| Previous Section | Index | Home Page |
8 Jun 2004 : Column 147
8 Jun 2004 : Column 149
Age-Related Payments Bill (Programme) (No. 2)
12.41 pm
The Minister for Pensions (Malcolm Wicks): I beg to move,
That, in accordance with the resolution of the Standing Committee of 25th May, the Programme Order of 12th May in relation to the Age-Related Payments Bill be varied as follows:
Consideration and Third Reading
1. Paragraphs 4 and 5 of the Order (consideration and Third Reading) shall be omitted.
2. Proceedings on consideration and Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on consideration or, if earlier, at the moment of interruption.
The Age-Related Payments Bill is a short and relatively simple measure. Following scrutiny during two sittings of Standing Committee D, we are now returning to the House for consideration and Third Reading. The Standing Committee agreed the terms of the programme motion without dissent. As my hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard) was just saying, where the light shines, happiness reigns, and I hope that that might continue for the next three hours.
Question put and agreed to.
8 Jun 2004 : Column 150
Orders of the Day
Age-Related Payments Bill
Not amended in the Standing Committee, considered.
Clause 1
12.41 pm
Mr. George Osborne (Tatton) (Con): I beg to move amendment No. 3, in page 1, line 6, leave out paragraph (b) and insert—
'(b) is already 70 years old at the start of the financial year ending 31st March 2005, or attains that age at any time during the said financial year, or was living with such a person who dies during the said financial year.'.
Mr. Speaker: With this it will be convenient to discuss the following amendments: No. 2, in page 1, line 6, leave out 'relevant week' and insert '31st March 2005'.
No. 9, in page 1, line 13 [Clause 2], leave out 'either'.
No. 10, in line 14, leave out from 'individual' to end of line 15.
No. 11, in line 19, leave out paragraph (b) and insert 'and'.
No. 4, in line 19, leave out from 'credit' to end of line 20.
No. 12, in page 2, line 3, leave out from 'individual' to end of line 7.
No. 13, in line 10, leave out from 'individual' to end of line 11.
No. 14, in line 40 [Clause 3], leave out subsection 4.
No. 15, in line 44, leave out subsection 5.
No. 16, in page 3, line 6, leave out subsection 6.
No. 18, in line 12 [Clause 4], leave out paragraph (a).
No. 19, in line 17, leave out paragraph (a).
No. 17, in page 5 [Clause 8], leave out lines 15 and 16.
Mr. Osborne: On the theme of light, I am sure that most of us would rather be outside in the sunlight than in here. We are doing our duty, however, as this is an important measure.
My amendments—I tabled only two of the amendments in the group; the Liberal Democrats tabled the others—seek to revisit an argument that was explored in Committee. It is worth revisiting, however, as it is on the issue of eligibility.
The Bill is all about giving elderly people a £100 payment to help them to pay their council tax bills, although it does not require people to pay council tax to receive the money. We have been round that course a couple of times, however, and the issue is eligibility. The Government included a requirement that only those who are 70—or over, obviously—during the week of 20 to 26 September this year will qualify. I suppose that they did so for reasons of administrative simplicity, and because that is the qualifying period for winter fuel payments.
8 Jun 2004 : Column 151
Our amendments Nos. 3 and 2—principally amendment No. 3—would help all those who reach the age of 70 during this financial year, not just those who were 70 or over during the week of 20 to 26 September. Amendment No.3 would also help those who were living with someone aged 70 or over where the person had died before the qualifying week arrived. It helps two groups of people who are not being helped because of the rough justice of the Government's proposed system of administration. It will help those who turn 70 after 26 September, who under the Bill will not get any money, but who are paying council tax bills for this financial year, and indeed have probably already done so. It will also help those who are paying in instalments. Furthermore, it will help widows, widowers and partners of people who were 70 and who paid their council tax bills, but who died before the magic qualifying week.
Of course, those people would have been alive to hear the Chancellor promising them that money. I do not suggest that £100 would make up for the loss of a relative, husband, wife or partner, but the situation seems a little unfair.
When the Chancellor made his Budget speech, he produced the proposal with a great flourish—it was the big bit that he was saving for the end of his speech that was announced at the last minute and designed to get a cheer from Labour Members. After listening to him, one would not have imagined that some people who would be aged over 70 during the financial year and had to pay council tax bills would not be eligible—he certainly did not spell that out.
When the Chancellor made the announcement, he had little idea that primary legislation would be required to bring about the £100 payment. The Bill has presumably been pushed upon the Chancellor and the Government because he did not consult the Department for Work and Pensions before he made the announcement. The Department had to go to him after the event to say, "Hold on Chancellor, you're going to need a full piece of primary legislation here", and that is why the details were not spelled out in the Budget speech.
The Conservative amendments address the basic point of what the Bill is about. It is designed to help elderly people to pay their council tax bills. The bills landed on their doorsteps in early April or late March, and they have already paid them or are paying them in instalments. Although the measure is linked to winter fuel payments, there is a big difference between the schemes. People receive winter fuel payments on the basis of the qualifying week between 20 and 26 September because the scheme is linked to the winter, so September is a good time to ascertain which people will be 70 during the forthcoming winter. However, the Bill is linked to council tax bills, which are issued in April. I do not understand why, for simple reasons of administrative efficiency, the Government are excluding people who will be 70 in the forthcoming year and paying high council tax bills. Such people are on fixed incomes and are exactly the kind of elderly pensioners whom the Chancellor mentioned. However, by a fiat of Whitehall, they will not receive the money which they are due. That is unfair and it is not what they would have
8 Jun 2004 : Column 152
expected after listening to the Chancellor. The amendments would achieve the simple objective of allowing the Government to live up to their word.
Mr. Steve Webb (Northavon) (LD): When I saw the eight-minute speech limit sign flash up on the Annunciator, I thought that there had been a sudden rush of interest in the Age-Related Payments Bill and that hon. Members were queueing up to have their say. I then realised that the limit related to far more important matters, such as where airports should go. As the hon. Member for Tatton (Mr. Osborne) said, the Bill is important. It will lead to the spending of nearly £500 million of public money, so slightly more than desultory attention should be paid to it—it will probably get that this afternoon.
There are two kinds of amendments in the group. As the hon. Gentleman said, the first kind revisits arguments that we had in Committee. Liberal Democrats advocated similar arguments about which 70-year-olds should be eligible: should they be those who reach 70 by the week in September or should there be a more generous interpretation under the scheme? The Minister is a generous man, so I am sure that he will want to accept the amendments with a generosity of spirit.
If the Bill is supposed to help people who are 70 and have to pay council tax, why would we want to exclude from its provisions people who reached 70 during the year and started to pay council tax in April? One amendment would provide that if people reached the age of 70 by the end of the financial year, a payment could be made to them. Such people might spend half the year at the age of 70, but despite paying council tax for that time, they will not receive a penny from the Government or qualify for anything.
As the hon. Member for Tatton rightly pointed out, one can see the convenience of linking the payment with the winter fuel payments, but there is no winter aspect to it. Since it runs from last April to next March, we think that people who reach 70 at any point during the year ought to qualify.
If the typical council tax is about £900 for a band D property, and knocking off a quarter for the single person's discount makes it about £675, the £100 payment is only a tiny fraction of the council tax bill. If a 70-year-old were 70 for only half the year, he or she would still pay more than £300 in council tax while 70 but would not qualify for £100 from the Government towards that bill; they would qualify for nothing because they became 70 at the wrong point in the year. It is a bit daft to use a cut-off point that has something to do with winter, which is related to an entirely different system for help with fuel costs. It means transposing that system into something to do with council tax, which is not seasonal but requires payments pretty much throughout the year. I sympathise with the amendment that would allow the payment to be made by the end of the financial year, and I recall from Committee that, in the context of the £500 million cost of the Bill, the cost of including those who become 70 in the second half of the year would be relatively marginal and would not upset the overall balance of the scheme.
Since Committee, we have tabled amendments that arose, in the true spirit of parliamentary scrutiny, from the Minister's responses. When we looked at the Bill in
8 Jun 2004 : Column 153
detail, we discovered some unpalatable aspects to it. One is the fact that the £100 is not universal, as we had thought, but means-tested. The public do not appreciate that whether someone gets £100 depends on whether they are receiving a means-tested benefit. That is not widely understood.
The Minister has been very helpful. I raised some hypothetical cases with him in Committee, and within the last hour my fax machine has whizzed away as he has made sure that, in plenty of time for this debate, I had the details of how the system works. It is worth putting a couple of examples on the record that illustrate quite how beautifully the new scheme will work. The Government think in terms of pensioner households, but there ain't no such thing: there are individual pensioners living in different combinations, each of whom, known in the jargon as a benefit unit, has an entitlement to the age-related payment.
The Minister has given me two examples. One involves three sisters—the Beverly sisters, perhaps, all now over 70, I imagine—who are living together and none of whom is in receipt of pension credit. Each of them would get £50. On the other hand, two brothers—the Righteous brothers, maybe; I do not know how many of them there were—over 70 and living together while in receipt of pension credit would get £100 each. That pensioner household would get £200, but the payment is supposed to be £100. Why do they get £200? It is because they are poor. So poor people get more, but the payment is not means-tested: I do not quite follow that logic.
Another of our amendments would remove another perversity. If one lives in a nursing home, the Government do the opposite to the foregoing. Poor people in nursing homes get nothing, but those in nursing homes who are not on pension credit get £50. Where is the logic in that? When we pressed the Minister, he said that poor people in nursing homes have their council tax paid for them. Lots of people have their council tax paid but can get the £100 if they do not live in a nursing home.
The more we looked at the Bill, the more riddled with inconsistencies we found it. The Minister will correct me if I am wrong, but I am told that the Bill mirrors precisely the arrangements for the winter fuel payment, which means that that is far more means-tested than I had realised. We have tabled a lot of amendments because the Bill is riddled with means-testing. The words "pension credit" appear all over the place, and the question must be why, if the payment is a flat-rate, universal one, the Bill refers to pension credit at all.
In fact, this is a means-tested payment that the Chancellor dressed up as a universal one. Had he said at the end of the Budget that he would introduce a £100 payment, but it would be means-tested and how much anyone would get would depend on whether they were on pension credit, who they lived with and whether they were on pension credit, and whether they were in a nursing home, his reception would not have been quite as rapturous as it was.
The amendments are intended to remove every reference in the Bill to pension credit. The effect would be, we hope—amendments do not always do quite what
8 Jun 2004 : Column 154
we intend them to do—to say that the amount people get should be fixed and should not be means-tested. That would not enhance the payments of people on pension credit, but those in nursing homes would not be penalised for being on pension credit, which seems right. There is a long string of amendments, but there is one point to them: why are we making a universal payment, then introducing all sorts of aspects of means-testing to determine how much is paid?
| Next Section | Index | Home Page |