James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick & Leamington, Labour)

I welcome you to the chairmanship of the Committee for our sitting this afternoon, Mr. Taylor.

We now come to the provision that ends the requirement that entitlement to category B pension is dependent on a category A pension having been claimed by the person’s spouse or civil partner. Hopefully, clause 2 is one of the more straightforward clauses in the Bill. It simply will remove the current restriction on entitlement to a category B pension, which is a pension based on the contribution of a person’s spouse or civil partner rather than on that person’s own contribution in situations when the spouse or civil partner defers claiming his or her category A pension.

Category B pensions for married people and people in civil partnerships are payable at about 60 per cent. of the standard rate of basic pension. They are still commonly known as married women’s pensions, but from 2010 they will be available to some married men and people in civil partnerships.

Sally Keeble (Northampton North, Labour)

Is that payable only when the person who receives the category A pension defers or is it applicable in all cases such as if the person who receives the category A pension has not reached retirement age? Does it mean that a woman aged 58 years or 62 years can claim it if her husband is also 62 years and therefore not reaching his pension?

James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick & Leamington, Labour)

Both parties have to have reached retirement age. I am just about to clarify such matters. My hon. Friend has anticipated the material to which I am about to refer.

A person can only qualify for a category B pension if their own entitlement to a category A basic pension is lower than a category B rate. For example, a married woman with entitlement to a category A pension at50 per cent. of the standard rate would have her pension topped up by 10 per cent. to the category B rate.

Under the current rules, a person cannot qualify for a category B pension until both he or she and his or her spouse or civil partner have reached pension age, and the spouse or civil partner has actually claimed his or her category A pension. This clause removes just the latter restriction—one that limits choice and that can create complicated decisions on whether to defer drawing state pension.

To help my hon. Friend and other members of the Committee with an illustration, let me introduce Mr. and Mrs. Jones. Mr. Jones is considering deferring his category A pension because he plans to work on for two years after reaching state pension age, but Mrs. Jones has already reached state pension age and is drawing a small category A pension based on her own contributions. If Mr. Jones defers his pension, then Mrs. Jones will not qualify for her category B pension until he eventually claims. So, Mr. Jones faces an invidious choice. He would like to accrue deferral benefits—a lump sum or extra weekly pension—on his own pension, but that would mean that his wife would not be able to draw her pension.

Clause 2 solves this dilemma: Mrs. Jones will be able to draw her category B pension from the point that Mr. Jones reaches state pension age, regardless of whether he decides to defer. The change will apply from   2010 to both existing and future claims. The proposal will simplify the claims process and enable people to make an independent claim for their state pension. They will no longer be dependent on their spouse’s decision. That will make it easier for people to understand what they may claim and when they may claim it, and for those reasons I urge hon. Members to support this clause.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

It is also my pleasure, Mr. Taylor, to welcome you to this second sitting of our Committee. I have had the pleasure of serving under you before, and look forward to doing so again.

Clause 2 is short and uncontroversial. It is generally to be welcomed and I see no amendments or new clauses tabled in relation to it. The removal of a restriction on entitlement to category B retirement pension has to be generally welcomed, meaning that, in future, it will be possible for one member of a couple to receive such a pension even if the other has deferred a category A pension. This is particularly important, as more and more people are likely to be deferring their pensions by keeping on working, as older people generally enjoy better health and working in later life—past state pension age—becomes more common. As the Minister said, there are clearly benefits to deferring a pension in the increases that come later. Because we are going to see more of that, Opposition Members are happy to see clause 2 in the Bill.