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As my hon. Friend the Member for Rochdale (Paul Rowen) says, it would be irresponsible to table an amendment with a view perhaps to dividing the House without having an idea of the costs. On 30 October I tabled a written parliamentary question for named day answer on 4 November asking what the cost of the amendments would be. As of lunchtime today, I had received no response. Therefore, I am rather surprised that the Minister was able to give the figure, as I asked for it a month ago and have not been given it. I had to table my amendments last week in ignorance, which is unsatisfactory. I hope that she accepts that.
I understood the Minister to say that the £3 billion—a large sum of money—relates to the relaxation of the 20-year rule. I do not know whether she has a separate figure for amendment (a). I will be happy to take an intervention at any point if she wants to clarify that.
Some issues of principle are at stake. The Government accepted Baroness Hollis’s amendments, and I pay tribute to her for her work. We are talking about a very restricted group of, generally, women. Many hon. Members will have heard the press coverage and thought, “Something very dramatic is going on. Lots of women will be entitled to buy back years.” The impression given was that the changes were given extensive coverage, but there was no mention on the day of the fact that the cost of class 3 was going up by about 50 per cent. Mysteriously, that fact never entered the discussion. As it turns out, it is not an unreasonable charge for the benefit that has been given, as the hon. Member for South-West Bedfordshire (Andrew Selous) said, but it would have been nice to have had a more balanced account of what was being done. Instead, we got the jam rather than the slight sting in the tail.
The package restricts the concessions to a narrow group and is of nil cost to the Exchequer. The amendments are probing. I want to know whether the Government will look again at the restrictions that they have applied, even if not to the extent that I propose. The first restriction is that women who have reached pension age by April this year, or will do so over the next few years, can buy back, but the die is cast for those who are 61, 62 or 63, as the hon. Gentleman said.
Having said that, in the unlikely event that anyone follows our proceedings, I would like to put on the record a brief commercial for the scheme whereby women who have already retired can still buy back. Women born between April 1938 and October 1944 can buy back missing years from 1967 to 2001-02 under the reinstatement of deficiency notice project. The deadline for some women is next March; for others, it is the year after. There is still a chance for women to buy back if they do not fall within the scope of the Lords amendments. I hope that as many women as possible will do that—and continue to send me commission as they do so.
The year 2008 is inevitably an arbitrary cut-off. Many women who retired a few years earlier with incomplete pensions feel aggrieved by that and write to me in large numbers. I am sure that they write to the Minister as well. Baroness Hollis said:
“I would like this to go further. Ideally, it would be back-dated for older women who had already reached state pension age.”—[ Official Report, House of Lords, 29 October 2008; Vol. 704, c. 1590.]
My suggestion is very much in the spirit of what the Baroness was trying to do. It is entirely consistent with that.
Amendment (a) refers to 1978, which essentially means pretty much all retired women, which may be overdoing it, but I hope that the Government will over time look at the issue again. It is in the spirit of what used to be called new Labour—I do not know whether that exists any more. It is very much in the spirit of something for something. We are not asking for charity or a freebie. The women have incomplete records. Why? Generally because they have spent time in low-paid, part-time jobs not earning enough money, perhaps while bringing up a family. There is a raft of perfectly good reasons why women may not have complete pension records. To penalise them by saying that they cannot even now put money back into the system because it is too late—their chance has gone—is unfair.
The reason women in their early 60s and beyond are getting incomplete pensions is by and large because of pension rules written in the 1940s, yet we still apply that model and women are suffering today because of it. It is anachronistic and we could extend the scope of the arrangement. As it is, what we will have is essentially a two-tier retired population. Women who hit 60 now or over the next few years will potentially get a much more generous deal. Women who are now 61, 62 or 63 will for ever be the poor relative. That simply seems unfair.
The Minister said, “Ah well, but many of them are living overseas.” Good luck to them! I am astonished that the Government’s basis for not accepting an amendment that allows women to put money into the system and get something back out of it is that they do not live here any more. They paid all their contributions when they lived here. Why should they not choose where to live? They should not be discriminated against because they have chosen to go and live somewhere else. I was not aware that that was culpable morally in the Government’s eyes, but perhaps it is. We should extend the scope of the arrangement, perhaps not back as far as 1978, but to an interim period.
The second amendment, amendment (b), notes that we are going to restrict the concession to people who have already put 20 years or more into the scheme, and, again, I find that very odd. The hon. Member for South-West Bedfordshire will be familiar with the biblical verse:
“To those who already have, more will be given.”
I had not realised that it was Government policy, but it seems to be now. If one already has at least two thirds of a pension, because once the minimum period is 30 years, anyone with 20 years will get at least two thirds of a pension, and potentially much more, one will be able to pay more in; but the women who have put in 19, 18, 17 years or less, and are already scrimping and getting by on wholly inadequate pensions, will not be able to. The women who have already put in 20 years or more are, on average, more likely to be able to afford the extra years, but it will be a struggle for the women on smaller pensions. There will not be hordes of them, and I am astonished at the cost, because it will depend on take-up. Given how complicated the whole process is, I should be astonished if there was take-up on the scale that has been described, but those women are surely the priority, so why have the Government prioritised women with bigger pensions over those with smaller pensions?
It seems to be entirely the wrong way round, and I hope that the Minister will explain the logic, if logic be the right word for the provision.
The women who suffer most through the pension system are those who have put in, perhaps, eight or nine years, and do not get any pension at all because they have not satisfied the 25 per cent. rule. It would be good if those women were able to benefit most by being able to make extra contributions and, actually, to receive a pension. Some of them do not, and they are precluded.
I was rather startled by Lord McKenzie’s comments on the matter, because, on the reason for 20 years, he said:
“That enables us to target help to those who have already made a significant contribution and are genuinely seeking to plug small gaps in their records.”—[ Official Report, House of Lords, 29 October 2008; Vol. 704, c. 1589.]
What is not genuine about the woman with 15 years of contributions? In what sense is that not a genuine attempt to plug a gap, albeit not a small one? The crucial point is that many women have gaps in their records, but they have not spent their time backpacking around Australia, as I think someone mentioned. The odd one may have, but Government policy should not be framed around the assumption that women with incomplete pensions are backpackers. They, like anyone else, simply want to put in their own money and get something back for it. Something for something seems to me to be a good basis for Government policy.
By tabling these amendments, I have been able to get an answer to my parliamentary question, which I could not get by tabling a parliamentary question. We therefore now have an idea about the cost, and it is clearly very large. I shall not pursue my amendment, but I urge the Government both to look again at the very tight and restrictive way in which they have drawn the other amendments, and to think about whether something more generous might have been considered.
Ms Rosie Winterton: I thank the hon. Members for South-West Bedfordshire (Andrew Selous) and for Rochdale (Paul Rowen) for their support on the Kindertransport amendments. I shall try to deal very quickly with the points that have been made, but if anything is left out, I shall write to hon. Members.
On the issue of data security, we will ensure that the sharing of data will be in compliance with existing safeguards and will follow statutory and best practice guidance. [ Interruption. ] So, that’s okay, isn’t it? Clause 136 allows regulation-making powers to strengthen the legal safeguards of data that are shared by the Government and energy suppliers by creating a new offence for anyone who unlawfully discloses data. On the question of whether the Government will supply all details of pensioners to those private companies, our plans for data sharing involve sharing a minimum amount of data, and that is simply required to confirm that pensioners are in receipt of pension credit. Obviously, the aim is to ensure that energy suppliers are able to provide assistance directly to poorer pensioners, but we will ensure that appropriate safeguards are in place, including in respect of the opt-out. Legal safeguards are already in place through the Data Protection Act 1998 and the Human Rights Act 1998, meaning that access is restricted to the minimum amount of information that is necessary for the purpose. We are looking at ways to address the
concerns of pensioners who want to opt out of the process, and we will keep the Opposition informed about that.
On Baroness Hollis’s amendment and the question of writing to people who could benefit, we will work with colleagues at Her Majesty’s Revenue and Customs over the coming months to consider the best way of publicising the scheme. We can also do things with, perhaps, Age Concern, Help the Aged and so on, and I know that Baroness Hollis has been looking at some of those issues.
7.45 pm
The difference between the figures of 110,000 and 550,000 relates to the people who might be eligible to make an application, and the people whom we feel would benefit from making a claim. We arrived at the take-up figure of 20 per cent. based on previous exercises.
On the issue of increased costs and pension credit, overall, as I have previously said, the package was cost-neutral and the costs were net of income-related benefits, including pension credit. Returning to data sharing, I should say that the Fuel Poverty Advisory Group advocated such data sharing, and we will work with organisations to ensure that we get it right.
Andrew Selous: I am still a little confused about the difference between the figures of 550,000 and 110,000. If I understood the Minister correctly, she said that she thought that the take-up would be 20 per cent. of the 550,000 people who could benefit. I am a little bit concerned about that, because she would miss out a group of 400,000-plus people, whom I think she says could benefit, but, it seems, will be left out.
Ms Winterton: It was a reference to the fact that some people could be eligible for the six-year extension, but it may not be considered to be in all their interests. We arrived at the 20 per cent. figure based on that and on previous exercises. Obviously, it is for individuals to decide whether they feel that they would benefit, but we estimate that we will end up with a figure of about 20 per cent.
I am sorry that the hon. Member for Northavon (Steve Webb) feels that his parliamentary question has not been answered, and I shall have another look at it. I asked officials to look today at the £3 billion and £2 billion issue in order to respond to his points. However, it is very difficult to go back—right back—to 1978 and calculate the increased costs. In effect, we have given the minimum estimated cost, going back only to 2004. If we went back a further period, as I think his question asked us to, the cost would, indeed, be higher. I shall try to get as accurate a figure as I can, but I wanted to give him a minimum figure this evening.
In view of the time, I shall not reiterate my previous arguments. I understand the hon. Gentleman’s points, but we estimate that the cost of accepting his amendment would be at least £5 billion, and we want to target help where it is most needed. Our amendments have been widely welcomed, so I am afraid that I must reject his amendment and commend the others to the House.
Lords amendments Nos. 153 to 177 agreed to [some with Special Entry].
Ms Rosie Winterton: I beg to move, That this House agrees with the Lords in the said amendment.
Madam Deputy Speaker (Sylvia Heal): With this it will be convenient to consider Lords amendments Nos. 179 to 199, 217, 218, 224 to 226, 231, 247 to 278, 285, 286 and 289.
Ms Winterton: As we are in the final stage of the debate, I should like briefly to thank my officials in the Department for all the hard work that they have put into the Bill. They have tried to maintain an open dialogue with members of the Opposition and stakeholders, and I pay tribute to their extremely hard work. They have supported not only us in this House, but my noble Friend Lord McKenzie in the other place.
This final group of amendments has been introduced to strengthen the operation of the Pension Protection Fund, the financial assistance scheme and the pensions regulator. Amendments Nos. 178 to 187 and related amendments make sure that the provisions relating to the sharing of compensation on divorce, dissolution of a civil partnership or annulment work correctly. Amendments Nos. 188, 192 and 193 ensure that the Pension Protection Fund can recover costs when dealing with sharing orders.
Amendment No. 260 and related amendments follow from an issue raised by my hon. Friends the Members for Preston (Mr. Hendrick) and for South Ribble (Mr. Borrow)—that of lump-sum payments of PPF compensation for the terminally ill. That was an important campaign, and I thank my hon. Friends for what they have achieved. Amendment No. 260 would allow members with future rights to PPF compensation who have a progressive disease, from which their death may reasonably be expected in the following six months, to access a lump sum equal to two years’ worth of the compensation that they could expect on reaching their normal retirement age.
I turn to the financial assistance scheme. Amendments Nos. 194, 196 and 217 seek to allow schemes that were not previously eligible—particularly small schemes such as that operated by Desmond and Sons—to qualify for the FAS. Government amendments Nos. 194, 196 and 217 would enable us to bring forward regulations to allow those schemes into the FAS by making exceptions to the current requirement that pension schemes must have started to wind up before 6 April 2005 to qualify for the FAS. My hon. Friend the Member for Foyle (Mark Durkan) has done a lot of campaigning on behalf of his constituents who worked for Desmond and Sons.
This group also contains a number of technical amendments that allow us to protect scheme assets, for example. Amendment No. 278 relates to the anti-avoidance powers of the pensions regulator. Hon. Members will be aware that earlier this year, the Government consulted on proposals to make proportionate changes to those powers, to deal with new risks that have emerged in the market. Subsequently, the Government tabled amendments that would include a new alternative test for the regulator’s power to issue contribution notices.
Our stakeholders, including the CBI, the British Venture Capital Association and the National Association of Pension Funds, agree that we have made enormous progress in developing this legislation through the amendments in this group, striking the right balance between protecting members’ benefits and minimising the impact on routine business. In summary, all the amendments are designed to help the PPF, the FAS and the regulator function effectively and continue to build confidence in pensions. I commend the amendments to the House.
Mr. Waterson: I shall try to tailor my remarks, because although this is an important group of amendments, which deals with some important issues, we are subject to time constraints—which, of course, were imposed by the Government.
I join the Minister in thanking everybody who made going through this process such a huge amount of fun. There is no physical similarity, but the Minister slightly reminds me of Marshal BlĂ1/4cher arriving in the early evening of the battle of Waterloo, just in time to bayonet the wounded. The Minister has arrived in the nick of time and is here to take the victory parade, as it were.
Lords amendment No. 198 and related amendments are about the important issue of buy-outs. It is hugely important to get that issue right. Initially, I am afraid, the Government got it horribly wrong. Our position has always been clear: yes, the business models for buy-outs of pension funds have run ahead of the legislation and the regulation, so something needed to be done. However, we did not need to throw out the baby with the bathwater. For some people in some pension funds, a properly regulated and financed buy-out would give an element of security that they would not otherwise have—and, incidentally, would allow the sponsoring company to get on with its core business instead of spending all its time worrying about running the pension fund. That is our position, and we have never wavered from it.
Initially, when the Minister’s predecessor approached me about the potential concerns about the issue, I said that we were happy to give our general support, subject to seeing the detailed legislation. The then Minister made a statement in April about his intentions, thereby stopping any unsuitable deals in their tracks. With the permission of the Attorney-General, he made it clear that the provision would be retrospective, and we had no difficulty with that.
We parted company with the Government when they introduced in the Lords a wide regulation-making power to deal with the issue, without putting any detail in the Bill. That caused huge debates in the House of Lords. The Government forced it through before the summer. However, I am pleased to say that during the summer, wisdom prevailed; organisations such as the CBI, the British Venture Capital Association and others made it clear that if the Government were not careful, and overdid things, they could jeopardise genuine turnaround situations and legitimate business models that give the security to which I referred earlier.
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