I reiterate what both noble Baronesses have said, that individuals with earnings below the lower earnings limit, whether on zero-hours contracts or not, are not without some protections already. At the highest level, individuals have to reach the lower earnings limit in only 30 years of a 49-year working life to qualify for a full state pension. Those who reach state pension age from 6 April 2016 will require an additional five years. That means that the individual can fall below this limit for a significant number of years—up to 14—and not be penalised in retirement.

Of course, there are also the other protections, which both noble Baronesses have referred to. Not only income that is above the lower earnings limit counts towards eligibility for a full state pension. Many national

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insurance credits also count towards that entitlement. For instance, NI contributions can be credited where a person is unable to work full-time due to ill health or because of caring responsibilities. These can be awarded to those receiving certain benefits, such as child benefit or working tax credits, to help build entitlement to a state pension. While we cannot be certain, it is highly likely that many individuals whom the noble Baroness is seeking to benefit are getting national insurance credits during those years in their working life where their earnings fall below the lower earnings limit.

I know that the noble Baroness is keen to make changes as soon as possible, but more work is clearly needed to understand the full extent of the issue. In any event, as I have said, this amendment, which deals only with zero-hours contracts, does not and would not resolve the issue entirely in the way that the noble Baroness wishes. I therefore urge the noble Baroness to continue working closely with the DWP and HMRC on this matter so that they can have the benefit of her very considerable experience and we will eventually reach a satisfactory solution. However, I submit that the way we should do that is not through this Bill and this amendment.

Baroness Hollis of Heigham: I thank my noble friend Lord Young, and especially my noble friend Lady Drake for her powerful speech.

The noble Lord, Lord Newby, made three points in reply to which I need to respond. The first was that work was in hand on the working party chaired by the IFS—which, as I said, his right honourable friend Steve Webb set up—on how best the problem should be addressed. Not so. We were told explicitly that all that we could do was collect the data on how many people might be affected, not come up with any policy recommendations. I noticed that when I suggested half a dozen, they were not included in the minutes.

I would be delighted to have the wider remit that the Minister suggested, because that would indeed allow us to take the issue forward. Instead, it has hung around his second point, which is the number coming from DWP of 50,000 as opposed to my figure of 200,000. I am not sure about the propriety of my citing this information in the Moses Room, but if he checks the minutes and the additional information based on research of P14s from HMRC and his department, he will probably find that it is estimated that 130,000 people will be above the current LEL in any one pay period, which could be a week or a month, but over the course of the year will be below LEL, so they are in addition to the 50,000. In addition to that, it was suggested to the working party that about 30,000 or more, possibly far more, are untouched or uncaught because they work for very small employers—the newsagent’s shop, and so on—and are not within the PAYE system. Put those figures together and you get to more than 200,000, my original figure of some two months ago.

The Minister’s third point was that the amendment was very partial and that there was a wider problem with part-time workers more generally. I absolutely agree; he is right. I will be delighted if, as a result, I have persuaded him that the Government need to

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come back on Report with a comprehensive amendment, a freestanding clause which will address the issue more widely. I invite him to do so, because that is what he has been suggesting and would be consistent with his position in his reply.

At the core—okay, we are arguing between ourselves —is that it cannot be right, first, that someone who is not employed comes into the national insurance system but someone who may be working 30 hours a week cannot do so. Secondly, it cannot be right that when we have a flexible labour market—we have all agreed that a flexible labour market in a 24/7 economy is necessary—all the risks, including the risk of losing a sizeable chunk of your state pension, should fall on the shoulders of the worker, usually a middle-aged woman. That cannot be right. I regard it as immoral. If we want a flexible labour market, and most of us accept that there is a need for it in places, we should ensure that the national insurance system supports those people to do what the rest of us want, wearing our hats as consumers. If we do not, I think that we are behaving immorally. I am sure that, on reflection, the Minister would agree.

I am very happy to continue to discuss numbers on the working party. I am very happy that the Minister will recommend to his right honourable friend that we enlarge the terms of reference of that committee and therefore come up with policy recommendations, and I would be very happy if the Minister were minded to produce some of those recommendations on Report as a government amendment. I would then be very content. I beg leave to withdraw the amendment.

Amendment 68ZY withdrawn.

Amendments 68ZZ to 68ZAC not moved.

Clause 148 agreed.

Clause 149: Regulations in connection with public sector exit payments

Amendment 68A

Moved by Lord Newby

68A: Clause 149, page 139, line 5, leave out “The Treasury may by regulations” and insert “Regulations may”

Lord Newby: My Lords, Clauses 149 to 151 give Her Majesty’s Treasury powers to make UK-wide regulations with regard to public sector exit payments. Amendments 68A to 68N and 101A will provide Scottish Ministers with equivalent powers to make regulations to recover exit payments made by relevant bodies in Scotland. They do not enable Scottish Ministers to make regulations affecting payments made elsewhere in the UK. I can confirm that that the Scottish Government have seen these amendments in draft and are content with them. I beg to move.

Lord Young of Norwood Green: I see no reason to oppose the amendments.

Amendment 68A agreed.

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Amendments 68B and 68C

Moved by Lord Newby

68B: Clause 149, page 139, line 9, leave out “Treasury think” and insert “person making the regulations thinks”

68C: Clause 149, page 139, line 31, leave out subsection (6)

Amendments 68B and 68C agreed.

Clause 149, as amended, agreed.

Clause 150: Section 149(1): further provision

Amendments 68D and 68E

Moved by Lord Newby

68D: Clause 150, page 140, line 1, leave out from second “a” to “or” in line 2 and insert “prescribed public sector authority”

68E: Clause 150, page 140, line 3, leave out “public sector office so prescribed” and insert “prescribed public sector office”

Amendments 68D and 68E agreed.

Clause 150, as amended, agreed.

Amendment 68F

Moved by Lord Newby

68F: After Clause 150, insert the following new Clause—

“Power to make regulations to be exercisable by the Treasury or Scottish Ministers

(1) The power to make regulations under section 149(1) is exercisable—

(a) by the Scottish Ministers in relation to payments made by a relevant Scottish authority;

(b) by the Treasury in relation to any other payments,

(but this subsection is subject to subsection (2)).

(2) Where the relevant Scottish authority is the Scottish Administration the power to make regulations under section 149(1) is exercisable by the Treasury (instead of the Scottish Ministers) in relation to payments made to—

(a) the holders of offices in the Scottish Administration which are not ministerial offices (read in accordance with section 126(8) of the Scotland Act 1998), and

(b) the members of the staff of the Scottish Administration (read in accordance with section 126(7)(b) of that Act).

(3) In this section “relevant Scottish authority” means an authority which wholly or mainly exercises functions which would be within devolved competence (within the meaning of section 54 of the Scotland Act 1998).

(4) Regulations under section 149(1)—

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(a) if made by the Treasury, are subject to negative resolution procedure;

(b) if made by the Scottish Ministers, are subject to the negative procedure.”

Amendment 68F agreed.

Clause 151: Power of Secretary of State to waive repayment requirement

Amendments 68G to 68N

Moved by Lord Newby

68G: Clause 151, page 140, line 38, leave out “virtue of” and insert “regulations made by the Treasury under”

68H: Clause 151, page 140, line 38, at end insert—

“(1A) The Scottish Ministers may waive the whole or any part of any repayment required by regulations made by the Scottish Ministers under section 149(1).”

68J: Clause 151, page 140, line 42, after “regulations” insert “made by the Treasury”

68K: Clause 151, page 140, line 42, at end insert—

“( ) make provision for the power under subsection (1) to be exercisable on behalf of the Secretary of State by a prescribed person,”

68L: Clause 151, page 141, line 2, at end insert—

“( ) The exit payments regulations made by the Scottish Ministers may—

(a) make provision for the power under subsection (1A) to be exercisable on behalf of the Scottish Ministers by a prescribed person,

(b) make provision for a waiver to be given only—(where provision is made by virtue of paragraph (a)), and

(i) with the consent of the Scottish Ministers, or

(ii) following compliance with any directions given by the Scottish Ministers,

(where provision is made by virtue of paragraph (a)), and

(c) make provision as to the publication of information about any waivers given.”

68M: Clause 151, page 141, line 3, after “regulations” insert “made by the Treasury”

68N: Clause 151, page 141, line 5, leave out paragraph (a)

Amendments 68G to 68N agreed.

Clause 151, as amended, agreed.

Committee adjourned at 6.57 pm.