HL Deb 18 October 2004 vol 665 cc177-86GC

(1) A person shall be entitled to a Category A retirement pension as defined by the Social Security Contributions and Benefits Act 1992 (c. 4) ("the 1992 Act") whether or not in any particular week he paid national insurance contributions on earnings above the lower earnings limit, provided that any one of the conditions in subsection (2) is met.

(2) The conditions are—

  1. (a) that he was caring (as the child's parent) for a child for whom child benefit is being paid;
  2. (b) that he was caring for a child as an approved foster parent or foster carer; or
  3. (c) that he was engaged for at least 20 hours in that week in caring for a person in respect of whom there were payable any of the benefits specified in subsection (3) below.

(3) The benefits referred to in subsection (2) above are—

  1. (a) an attendance allowance under section 64 of the 1992 Act;
  2. (b) the care component of disability living allowance at the highest or middle rate prescribed in accordance with section 72 of the 1992 Act;
  3. (c) a constant attendance allowance under any service pensions instrument, personal injuries scheme or 1914–1918 war injuries scheme; and
  4. (d) an increase of disablement pension under section 104 of the 1992 Act in respect of constant attendance, and any benefit corresponding to such an increase under a pneumoconiosis and byssinosis benefit scheme or under regulations under paragraph 7(2) of Schedule 8 to the 1992 Act.

(4) Paragraph 5(7) of Schedule 3 to the 1992 Act is repealed."

The noble Baroness said: I wish to move this amendment and to speak to Amendment No. 336B. I do so with a little trepidation because this whole area of pensions is increasingly complex. There are very serious questions about whether the current structure will serve us in the future. Certainly last week's Pensions Commission report made clear that the whole area is very complex. Support for a universal state pension is growing; I am drawn to it. We will have to look at the whole area of pension provision in the UK, which has grown like Topsy over the years—for all the right intentions.

My two amendments do not help with the simplicity argument; I accept that immediately. They are probing amendments, however, so the Minister can take comfort from that. The amendments do not deal solely with the position of women, but, because of the position of women on pensions, the majority of beneficiaries under them would be women.

It is interesting that in all the coverage that the Pensions Commission report rightly drew last week, I saw none that drew out the position of women in receipt of pensions in the UK—I guess there must have been some. Sixty-four per cent of retired people are women, and yet on retirement they receive on average 50 per cent of the income that men receive. It is a big area of concern.

Amendment No. 336A is about persons entitled to a category A retirement pension, which is paid throughout life. I have two areas of concern. First, although credits are given to those who are paid carer's allowance, to qualify one must be a carer for at least 35 hours a week. My amendment would change that to 20 hours. The figure of 35 hours a week is arbitrary. We should remember that many carers also work part-time and do not meet the 35-hour requirement.

The Minister rightly referred earlier today to the home responsibility protection payments. Those are certainly a great help, reducing the number of years in which one must contribute in order to qualify for the basic state pension. Over the years, a number of Members of the Committee have argued for that very positive move. However, the payments will apply only in relation to children under 16. As for the second state pension, it will apply only to care for children up to the age of six. I listened with great interest to the compelling points that the Minister made earlier. The flaw in the arrangements is that they apply only to total years. If someone works for only one week in a tax year, she will not qualify. It is very arbitrary. Receipt of any other benefit also will exclude her from entitlement to the benefit.

I do not wish to take up too much of the Committee's time. However, these two amendments are a manifestation of the great unfairness to women in our present pensions system.

I turn to Amendment No. 336B. Some 41 per cent of women in work are working part-time. It is an enormous percentage. In Britain, about two-thirds of married women with families are working. Thirty years ago, the figure was about 50 per cent. Outside Scandinavia, Britain has the highest number of working married women in Europe, I think; I am not sure whether that is still true.

I believe that the Minister's heart is with me on Amendment No. 336B, even if her head or logic may not allow her to be because of the complexity in a number of other issues. The whole nature of work is changing. The idea of a job for life is gone. Many people, men included, now have to work for up to four employers. All of that employment may be low-paid. Cumulatively, that employment may pay them a higher wage than the lower earnings level for a pension. Individually, it may not, and that is where the system falls down. Anyone earning from a single employment will not qualify. On recent figures, 1.4 million women earn less than the lower earnings level of £70-odd a week, so they do not start to qualify, even if they want to pay into a state pension. We are perpetuating in a way the anomaly whereby although a majority of retirees are women, a substantial minority are on an unfeasibly low income and have to rely on state support.

I fully accept the complexity of the issue. These are probing amendments. As for reviewing pension schemes, I believe that the universal state pension would deal with many of the anomalies we have talked about today and in earlier amendments. However, these amendments do not deal with that. I beg to move.

Baroness Turner of Camden

I rise to support the amendment moved by my noble friend. As all those who have been discussing the Adair Turner report and pensions issues in general know, those most at risk when it comes to low pay and so forth are women. Those suffering poverty in retirement are in the main women, for the obvious reason that many of them have an interrupted work pattern. They care for children and, later on, may care for elderly relatives. The Government often pay tribute to how much we all owe to carers, so I hope that my noble friend at the Dispatch Box will look at what has been said with a great deal of sympathy.

The same arguments apply to those in part-time employment, who again are mostly women. When they come to retire, if they have a pension at all, it is related to very low pay and they mostly depend almost entirely on state benefits.

I apologise for not being here earlier. I was at a meeting of OPAS, and it so happens that the service has just produced a very good report about women and pensions.

Lord Higgins

Both noble Baronesses who have just spoken have distinguished records in the field of pensions and trade union action in that regard. One must acknowledge that. It is right that they should stress the continuing unfair position of women. Having said that, and in the light of Turner, there is no doubt that we have to look to the future. Both parties, whichever may be in power, will have to make significant changes in this direction.

There is only anomaly about Beveridge which has always worried me over the years; that is, married women receive a married woman's pension towards which they and their spouse have contributed no more than a single, unmarried person. That was understandable at the time of Beveridge, but is not really sustainable any longer. For many years we have been seriously disadvantaging the position of unmarried women. In looking forward on these issues, we shall need to take that point into account. It is a strange situation, given present-day circumstances, although as I say it was entirely understandable at the time of Beveridge. However, as both noble Baronesses have remarked, we need to look carefully at the Turner report and decide which are the fair ways we can adjust the position so far as concerns women pensioners.

Baroness Hollis of Heigham

I was expecting a more extended debate. I note that my noble friend has grouped her two amendments together. She has rightly anticipated to some extent where I may be seeking to go.

Noble Lords will know that home responsibilities protection was introduced by Barbara Castle to protect the basic state pension by reducing the number of qualifying years needed for a full pension to a minimum of 20 years. HRP is simple, broad based and cost effective. Just in case there is any misunderstanding, I should explain that one week's work would not remove HRP. Any year where a person is caring and earns under 52 times the lower earnings limit—around £4,000—will be covered. It may be that my noble friend's worries on this point are not entirely well founded. There is often a misunderstanding about exactly how HRP works.

However, this amendment would go further than perhaps my noble friend appreciates, because many of my concerns about it are related to issues that she did not raise. Removing the 20-year requirement in the HRP provision would allow a person who has spent most of his or her working life outside the labour market to get a full state pension. The costs of that would have to be met by those in work, including other parents.

Earlier we discussed an amendment moved by the noble Lord, Lord Skelmersdale, which sought to extend the cut-off point for help through the S2P for people caring for children by raising it from the age of six to the age of 12. The new clause proposed by my noble friend would remove the age restriction completely so that, provided child benefit is payable, a person could receive help through the S2P on the basis that they are caring for a 19 year-old, who if they are not in full-time education could have been in waged work. Indeed, they could have been married. So I am not sure whether my noble friend intended the consequence of her amendment, but I am sure of the effect. Moreover, the costs would be very significant, running at over £3 billion by 2050.

6 p.m.

The amendment would also extend help to carers looking after disabled people for 20 hours a week or more. The current limit is 35 hours a week. This limit is used not only for HRP and S2P, but also and importantly—for the carer's allowance, which my noble friend will know is triggered by the disabled person being cared for qualifying for the middle or higher rate of disability living allowance.

I have worried about this issue because I think that there is a problem regarding those who are caring sometimes for two people for 20 hours each a week. However, the difficulty here—I have been trying to find a way through—is that it is easy to cover in law responsibilities for looking after children by relating those duties to their age. They are born and reach a certain age, so there is an easy audit trail. However, with caring it is not easy once you move away from clear passport entitlements such as middle-rate DLA, 35 hours of caring duties and the carer's allowance. Below that, should we allow for someone who generously helps to keep afloat five different people, each for a package of between three and five hours? How would we put together a paper trail for that?

From my experience, it would not be customary for someone who receives DLA at the middle rate to require care for as few as 20 hours a week. Normally the requirement is much higher than that. Furthermore, how can we achieve recognition in the national insurance system for caring responsibilities where there is no easy audit trail for care of the elderly as there is for children? The carer's hours may fluctuate. One week may include laundry and shopping duties so that 25 hours is spent on care, while during another week the carer may just be popping in for an hour a day, amounting to only five hours. I find it difficult to envisage exactly how it could be calculated. For these various reasons, therefore, I do not think that I can help my noble friend.

I turn to Amendment No. 336B. This new clause seeks to allow for the aggregation of earnings below the lower earnings limit for people with a number of paid jobs, thus providing a qualifying earnings factor for both basic and additional state retirement pension.

Again, we recognise the issue here. Around 60,000 people have total earnings above the LEL for these purposes. most of them women. The crux of the issue which this amendment seeks to address is that liability for national insurance is determined by the level of a person's earnings in an individual employment, as opposed to being able to calculate two jobs together. As a result, a person could he earning well above the LEL and not qualify.

However, again there would be a number of practical difficulties, such as the need for employers to record more information. Let us take someone who has five different part-time jobs. Would we ask one of those employers to be the nominal employer for these purposes and the other four employers not? In a sense this is a version of the carer's dilemma: at the moment we have an easy option whereby we can follow a paper trail for audit purposes.

When significant benefits hinge on the robustness of the paper trail, does my noble friend suggest that we should stipulate two employments but not three, or three but not five? Alternatively, would my noble friend pursue an income-related test? That might be sturdier, but even in that case you would still need one of the employers to be responsible for the employer's side of the national insurance contribution. How would that responsibility be spread?

I suspect that all noble Lords, including myself, are sympathetic to the entire bundle of issues raised here, so many of which are related to women's access to the basic state pension by virtue of some of the anomalies that we have inherited from Beveridge. However, I repeat that I do not think that we can address them on a piecemeal basis because each would have knock-on effects. Not only would those be costly and complex, they would often subvert other things that we are seeking to do on the pensions front. Again, as I asked noble Lords earlier today, I would ask my noble friend to await our report on women's pensions due in the forthcoming year.

Baroness Dean of Thornton-le-Fylde

I thank my noble friend for her detailed explanation in response to my amendments, which was not at all unexpected. I take the point about carers and making piecemeal changes. In the field of pensions and public policy associated with that, answering one question creates a whole range of others.

In response to the point about aggregation of earnings, on paper her answer is logical and I accept it, but I am still troubled by the fact that if that fictitious woman had three jobs, it would not stop the Inland Revenue deducting income tax from her for each of those jobs. If she was on some kind of family support, it would not stop the welfare system taking into account all the earnings from her three jobs. I accept that it is difficult, but the point is: do people have to fit the system or do we have systems to fit people? We must debate that in considering the whole of the pension system. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 336B not moved.]

Clause 286 [Dissolution of OPRA]:

Baroness Hollis of Heigham moved Amendment No. 336C:

Page 218, line 8, leave out subsection (3) and insert— (3) Subject to subsection (4), information obtained by the Regulator by virtue of subsection (2) is to be treated for the purposes of sections 76 to 81 (disclosure of information) as having been obtained by the Regulator in the exercise of its functions from the person from whom OPRA obtained it. (4) Information obtained by the Regulator by virtue of subsection (2) which was supplied to OPRA for the purposes of its functions by an authority exercising functions corresponding to the functions of OPRA in a country or territory outside the United Kingdom (the "overseas authority") is to be treated for the purposes mentioned in subsection (3) as having been supplied to the Regulator for the purposes of its functions by the overseas authority.

The noble Baroness said: This is a vast raft of amendments and perhaps I could speak very briefly to them. They are minor, technical amendments. For example, Amendment No. 340AA is a consequential amendment on pensions liberation, which we discussed much earlier. However, I draw the Committee's attention to Amendment No. 344A, in which we agree that there should be parliamentary scrutiny of orders relating to amounts to be raised by pension protection levies. That amendment, partly in response to the Committee's concerns, makes them subject to the affirmative procedure. I am happy to give further examples if the Committee wishes, but, as I said, the amendments are minor, technical and drafting in nature. The only one of substantive significance is that to which the Government propose that orders affecting pension protection levies should be passed by affirmative resolution. I hope that noble Lords will agree to the amendments. I beg to move.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 337:

Page 218, line 10, at end insert— ( ) Where tax information disclosed to OPRA is obtained by the Regulator by virtue of subsection (2), subsection (3) does not apply and subsections (3) and (4) of section 82 apply as if that information had been disclosed to the Regulator by virtue of subsection (2) of that section. For this purpose "tax information" has the same meaning as in that section.

On Question, amendment agreed to.

Clause 286, as amended, agreed to.

Clause 287 [Transfer of employees from OPRA to the Regulator]:

On Question, Whether Clause 287 shall stand part of the Bill?

Lord Higgins

Why are we including subsection (2), which states: The provisions of Regulation 7 of TUPE…shall not apply to the transfer"?

Baroness Hollis of Heigham

Clause 287 makes specific provision in relation to staff who transfer from OPRA to the Pensions Regulator. It ensures that the terms and conditions of employment of staff who transfer will be protected, with the transfer expressly being made subject to the provisions of TUPE. However, those TUPE regulations do not protect occupational pension rights. Subsection (2) makes express provision for such rights to be protected. I commend the clause.

Lord Higgins

If they are not normally protected. why are they being protected here?

Baroness Hollis of Heigham

We think it right to protect the occupational pension rights of staff who transfer from OPRA to the Pensions Regulator. TUPE does not provide for that, so we have to do it this way.

Lord Higgins

Yes, but what are the reasons why TUPE does not apply here?

Baroness Hollis of Heigham

Because TUPE does not cover pension regimes when moving in such circumstances; and because one is moving from one non-departmental public body to another. TUPE currently applies in public sector to private sector transfers.

Lord Higgins

I am grateful.

Clause 287 agreed to.

Clause 288 [Dissolution of the Pensions Compensation Board]:

Baroness Hollis of Heigham moved Amendment No. 337A:

Page 218, line 28, leave out subsection (3) and insert— (3) Information obtained by the Board by virtue of subsection (2) is to be treated for the purposes of sections 188 to 192 and 194 (disclosure of information) as having been obtained by the Board in the exercise of its functions from the person from whom the Pensions Compensation Board obtained it.

On Question, amendment agreed to.

[Amendment No. 338 had been withdrawn from the Marshalled List.]

Baroness Hollis of Heigham moved Amendments Nos. 339 and 340:

Page 218, line 30, at end insert— ( ) Where tax information disclosed to the Pensions Compensation Board is obtained by the Board by virtue of subsection (2), subsection (3) does not apply, and subsections (3) and (4) of section 193 apply as if that information had been disclosed to the Board by virtue of subsection (2) of that section. For this purpose "tax information" has the same meaning as in that section.

Page 218, line 34, after first "to" insert "192 and"

On Question, Whether Clause 288, as amended, shall stand part of the Bill?

Lord Skelmersdale

Clause 288 contains—or contained—a government amendment that has been withdrawn. Indeed, that is the first of seven such amendments today; I shall not ask the noble Baroness to explain all of them. However, am I right that Amendment No. 338, which has been withdrawn, has been superseded by Amendment No. 340, which is in a more felicitous place? If I am right, I shall be satisfied. If I am wrong, I will be more than a little surprised.

Baroness Hollis of Heigham

The noble Lord is entirely right; it has been superseded.

Clause 288, as amended, agreed to.

Clauses 289 to 291 agreed to.

Clause 292 [Overriding requirements]:

[Amendment No. 340A had been withdrawn from the Marshalled List.]

Baroness Hollis of Heigham moved Amendments Nos. 340AA and 340B:

Page 221, line 30, at end insert— ( ) any regulations made under section (Pensions liberation: court's power to order restitution)(7); ( ) any regulations made under section (Pensions liberation: repatriation orders)(4);

Page 221, line 36, leave out from "any" to end of line and insert "subordinate legislation made under that Part;"

On Question, amendments agreed to.

[Amendment No. 340C had been withdrawn from the Marshalled List.]

Baroness Hollis of Heigham moved Amendments Nos. 340CA to 340D:

Page 221, line 41, at end insert— ( ) any ring-fencing notice issued by the Regulator under section (Power of Regulator to require ring-fencing of assets);

Page 221, line 42, after "section" insert "274,".

Page 221. line 42, after "293," insert "(Modification of pensions legislation that refers to employers),"

Page 221, line 42, after "303(2)" insert "or (3)".

On Question, amendments agreed to.

On Question, Whether Clause 292, as amended, shall stand part of the Bill?

Lord Skelmersdale

I said that I would not comment on each of the withdrawn amendments, but I must comment on Amendment No. 340C. It was a paving amendment to introduce a new clause, covering the powers of the regulator to require the ring-fencing of assets. That has disappeared as well. One rather wonders what has been going on in the preparation of the Bill. There have been a substantive number of government amendments so far and we have been promised a whole string more on Report, many of which are in response to queries and suggestions made in Committee and earlier. However, to withdraw an entire new clause is more than a little odd. I would like to know the reason for it.

Baroness Hollis of Heigham

We are talking about Clause 292, which—

Lord Skelmersdale

No, we are not. We are talking about Amendment No. 340C to Clause 292, which was a paving amendment for another new clause.

Baroness Hollis of Heigham

I am sorry; the debate is about whether Clause 292 shall stand part of the Bill.

Lord Skelmersdale

It is. I am asking a question on Clause 292. I am asking why the Government decided to withdraw Amendment No. 340C, which was in turn a paving amendment for another amendment.

Baroness Hollis of Heigham

It is basically because the amendments that we originally envisaged were about the ring-fencing provisions, which have been superseded by the directive. The clause is about scheme rules. It is a little odd to be fished on amendments that are not on the Marshalled List; that is why I pushed the noble Lord on it.

Lord Skelmersdale

They were on the Marshalled List.

Baroness Hollis of Heigham

But they have been withdrawn from it. I would not normally expect the noble Lord to move amendments that he had withdrawn from the Marshalled List, either.

Lord Skelmersdale

I am not moving an amendment. I am asking a question on clause stand part. Let us forget it.

Clause 292, as amended, agreed to.

6.15 p.m.

Clause 293 [Modification of this Act in relation to certain categories of scheme]:

Baroness Hollis of Heigham moved Amendments Nos. 341 to 342A:

Page 222, line 20, at end insert— ( ) any case where a partnership is the employer, or one of the employers, in relation to an occupational pension scheme.

Page 222, line 24, leave out paragraph (c).

Page 222, line 26, leave out "and"

Page 222, line 28, at end insert ", and ( ) Part 7 (cross-border activities within European Union).

Page 222, line 33, after first "scheme" insert "rules"

On Question, amendments agreed to.

Clause 293, as amended, agreed to.

Baroness Hollis of Heigham moved Amendment No. 342B:

After Clause 293, insert the following new clause—