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Baroness Maddock: My Lords, it would be very ungracious of me not to welcome this amendment. I too am grateful for advice from Shelter and the housing law practitioners association which enabled me to bring forward the amendments. Again, I thank the Minister for all his support during the passage of the Bill.
On Question, amendment agreed to.
On Question, Bill passed, and returned to the Commons with amendments.
State Pension Credit Bill [HL]
4.9 p.m.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Serota) in the Chair.]
Baroness Greengross moved Amendment No. 1:
- Page 1, line 4, at end insert—
The noble Baroness said: The first amendment we consider to this important Bill concerns its title. It is important that we do so. On Second Reading even the Minister appeared not to be convinced by the title, nor was the noble Baroness, Lady Barker, among others. It is important that we get the title right as it could affect take-up for example. We have the bitter experience of the precursors to the state pension credit to learn from—all were rather badly named.
To call extra help for a pensioner "supplementary benefit" is never likely to instil the feeling that it is a right rather than a handout. A similar situation has applied to income support from 1988. That is a benefit also paid to all low income groups, most of whom are likely to be in a completely different situation from that of a retired and sometimes very elderly person.
Therefore, I personally welcomed the principle of breaking the link between income support for those aged over 60 and those aged under 60 when the minimum income guarantee was introduced in 1998. However, the name did not constitute much of a move forward, particularly as it was neither a guarantee nor a minimum income if one had savings over £3,000. The Minister may recall that at the time Age Concern supported a case to the parliamentary ombudsman on that very point; that is, that the name "MIG" is misleading. Apart from anything else, it reminds everyone of the cold war, which is unfortunate.
I know that some, including many of my former colleagues at Age Concern, are worried by the term "credit" in the Bill's title. They feel strongly that it might be taken to mean a loan or a debt. I do not share that view as I believe that people get used to new things and new names if they are introduced well and thoughtfully, as we have seen with the introduction of the euro. The notion of a tax credit, money not paid in tax or a form of "tax back" is, I think, better understood than it used to be.
It might be better to call the state pension credit the state pension premium or the state pension addition, but that is a matter for debate. However, my main concern at the moment is that we seem to have two names for it. The Bill is titled the "State Pension Credit Bill", yet in all the promotional material that I have seen from the Minister's department the provision is called just the "pension credit". The dropping of the word "state" is unfortunate as the provision is a state benefit. My amendment seeks to restore the word "state" in the name presented to the general public so that people will not become muddled and think that the provision has something to do with private pensions or some other scheme. In addition, my amendment would give the Government the flexibility to rename the state pension credit if it is shown, through research or experience, to be unfortunately or unsuccessfully named.
The amendment is, of course, a probing one to determine what research or thought was carried out as regards the naming of the measure. I should like to know if any such research was done. I beg to move.
Lord Higgins: At the beginning of our proceedings I must once again declare an interest as a chairman of an occupational pension scheme. I have considerable sympathy with the points made by the noble Baroness,
Baroness Hollis of Heigham: It survived for a long time.
Lord Higgins: The noble Baroness reminds me that it survived for a long time. That may be so. We must hope that suitable provision for the elderly also survives for a long time. However, I do not know why the title includes the word "state". I disagree with the noble Baroness, Lady Greengross, on that point as it seems to me a rather unnecessary complication. As she rightly pointed out, most of the promotional literature refers to the pension credit rather than to the state pension credit.
Before the end of our proceedings, we shall obviously need to reach a decision on the proposal. However, in announcing the Committee stage of the Bill, the Deputy Chairman requested that the title of the Bill be deferred. Perhaps at that stage we could reach a common consensus on the matter.
There are serious issues involved here. As the noble Baroness rightly pointed out, the word "credit" can lead to confusion. The provision is not a credit. All it means is that the Exchequer will take rather less of people's money than was formerly the case. To that extent, to call the provision a credit is a little disingenuous.
I am worried about the terminology used throughout the Bill. The Bill brings together two separate propositions: the guarantee credit and the savings credit. They appear in most of the clauses that we shall debate. As regards pensioners, I ask the Minister whether it is proposed that the minimum income guarantee terminology should disappear altogether? People are used to that terminology and considerable explanation will be required to inform people that what they thought was a minimum income guarantee has not disappeared but is subsumed under a different title, part of which comprises what used to be MIG and part of which will be the savings credit.
I am also worried about the huge proliferation of terms in the Bill. We not only have the state pension credit but also the appropriate minimum guarantee, the standard minimum guarantee, the savings credit threshold and others. Those terms will greatly complicate the terminology. As one of the problems we face is whether people understand these matters—if they do not, they tend not to claim and take-up is correspondingly reduced—in the course of our proceedings we ought to see whether we can simplify these matters, particularly the title. It was helpful of the noble Baroness to raise that point.
Baroness Barker: I said on Second Reading that I was something of a neophyte in terms of pensions debates. I point out to the Minister that, just as she predicted, my reading matter over the past few months has changed dramatically. I have been immersed in a number of fascinating documents. Whether or not I would have found them fascinating before I was
On reading that document I was struck forcefully by the importance of the seemingly trivial amendment that we are discussing. I also said on Second Reading that I was not thrilled by the title of the Bill. I find it most unhelpful. I believe that the Minister also said that she was not terribly wedded to it either. Having read of the reasons why many older people do not claim income support, I am even less disposed towards the Bill's title. I take issue with the noble Lord, Lord Higgins, on one point that he made as regards dropping the word "state". The Government's research indicates strongly that older people are more likely to claim additional benefits the closer those benefits are linked to the state pension. One of the major barriers to people claiming benefit is their feeling, rightly or wrongly, that they are not entitled to it. However, they consider that they are entitled to the state pension.
Lord Higgins: But it is not called a state pension, is it?
Baroness Barker: The term "state pension" is widely understood by many pensioners. I thought the noble Lord talked about a state pension credit. I believe that we should consider what the noble Baroness, Lady Greengross, said in that regard. I think she would agree that we have not yet found a way correctly to identify the two elements of the new provision: the guarantee credit and the savings credit, to which the noble Lord, Lord Higgins, referred. Until such time as we do, there will be a severe problem not just for pensioners but also for all those who seek to advise them on their entitlement. Perhaps we could come up with a title that was longer but more descriptive, such as "the pension top-up" or "the pension top-up and savings allowance". That is, I agree, clumsy and inelegant but it is descriptive. That would have an effect on take-up.
"(1A) State pension credit shall be publicised to the general public under the title "state pension credit" unless or until an alternative title is shown to be more appropriate or effective."
4.15 p.m.
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