Draft State Pension Credit Regulations 2002

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Annabelle Ewing (Perth): Many of the comments of Opposition Members reflect the concerns that I raised in Committee on the primary legislation and in the Chamber. I should like to ask a couple of questions, one of which deals with the complexities of the system, which have already been discussed at some length. I

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was told only at lunchtime today that I was to attend this Committee, so hon. Members will appreciate that I have not had time to study the draft regulations in detail. However, I have quickly read them with the eye of a lawyer, which is my background, and they seem incredibly complex.

The key justification of the measure is that it will end weekly means-testing, which is of course a good thing. Concerns have been expressed by me and hon. Members from all parties that the legislation will result in a massive extension of means-testing for many pensioners. It is incumbent on Members of Parliament to consider exactly the scheme that is being proposed.

Regulation 12 addresses the key issue of the assessment period, but must be read in conjunction with the full set of regulations. I assume that further regulations, or amendments to existing legislation, will be introduced to implement the State Pension Credit Act 2002. The idea that the vast majority of pensioners will be assessed every five years is a somewhat optimistic aspiration, especially as a key part of regulation 12 states:

    ''An assessed income period shall end at such time as—

    (a) the claimant no longer satisfies a condition of entitlement to state pension credit''.

The regulations' 50 pages of detail suggest that in practice the assessed income period will not be five years for many pensioners.

The explanatory memorandum, which was helpfully provided by the Department for Work and Pensions, contains an assessment of the likely cost of introducing the measure. It shows the estimated cost to cover 2003{**nrl**}04 and 2004{**nrl**}05, but then there is silence, with no further projections. In the estimates, what is the breakdown of the actual costs in terms of the benefit that will be provided to pensioners—albeit of a limited nature—and of the administrative costs of implementing such a complex system?

I share the concern expressed that the implementation date will come and go with many problems still to be resolved.

It is regrettable that we have had limited time to consider the regulations, because they deal with many important provisions, and it is always the detail that is important to ensure that a measure is workable in practice. That is my experience as a lawyer. If something is not properly reflected on, many problems arise down the line. Surely, we all have an interest in ensuring that pensioners secure the limited marginal benefit of the measure, and I hope that if further regulations emanate from the Department for Work and Pensions in relation to the Act, we will be given more time to study them.

5.30 pm

Mr. Brazier: I echo the remarks by my hon. Friend the Member for Daventry and the hon. Member for Perth (Annabelle Ewing) when they say that the notice given for the publication of the regulations was ridiculous. My hon. Friend alluded to the fact that 13 statutory instruments are being considered up and down this Corridor this week, including two from the Department for Work and Pensions. It does seem

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ridiculous that the cards came around today. Even in the Whips Office, we knew about it only late last week.

Maria Eagle: I hope that the hon. Gentleman is not trying to suggest that that is anything to do with the Department. It is a matter for the House.

Mr. Brazier: It must be a matter for the Department and the Government that we have 13 statutory instruments coming up in one week. I am not going to get into any discussion of the role of the usual channels. It is a good convention that we do not. The fact is that if too much is pushed into the system, it is bound to come out at some point or other. I can think of very few weeks, if any, in this term when there have not been large numbers of statutory instruments to consider. This week we have a really excessive number.

The regulations confirm all the worst expectations of those of us who served on the Standing Committee on the primary legislation. We see that the rules on retired people who go abroad for short periods have not been eased at all in the details of the regulations, which throws up all the anomalies mentioned by my hon. Friend the Member for Daventry. The fact is that the arrangements for the treatment of capital are unfair. The Minister argued that they are not quite as unfair as they were under income support, but my point is that they are extended to far more people, as is the measure as a whole.

Maria Eagle: Does the hon. Gentleman accept the fact that because they are extended to more people, more people are receiving the benefit?

Mr. Brazier: Indeed. The Minister cut me off from saying that we will end up with more than half the people in the country on some form of means-tested benefit. That is something that goes against the Government's target of an eventual end to means-testing, announced at the beginning of their time in office. Many of us find it extremely sad that the Government are going in the opposite direction. I spoke against means-testing when I was a rather rebellious Back Bencher under previous Conservative Governments. I am disappointed to see this Government building on the worst mistakes that we made, while tearing apart our great achievements. Further extending means-testing—

Angela Smith (Basildon): Every five years.

Mr. Brazier: Successive speakers have given a range of reasons why it will not be once every five years for a large and growing number of pensioners. For those who are working it will not be once every five years. The Secretary of State has said that he wants to see a growing proportion of pensioners working. Last week, the Minister was there, as I was, when he said that he wanted to see an end to the artificial watershed—the situation in which people go suddenly from working to not working. He wants to see a rising proportion of people, especially in the earlier part of their retirement, working. Such people will be means-tested not every five years but on the old basis.

I do not want to bore the Committee, and I want to hear what the Minister has to say, so I shall simply ask

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her two straightforward questions. First, what does she think the take-up rate of this benefit will be? She must realise that it needs to have a high take-up rate if it is to be effective in tackling the disincentive to save, much of which stems from the Government's own measure, the minimum income guarantee. Is she willing to put her reputation on the line and predict that it will have a high take-up rate? Secondly, what effect does she think it will have on incentives for pensioners to work, especially in the early part of their retirement? The Secretary of State wants to see a higher proportion of people active, particularly in those earlier years. What effect will this measure have on that?

5.35 pm

Mr. Djanogly: Unlike my hon. Friend the Member for Daventry, I would not profess to be an anorak on this subject. However, I have some observations, essentially based on what I have heard today.

I think that all hon. Members who have spoken have referred to the complicated nature of the regulations. The Minister seemed to imply that many, even the majority, of the complications have come from the previous income support legislation, which has been loaded into these regulations, making them much more complicated. It would seem to me to be basic to suggest that this should have been the opportunity to make matters less complicated. Was this not the time to review the provisions and sort them out? It seems to have been something of a wasted opportunity—or is the idea to make the system even more complicated, so that even fewer people will make claims?

We have not discussed very much the process for applying for the benefits. I should be interested to hear from the Minister what type of paperwork will be involved and whether there will be any change from the existing arrangements. From what has been said, it seems that not a lot is being changed. I know from my constituents that the method of applying is often very confusing for older people.

Maria Eagle: The hon. Gentleman is aware, I expect, that the minimum income guarantee claim form, based on the old income support form in place when his party was in power, was 40 pages long. We have already reduced it to 10.

Mr. Djanogly: I thank the Minister for that clarification, but I am simply relating what my constituents have said. Surely this is a time to be re-examining such matters. We know that many thousands of elderly people are not making claims, so that should be considered.

5.38 pm

Maria Eagle: As a rule, we have lively debates when we enter the Committee Room to discuss social security regulations. Today has been no exception. I shall take the remaining time to do my best to deal with some of the detailed points that hon. Members have raised. I hope that they will forgive me if I do not manage to get through all of them, because some of the issues raised and answers required are quite complicated.

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Mr. Boswell: I am grateful to the Minister, who is seeking to be helpful. I suggest that she could revisit the debate and the official record of it and write, if necessary, to any of us who has raised questions that she cannot answer now.

Maria Eagle: Of course I shall do my best to ensure that hon. Members get answers to their questions, if not today then by correspondence.

The hon. Member for Daventry asked several questions. I shall resist the temptation to engage in the party political discussions into which he tried to lead me, simply because the time available is a little short. However, it is not fair to say that we are ramming the regulations through. In fact, they were discussed during the passage of the primary legislation. I am glad that we managed to get them written, published and in the public domain as soon as possible. Naturally, given what hon. Members said about the time at which they received their cards for this Committee, I do not welcome the fact that some people had somewhat less time to consider the regulations than they may have wished.

The hon. Gentleman asked several questions about the exclusions in regulation 2. He asked whether asylum seekers were included in the exclusions of persons not in Great Britain. They are not excluded. He also asked several questions about persons temporarily absent from Great Britain. One question was whether there were estimates of or figures on the scale of the problem. I am unable to refer him to any centrally collected data on the numbers involved in temporary absences or the benefit savings. Therefore, in that sense, I cannot give him an overall figure for how many people might be affected by the regulation. However, there is no difference between this element of benefit and the old income support.

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Prepared 8 July 2002