State Pension Credit Bill [Lords]

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Mr. McCartney: The hon. Gentleman is being a bit disingenuous. Changes can be made by regulation. The hon. Gentleman and other colleagues have legitimately raised this issue, but have concentrated solely on older people. The Government took the view, however, that changes should not impact negatively on other groups. We therefore went further than any campaign or this House ever intended us to. We extended provision to all those who have been affected by hospital downrating. That is the best way forward. The hon. Gentleman is content to focus narrowly on one very important group—the largest group. He cannot possibly be serious in saying that the Bill should be amended to give something to pensioners while denying it to others in the same circumstances because they receive another form of income from the state.

Mr. Webb: That is a very strange intervention. Clearly, as the Minister just said, pensioners are the biggest group affected by downrating, so it is not surprising that pensioner groups have been pushing the campaign. I am delighted that the Minister came to his office with the desire to do something about the issue—that is great. No pensioner group would have objected to the extension of the principle to non-pensioners, but that is not their client group, nor does such extension fall within the scope of the Bill.

The Minister says that we can amend the provisions by regulation. He may be aware that the Opposition do not have the power either to introduce regulations or to amend them when they are laid before the House—we are able only to say either yes or no. It is

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the Government's job to make such amendments and I am concerned that they have failed to do so.

If the amendment were passed, we would want the principle to be extended. The Under-Secretary said, ''Ah, but what about the cost?'' She used the term ''billions'' during her speech and then she said that very few people were involved. She cannot have it both ways.

Maria Eagle: I was making a general point when I said ''billions''. As a social security Minister I have found that changes that appear small can sometimes result, when followed through the system, in billions of pounds in costs. I was not suggesting that abolishing hospital downrating would cost billions.

Mr. Webb: No, because the Minister knows that it would not cost anything like that much.

Maria Eagle: I did not say it.

Mr. Webb: Well, we will not continue to bat back and forth.

As the Minister said, we are talking about 3,000 non-pensioners and 6,000 pensioners. The principle has already been breached. The measure involves very few people, so the cost would be limited. The Minister has not addressed the issue hinted at by the hon. Member for Daventry, which is that there is a cost to the Government of running hospital downratings.

Even if someone reports on day 1 that they have passed the six-week or 13-week mark, the Government have to stop and then reinstate their benefit, which has a cost. If someone were to stay for 14 weeks, I should have thought that the cost of stopping their money would be greater than the money saved by doing so. So it is not clear that the measure will save the Government much money. If someone inadvertently fails to report a long stay in hospital and they end up being overpaid, the Government have to recover that and that costs money as well.

There is no great issue of principle involved, because it has already been breached. Hardly any people are involved and no evidence that double provision is occurring has been produced, so I cannot understand the Government's objections. I understand the issues around nuns and prison inmates, which is why they are excluded from the amendment. I feel that no coherent objection to our argument has been made, but it is not my position to decide which amendments in the group we should divide on, so I will leave it at that.

Mr. Boswell: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Boswell: I gave notice, in moving the amendment that we have just discussed, that I would press the Minister on some wider issues concerning clause 2. By way of trailer for later discussions—which may not even take place in Committee, so rapid and telescoped are our considerations—I should say that we may propose putting clauses 2 and 3 together.

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Some Members who would not normally be seen as allies of mine wonder what is going on in conceptual terms. As I understand it, we are essentially extending the minimum income guarantee above the level of minimum income by providing a phased withdrawal in relation to savings income. Yet two separate concepts—the guarantee credit and the savings credit—are addressed in separate clauses. I do not want to debate that matter now, but I should like to pick up on the Under-Secretary's remarks about improvements in the minimum income guarantee. Let us isolate the issue of the savings credit—if that is possible—and consider the criteria for the minimum income guarantee. The essential point is that it is now available above the MIG level, and that is what the Bill effects.

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It would be helpful if the Under-Secretary could say whether there are any other changes of substance beneficial to pensioners in how the guarantee is made available, and whether any other changes arising from clause 2 are negative for pensioners? I do not canvass any because I do not think that there are any, but it would be helpful if she could give an assurance. Under clause 3 we shall be able to debate the substance of the savings credit.

Several hon. Members have already expressed concern about the way in which the guaranteed income traditionally delivered by income support and now delivered by the MIG has been compressed against the entitlement to pension, or that the two have now separated, leaving a gap that the Bill was designed to address. Leaving those macro issues aside, let us consider entitlements and the delivery of the guarantee element of the credit. Will the Under-Secretary tell us whether that has changed, and whether the change is beneficial? We were not heavily lobbied on the matter, and it would be fair to say that clause 2 has almost crept by inadvertently, but it would be useful to discuss that matter before we discuss the savings credit.

Maria Eagle: Clause 2 is creeping by somewhat quickly, which, as the Minister, I should welcome, because we do not want to debate one clause for too long. However, I want to say in more detail why I think that the clause should stand part of the Bill.

The clause ensures that the minimum income guarantee, which is an anti-poverty measure, is carried forward into pension credit. The meat of the Bill and the changes that it brings about relate more to the savings credit in clause 3. The guarantee credit simply ensures that no one loses out in the system.

Mr. Boswell: Can the Under-Secretary give us the explicit assurance that there will be no losers in the system, at least in relation to the guarantee? Perhaps I should have asked that more explicitly in the first place.

Maria Eagle: I can indeed. I am happy to make it clear to the Committee that there will be no losers and that no one will be worse off on the guarantee credit than they would have been under the minimum income guarantee. Perhaps that explains why the hon. Gentleman found it difficult to spot aspects of the

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guarantee credit that were different from those of the minimum income guarantee.

The hon. Gentleman will be aware that when the Government came to office we were keen on assisting those pensioners at the bottom end of income distribution. We may debate whether his party agrees with the way in which we have undertaken that or even the concept of undertaking that, but that has been our policy. We wanted to get help to those at the poorest end of income distribution as quickly as possible, so we had to build on what was already there—which was income support.

We are going further than that now, not only to award savings, which comes under a different part of the Bill, but by ensuring that those who have benefited from MIG do not lose out from the changes that we propose. Clause 2 ensures that no one should be worse off in respect of the guarantee credit than they would have been in MIG.

Some problems have been highlighted with regard to MIG that have arisen because it is based on income support. For example, we heard about the 40-page form that asked a female pensioner whether she was pregnant. That happened because the system was based on the income support form and the income support computer system. Of course, we ameliorated those effects in time, but our main priority was to get money to those pensioners at the poorest end of income distribution as quickly as possible, and building on income support was the way to do it.

Mr. Boswell: In a sense, the Under-Secretary answered the point that I anticipated making. She has been able to make those changes before legislating in the Bill. The form does not have to be complicated just because it is based on the son or daughter of the old income support form.

The Under-Secretary mentioned the reference on the form to whether a female pensioner was pregnant. I realise that she used that slightly absurd case to make her point. Of course, as she will know, there is a presumption in law that there is no absolute bar on pregnancy. In the next village to mine, a lady aged 56 gave birth to healthy twins. When considering approximation or even equalisation, we must remember that it is not impossible that at some stage it may be necessary to reintroduce that question into the form. I welcome that, and have no objection to it in principle. My substantive point is that the Under-Secretary was able to make changes under the old format without clause 2.

Maria Eagle: I am sure that my father, who had to cope with twins at a much younger age, would have a great deal of sympathy for the lady in the next village to the hon. Gentleman. It seemed as though he was arguing for the reintroduction of complex forms, although I know that he was not really doing so.

We reduced the minimum income guarantee form from 40 pages to 10 simply by concentrating on the fact that we want to provide pensioners with services that are relevant to them and are not just tacked on to the working-age services that we provide through income support. That has driven not only the design of pension credit but, for example, the creation of the

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Pension Service, which will be a public service aimed directly and solely at helping pensioners to meet their needs. Pensioners interacting with the benefit system and trying to claim their entitlements will no longer have to go to offices designed to help those of working age get back into employment, and they will no longer have to fill in forms that are designed to meet the much more varied circumstances of those of working age. We Labour Members think that pensioners will come to value that.

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