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Lord Higgins: My Lords, I thank the Minister for that explanation. This matter has had a very long history, as I think a high percentage of noble Lords in the Chamber, including the Government Whip, who have sat through much of the proceedings will recognise. It has developed steadily as a result of the debates which we have had, and a great deal of progress has been made. I certainly join with the Minister in paying tribute to the noble Lord, Lord Rix, and to the noble Baroness, Lady Greengross, who have been in the forefront of trying to sort out the matter.

It is a sad story. As the noble Baroness said, it is now likely to cost some £12 billion to put right. I still regret that we have not been able to find out who is responsible so far as concerns the Civil Service's part in the matter. However, what the Government now propose will go a considerable way towards putting things right.

The Government's original plan was not satisfactory and was heavily criticised on all sides, not only in this House but by the Social Security Advisory Committee, which said that the scheme as presented was not operationally viable and that it was a "cheat's charter" and an invitation to fraud, and so on. We on this side of the House were certainly very glad when, in November 2000, the Government brought forward their new plan. However, there are some points that we need to clarify.

I have a confession to make. Two days ago I received a letter from the Department of Social Security--

Baroness Blatch: My Lords, so did I!

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8.15 p.m.

Lord Higgins: My Lords, as did my noble friend Baroness Blatch. I am surprised that the department wrote to the noble Baroness, who is much younger than I.

The letter concerned widows' inherited SERPS and affected those in the SERPS scheme. But I am not, and never have been, in the SERPS scheme; I was in a contracted-out scheme. It would appear to be the case that the department is now sending these letters to everyone regardless of whether or not they were in the SERPS scheme. This is likely to cause confusion to those who are not eligible and they may well write in and ask, "What is this all about? I should like some money". It also suggests that the department simply does not know which pensioners are contracted out and which pensioners are contracted in. That seems to be a rather worrying point.

Having said that, the new scheme which the Government announced in November is certainly an improvement on the previous scheme. However, the noble Baroness will remember that in previous debates on this issue I raised the question of the points made by the ombudsman. I criticised him for the very long time that it took him to produce details of four sample cases and for the fact that his report on the subject was rather strange; it was written almost entirely with reference to a letter he had written to the Permanent Secretary at the department, rather than in a more normal format. The letter is dated 9th May, so it is at the in-between stage.

He did not express in the letter any view as to the merits of the case. He said:

    "in my report, I reserved my position on redress, confining myself to some general comments, and why I undertook to offer advice to Parliament, once the details were known".

He went on to say:

    "It is for the Government, not for me, to produce detailed proposals; and I will comment on them when they are produced"--

and he stated that it would be ultimately for Parliament to decide and so on. I am not the least bit clear whether the ombudsman has now commented and, if so, what he said about the present scheme.

One particular aspect of what he said previously in regard to the onus of proof was very clear. He said that in his view the onus of proof should be reversed as to whether someone had been misled and whether they had, as a result, suffered loss. Indeed, the Minister will remember that I moved an amendment at an earlier stage suggesting that at least the first part of that requirement should not hold; that it should be assumed that people had been misled and should be left to prove whether or not they had suffered loss. That amendment was carried in your Lordships' House but reversed in another place.

As I understand it, there is still a group of people who may have been misled, who may have suffered loss and who are not now covered by the Government's proposals. It would seem that the Government are changing their view with regard to the reversal of proof. While obviously a large percentage

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of the people affected will be covered by what the Government now propose, there would seem to be some people in certain age groups who may still feel that they have been misled and have suffered a loss as a result. Is it the case that if any claims of that kind are put in, the normal procedures for compensation referred to in the ombudsman's report will not apply, but the onus of proof will be reversed? If people in this particular group wish to pursue the matter--there are probably only a small number of them and it is impossible to say whether any of them will wish to pursue the matter--will they be allowed, as the ombudsman originally suggested, to have the onus of proof reversed in regard to any claim that they may make?

I am slightly surprised that in her opening remarks the Minister did not refer to the 5th report of the Public Accounts Committee on Draft Social Security Inherited SERPS Regulations 2001 dated 12th February. It is an important report and I expected the noble Baroness to refer to it.

The Public Accounts Committee raised a number of points which it may be helpful for us to consider and to which the noble Baroness may wish to respond. The committee rightly said, as we have, that it welcomes the proposals which, to a considerable extent, address earlier concerns. That is fair enough. The report then goes on to say at paragraph 6(ii):

    "The proposals also provide some comfort to those approaching state pension age, who are likely to have less opportunity to make adjustments"--

and so on. It then goes on:

    "Nevertheless, the success of the proposals will depend on the extent to which those within the taper"--

referred to by the noble Baroness in her opening remarks--

    "are in practice able to secure appropriate top-up provision should they so wish, and without incurring disproportionate costs".

The PAC gives a specific example of someone who is four years away from retirement, stating that it would expect the department to assess the likely impact on those affected by this situation and (paragraph 17) whether they would be able,

    "to obtain cover through life assurance to provide a guaranteed sum on death equivalent, to 20 per cent of their pension, and at what cost".

The committee states again (at paragraph 18) that it recognises that this will provide automatic protection in full or in part for a number of people, but that,

    "the draft regulations do not provide details of the proposed compensation arrangements, and it will be essential for the Department to set clear criteria for eligibility for compensation",

and that the department should take into account various factors. The paragraph continues:

    "We also expect the Department to continue to recognise that the onus of proof rests with them to demonstrate that an individual was not misled by their advice".

That is the point I was making a moment ago.

Perhaps I may refer to one other passage in the PAC's report. The committee points out that the department accepted its previous recommendation on

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the importance of people being able to claim redress after most claims have been received, but that the committee remains,

    "convinced that, to achieve equity and fairness for all those who may suffer loss as a result of misleading advice from the Department, people are not prevented from seeking compensation by an arbitrary cut-off date".

All these points are important. As I said, we have made considerable improvements in the situation, which, as the noble Baroness rightly pointed out, arose initially as a result of problems caused when the previous government did not publicise these matters as they should have done; indeed that was continued subsequently, as the Minister knows.

We are making a great deal of progress. However, it would be helpful, in the light of this instrument--which, as I understood it, sought to finalise in effect what the situation now is--if that could be clarified. A great deal of publicity will be necessary if people are not to find themselves in the same situation, which seems increasingly to happen at present, of under-spend on benefits which the Government say they will increase or provide, but which in the event are not taken up to the extent that they ought to be.

Earl Russell: My Lords, parliamentary success stories are not so common that we can afford to let one go by without celebration. This is clearly a parliamentary success story. The Minister has generously thanked other Members of this House for helping to bring it about. I think the Minister must consent to receive thanks as well as to give them. A good House tends to come with a good Minister, and that has certainly been true in this case.

The Minister has fought her corner. I do not think that the noble Lord, Lord Higgins, or I would dispute for a moment that she did so with great vigour. But never for one moment did she continue to defend the indefensible. Being able to do those things together is one of the marks of a good Minister.

The Government improved their offer in ways which are entirely welcome, and they did so as a result of arguments most of which I have heard the Minister advance in this Chamber in response to amendments moved by the noble Lord, Higgins, by me, or by my noble friend Lord Goodhart. I wonder whether the Minister has addressed those arguments to other people as well. I speculate no further, but she may possibly deserve a great deal more credit in this story than anyone will ever know in public.

I am also extremely pleased to see the noble Lord, Lord Rix, in his place. He and the noble Baroness, Lady Greengross, have made a long and distinguished contribution on this subject. The noble Lord, Lord Rix, took the matter up with a tenacity which has done a great deal to keep it on the agenda right through to the point of completion. We are all very much in his debt.

It is also vital to note that the criticism in this instance came first from the Cross Benches. This has never been properly regarded a party matter. The fact

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that it came from the noble Lord, who has no party axe to grind, gave it a great deal of weight to which it was entitled but which it might not otherwise have received.

I should also like to acknowledge the contribution of my noble friend Lord Goodhart, whom I am understudying tonight, and of my honourable friends Mr Rendel and Professor Webb. My honourable friends, as well as my noble friends, are delighted by the way in which the matter has been concluded.

It was obvious from the beginning, first, that something was going to have to be done and, secondly, that deciding what should be done was a matter of appalling complexity. That complexity was usefully ventilated in our debates. While I do not think that either I or my honourable friends would want to claim that this solution offers the best of all possible worlds, it is probably the best that is possible in this world. A great deal of work has gone into making it so. All we should properly do now is to offer our thanks to all those concerned, and to welcome the results.

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