State Pension Credit Bill [Lords]

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The Chairman: Order. I appreciate that we went rather wide on that amendment—thanks to my indiscretion in being generous with the Committee. However, I wish the hon. Gentleman to conclude on the issue of the word ''state'' being excluded from the amendment. The issues that he is talking about can easily be discussed when later amendments are addressed.

11.30 am

Mr. Boswell: You are very perceptive, Mr. Griffiths. I would not dream of saying, as you modestly have, that you are indiscreet, and if you were, I would not wish to join you in your indiscretion. I am happy to address the subject more narrowly.

The amendment is very narrow. It is about nomenclature. The Minister gave us an assurance on the publicity scheme mentioned under amendment No. 18. He also gave us some explanation—albeit transmitted at third hand through the parliamentary draftspersons—why he did not want to call the credit ''the pension credit''. I suspect that, given more time and thought, we could have found an acceptable alternative. We could have called it the pensioners' credit instead of using the term in the Bill. I offer him that name in case he later decides to amend the term.

The Minister has attempted to charm us with his rhetoric, but there is still a problem with the Bill, which will not achieve what it is intended to do. I do not like the word ''state'' being slung around its neck, as it is not really about the state contribution to the joint programme that will provide an adequate income for those in old age. I know that the Minister has expressed jocular concern about our thinking on the matter. I assure him, first, that we meant what we said in our reasoned amendment and, secondly, that we will continue to consider constructive ways of effecting that. It is sad that our meetings on Tuesday mornings are disrupted by the Committee, as they provide even better value. I hope that the Minister will learn something from those meetings, as I am sure that we will.

We have had an interesting exchange on state pension credit. We are not going to be factious and divide on everything, but on this occasion, particularly as the Minister went rather over the top, I feel inclined to advise my hon. Friends to persist with the amendment, which stands in my name and that of my hon. Friend the Member for Hertsmere.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 12.

Division No. 1]

Boswell, Mr. Tim Brazier, Mr. Julian Clappison, Mr. James
Mercer, Patrick Selous, Andrew

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Brennan, Kevin Cairns, David Cruddas, Jon Eagle, Maria Ewing, Annabelle McCartney, Mr. Ian
Osborne, Sandra Purnell, James Smith, Angela Turner, Mr. Neil Tynan, Mr. Bill Webb, Steve

Question accordingly negatived.

Mr. Boswell: I beg to move amendment No. 22, in page 1, line 20, leave out paragraph (a).

The Chairman: With this it will be convenient to take amendment No. 13, in page 1, line 23, leave out 'temporary'.

Mr. Boswell: I last moved an amendment deleting the word ''temporary'' from legislation when I was a Government Back Bencher. It triggered a debate—lasting some hours—in which I received massive assistance from the Labour party. That resulted in one of the relatively few occasions when I was unable to support the Government of the day; I abstained. I cannot possibly make such claims about the intentions or the effect of the amendment, but I want to probe some important points that both amendments raise.

I thank the Under-Secretary for indicating that she will reply to this short debate. Amendment No. 22 would remove subsection (5)(a), which relates to

    ''circumstances in which a person is to be treated as being or not being in Great Britain''.

It is a classic probing amendment and designed to encourage the Under-Secretary to explain the circumstances under which such a provision may arise. I have two points to make. First, why cannot a court decide whether a person was in Great Britain? Why do we need regulations? Surely that is relatively easy to prove.

Secondly, it would be helpful to receive the Under-Secretary's elucidation of how it is possible to be in Great Britain for the purpose of receiving the pension credit, but not to be physically in Great Britain at the time. The explanatory notes proceed on the analogy of income support and dangle out to us the prospect that no action will be taken if a pensioner entitled to the credit is outside the United Kingdom for four weeks, or eight weeks in certain circumstances. Will the Under-Secretary explain her thinking about the four-week period and say how it may be extended to eight weeks?

Clearly, no one is suggesting that, if someone goes on an awayday trip to Calais, he or she is disqualified from receiving benefit. However, can the Under-Secretary explain why people who leave the jurisdiction for longer than the normal length of a holiday may lose their entitlement to pension credit? On what basis is such a provision made? Income support is essentially a short-term benefit related to immediate need, although within that are some savings to prevent people from losing the benefit immediately when their circumstances change. Under the Bill, however, such concepts are bolted on to consider eligibility for pension credit.

I have two or three worries that are touched on to some extent by amendment No. 13 that would delete the word ''temporary''. The obvious point is that the

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assessment period for pension credit is to be set at five years or, to put it another way, a person will not lose his entitlement to pension credit over five years, after which time circumstances would be re-examined. I understand the Bill well enough to know that it does not contain such a provision relating to, for example, a visit to hospital. Leaving the United Kingdom on a permanent basis would be a notifiable event and there would be a reassessment.

Mr. Ian McCartney: Marriage.

Mr. Boswell: And marriage, as the Minister says. Good luck to people of that age who do marry. I welcome it.

The Under-Secretary must set out for the Committee why such an arrangement has been chosen, why the periods are such, why it is appropriate to go alongside the income support period and how that will mesh in with the much wider entitlement to pension credit that is available without reassessment.

Mr. Clappison: My hon. Friend is asking for insight. With regard to fixing those periods, in the consultation paper the Government said that they wanted to learn the lessons of the working families tax credit. Does my hon. Friend share my interest about which lessons they have learned from that, given that in their new arrangements for the working families tax credit they have altered the way in which assessment is to take place from fixed periods to periods which are more sensitive to changes?

Mr. Boswell: That is a germane point, and I hope that the Minister will reflect on it and address it in his argument.

I wish the Minister to think a little more about what we have said about what the periods should be and why they should be that, bearing in mind that we are talking about regulations which will eventually, no doubt, fall to be considered here.

Beyond that—to make a point that begins to mesh into my second amendment—I wish to address the question of temporary absence. Why should these periods be set at all? I do not want to caricature the pension credit but, somewhere at the back of my mind, I am thinking about a problem of equity that might arise. A person might perfectly legitimately—and with no mis-statement of their income or circumstances—receive an assessment with regard to pension credit on day one that fixes their entitlement for five years, and that is, as it were, a one-way street, because it can be increased but it cannot be reduced. Shortly after that assessment they might, for example, receive a windfall, perhaps from the death of an elderly relative, which makes them very much richer, and they might continue to live in the United Kingdom, and to benefit from both the pension credit and from the windfall gain for five years, until reassessment. One can contrast that position with a situation where someone either finds that they have a reduction in income, and they may or may not apply, or they go outside the jurisdiction to another country, perhaps for very good reasons, such as family reunion, and after a qualifying period they are no longer entitled to the pension credit. There is

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the potential for a tension in equity between those two cases.

I turn to how far the regulations run—and how far they might extend. Are they, for example, absolutely neutral between residents and people who have undertaken a longer than temporary removal to another country within the European Union, or to a British colony, such as the Falkland islands, or are the regulations intended to be absolutely neutral between all countries, for example the United States of America, or a Commonwealth country, or a country outside Europe that is not directly associated with the UK in any way?

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): Will the hon. Gentleman clarify something for me, so that I can try to answer his point when I reply to the debate? Is he just asking whether there will be no difference, outside the UK, between the European Union, for example, and anywhere else? Is that the point that he is asking me to clarify?

Mr. Boswell: I think that I am. That is the first point. However, I then come to my final point, which is buried in the second amendment.

I realise that we are entitled to debate legislation here, irrespective of proceedings in courts elsewhere—there is, as I understand matters, no sub judice law. I am not asking Ministers to trespass on areas that, no doubt, their counsel will be advocating in the High Court at this moment, but it will not have escaped their attention that currently there are proceedings in the High Court about overseas pensioners, which are addressing whether they have an entitlement and, if so, whether it is principled to withdraw that entitlement for those who have moved to certain countries, but not to others. With regard to that, there frequently appears to be a link with countries where there is a reciprocal social security agreement.

We are faced with a complex picture. With respect, it is not quite as simple as the Minister was seeking to set out, and, therefore, it is important to probe the exact basis on which this state pension credit entitlement would be withdrawn if someone were to leave the UK.

I am sure that nobody, least of all the Minister, would wish to caricature us by suggesting that we are saying, ''The moment you arrive at Dover, that's the end of it; you lose it, it's gone.'' Of course, that is not the case. Neither do I suggest that pensioners should not be able to go on holiday—of course they should. I am sure that the Minister would want that as well.

11.45 am

I understand the argument that if the benefit is income-related, although that is sometimes equivocal, Ministers might want to set a limit on the entitlement period if a person moves outside the jurisdiction. Whether they do or not, that should be principled. That chimes in with issues such as whether the jurisdiction would be the European Union or wider than that, and whether a limit would be compatible

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with European law. Additionally, the measure could be discriminatory against different types of pensioners who may move to different areas.

These matters are sensitive, and the Minister will know—I have made my worries clear—that some apparently settled arrangements on retirement pensions are being challenged in the High Court. We neither could, nor should, rehearse all that today. However, we must be on the right basis before we start, and we need a clear understanding of what Ministers are trying to do and the reasonableness of rules to limit entitlement that they will set in regulations.

Alongside that is the obverse of the concessions that Ministers explained or made. If the Government intend to give a five-year entitlement to person A who receives a bonus of income but remains in the UK with full entitlement to pension benefit, they must consider pensioner B, who may have the same entitlement due to their initial income but who could move outside the jurisdiction and be disqualified from receiving benefit although he or she has a much lower income than person A. These are real issues of equity, but there are also legal issues and, in any case, we need to know from where Ministers are coming.

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