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Baroness Jay of Paddington: My Lords, I am sure that my noble friend is aware that that is, of course, entirely a matter for the other place. As regards the arrangements for this House--in which I am engaged--I believe that the usual channels have been consulted. In accordance with the undertakings which I gave last week, I understand that the Cross-Benchers have also been consulted on this important issue and that agreement has been reached in your Lordships' House on the timetable which is, of course, the matter which concerns your Lordships.

Lord Peyton of Yeovil: My Lords, the noble Baroness has just said that the handling of this Bill is entirely a matter for the other place. Not everyone in your Lordships' House is satisfied that the House of Commons is able to give or accustomed to giving thorough examination to very important measures. This one, which is highly contentious and very speculative, will receive only a short period of review in the other place. One wonders what will happen in this House. There are serious concerns about a measure which has been put forward suddenly, abruptly and without

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adequate consideration. No one would ever claim that the draftsmanship which goes into the legislation which comes before your Lordships' House is immaculate.

Baroness Jay of Paddington: My Lords, as I say, I can only repeat that I understand precisely the concern of the noble Lord, Lord Peyton of Yeovil, about the extreme importance of this particular measure. However, the arrangements for the other place are entirely a matter for the other place. As I said in reply to the noble Lord, Lord Molyneaux, I am sure that there will be adequate time for your Lordships to give their usual scrutiny to this Bill. As I stated, the opportunity to table amendments is already available.

Earl Russell: My Lords, does the noble Baroness agree that the noble Lord, Lord Stoddart of Swindon, is mistaken in saying that the House of Commons is sovereign? Is it not only one person in the parliamentary trinity?

Baroness Jay of Paddington: My Lords, I always defer to the noble Earl and his constitutional observations.

Lord Campbell of Alloway: My Lords, will the noble Baroness explain how we are to deal with amendments if the Bill is to be taken through all its stages in one day? Will there be a Committee stage, Report stage and Third Reading?

Baroness Jay of Paddington: My Lords, I am afraid the noble Lord is mistaken. The Bill will not be taken in one day. The Second Reading will take place tomorrow. As I stated before, as has been agreed through the usual channels in co-operation with the Cross-Benchers, the further stages will be taken on Thursday.

Lord Elton: My Lords, will the noble Baroness elaborate a little further on that? I do not want to trespass on the delicate ground of what the usual channels do in private. But those of us who are not in that circle are concerned, if amendments are tabled and agreed in Committee, as to whether there will be sufficient time to deal with them or indeed to refine them on Report. Therefore, where are the buffers at the end of the line? Are we trying to get away at the end of July or is there a possibility that a Report stage could be held over into the following week?

Baroness Jay of Paddington: My Lords, the buffer on this particular piece of legislation is Thursday evening. As I said, that has been agreed through the usual channels. I agree with the noble Lord that the mysteries of this particular process are not always immediately obvious, but that is the understanding. I am sure that the noble Lord and the whole House are aware of the implications of that timetable for the whole process of devolution which we all very much hope will take place this week.

On Question, Motion agreed to.

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Welfare Reform and Pensions Bill

3.28 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Baroness Hollis of Heigham.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 51 [Entitlement to Category B retirement pension by reference to new allowances]:

Lord Rix moved Amendment No. 91A:

Page 58, line 25, at beginning insert ("Subject to subsection (7A),").

The noble Lord said: Although this is already on record, I should declare that personal interest which all of us with spouses have, especially if our mortality catches up with us after April next year.

I do not want to detain Members of the Committee on matters on which other noble Lords and the Minister have spoken so eloquently. I shall attempt to be brief in the commonly accepted sense of that term and not as in Chaucer's Prologue.

In brief, a previous administration used the Social Security Act 1986 to halve the earnings related to the inheritance of spouses with effect from April 2000. That change is now in Section 50(5) of the Social Security Contributions and Benefits Act 1992 and is reflected in Clause 51(7) of the Bill which we are now debating. The Minister has inherited that poisoned chalice but she and her colleagues have not so far been minded to disown it. What the noble Baroness and her colleagues in another place have done is acknowledge that the suppression of information about the loss of accrued rights under the 1986 Act has created injustices which will have to be addressed through some form of compensation for some people.

My amendment--I recognise its drafting limitations--seeks to require regulations to be made, subject to the affirmative resolution procedure. Those regulations would, I envisage, give full inherited pension rights to the spouses of those whose contributions span the whole period from 1978 to 1986 before the 1986 legislation came into being to diminish those rights. Using the formula of which I have notified the Minister, they would give a lesser inheritance to the spouses of those who contributed after 1986 during the period when the law had changed, but that change in the law had not been notified to those affected by it.

I propose this approach because I do not want to complicate an already complicated clause and because I am wedded to the principle of justice but flexible as to the detail of what should be done to deliver justice. My approach has, I believe, the potential to secure justice without all the costs of a flood of individual compensation cases.

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It behoves lesser mortals to take shelter when the Titans are hurling rocks. I am aware that Lady Sally Greengross of Age Concern has put to the department a legal opinion which challenges the legal opinion quoted by Ministers that the Human Rights Act and the European Convention on Human Rights allow the inheritance rights of spouses to be reduced. It may well be that this part of the Bill--though not only this part--will have to be reconsidered. I do not want this debate in any way to prejudice proceedings. I am anxious to know whether the Minister is in a position to amend what she said about the legal position at Second Reading.

In conclusion, I should like to make three points which I think are hard to controvert. First, the Government have--and have acknowledged having--a problem; albeit not one initially of their own making. The Government have accepted that money will have to be spent on resolving that problem. Secondly, it really is not acceptable to take away pension rights already contracted for and paid for. No occupational pension scheme would be allowed to act in this way, as we are now aware with the case at present going through the courts. Thirdly, it is not acceptable to take away future rights unless those affected have been notified and have had the opportunity to seek to make alternative arrangements. In this case, not only were people not told; they were assured that their spouses' rights were intact.

I am offering the Government a lifeline. I would go on to say that I stand astounded at my own moderation, were it not that readers of Macaulay might recall that when Warren Hastings made that comment he was refusing to apologise for having appropriated rather large sums of money. In this case, if I may say so, the Government seem to have appropriated rather large sums of contributors' money. I hope that the Minister will be able to express her gratitude for my rescue package and take that which is offered in a spirit of goodwill and with cheated contributors and disappointed surviving spouses particularly in mind. I beg to move.

3.30 p.m.

Lord Higgins: There were originally three amendments on the Marshalled List concerned with the issue which the noble Lord, Lord Rix, has drawn to our attention. I am sure that the Committee will be grateful for the elegant way in which he put forward the arguments.

We debated this matter last Tuesday, 6th July (col. 141). I moved an amendment designed to deal, in part, with the problem which we now face, by suggesting that the arrangements should not go forward in the Bill until such time as the Government had put forward their proposals regarding compensation for those who were not informed of the true situation as regards the reduction of widows benefits.

It is important to distinguish between the two separate issues raised by the noble Lord. I refer to the reduction by or to 50 per cent of the widows' pension, enacted as long ago as 1986, and to the subsequent problems which

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have arisen because individuals were misinformed as to the fact that that was the state of the law, or at least appeared to be.

As regards the first matter, there is a significant difference between the amendment tabled by the noble Lord and that which I moved the other day. I was concerned with the problem of misinformation; he is concerned, more fundamentally, with the question of the reduction in widows' pension in the first instance. In 1986 proposals were made which stated that pensions would not be reduced immediately but after a period of 14 years. Time has moved on and that period has virtually expired. The present proposals are that the pensions will be reduced as from April next year.

As I have mentioned, there is a third amendment on the Marshalled List, tabled in the name of the noble Earl, Lord Russell, which goes still further. It seeks to reverse the situation created in 1986. We need to clarify the position with regard to all these matters. No doubt the Minister will reply to the points raised by the noble Lord, Lord Rix, as regards the underlying situation of the reduction in pension and, in particular, to the points he raised concerning the European Convention on Human Rights. Although that was not part of our domestic law in 1986, it is now. I do not wish to elaborate on that side of matters. I want to concentrate on the question of misinformation.

I pointed out the other day, and I repeat now, that it seems to me that this is not a partisan issue. Whatever one may think about the basic question of the reduction, I have looked back on the debate and, surprisingly, there seemed to be remarkably little opposition, in some ways, at the time. However, there were proposals for transitional arrangements, and so on.

Despite the remarks made by the noble Lord, Lord McIntosh of Haringey, the other night regarding the effect of SERPS and the change which was made, as I understand it the Government do not propose to alter the basic situation with regard to the reduction of the pension, although the noble Lord Rix is suggesting, as indeed are the Liberal Democrat Benches, that that should be so.

However, the problem arises from a tactical point of view, if I may put it in that way, as to what should be done about the misinformation. Clearly, this happened under the previous Government and under this Government in a quite extraordinary way. The original proposals for informing people of what would happen after the lapse of 14 years from 1986 did not take place. We run into difficult problems of parliamentary accountability.

The traditional view is that Ministers are accountable, both those of the previous government and the present Government. It is also important to consider the relationship between Ministers and officials. We need to consider the position of the officials involved in this affair. In the light of the report of the Treasury and Civil Service Committee of some years ago, which I looked up, although there were subtle distinctions made between the actions of officials on the one hand and the conduct of officials on the other, nonetheless, the

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general doctrine was agreed that if something had gone wrong, Ministers should look into the matter and at least assure the House that something had been done by way of disciplinary procedures.

Perhaps the Minister could clarify that situation for us this afternoon. Obviously there are additional complications, given the change of government in the meantime and the problems of referring back to papers of the previous government. However, clearly the problem arises from the fact that what Ministers said would be done did not take place. This is an important issue.

The other important issue concerns people being misinformed and, as a result, not making provision for their pensions. What evidence will the Government use to establish whether a particular individual has been misinformed or not? I refer, for instance, to phone calls--the noble Lord, Lord Rix, referred to the fact that he had some experience of that--or to correspondence, which, presumably, is more likely to be on the record. It would be helpful if the Minister could tell us the situation as regards such evidence as may be produced.

The Parliamentary Ombudsman is considering whether there has been maladministration and he said in a press release that he will report before the change in pension payments is made. That is to happen, once and for all, on a specific date and I do not believe that that is satisfactory. We should be clear about what will happen well in advance of that date and before the legislation is passed. Perhaps the noble Baroness can give us some idea of the timetable.

In the various exchanges across the Floor of the House at Question Time, the noble Baroness pointed out--some months ago now--that she was taking legal advice about the Government's liabilities in the circumstances that have been described by the noble Lord, Lord Rix, regarding misinformation. It is important that we have some idea of the nature of that legal advice. I hope that the Minister will tell us what advice she has received. She must know what it is by now and, if she is unable to reveal it, perhaps the Law Officers should come before us and explain the true situation.

We are unclear about what the Government have in mind by way of compensation. The Minister of State in another place has made it absolutely clear that the Government will ensure--that is the word he used--that those who have incurred loss as a result of being wrongly informed about the true situation will not suffer. That is a pretty comprehensive statement. However, we are not the least bit clear about what the Government propose. We do not know whether they favour the proposal advanced by the noble Lord, Lord Rix, in his amendment, whether they will defer the change, or introduce compensation in the form of cash or whatever.

The Government are paying compensation for a whole range of things, not least as a result of the failure of the Department of Social Security's computer. These are important issues, and we hope that the Minister will spell out in more detail than has been provided so far what the Government intend to do. They have had

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sufficient time to consider the matter. We should be in a position to hear this afternoon what the Government propose to do about compensation and the more fundamental issue of their attitude to the noble Lord's amendment.

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