Guarantee Credit
State Pension Credit Bill [Lords]
9:30 am
Professor Steve Webb (Northavon, Liberal Democrat)
Good morning, Mr. Griffiths. The purpose of amendment No. 3 is similar to that of amendment No. 14. That amendment would remove subsection (6), while our amendment would allow the Secretary of State the power to specify lower amounts, except in respect of hospital in-patients. That proposal is more narrow than amendment No. 14, because the explanatory notes to the Bill suggest that the Secretary of State needs powers to specify lower amounts, for example, in respect of prison inmates. Even I do not have a problem with a lower rate of pension credit for prison inmates. However, hospital in-patients should not be treated the same.
We welcome the fact that the Government made a concession in another place. It is clearly a step in the right direction, but has it gone far enough? The issue is one of principle as well as one of pragmatism. The key question is whether the Bill should give the Secretary of State power to reduce guarantee credits for hospital in-patients. The Minister will no doubt say that it has been a feature of the welfare state since the war that people in hospital have their benefit cut, but because something has been going on since the war does not make it right. There has been an upper earnings limit on the national insurance system since it was established, but yesterday the Chancellor of the Exchequer breached that by taking national insurance beyond the upper earnings limit. That something has been in done for decades does not mean that it cannot or should not be reformed, and I hope that the Minister would not suggest that that is a reason for continuing with the system.
We have to examine the thinking behind the practice. The historic argument is that the state should not pay twice—in this case, by providing for patients in hospital and also paying their full pensions, or pension credits. They are being fed, sheltered and looked after while they are in hospital, which is part of what the pension credit is about. However, the Government have not produced any evidence about the extent, if any, of the double provision, so my first question is empirical—what evidence is there of double provision? Clearly, food would be an obvious example.