two recommendations that are reasonably clear. First, on page 13 in paragraph 32, the ombudsman states that the Department should provide

redress on a global, rather than an individual, basis.

Secondly, he says that the burden of proof, to which the Minister referred, that a claimant

would not have acted differently had he or she not been misinformed rested on the department.

I realise that we do not yet have regulations on the subject, and I suspect that one reason for the amendment is to give the Government a prod about that, but it seems clear from what the Government said in another place and in Committee that they intend to provide redress on an individual basis. I understand that people who want to receive compensation under the Government's scheme have to jump over two hurdles. They have to show first, that they were misled by information, and secondly, that they sustained a loss. If the Government accept the ombudsman's report, they will have to prove otherwise. However, we know from what they have said that they will not have many records to disprove claims. They have set themselves an uphill struggle.

Baroness Hollis was most helpful in a debate on 6 July 1999, when she said:

There is a very real issue of proof . . . No record is kept of telephone calls, any more than a record is normally kept of conversations at the desk. Paper records are kept for about six months. But if someone asserted that he had received that

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misleading advice, I suspect it may well be the case that the Government would have to prove that he had not, rather than the contrary, because there would be no evidence to counterbalance it.--[Official Report, House of Lords, 6 July 1999; Vol. 603, c. 847.]

Any claimant who says that he walked into the Department's local office in one of the many parliamentary constituencies and picked up a leaflet that did not contain the information about SERPs must have a case. It would be impossible for the Government to prove otherwise.

On 15 March, The Daily Telegraph reported a suggestion that the Government were seeking written evidence that claimants had originally made a claim.

Mr. Rooker: That is not true.

Mr. Pickles: The right hon. Gentleman says that it is not true, and that reassurance is good enough for me so I will not pursue the point.

We need to see regulations reasonably soon. Given the issue of burden of proof, the lack of records and the right hon. Gentleman's reassurance, the effect will be the same whether or not the amendment is agreed to because the Government will not be in a position to disprove claims. People will only have to say that they went into an office and picked up a leaflet about retirement in which SERPS was not mentioned, so they did not take the necessary precaution of increasing their private provision. It matters not a jot how Members vote this evening, the effect will be the same. If the NAO is right, we are looking at a cost of £8 billion, admittedly over a number of years, but that cost is very great.

Mr. Webb: I agree with the noble Friends of the hon. Member for Brentwood and Ongar (Mr. Pickles) more than he does, because I agree with the amendment, and we will not support the Government's motion to disagree.

The Minister said that he wants to keep his options open--I hope that I am paraphrasing him fairly--and that the Government are in the process of drawing up regulations, so they do not want to close off any avenues. They think that the amendment may constrain their future actions. However, in saying that he is admitting that he can envisage circumstances in which the Government might want to breach the presumption in the amendment. In other words, he can envisage the introduction of regulations that do not presume that people have received incorrect or incomplete information unless they can prove that they have done.

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