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The various claims being made by the Opposition parties differ. I give the hon. Gentleman credit for saying straightforwardly that he would spend more taxpayers’ money. However, I think that we should be cautious about deciding to spend large amounts of Government money on ensuring that those who have not paid the insurance premiums into the pot, as the people in the PPF scheme have paid, should get the same benefits because the Government chipped in. We have to get the right balance between the rights of the
pensioners and the rights of the taxpayers. By saying that they would not spend large amounts of taxpayers’ money, the Conservatives recognise that that balance needs to be struck, but they claim that they can magic the money from somewhere else. I do not accept that.
The claim is made that a threat has somehow been made to withdraw the increase to 80 per cent. if the Bill goes into the spill-over period. That was the substance of a letter that Conservative Front Benchers sent out earlier today, but it is complete nonsense. It is true that I warned in the last debate that if the Bill was delayed into the spill-over period the increase from 60 per cent. to 80 per cent. in the cover under the financial assistance scheme would also be delayed, and pensioners would not get it over the summer—and I think that they deserve it. That is why I am pleased that the Opposition have agreed to the amendments and that the Bill can receive Royal Assent so that the increase to 80 per cent. can begin to be paid by the FAS operational unit. That will happen within days of Royal Assent, which I hope will occur shortly.
The hon. Member for Eastbourne made several other points, which I shall address briefly. He mentioned that Lord Skelmersdale had drafted the amendment, but for the sake of clarity I suggest that he had a little help from his friends. As far as the Young report is concerned, the total assets are £1.7 billion. He asked what percentage was likely to be effective, and the answer is that almost all of that sum will be covered, as he suggested.
As for the regulations and the timescale, I have already said that we would like to introduce the regulations as quickly as possible. We will happily show them to Opposition Front Benchers, but we want to put them into operation quickly. That means that we will not consult widely on them. I am happy to put a copy of the letter that I sent last week in the Library, and send one to Opposition Front Benchers. I apologise for not ensuring that that had been done before.
The hon. Gentleman also asked whether seeking the consent of the Secretary of State was likely to be rare. From our point of view, it would be rare. It might happen if an otherwise fully funded scheme was close to being wound up, but found that it had a small gap. It would therefore not stand to benefit very much from the FAS, so the trustees might ask the Secretary of State whether they could annuitise in those circumstances. The Secretary of State would look at the facts and take a view. Such circumstances would be rare, which is why we do not want annuitisation to proceed for funds engaged with the FAS—and that would be the purpose of the amendments.
The only other question that I was asked had to do with the nine-month period, and I can tell the House that we are looking at the nine months from September. We hope that Young will report in November, and we expect to be able to make some decisions fairly quickly thereafter. We do not yet know the full terms of the Young report, so we will have to wait and see what it contains, but we want to put various alternative courses of action before the House as quickly as possible. Details of any substitute scheme will be made known in regulations put in place before the nine months elapse.
Finally, despite the bit of political knockabout that we had, I am grateful for the positive reaction of the hon. Member for Eastbourne to the amendments, and I hope that he will adopt a similar approach to the next group.
Mr. O'Brien: I beg to move, That this House insists on its disagreement with the Lords in their amendment No. 28 but proposes amendments (a) and (b) in lieu.
I shall be brief. We considered that Lord Fowler’s amendment No. 28 was unnecessary, not least because we have already made commitments to keep under review the reforms enacted by this Bill. We also have reservations about the exact terms of the amendment. Although we may have an idea about what the term “post-legislative scrutiny” means, we are reluctant to commit the Secretary of State to complying with a duty until there is a clear understanding of what that might entail. No final agreement has been reached about what post-legislative scrutiny would entail, so we have proposed instead that the Secretary of State present to Parliament a report on the operation of the Act that will give Parliament an opportunity to consider and debate the findings.
We also took the view that 2011 would be too early for a review to be conducted, as only the measures relating to new qualifying conditions for state pensions would have come into effect by then. Many of the provisions in the Bill would not have come into effect by that date, so we suggested in the other place that the Secretary of State should present the report by the end of 2017. That would follow a period of some years when all the measures, apart from the increase in state pension age, had had time to bed in. It would also allow us to consider whether we were taking the appropriate steps to ensure the smooth implementation of the state pension age changes in 2024.
It was evident from yesterday’s debate in the other place that their Lordships were dissatisfied with the proposed date for the Secretary of State’s review. We now propose, therefore, that he should present his report by the end of 2014. I understand that Conservative Front-Bench spokespersons in the other place would be satisfied with that compromise, and for completeness I should tell the House that Government amendment (b), to clause 28, is purely consequential. Clause 28 defines the extent of the measures in the Bill, and the amendment would ensure that any review of the operation of the Act in due course would take account of the provisions as they relate to Northern Ireland.
I believe that the proposed amendments in lieu are sensible, and consistent with the principles of good administration. I hope that they command the support of the House.
Mr. Waterson:
As the Minister has explained, the Government amendments are, in effect, a compromise arising from the Lords debates, and on behalf of the official Opposition, I welcome them. Lord Fowler made a powerful case in the Lords for the principle of post-legislative scrutiny. In recent times, we have heard a lot about pre-legislative scrutiny, and that of course
has its place. However, one can actually sustain the argument that scrutinising the effects of legislation after the event is every bit as important, if not more so.
In a powerful speech in the Lords on 11 July, Lord Fowler made his case extremely well, based on his massive experience in such matters. He gave two specific examples. The first related to the Social Security Act 1986, the state earnings-related pension scheme and subsequent issues such as compensation claims and the non-issue of leaflets. In that case, he thought that post-legislative scrutiny would have made a significant difference.
Lord Fowler’s second example related to some of the issues dealt with by the parliamentary ombudsman, the High Court, the European Court and Select Committees in recent times. It is not for me to rehearse all the arguments on this occasion. The issues are currently before the courts, but he uses them to show how a post-legislative scrutiny procedure could have picked up some potential problems and some of the misinformation on the basis of which the ombudsman found that there had been maladministration.
Lord Fowler came in for a certain amount of criticism from the Minister in the other place for leaving rather vague the issue of who would actually perform such scrutiny. However, as Lord Fowler said:
“The amendment would give the Government maximum flexibility.”—[ Official Report, House of Lords, 11 July 2007; Vol. 693, c. 1410.]
There is some merit in that view.
Most important is the common-sense point that every time we pass pensions legislation in the House the law of unintended consequences runs through it. It was trumpeted that one of the principal aims of the Pensions Act 2004 was the protection and enhancement of defined benefit schemes. In fact, the measure accelerated the closure of such schemes to new entrants and even to existing members, so I permit myself a wry smile when I consider the arguments in the Lords about the time scale for post-legislative scrutiny. Is it not interesting that within barely two years of the 2004 Act the Government’s White Paper announced a review of its provisions? Any Government worth their salt would look closely at such legislation in a much shorter time scale than that proposed in either the original amendment or the compromise amendment. It is ironic that on this very day the Government published the results of the regulatory review.
We on the Conservative Benches are keen supporters of Lord Fowler’s proposition that major legislation deserves proper post-legislative scrutiny. I join Lord Fowler in noting the fact that the new Prime Minister has said that he wants to restore the role of Parliament, and we welcome the Government’s deathbed conversion to the principle. I understand that Lord Fowler and his colleagues in the Lords are content with the amendment proposed; therefore I am too, so we shall not oppose it. However, if and when we win the next election we shall certainly carry out our own thorough review of this and other recent pensions legislation.
Danny Alexander:
The activities in the other place to add the concept of post-legislative scrutiny to the Bill played a useful role. The work done by Lord Fowler,
supported by Liberal Democrat, Conservative and Cross-Bencher colleagues, in insisting on that concept has in the end managed to wheedle from the Government a useful amendment in response. That goes some way towards meeting the objectives set out in the Lords and on that basis I welcome the Government’s amendment.
The Bill will have a very long-term impact indeed. The main impact of the legislation will be felt not in one, two, three or four years’ time, but for generations to come. It is appropriate therefore that there be scrutiny of the Bill’s impact once it receives Royal Assent and becomes law. That is true for a number of reasons, the first of which is the point that Lord Fowler made in his speech in the other place about perceiving and acting on errors or mistakes that may have been made. Government amendment (a) will allow the possibility of proper scrutiny in the future of some of the flaws in the Bill that my hon. Friends and I have highlighted during its passage. The Government deny that there are flaws, but the truth will become certain only with the passage of time. Government amendment (a) will allow time to elapse before those issues can be properly examined.
3.45 pm
I hope in particular that, in implementing Government amendment (a) in relation to reviewing and preparing a report on the operation of the Act, the Secretary of State, whoever that is by 2014, will have regard to questions about the extent to which means-testing is still a pervasive part of the system by that date. No doubt we will debate this when the next pensions Bill comes down the track—one is expected in the next Session—but I remain of the view that the extent to which means-testing or mass means-testing, is still a pervasive part of the system, should be considered. I believe very much that that could well undermine personal accounts, the establishment of the delivery authority for which is part of the Bill.
The Liberal Democrats have concerns about what the way in which the Bill operates will mean for the rights of many women pensioners to have access to a full state pension—a matter which we debated briefly last week. Again, I hope that the Secretary of State can include that in his report. The Minister rightly referred in his opening remarks to the increases in the state pension age that will follow the Bill. Again, reviews of the proper operation of the implementation of that will be important.
The Bill relates to the uprating of pensions in line with earnings. We have been given a date—I think that it is 2012—but we have also been told that the uprating might not happen for two or three years after that. It might well not happen until the end of that Parliament. Although I am not able to predict the dates on which Parliaments begin and end, it is possible that the uprating in line with earnings will not start until 2015. I hope that the timing of the report before the end of 2014 will, if necessary—I hope that it will not be necessary—act as a strong corrective to any governmental wish to delay yet further the implementation of the uprating in line with earnings.
The Minister will know that the Liberal Democrats have called for that uprating to take place immediately, and I remain of that view. Even if the Minister is not of
that view, I hope that by including the report in the Bill under Government amendment (a) and by requiring the Government to produce such a report and bring it before Parliament, where we would expect to debate it, so that it could come under scrutiny and pressure from hon. Members about possible failure to deliver the content of the Bill, we will ensure that Ministers act quickly to do the decent thing in relation to the uprating in line with earnings and introduce it, at least by their own timetable, inadequate though the Liberal Democrats believe that is. With those few words, I say that the Liberal Democrats will be happy for the House to pass these amendments.
Mr. Brian Jenkins (Tamworth) (Lab): With regard to post-legislative scrutiny, when provisions come before the House, many Members are at a disadvantage in so far as we do not have the time to go through the detail. Would the Minister like to give an undertaking to ask the National Audit Office to produce a report that covers certain key sections to inform Members, so that they can fully take part in any scrutiny debate in the House?
Mr. Mike O'Brien: I begin by thanking both Opposition spokespersons, and, indeed, my hon. Friend the Member for Tamworth (Mr. Jenkins), for supporting the amendment.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. and learned Gentleman should seek the leave of the House to reply to the debate.
Mr. O'Brien: Forgive me, Mr. Deputy Speaker. I beg to ask leave of the House to reply to the debate.
These are important amendments. It is perhaps fitting, as we move towards the conclusion of the Bill, that the amendment has been dealt with in a spirit of compromise. That is important because pensions, above all, require a consensus to be built around long-term planning to develop security for the elderly in the future.
The Bill will enable a lot of legislation to be passed—some of it potentially quite controversial, such as the provisions to increase the retirement age. We have been able to put those provisions through the House because the Turner report, and those who worked on it, provided the basis for a consensus to be built around pensions policy. There were some issues of political controversy during the course of the Bill. In the course of reviewing the Bill, perhaps a Minister will look at some of those issues, as well looking at the areas where we all agreed. It was important that we had that level of agreement and that we were able to get through some potentially very difficult issues. I extend the Government’s thanks to Opposition Front-Bench Members for their broad approach to many of the issues.
May I also place on record my thanks—and those of my predecessor, my right hon. Friend the Member for
Stalybridge and Hyde (James Purnell), and other Ministers who dealt with the Bill before I did—for the way in which officials briefed us and ensured that we were able to find our way through some quite complex legislation? Of course, I look forward to working with the hon. Members for Eastbourne (Mr. Waterson) and for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) on the next Bill, which is likely to come forward fairly soon. I will consider the suggestion from my hon. Friend the Member for Tamworth for the NAO to be involved. I will not give a commitment at this point, but it is an interesting suggestion and the Government will consider it.
Mr. Waterson: I am grateful to the Minister for giving way for what I imagine will be the last time during the passage of the Bill. May I join him and express the thanks of the official Opposition to the officials, the Clerks, all hon. Members who have spoken during the various stages of the Bill, the Minister’s predecessors and the previous Secretary of State? Any blame for decisions about the Bill that we think were wrong is attached entirely to Ministers. We are very grateful to everybody else.
Danny Alexander: May I add some remarks from the Liberal Democrat Benches to follow the remarks of the Minister and the hon. Member for Eastbourne (Mr. Waterson)? Although I have not been associated with the Bill for very long, my hon. Friends the Members for Yeovil (Mr. Laws) and for Solihull (Lorely Burt) were involved in the Committee stage and I would like to express our gratitude to the officials, the Clerks and so on, all of whom have assisted with the passage of the Bill. Although the consensus has not always been complete, there has been a model of working to achieve that. There may be a deal more controversy with the next Bill, but I look forward to the efforts that the Minister has said he will make to build consensus in that instance too.
Mr. O'Brien: I thank the hon. Gentleman. The press will no doubt report the arguments. I suppose that, in a democracy, debate is what creates stories for the media. However, the real story has been that a difficult and controversial issue has been dealt with sensibly by Members. We have reached a consensus. We have put forward one piece of legislation, which has broad support. I hope that, in due course, the following piece of legislation, which will build on this Bill, will be passed in the spirit of continued co-operation and good will. We still have a lot of work to do on pensions. It will take a lot of effort, but the good will is there to make sure that we provide for the pensioners of the future.
Government amendments (a) and (b) in lieu of Lords amendment No. 28 agreed to.
DEFERRED DIVISIONS
Mr. Deputy Speaker (Sir Alan Haselhurst): I now have to announce the result of a Division deferred from a previous day on a Question relating to immigration. The Ayes were 285, the Noes were 52, so the Question was agreed to.
I shall also announce the result of a Division deferred from a previous day on a Question relating to children and young persons. The Ayes were 277, the Noes were 186, so the Question was agreed to.
[The Division Lists are published at the end of today’s debates.]
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