Clause 9 - Duration of assessed income period
State Pension Credit Bill [Lords]
4:45 pm
Mr Ian McCartney (Minister for pensions, Department for Work and Pensions; Makerfield, Labour)
On the basis that over a five-year period there are economic cycles, and cycles affecting
public expenditure, income from the stock market, Government expenditure, inflation and people's personal use of their capital assets. The five-year assessment may fall in between those cycles, but at any point the virtuous circle can come into operation and a pensioner can intervene when their circumstances have changed and they require more support under the proposals. They can secure a reassessment.
That is the important thing here. Rather than just a rigid five-year cycle requiring them to have absolute certainty about their likely income, we give them other important inputs to the process to help them to have some ownership and control over their income. We allow them to have a reassessment during the five-year period when their income has gone down for legitimate reasons. If their income goes up—we had this debate during our consideration of an earlier clause, so I will not go back over it—their assessment remains as it was. We do not remove income from them. That is a clear judgment made by the Government.
In the end, all Governments have to make judgments on the political issues of the day. That is the judgment that we made and we will have to stand by it. It will be effective, because we did not just pluck it out of the air—we have held consultations and involved people in the decision, including older people's organisations and the panoply of other organisations involved with this measure.
We made that judgment because a five-year period ensures that older people have certainty and clarity, but is not so long as to allow huge variations to impact negatively on them. The judgment was made on the basis of providing older people with support, rather than out of consideration for the system itself.
The hon. Member for Daventry may be concerned that we do not have a 50,000 page consultant's report giving us a range of options from one to 99 years, but I should have thought that that would be a bit of a waste of money. He might want to give us one—we could have it for nothing. If he wants us to go for 10, 15 or 20 years, he will have to give us examples of where interventions would take place and why. After any length of time greater than five years, the potential difficulty of the assessments increases.
In the end the matter is about judgment. Unlike the Liberal Democrats, we are still prepared to use judgment in such matters. I hope that, if hon. Members are not happy, they will accept that the process has been one of consultation involving proactive consideration and assessment of difficult issues on behalf of older people.
It is a clear break with the past. Pensioners are subject to weekly means testing. We also check on their capital and second pensions in three-year reviews. However, their incomes are largely stable, as I said earlier, although there is some capital drawdown. The five-year proposal is sustainable. It has the support of the older people's organisations and of older people themselves. If there is no analysis or evidence leading to a particular decision, in the end it is a question of
judgment. I submit my judgment to the Committee and hope that it can accept it.
Question put and agreed to.
Clause 9 ordered to stand part of the Bill.