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Baroness Turner of Camden: I thank the Minister for her comprehensive response. Although there has been some talk about basic state pension, and my attachment to the idea that it should be uprated in line with earnings, the amendments do not deal with that issue. The amendments relate to the wording of the Bill and the intentions underlying the wording. I was most anxious to ensure that the measure was comprehensible. I still believe that Clause 3 is extremely difficult to understand. We shall have another opportunity to consider the matter today; another amendment deals with that very point. However, I find aspects of the wording incomprehensible. I believe that there is an obligation upon us to ensure that primary legislation on a new and important measure such as this should be understandable.
It is not my intention to press the amendments. They were probing amendments to ascertain the Government's attitude towards my view of the comprehensibility of the provisions. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Barker moved Amendment No. 3:
- Page 1, line 6, leave out paragraph (a).
The noble Baroness said: The amendment relates to pensioners who are living abroad. It is a similar area to that addressed in the later amendment tabled by the noble Lord, Lord Higgins, on regulations.
In moving the amendment, one has a sense of history. I understand that similar debates have been held intermittently since 1929 on the issue of pensioners who choose to live abroad.
The issue that I seek to address is often raised in the context of the state pension. I raise it in the context of the pension credit. I refer to pensioners who live abroad whose income is not uprated as it would be if they lived in this country. I do not wish to list the countries with which there are or are not reciprocal arrangements. I simply wish to raise one point. The latest figures for those pensioners who receive upratings are dated 15th January 2001. The number of pensioners who live abroad and have a state retirement
pension at a frozen rate is 460,000; 378,000 pensioners have their pensions uprated annually. However, I have been unable to find figures beyond 1998 relating to where those pensioners have retired to.Patterns of work and pensions are changing rapidly. I do not wish to focus on the common myth that pensioners living abroad are affluent, having retired to the Mediterranean and the sun. I refer to the migration of pensioners to this country. Great changes have taken place during the lifetimes of those pensioners, most notably in countries such as eastern Europe, and so on. That is the issue that I seek to address. I shall be interested to hear the Minister's response.
Baroness Hollis of Heigham: I am sorry that this amendment is not grouped with the next amendment. We tried. They are in separate groups but raise the same issue. It would have been better to take the amendments together.
Amendment No. 3 would remove the need for a person to be physically present in Great Britain in order to claim pension credit. Pension credit could be claimed, therefore, by anyone living abroad. It will not come as any surprise to the noble Baroness to know that the Government do not accept the proposal. I hope that the Committee will agree that it cannot be right that a person who might have no connection with, or affiliation to, the United Kingdom could receive pension credit, the funding for which will be provided by the taxpayers of this country. Were no residence or presence criteria attached to pension credit, the cost to the British taxpayer could be enormous, potentially running into billions of pounds.
Rather the Government intend that in order to receive pension credit a good degree of affiliation to this country will be required. Some form of residence condition is an inherent requirement in social security benefits generally. We do not believe that pension credit should be an exception to this rule.
We propose, therefore, that, first, it will be a condition of entitlement for pension credit that a person is present in Great Britain when a claim is made. In addition, such a person will be required to be habitually resident in the common travel area of the United Kingdom, Channel Islands, the Isle of Man or the Republic of Ireland. People with certain European Community rights such as workers, refugees and people granted exceptional leave to remain in the United Kingdom will not be required to demonstrate that they are habitually resident here.
As Members of the Committee will know, being habitually resident in the common travel area is a pre-requisite for a number of benefits including minimum income guarantee. In order to determine whether a person is habitually resident, a decision-making officer considers a variety of factors about the person's circumstances—for example, the length, continuity and general nature of actual residence, reasons for coming to this country and the claimant's future intentions. Indeed, when my son returned from the States, he was asked to which societies and organisations he belonged, and so on. I believe that
those were perfectly proper questions to see whether someone's place of habitual residence was in this country.During the previous Parliament, the Government undertook a review of the habitual residence test and made a number of changes to improve the efficiency and fairness of the test. Given that, and the fact that there is some similarity of purpose—I am sure the noble Baroness will recognise that—with minimum income guarantee in providing a guaranteed level of support to poorer pensioners, we believe that it is appropriate to use the habitual residence test for pension credit.
Of course, that is not to say that pension credit should cease immediately upon a person departing these shores. We intend to allow pension credit, as with minimum income guarantee, to continue in payment for periods of temporary absence from great Britain of up to four weeks. Where the claimant accompanies a family member who is a child and travelling abroad to receive medical treatment, this can be extended to eight weeks.
It is useful to get these matters on the record; that is what Committee stage is about. I hope that I have explained the position to the noble Baroness and that she will withdraw the amendment.
Baroness Barker: I thank the Minister for her reply. When the noble Baroness referred to absences for between four and eight weeks I thought we were in danger of straying into hospital downrating since it will now be increasingly possible to go to a hospital abroad. Perhaps the Government are ahead of us on these matters.
The Minister's response was as I predicted. Perhaps I may repeat that patterns of pensioners' lives are changing and there is a case for further research and updating on this issue. Were these pensioners—they are not affluent but are returning home—to remain resident in this country, they would fall into the category covered by the pension credit. Those people may have been in this country for a long time. Nevertheless, I have listened to what the Minister said. The noble Baroness is well versed and has long-standing experience in these matters. She graciously spent time explaining those matters to us. However, I think that the matter needs to be aired periodically. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 4 to 6 not moved.]
5 p.m.
Lord Higgins moved Amendment No. 7:
- Page 1, line 20, leave out paragraph (a).
The noble Lord said: In moving Amendment No. 7 I shall speak also to Amendments Nos. 8 and 9. Perhaps I should explain that I was in no way responsible for the de-grouping of the previous amendment with this one. I was not in favour of that.
The amendment seemed to fall naturally into this group. I presumed that there had been representations from somewhere else.
Baroness Hollis of Heigham: The noble Baroness, Lady Barker, wants to intervene.
Baroness Barker: I rise to point out that I do not think that the amendments were ever grouped together. They were not de-grouped by me.
Lord Higgins: Therefore, if they were not grouped together in the first place, it is the Government's responsibility.
I shall not go into the arguments which were put forward on the previous amendment by the Liberal Democrats because it had not occurred to me that those issues would be raised. There is a history of problems faced by those abroad who do not have their national insurance pension uprating. That is very well understood. However, I have never heard anyone say that those overseas should get what was MIG and is now the standard credit or that they should receive relief for their pension savings. They would probably be as astonished as anyone else if that were to happen.
I turn to Amendments Nos. 7, 8 and 9. This is the first stage in the Bill where the dreaded expression "regulations" appears. Perhaps it would be helpful just to say a word or two about that. Many of those outside have complained at great length about it being extremely difficult to know what the Bill does because vast tracts of it will be taken up by regulations. Having said that, the Select Committee on Delegated Powers and Regulatory Reform gave the Government a fairly clean bill of health concerning whether the regulatory powers should be dealt with by positive or negative resolution. It made two caveats—for example, Clause 15. By and large it has not expressed concern. None the less, it is important to seek to establish during the course of debate what the Government's intentions are.
In that context, the noble Baroness said at Second Reading that she would try to provide us with drafts of the various regulations, of which this is the first to appear on the face of the Bill. I realise, and understand, that she has had considerable difficulty in fulfilling that undertaking. None the less, she has managed to get some commentary—I think that would be the right way of putting it—on the various regulations. That only alas—my fault not hers—reached me earlier this morning. I am grateful for it. No doubt between now and Report that will be circulated to others participating in these debates, and we can all take advantage of it.
One basic point of principle is that it is entirely appropriate to make regulations where the particular element of the Bill will be variable in the future. We clearly cannot go through primary legislation every time there is some major change in rates or whatever. On the other hand, if it is a matter which can be put on the face of the Bill, it should be. In a number of instances that may be the case. For example, the
regulations make provision for the circumstances in which a person is to be treated as being or not being in Great Britain. That is not something which varies over time. The Government should know the circumstances in which they will treat a person as being or not being in Great Britain.
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