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Standing Committee Debates
Child Support, Pensions and Social Security Bill

Child Support, Pensions and Social Security Bill

Standing Committee F

Tuesday 8 February 2000

(Afternoon)

[Sir David Madel in the Chair]

Child Support, Pensions and Social Security Bill

Clause 28

Earnings from which pension derived

Amendment proposed [this day]: No. 147, in page 24, line 18, after `year', insert

    `or part thereof'.—[Mr. Burstow.]

4.30 pm

Question again proposed, That the amendment be made.

The Chairman: I remind the Committee that with this we are taking the following amendments: No. 148, in page 24, line 19, after `year', insert

    `or part thereof'.

No. 149, in page 24, line 35, leave out `throughout the year' and insert

    `in any week throughout the year'.

Mr. Paul Burstow (Sutton and Cheam): Before we adjourned for lunch I listened closely to the Minister's response and particularly to his comments about how the linking rule could work in theory. Since then I have had the opportunity to obtain some advice about the way in which it works in practice, and I shall put one or two points about that to the Minister in a minute.

At the start of the Minister's response to this group of amendments, he chastised Opposition Members for raising what he regarded as nit-picking points, saying that it would be more appropriate for us to laud the clauses from the rooftops. At the beginning of my remarks this morning I made some clear comments on our views about the principles behind the clauses, partly to address Ministers' understandable concern about what Opposition Members might say. However, our role in Committee, as the Minister rightly said, is to move amendments that delve into the detail of the clauses. Teasing out answers relating to some of the principal concerns that are brought to our attention and, I dare say, to Ministers' attention, should be part of what we are doing. Therefore, I make no apology for being critical on occasions in the debates on this and later groups of amendments.

The fundamental constraint that we encounter is information technology: we were told that the computer systems cannot cope with the administrative burdens imposed by this kind of development.—[Interruption.] If the Under-Secretary wishes to intervene, I shall be happy to give way.

The Minister told us that a weekly system would cause considerable administrative problems for the Government.

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): Will the hon. Gentleman give way?

Mr. Burstow: I am happy to give way to the Under-Secretary, who has been speaking from a sedentary position.

Angela Eagle: Will the hon. Gentleman confirm that he is now saying that it is Liberal Democrat policy to have a weekly calculation of people's pension entitlement?

Mr. Burstow: The Under-Secretary was here this morning when I introduced the amendments and I hope the record will show that I said at the start that they were probing amendments. I am sure that she has tabled amendments in the past, so she knows what that means: it means that we seek clarity. The amendment is not necessarily a Liberal Democrat policy that is set in tablets of stone, but is a legitimate means of exploring the difficulties that arise from the way in which the system is set up. There may be benefits from not doing the calculation weekly: it may minimise and inhibit the crediting of contributions to a state second pension, as we outlined earlier.

I accept that the problem is partly to do with computers and partly about practicalities. The Minister also referred to employers' additional burdens. We are talking about carers here. The amendments that I have tabled specifically refer to the invalid care allowance gateway for contributions. Carers receive an invalid care allowance. Some carers may work, but the majority do not, so I could not follow the Minister's point about an additional burden for employers, because carers do not have employers in a recognisable sense.

However, what worried me most was the Minister's assertion that a carer and the person they are caring for can have eight weeks of respite care in a year without in any way reducing the carer's ability, under the Bill, to secure their contributions to the state second pension.

I have made further inquiries about this, and the Minister is right to say that that would technically be possible, but it would require a superhuman feat of management or very good fortune to achieve it in most cases. This will affect the carers of the most seriously disabled people in the community—people with multiple disabilities, who often require regular respite care. Following consultations with the Carers National Association, I understand that a large number of cared-for people in that group regularly go into respite care.

Under the linking rules, it would be necessary to have a 28-day gap between each period of respite care, otherwise there would be difficulties with ICA no longer being available, and consequent broken contribution records. That aspect of the problem greatly concerned me—as well as Age Concern and the Carers National Association—and it does not appear to have been addressed.

I have listened closely to what the Minister has said, and I shall seek leave of the Committee to withdraw the amendment. However, I hope that the Government will consider further the implications of the way in which the linking rules will work in practice. They will, as I understand it, make it very difficult for people with heavier caring responsibilities to benefit from the provision.

The Minister of State, Department of Social Security (Mr. Jeff Rooker): I thought that I had responded earlier. I do not expect anyone on the Opposition Benches to talk up an aspect of the Bill that will provide for two million extra carers to get help with their pension. However, the way in which they put across their arguments suggested that there was nothing in the Bill for carers. That gave a false impression.

In relation to feats of management, I accept that there might be difficulties in individual circumstances for some families. We are introducing legislation to cover everyone, but one cannot cover every eventuality. Life is not like that.

I gave an example in relation to the effect of amendments Nos. 146 and 147, which the hon. Member for Sutton and Cheam (Mr. Burstow) described as probing amendments. Would not the effect of amendment No. 149 be to allow a person in receipt of invalid care allowance for one week to benefit from a full year's entitlement to a state second pension? It clearly cannot be the intention for that to be credited on a weekly basis. We are not complaining about the IT in this case, but it makes no sense to accrue pension for a lifetime on a weekly basis. It makes no sense in pension terms, let alone in operational terms.

We are starting not with a clean sheet of paper, but with the existing system of additional pensions. We are building on the present arrangements, to ensure that much more help—in the form of a second state pension—goes to those who miss out under the present system. We are not tearing up the old system and starting again. I ask the hon. Gentleman to take that difference on board.

Mr. Burstow: For the purpose of the debate, we needed to table amendments that would give us the opportunity to raise various concerns. I accept the Minister's argument about weekly crediting. However, I want the Government to think again about the way in which the linking rules will work. It may be unjustifiable that someone who qualifies for ICA for a week should get the credit for a whole year, as the Minister cited in his example. However, it would be fundamentally unfair if a person who had received ICA for a substantial period of a year received no credit for that period, because of the way in which ICA was structured. The amendments are a means of asking the Government to look again at the provision.

Mr. Rooker: I can only repeat what I have said. I do not want to give a false impression to the hon. Gentleman. The system works on the basis of yearly accrual. I return to an example that I cited earlier, which was not picked up by members of the Committee. If someone cared for a person for 11 months and that person died, the carer would lose only that year's accrual—not all the accrual that may have been accumulated in previous years—for the simple reason that the system has an annual basis. I could not justify any grounds for moving from that yearly basis.

Mr. Burstow rose—

Mrs. Jacqui Lait (Beckenham) rose—

Mr. Rooker: I have forgotten whether I am responding to the amendment or intervening on an hon. Member.

The Chairman: It is a general discussion.

Mr. Rooker: I am not sure if I am due to give way to the hon. Member for Sutton and Cheam. Did he originally give way to me?

Mr. Burstow: We have not yet considered a scenario in which someone who has a full year of relevant contributions, part of which is ICA, becomes ill and thus eligible for another benefit on account of that incapacity. They would thus have a full year's entitlement. Would it be possible to take that into account?

Mr. Rooker: That would depend on the benefit concerned. In the case of invalidity benefit, the person would be covered, on the basis of their accruals, for the state second pension. That could represent a worse situation, because in some unfortunate circumstances the person's benefit could be partly in one benefit year and partly in another year. The situation would then depend on what the person's work record had been.

At a point of change, difficult decisions are always involved. I am not seeking to deny that. However, in some cases people will be able to swap from one benefit to another and still be covered, because of the nature of the benefit. It will depend on individual circumstances, including factors such as work record and national insurance status.

Mrs. Lait: I am sure that we all have sympathy with a person who accrues a large amount of a year's contributions. Perhaps it would be possible to work towards a situation whereby when a person approaches retirement the indicative number of credits associated with national insurance stamps and other such forms of help are totted up to arrive at a notional deeming of the amount of credit that they have. The objective is to try to ensure that people have a pension, not to stop them having a pension. The Bill seems to be closing options down rather than opening them up.

 
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