§ Mr. BoswellI beg to move amendment No. 13, in page 6, line 28, at end insert—
'(1A) The Secretary of State may provide by regulation for the assessed income period to be continued for a period not exceeding five years notwithstanding that the payment of benefit during that period has been terminated under regulations made under section 1(5) or section 2(6) of this Act, and may make provision for the restoration of benefit on the same basis of assessment as has previously applied when the conditions giving rise to the termination of that benefit no longer apply.'.Even those of us who do not habitually indulge in immoderate language or high political grandstanding are entitled to do so from time to time. I seem to remember on one occasion during consideration of the Bill that became the Learning and Skills Act 2000 becoming extremely excited with the Secretary of State and threatening at about midnight to divide the House. Although I make no such threat at this point, which might be a comfort to some hon. Members, who knows what will happen? As ever, it depends on the Minister's response. There is a serious and important point that needs to be dealt with. We discussed it at some length in Committee, but I do not feel that it has been satisfactorily answered yet, although I realise that it might be resolved at a later stage through appropriate regulations.
The whole business arises from the Government's shift to an assessed income period of a maximum of five years, compared with what might be regarded as a traditional measure of weekly income for means-tested benefits, or annual income for tax. My argument is not that that shift should not have happened. We all know that for practical reasons the purity of the doctrine of the weekly basis for the payment of means-tested benefits has become somewhat attenuated in recent years—for example, in the qualifications for jobseeker's allowance and the linking rules that apply to people who are returning to work—but the House would not forgive us were we to dilate on those issues today. However, we face an extraordinary and unprecedented position in which, at up to five years, the assessment period for a means-tested benefit—the savings credit—is to extend for considerably longer than the annual period of assessment for tax or the period used in respect of any other benefit.
We are not arguing in the amendment that that concept should be removed from the legislation—there are immensely important practical reasons why it should stand. However, unlike some pensioners' organisations, the Government do not appear to have fully grasped the dramatic administrative implications of trying to run a means-tested benefit for approximately 5.5 million pensioners—half the total number. It is clearly sensible to make the assessment period as long as reasonably practicable, but the implications of doing so must be addressed.
There are basic inequities that will be difficult to eliminate in applying assessment over a long period. When we asked Ministers about that in Committee, 457 their reply was, in effect, that if something happens to a pensioner's income and it falls, they can apply for reassessment, or they will receive an annual reminder and then apply for reassessment. In short, the matter can be picked up, and they can be reassessed and their credits adjusted appropriately. That appears wholly reasonable. However, there will be other cases in which a pensioner's income will rise for some reason—for example, they might come into some money. That might make them no longer eligible for benefit if they are new claimants; conversely, if they have had an assessment, which lasts for five years, they will not be required to report their windfall or to have their means-tested benefit reduced. There could be inequity between people with the same level of income, or assumed income, according to whether or not they were assessed for five years. That also applies to circumstances in which there may have been a discontinuity in their benefit, and those are addressed in the amendment.
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In Committee, when we asked Ministers about such circumstances, they said that if it would be better for pensioners to reapply, they could reapply. However, we pointed out that if continuity for pension credit had been broken and a new assessment was required, pensioners would need to reapply but would receive a lower benefit than someone in exactly the same circumstances who had maintained their benefit for five years.
We need to discuss the circumstances in which that problem might arise. I should make it clear to the House that we are not talking here about what might be termed genuine changes in circumstances arising, largely, from voluntary decisions. If a pensioner chooses to marry or has a child, clearly there is a material change in their circumstances, but those factors have always been recognised in the benefits system. We are concerned here with what I might call contingent changes of circumstance whereby pensioners go through a hoop and then have to reapply on a new basis, as a consequence of which they may lose out, as against pensioners with exactly the same income circumstances who can maintain their vested rights to an assessment for five years.
The circumstances that may arise range, if I may put it this way, in order of diminishing acceptability, from the entirely reasonable to the more questionable. First, a pensioner may spend time abroad. It is envisaged in the explanatory notes to the Bill that, on the analogy of jobseeker's allowance, a pensioner who goes abroad for four weeks will be able to maintain their benefit, and after that it will cease. That period will be extended to eight weeks, as I understand it, in cases where a pensioner has to go abroad to support a child who is receiving medical treatment. No one wishes to cavil at that. If it is necessary to have a distinction, that seems to be an acceptable one.
We need to consider the situation of pensioners who normally go abroad for longer than four weeks. For example, they might want to go abroad to receive medical treatment. It could even be that they had been referred by the NHS to a hospital in another country, paid for by the British taxpayer. If they could not get the operation that they needed in the UK, they might be sent abroad for it, and they might need to be away for more than four weeks, 458 although medicine now tends to achieve quicker turnaround times. In that circumstance, which arises from a deficiency in NHS provision, they might say, " I accept that I must have treatment abroad, and I am going at the public expense, although I don't object to that." However, they might come back to find that their pension credit entitlement had ceased. In that case, they would have to make a new application, and they might get less.
That would be the extreme case, and Ministers understand that not everything can be tailored to the needs of the hard case, but there is a point of much wider application, for example, to anybody who wanted to go away to the Costa Brava for a winter holiday. Unless I have completely misunderstood the Bill, after four weeks, the assessment that they had previously enjoyed would be lost, and on coming back they would have to reapply and be assessed on a new basis, which might be less favourable than the original.
I leave aside, because it will complicate the issue, concerns about the administrative arrangements for reactivating the benefit, although those will clearly be important. I leave aside also concerns about cases in which the pensioner had, in good faith, nipped off for a holiday, perhaps at short notice, and forgotten to inform the Pension Service. By doing so they would have committed a technical offence or perhaps even a substantive one.
Pensioners with an entitlement to benefit which is fixed for five years—it is not reassessed weekly—who take a holiday in another state of the European Union or beyond and are penalised may feel that they are harshly treated as against those who take their holiday in the UK and are not penalised. That may well attract the attention of European jurisprudence in due course. I mentioned that in Committee, and I do so again because there is a barrier to the free movement of persons if some disadvantage arises out of a contingent movement to another EU state. Anyway, in the real world, it is perfectly reasonable for a pensioner to say, "I want to take six weeks' holiday in the Costa Brava this year. I feel that I've earned it. Why am I being messed about on my benefit?"
As the Minister will remember, other cases may arise. I hope that when he replies he will not caricature such cases. One, which we did not talk through enough in Committee, is that of hospital downrating. That issue is separate from whether or not persons are sent abroad for treatment that is paid for by the NHS. It would be appropriate to ask whether, if a person was sent abroad by the NHS, and the period of treatment or hospitalisation exceeded 13 weeks, they would be subject to downrating on their basic pension as well. It would be useful to get that on the record.
There is also the question of the entitlement to savings credit. The Under-Secretary, who responded to the previous debate, confirmed that savings credit will not be lost even if hospital downrating takes place. It would be useful to get that back on the record. I am concerned about the re-entry into benefit when hospitalisation finishes, and I should like ministerial confirmation that the assessed income period that already applies will be maintained—that is, unless and until it is more favourable for the claimant to be assessed on a different period.
The final issues that I wish to raise are the perhaps less worthy ones that we debated and kicked around in Committee. They concern people who enter religious 459 orders, some of whom are represented in the Chamber this afternoon. I do not imagine that people would do so for a short period, so my query is hypothetical, but it also concerns individuals detained at Her Majesty's pleasure. I have said that there is a problem with double provision. Clearly it is wrong to pay someone pension credit while they are inside and being maintained at Her Majesty's expense—and very expensive that is, as we all know. On the other hand, should they lose satisfactory pension credit arrangements?
The intention and effect of the amendment is to suspend the assessment period, then reactivate it later. There should be no question about paying benefit while someone is abroad and perhaps, if we want to complete the provision, in the subsidiary example in which someone is in prison or some other state of disqualification from benefit. Rather than just simply having a mechanism that enables the system to regenerate a claim and get someone back on benefit, it would be more sensible to have a system in which the benefit is deemed to be suspended, then reactivated when those circumstances no longer apply. We have tried to draft the amendment in that way.
I urge the Minister to accept that I tabled the amendment with good will. The issue is difficult. The problem may not be as extensive as I have stated but, if I were him, I would make provision for it—if not now, then perhaps in the regulations that will no doubt flow from the Bill—so that, if necessary, benefit can be reassessed and looked at afresh. In addition, in certain cases it may be administratively easier and fairer for the benefit to be suspended, then reinstated when certain conditions no longer apply. Our amendment is tailored to do that.
§ Mr. McCartneyI hope that we can dispose of this item reasonably quickly, as we debated it for a considerable time in Committee. The next group of amendments, dare I say, contain more meat and are of a higher quality. At the risk of upsetting the hon. Member for Daventry (Mr. Boswell), his amendment has no merit, but I shall come to that in a moment.
The hon. Gentleman first raised these issues in Committee, when he said that convicted prisoners should continue to get the benefit of pension credit. We therefore nicknamed his amendment the Ronnie Biggs amendment. Such was the embarrassment of the Conservative party that it quickly dropped that argument and had to find another reason for tabling such an amendment. It has now found one, and has introduced the Costa del Sol amendment, which I shall deal with quickly.
In Committee, the hon. Gentleman gave me an A for the clarity of my explanation of why the amendment was not only unnecessary, but worked against pensioners, but I only got a C for its acceptability. Having listened to his contribution today, I have to give him a triple X for acceptability, as I am even less persuaded by it than I was by his argument in Committee.
The main effect of the amendment would be to allow a person who went abroad for more than four weeks and had his claim for pension credit closed to pick up where he left off. Any remaining assessed income period from his previous claim would be restored upon reclaiming, so changes in his circumstances would be ignored. The amendment would have the same result when someone lost entitlement to pension credit on going to prison or, in certain circumstances, as a consequence of hospital downrating.
460 The hon. Gentleman perceives an unfairness in our proposals because he believes that pensioners who can travel abroad may be inhibited from doing so. To use one of his examples, a person may receive a windfall, perhaps after the death of an elderly relative, which makes them much richer. They may continue to live in the United Kingdom and benefit from both pension credit and the windfall gain for up to five years. He contrasted that with someone who goes to another country and, upon their return, finds that they are no longer entitled to pension credit.
Opposition Members have tunnel vision, and need to look at the bigger picture. We are not ignoring lottery wins and other windfalls during the assessed income period because we think people in such a position need pension credit. We are doing so because we want to reduce intrusiveness for all recipients of pension credit. We can live with ignoring individuals' good fortune for the sake of simplifying the system for the overwhelming majority of pensioners, but we should not extend that generous treatment to people who reclaim pension credit because their previous claim rightly ended, whether as a result of going abroad or for some other reason. We must ask questions anyway, if only to be sure that the claimant is who they say they are, rather than an imposter taking advantage of someone's absence.
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I know what the answer would be if one asked a typical pensioner in the street whether he would like to retain the weekly means test, in order to avoid some perceived hardship to a handful of pensioners who had had a windfall and who could afford to travel abroad for months or even years at a time. The answer from the vast majority of pensioners would be a resounding no.
In any case, it is more likely that a person who has been abroad for some time will have a lower income stream, having used up savings, rather than a higher income from, say, winning the lottery. That is where the hon. Gentleman's case falls down. When people go on holiday, they are using their capital, so it is more than likely that they will come back with less income. Having paid for their holiday and taken their spending money with them, they are eating up their capital all the time that they are away. They have, presumably, not gone to Spain or any other country to work, but to enjoy themselves. It is therefore in the pensioner's interest that a reassessment is carried out.
As I said in Committee, it may be in the claimant's interest for a full assessment to be carried out on his return from a protracted absence, as people are more likely to win than to lose out. People who have been abroad for some time are more likely to have a lower income stream because they have used up part of their savings than they are to have won the lottery in Spain. I do not know what the odds are for winning—
§ Mr. BoswellFourteen million to one.
§ Mr. McCartneyThe hon. Gentleman has obviously played the lottery in Spain; I have never been able to, although I understand that one can now play it in the United Kingdom. That is being advertised.
461 In Committee, the hon. Member for Daventry, referring to me, said:
He says—he may be right; I do not contest that—that many people who return from protracted absences abroad may have spent themselves out, and might be better off with a new assessment"— [Official Report, Standing Committee A, 23 April 2002; c. 185.]At that point, I thought that the hon. Gentleman would have sat down and forgotten about the matter, but he is back again.The hon. Gentleman did not dispute my assertion that people who have been abroad for some time are more likely to gain from a full assessment than to lose out. The only people who stand to gain from the amendment are those who have some unforeseen increase in their finances, such as a lottery win or some other windfall, since their pension credit award and who go abroad for more than four weeks. It is not clear why this group so concerns Conservative Members.
As I explained in Committee, we intend to limit strictly the number of changes in circumstance that will require reassessment of income, but we believe that protracted absence abroad is one such instance. We also think it right that where a pension credit claim closes, it closes. It is entirely consistent to undertake a full assessment on a new, fresh claim.
It must be right that while simplifying the system for the benefit of pensioners, wherever possible we simplify administration too. I do not see how one can reconcile this important factor with holding closed claims in some kind of suspended animation, to be re-awakened at some unspecified future time, which may or may not occur.
The same arguments apply with regard to loss of entitlement to pension credit as a consequence of hospital downrating. I remind the House that it was the present Government who increased from six weeks to 13 weeks the period for which a person may be in hospital before having his benefit downrated. People in receipt of the pension credit will be able to retain entitlement to up to eight weeks on temporary absence abroad, as the hon. Gentleman said, for children's treatment.
People who travel abroad to receive national health service treatment will be considered still to be in Great Britain for the duration of that medical care. Ministers recently agreed that people who receive pension credit, income support and jobseeker's allowance who travel abroad for NHS-funded medical treatment will not be subject to the time restrictions on temporary absence from Great Britain. I hope that that helps the hon. Gentleman and will enable him to withdraw his amendment.
§ Mr. BoswellI am grateful to the Minister for that reassurance at the end, which represents some progress. I was disappointed by some of his earlier remarks. When he started attributing to me the title of the amendment—the "Ronnie Biggs amendment"—which he himself had used to ridicule it, I knew that we were in for trouble and some lack of understanding.
In arguing for the amendment, I was making the point that there is an inherent inequity between a person who travels abroad and receives a windfall and is then reassessed for pension credit or disqualified, and somebody who remains in the UK, receives the same or even a larger windfall and is untroubled. The Minister explained why that is the case, but the inequity remains.
462 I am even more troubled by the possibility that a person may feel inhibited, or there may be accusations that a person feels inhibited, from travelling round the European Union by the structure of the benefits system and the disqualification from certain benefits. That does not fully honour the spirit of mutuality of benefits that is beginning to be introduced in Europe.
However, these are complex issues and the Minister has tossed me a very small bone in relation to downrating, which is helpful. I do not want to be churlish and I shall not seek to press the amendment to a Division. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.