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Lord Higgins: My Lords, our objective on this side is to improve the Bill so that when it is returned to another place, despite the arguments originally advanced in this House, the Government will have been persuaded that these are the right things to do. Given the size of the majority in the other place, it is very much a question of persuasion over there rather than winning votes. Regrettably, at the moment it is difficult to win a vote at the other end. Having said that, I am reluctant to press this amendment to a vote if the argument at the other end would be simply that it is technically flawed.
We need to give this point some further thought between now and Third Reading, and I hope that the noble Lord on the Liberal Democrat Benches will take the same view. Perhaps we shall be able to devise an amendment which is not so technically flawed and deals with the problem of overlap mentioned by the noble Baroness. In the light of those considerations, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins moved Amendment No. 264:
"( ) The first payments under the financial assistance scheme shall be made no later than 1st June 2005."
The noble Lord said: My Lords, I apologise for my brief hesitation. This is another amendment which has been degrouped and is concerned with the date of the first payments to be made under the financial assistance scheme. We suggest that they should be made no later than 1 June 2005. It is important to clarify exactly how the various dates are to stack up, not least in the light of the comments made by the
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noble Baroness a few moments ago. As I understand it, she envisages that the PPF will be operational by April next year. Can she give us some indication of when PPF payments are likely to commence? I presume that the levy starts in April next year. Approximately when does the noble Baroness expect the first payments under the PPF to begin to be made?
On the previous amendment we referred to overlaps and gaps. We believe that the financial assistance scheme should come into operation as soon as practicable. This obviously will depend on some of the policy decisions that we have been considering but we should have a deadline. If the noble Baroness does not like the six months in the Liberal Democrat amendment and does not like our suggestion of 1 June, can she give an indication of what she considers to be an appropriate deadline?
There is a case for a deadline. Otherwise, no doubt, internal government discussions will go on indefinitely; the Chancellor will not be paying out the money he has promised; to that extent, the national debt will not go up as quickly and the interest payments by the Government will be less. All these considerationssordid though they may becould lead to the scheme not starting as quickly as we would like.
I hope that the noble Baroness will be able to clarify the situation. In the absence of any convincing arguments, of course, it will be appropriate to vote on the issue, but we shall wait to hear what she says in reply. I beg to move.
Lord Oakeshott of Seagrove Bay: My Lords, we are quite happy to support Amendment No. 264 or, in the light of the Minister's remarks, we may prefer to press Amendment No. 267 a little laterbut the principle of a fixed and early start date is very important for the reasons I gave earlier.
On various occasions in Grand Committee, when we tried to probe or help in some detail on the FAS, the Minister kept saying, "Don't chip away. Don't chip away at this". Frankly, at the moment there is very little to chip away at. Laying the firm foundation of when this scheme will start is a simple and clear thing to do. It is something for which people have been waiting desperately for years.
This is a reasonable matter for Parliament to decide. I would be happy with either the start date set down in the noble Lord's amendment or the one set down in our own, but we must have a firm date. In the absence of a firm date, we will press this matter to a Division.
Baroness Hollis of Heigham: My Lords, I very much hope the noble Lords will not do that. I want to persuade them that what they are asking for cannot be doneand therefore the amendments would have to be unpicked laternot because we do not wish to do it but because we cannot do it. I do not say that lightly; I say it in absolute good faith.
Both amendments seek to impose a date by which payments must start to be made from the FAS. As to the direct question of the noble Lord, Lord Higgins, in regard to when payments from the PPF would come
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into play, we would expect them to begin to be made from the second year. The first year will be an assessment period and payments will begin to be made from the second year.
It should be remembered that although a scheme may come into the PPF, it does not mean that liabilities will be immediately paid out. Liabilities will be paid as they fall and the bulk of people will not normally, unless they are existing pensioners, be required to receive payments within a month or three months. This is rather different from what may turn out to be the case with the FAS, which might involve a question of purchased annuities. I shall come back to the House on that in due course.
I have to repeat what I said in Grand Committeewe all want the money to be made available by government as quickly as possible. I understand and fully accept the decency of the motivation behind the amendments in seeking to give people guarantees as to when they might be paid, but when I say I cannot do so I am being realistic.
Let me make some comparisons. The Government's proposals for pension credit were published for consultation in November 2000; the State Pension Credit Act gained Royal Assent in June 2002; and the first payments were made in October 2003, some 15 or 17 months later. We published a consultation paper on tax credits in 2000; the Tax Credits Act gained Royal Assent in July 2002; the first payments were made in April 2003. Under a previous administration, there was the Social Security Act which received Royal Assent in 1986. I am sure noble Lords can tell me when the first payments were made on that, but if they do not recall I will remind them that they were made in April 1988, nearly two years later. I see that I am getting an endorsement from the noble Lord, Lord Fowler. I am sure the subject is dear to his heart. So, in all those Acts, there was a timetable of at least a year, sometimes more, from the date the Bill received Royal Assent to when the first payments were made.
Lord Oakeshott of Seagrove Bay: My Lords, how many millions of people were affected by those Acts and how many people are we talking about in respect of the FAS?
Baroness Hollis of Heigham: My Lords, that is not the point. It is simple if everyone is receiving the same sum of money, but if you have to assess every individual entitlement, that is very different. The FAS will certainly be making payments to much smaller numbers but, whether a payment scheme is large or small, a set of pre-conditions have to be in place: the regulatory framework to enable payments to be made; a detailed business design; IT; accommodation; telephony; and properly trained and supported staff.
I stress that, unlike the situation with income supportwhether it was called supplementary benefit or whateverwhich we have been delivering since Beveridge, this is an entirely new area for government. It is the first time that a government are seeking to pay taxpayers' money directly to members of winding-up
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pension schemes. We have to devise systems and processes which mesh with those already being operated by independent trustees and administrators during a complex winding-up processand we have to devise them from scratch.
Committing to a statutory deadline for making first paymentsand in particular one which would be only a few months after the principle of the Bill has been, I hope, accepted by your Lordships' House and the other placecould seriously compromise the successful delivery of FAS. We cannot do it. Noble Lords may argue with me, but I tell you that we cannot do it. I wish we could. There is no difference between us in that we want to see the scheme flowing as quickly as possible, but it cannot be done. It is an important principle that FAS should determine levels of assistance and make payments only when it is ready to do so.
Even if your Lordships pass the amendments todayand I do not doubt that you may have the numbers to do soit cannot be done. We are a grown-up House. When we are dealing with matters such as technical dates, there is no point in going for gesture politics that will have to be unpicked. This is not about a statement of principle where it may be important to flag up such a gesture; this is about a technical handling of when we start to pay.
It cannot be done. If your Lordships pass the amendments against the advice of the Government, we will seekand I am reasonably confident that we will succeedto overturn them because we cannot meet the deadlines proposed. I wish we could, but we cannot. It is an administrative matter, not a political one, and Members opposite who have been in Government know that perfectly well. I hope the noble Lord will not pursue the amendment.
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