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Baroness Hollis of Heigham: I shall do my best to explain. As to the noble Baroness's first point, it is not the case that if two single people came together as an unmarried couple they would, as a result, receive two single payments and therefore benefit. That is specifically excluded by Clause 4(1) and cannot happen. If they were to benefit in that way, it could be argued that we were privileging the state of non-marriage over the state of marriage—and I am sure that that would not be exactly acceptable to the noble Baroness either.
There is a difference between a same sex relationship couple where there are two single people—and remain so for both the privileges and burdens of social security—and an unmarried heterosexual couple, who are, indeed, treated under the Bill as though they are a couple, with all the financial responsibilities they have towards each other for social security purposes.
As I said, it is well-established—it goes back to 1948—as to what counts as a common law wife, to use the old phrase, or a co-habiting couple. Factors taken into account include the stability of the relationship, financial support, whether they have children, whether they publicly acknowledge the relationship.
For example, this is absolutely core to the issue of whether a lone parent who has a live-out boyfriend is entitled to claim credit and social security benefits as a lone parent as opposed to one of a couple. This is well established in social security law. As I said, the factors can include whether they share a common household, the length of the relationship, whether they have children and whether they operate as a couple.
If the noble Baroness wishes me to send her further information, I shall be happy to do so. But it is a common basis of all social security that where a heterosexual couple share a home in this way they are treated exactly the same for social security purposes whether they are or are not married. I am a little surprised that the noble Baroness would seek to change that. As pension credit and the guarantee element are income related it is reasonable—it has always been the basis of social security—that an income-related benefit should reflect the circumstances of the family, of the household, and that is what the Bill seeks to do.
If I can help the noble Baroness further by writing to her, I shall be happy to do so. But, as I said, what counts as a co-habiting couple is well established in social security legislation.
Baroness Noakes: It is not established in relation to a household unit. There are specific provisions—indeed, there is a regulation-making power—for who is or is not a part of a household unit for a married couple, but there is no similar provision in relation to an unmarried couple. Therefore an unmarried couple would not know where to look in the regulations.
Baroness Hollis of Heigham: They are treated exactly the same. If I need to qualify that, I shall write to the noble Baroness. In social security law, so far as it concerns income-related benefits, married and unmarried couples are treated in an identical way.
Baroness Noakes: I thank the noble Baroness. I look forward to hearing from her further. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden moved Amendment No. 18:
- Page 2, line 23, at end insert—
The noble Baroness said: The amendment seeks to make provision for the Secretary of State to review the amounts prescribed as the standard minimum guarantee in relation to the general level of earnings in Great Britain. If he believes that the prescribed amounts have not retained their value, he can then prescribe such higher amounts as he believes necessary to restore their value.
The Government have said that the minimum guarantee will rise in line with earnings during this Parliament—I emphasise, "during this Parliament". The objective of the amendment is to put this into legislation as a statutory requirement.
The Government have frequently said—and I agree—that pensioners should be able to participate and share in a general rise in the level of prosperity in the community as a whole. One of the ways in which that can be done—and probably the best way—is to link these amounts to rises in the general level of earnings.
The amendment is grouped with Amendment No. 23, which covers much the same ground. In my view, that is also a very good amendment. I wait to hear whether the Minister will respond to either amendment in a helpful and satisfactory way. I beg to move.
Baroness Barker: I speak to Amendment No. 23, which, as the noble Baroness, Lady Turner said, is grouped with Amendment No. 18. There is a subtle distinction between the amendments. Unlike the noble Baroness's amendment, the amendment standing in my name and that of my colleague does not seek necessarily to restore the link with earnings but refers to prices or earnings.
I bring the amendment forward for two reasons. First, to build on the current government practice of making an annual statement about uprating in November. I wish to see this on the face of the Bill in order to return to one of the principles behind the whole of the pension credit scheme—that is, to encourage people to make provision for their future. Knowing how to make the correct provision for one's future involves an understanding of what one's likely position will be in time to come.
This relates particularly to the standard minimum guarantee; specifically it does not relate to the other parts of the pension credit. As we have noted throughout much of what the Minister has said on this and other occasions, the Government are moving more towards targeted benefits rather than universal
If the scheme is to work in terms of the objectives set by the Government, it is important for people to have some understanding and certainty about how it will work for them in the future, so that they can plan appropriately. That is the reason for our amendment. I, too, await the Minister's response.
Lord Hodgson of Astley Abbotts: I do not want to introduce a discordant note into our proceedings, but I find some aspects of Amendment No. 23 quite concerning. We all want to see pensioners have a comfortable old age and a share in prosperity. However, if I read the amendment aright, it seems to have forgotten the other half of the social security system; namely, those in work, who are contributing to that system through tax and national insurance payments.
If the uprating is to take place according to whichever is the higher—prices or earnings—then, over a long period of time, arithmetically it could become easier to be in receipt of a pension than to be in work. If I have read the amendment correctly, each year the pension is bound to rise at least in line with the rise in earnings; and if inflation is higher, it will increase according to the rate of inflation. So gradually the gap will narrow. We must be very careful—
Baroness Hollis of Heigham: Will the noble Lord help the Committee by telling us when prices have exceeded earnings—which is essential to his argument?
Lord Hodgson of Astley Abbotts: Prices have exceeded earnings in the past, and they could do so again. There have been times when the rate of inflation has exceeded the rise in earnings. Therefore, there can be a situation in which it would be advantageous to be in receipt of a pension. It is perfectly fair to have a situation where the amount rises by the rate of one or the other, but over a period of time to be able to opt only for the one that is most favourable seems to lay the burden against those in work. Instead, one should take either earnings or prices, but not choose whichever is the most advantageous. If I have understood the amendment correctly, it seems to give cause for concern.
Lord Higgins: When we discussed uprating earlier, the noble Baroness suggested that we should defer the discussion until later in the Bill. I believe that she said that the undertaking by the Government on the minimum income guarantee—presumably now the standard minimum income guarantee—would go up "for this Parliament". That seemed an odd qualification. Everything is "for this Parliament", so why is it necessary to make that qualification?
On a further point, it would be helpful to know what is the Government's proposal on uprating the pensions element of the pension credit.
Baroness Hollis of Heigham: Forgive me. I do not understand the noble Lord's point.
"( ) The Secretary of State shall in each tax year review the amounts prescribed as the standard minimum guarantee for the purpose of determining whether those amounts have retained their value in relation to the general level of earnings in Great Britain, estimated in such manner as he thinks fit.
( ) If on any such review the Secretary of State concludes that the prescribed amounts have not retained their value in relation to the general level of earnings, he shall prescribe such higher amounts as he thinks necessary to restore their value."
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