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Baroness Turner of Camden: I have tabled Amendment No. 51, which is grouped with the amendments in the name of the noble Lord, Lord Higgins. As the noble Lord rightly said, Clause 4(3) provides that amounts of pension credit below a prescribed level will not be payable. I believe that the sum of 10p a week has been mentioned. The amendment seeks to make the credit payable annually; for example, 52 weeks at, say, 9p would amount to £4.68. Since entitlement to the credit will normally change only annually, such annual payments should cause no administrative difficulty. After all, £4.68 is £4.68.
If people are owed a sum of money, why should they not have it paid annually, as suggested in the amendments under discussion?
Baroness Hollis of Heigham: I believe that Amendments Nos. 50 and 52, when considered together, propose a change to the meaning of Clause 4(3). Amendment No. 51 has the same effect as Amendments Nos. 50 and 52. Therefore, I propose to address these amendments at the same time.
Clause 4(3) provides that pension credit will not be payable if entitlement is under a prescribed amount. The intention here is not to pay pension credit if entitlement is under 10p a week unless payment of pension credit can be combined with payment of another benefit. In fact, this rule will affect very few people—probably no more than 500, even if there were to be a 100 per cent take-up of pension credit—as we anticipate that in the vast majority of cases we shall be able to combine payment of pension credit with another benefit.
The noble Lord asks why we have not conceded anything so far. I am deeply mortified as I gathered that all his previous amendments were probing amendments. I understood that the intention of probing amendments was not to push for concessions but to explore the Government's thinking on the matter. If he does not consider that I have made our thinking sufficiently clear, I shall of course be prepared to speak at even greater length. But I believe that, on reflection, he may wish to consider his remarks further.
There will be a small number of remaining cases—possibly 500 or so—where no other such benefit is in payment. Even though pension credit would not be paid in such cases, there is an underlying entitlement—this is the substantive point which has not been mentioned by Members of the Committee—which means that, for example, the claimant would be passported on to benefits, such as housing benefit, in the normal manner, even with a trigger of an amount such as 10p.
That is a well-established rule and we consider it right to include it in relation to pension credit. If the amendments were accepted, it would mean potentially paying tiny amounts of pension credit—perhaps a matter of pence—at yearly intervals. It has always been a pragmatic decision whether to make such payments. But under this amendment the payment of 52p a year would be a possibility, and it is likely that that would be criticised by claimants as derisory.
Members of the Committee may also be persuaded by the fact that, if the amendment were accepted, we would be paying out less than £2,000 a year in pension credit at an administrative cost of well over £4,000 a year, as our computer systems do not support annual payments. It cannot be right to spend £4,000 in paying out £2,000 when the sum in question is only 52p a year. That amounts to two postage stamps.
By prescribing in regulations the precise rules which will apply to such cases, the Secretary of State will have the flexibility to adjust the circumstances in line with general changes in the methods of paying benefits. In other words, if the noble Lord is suggesting that in future
it will make good sense to pay the credit as an annual lump sum, then, when we have the necessary computer power, that may be an appropriate way forward. As a result of my explanation, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Higgins: We are grateful for that explanation from the Minister. She said that no problem arises with the de minimis arrangement if another benefit is payable. I am not clear whether or not that includes the other part of the state pension credit. Does "another benefit" include what used to be called "MIG"? If people receive MIG, will they receive this credit, even though it is a de minimis amount?
The noble Baroness has not clarified the point that I raised regarding the regulations which enable these prescribed amounts to be made in prescribed circumstances. As I pointed out, at first I believed that the regulations were those under Clause 3(8), which comes immediately before the exclusions clause. However, that appears to apply to persons and not to amounts, whereas what is being prescribed here is an amount payable in certain circumstances. Therefore, I am still not clear which power enables the clause which we are discussing to be operated.
Baroness Hollis of Heigham: The power appears under Clause 4. By virtue of Clause 17, which defines terms under the Bill, "prescribed" means specified in regulations. That relates to the last point which the noble Lord has just raised.
I now return to the wider point concerning regulations. In relation to draft regulations, I had hoped to be more helpful to Members of the Committee than they may consider me to have been. We produced an extended memorandum which sought to describe how those regulations would be used. Regulations will be developed over the next four months. As soon as I have anything which I consider to be more helpful to noble Lords than the document that I have already produced, I shall of course let them know.
Lord Higgins: We are very grateful for that. We fully understand that there is no immediate obligation on the Government to produce such regulations or, indeed, such descriptions of regulations. We always very much appreciate the way in which the noble Baroness handles these matters. However, I still have a problem in relation to the technical point. I cannot see which regulatory power enables Clause 3, which we are debating, to be implemented. If, indeed, it is the one under subsection (8), which appears before the exclusions clause, then, as I say for the third time, that concerns descriptions of persons and not amounts. What is being prescribed here is not persons but amounts. Therefore, I cannot find the regulatory power that will implement Clause 3. I am sorry to persist with this matter.
Baroness Hollis of Heigham: We are dealing with Clause 4. Is that the source of the problem?
Lord Higgins: I am sorry; I meant to say not Clause 3 but subsection (3) of Clause 4. Perhaps I may state again
that at the bottom of page 3 of the Bill is subsection (3), which we are now debating. It states that amounts may be prescribed or be payable in prescribed circumstances. I am not clear where the powers are that enable the Government to prescribe the amounts and the circumstances.
Baroness Hollis of Heigham: I shall write to the noble Lord if I am misleading him. However, if he looks at Clause 4(3) and then at Clause 17 at line 45 on page 11 of the Bill, he will see that "prescribed" means,
- "specified in, or determined in accordance with regulations".
Lord Higgins: Rather than delay the Committee further, I shall look at the references which the noble Baroness has given and, if need be, we can return to the matter on Report. With regard to the substance of the Bill, I am still not clear where we are with regard to whether or not the de minimis amount will be paid in relation to the other parts of the pension credit.
Baroness Hollis of Heigham: There is one pension credit which comes about as a result of the move from the guarantee to the savings. Therefore, we are dealing with only one sum. If, at the end of the day, a payment of less than 10p is due under the pension credit—whichever part of the pension credit it relates to—then, if it is aligned with another benefit, it will be paid. If it is not—we believe that only 500 or so people may be affected—then it seems to me inconceivable that someone for whom only the guarantee element comes into play will not also qualify for housing benefit or council tax benefit. Such a situation may apply to a few pensioners but in normal circumstances an alignment would take place. I suspect that that situation may occur when the amount tapers out at the very end.
As I said, we are dealing with a very small number of people. If, at later stages, the arrangement appears to be more problematic, it can be revisited. We have no wish to deny anyone, but when in the past government departments have sent out cheques for 2p, 3p or 50p over the course of a year, we have usually been teased by the Front Benches opposite, and rightly so.
Lord Higgins: I promise not to tease the noble Baroness. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.30 p.m.
[Amendments Nos. 51 and 52 not moved.]
Clause 5 [Income and capital of claimant, spouse etc]:
On Question, Whether Clause 5 shall stand part of the Bill?
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