Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I beg to move amendment No. 26, page 3, line 31, at end insert—

‘(d) is in receipt of certification by a relevant health or social care professional, verifying that they are involved in caring for a person or persons, for a minimum of 20 hours a week, not otherwise recognised by the regulations.’.

David Taylor (North West Leicestershire, Labour)

With this it will be convenient to discuss the following: Amendment No. 61, page 3, line 31, at end insert—

‘(d) is certified by the local social services authority as providing caring services for at least 20 hours a week for one or more people.’.

Amendment No. 63, page 3, line 31, at end insert—

‘(d) is engaged in caring for a person or persons in receipt of the higher, medium or lower rate care component of the Disability Living Allowance, Attendance Allowance, Constant Attendance Allowance, higher rate of short-term or long-term incapacity benefit, severe disablement allowance and any means-tested benefit for which a disability premium or addition has been added in the applicable amount for 20 hours a week or more.’.

New clause 15—Report on contribution credits—

‘The Secretary of State shall present a report annually to the House of Commons on—

(a) the number of carers in receipt of contribution credits;

(b) the number of carers caring for 20 or more hours per week who are not in receipt of contribution credits;

(c) the associated costs of contribution credits to the National Insurance Fund of (a);

(d) an estimate of the cost of providing contribution credits to persons falling within paragraph (b), and

(e) any proposals he may have for reviewing eligibility for contributions credits.’.

New clause 17—Allocation of child benefit to the relevant parent—

‘If child benefit is paid into a joint account and allocated to a parent who did not wish to accrue home responsibilities protection or contribution credits, and the other parent wishes to have accrued home responsibilities protection or contribution credits, the Secretary of State must reallocate the qualifying years of home responsibilities protection or contribution credits, as the case may be, to the parent who wished to receive them.’.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I, too, welcome you to the chairmanship this afternoon, Mr. Taylor, and into the course of the Bill. This morning, we were treated to a number of helpful and interesting debates and, as often happens with Bills, the defining characteristics of the different groups are starting to emerge.

The watchword of the Conservatives seems to be “not a penny more for pensioners”, to which they seem to be sticking quite rigorously. The Minister seems to be saying on numerous occasions that the “computer says no”. Unfortunately, when I suggested that he might want to crack that joke, my hon. Friend the Member for Yeovil was not quite so well up with what he calls youth culture. The Liberal Democrats’ watchword is that we are trying to get a better deal for pensioners. [Hon. Members: “Money tree”.] From a sedentary position, Conservative Members have mentioned a money tree but I would rather refer to it as a money sapling. In my defence, on our side of the House we have mentioned savings of £8 billion which have been identified already. Therefore, we are not going to take any lessons from the other parties on how to save or spend money.

Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)

Before the hon. Lady gets into her flow, I should point out that she referred, with a rather broad-brush attitude, to£4 billion for scrapping contracted-out rebates. However, the Government’s figures show that that has now been reduced to just under £2 billion. Therefore, she is just over £2 billion adrift from the Treasury’s figures. Will she deal with that?

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

My figures are taken from those presented by Help the Aged. Notwithstanding the hon. Gentleman’s figures—or the Government figures—they are still double what we have proposed. [Interruption.] I should move swiftly on.

We welcome this part of the Bill, particularly because carers do a phenomenal job. If we want to bandy figures about, let us consider the situation if carers did not do their job. It would cost the NHS roughly double what it currently spends to look after people who are selflessly cared for by carers who give their time and who also suffer financially. This Bill goes some way to redress the situation for carers who care for 20 hours or more a week, and it is therefore extremely welcome.

I want to explore the situation for people who miss out. By 2010, as it stands under this legislation, of the 160,000 carers who will be caring for 20 hours or more a week and not building entitlements to the basic state pension, 120,000 will get credit through the carers credit. This means that 40,000 will not be building their entitlement. We are trying to address that.

Amendment No. 26 was suggested by Carers UK. The Equal Opportunities Commission and Help the Aged also support it. The type of people who would miss out on carers credits will be those who have fluctuating conditions and who may be on and off benefit; those who care for someone who goes into hospital long enough to lose their benefits; those who care for someone who does not want to claim disability benefit but the carer nevertheless sacrifices that amount of time—very willingly, as a rule; and those who care for more than one person but neither of them is in receipt of the right benefits. We discussed those people on Second Reading. We propose that a health or social care professional could nominate—certify—that those people are in need of care for 20 hours or more a week.

Amendment No. 63 was, again, not our idea; it was proposed by Carers UK. It lists nearly all disability benefits and argues that if a carer is caring for someone in receipt of said benefits for more than 20 hours a week, they should be eligible to accrue entitlement to the basic state pension. The amendment is also supported by Help the Aged, Age Concern and the Equal Opportunities Commission. At the moment, under the eligibility criteria, someone would need to be caring for a person almost constantly, day or night, to qualify. The extension of the list of benefits is important.

What the Government have done so far is excellent, but we ask them to go the extra mile for the 40,000 people of the 160,000 who will not benefit for reasons that are not their fault.

Sally Keeble (Northampton North, Labour)

It is a pleasure to serve under your chairmanship, Mr. Taylor.

I tabled amendment No. 61 after discussions with carers groups to find a way to balance the different pressures on caring and pensions. It is important to recognise that many carers will benefit from other changes in the Bill—in particular, the reduction in the number of hours that have to be worked per week to qualify for the state pension. If they do not have to work for so many hours, it is easier for people with substantial caring responsibilities to qualify for a state pension. That has to be recognised.

It is obviously important that the system should properly compensate carers and recognise the contribution that they make. Some carers are not able to work because of their caring responsibilities, so they cannot qualify even on the fewer-hours basis. They therefore need credits to count towards their pensions.

We should not muddle that up with the caring roles that people normally play for their families. We have to draw the lines carefully. Otherwise, everybody will end up being a carer and what we are trying to do will become virtually meaningless. We have to be clear about that.

The credits are valuable; they are not light things. They are important, and there has to be a proper process for deciding who qualifies and who does not. Tagging on a long list of benefits means that people  can tick a box and get a benefit, but that does not always meet the realities of carers’ lives. That is why, in addition to the specified benefits, which I agree are probably not wide enough, we need a process that allows for the person who cannot tick the boxes, but who none the less does what amounts to a caring job. That person cannot qualify even at the fewer-hours rate because of their caring responsibilities. We need to find another way to recognise and assess what is going on.

The Opposition said that that should be done by one health or social services professional, but I do not think that that would be robust enough. To give an example from the Home Office, the domestic violence exemption system, in which two professionals sign, works well. That is sensible; there is evidence from two sources. In the case that we are discussing we could say that a doctor and social worker should sign. However, one person with a lot going on in their lives—caring, working, this, that and the other—would have to run around collecting bits of paper from different professionals. Furthermore, there would be the issue of what would happen if the doctors decided to charge. That is a problem because there is no agreement in place with doctors yet.

All of us have seen the letters that professionals write in support of housing applications, but a person advocating a patient or client is not always in a position to make an impartial judgment, one that follows due process or a set of criteria. They are more likely simply to say, “This person works very hard. They look after three children, who all have difficulties. Yes, they qualify as a carer.” An established process for such applications might provide a way forward. Amendment No. 61 would place a responsibility on the social services authority to undertake the process, rather than with an individual social worker whom people may not know. A social services authority in any event has a responsibility for undertaking care assessments for the different client groups; it will have family records, so the process would look at the care needs of the people concerned. The authority could say whether the mother looking after three children is indeed working as a carer as stipulated in the Bill, and that she should therefore be entitled to the carers credit.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

We agree about the robustness of the measurement, and we would want to have that degree of robustness in everything that is done. Given that the hon. Lady has left out the alternative of having a doctor advocate, would there not be circumstances in which social services is not involved with an individual? A person may not be on specific allowances; they may simply be very ill. Does she not envisage circumstances in which a doctor’s letter would be the only appropriate avenue for an individual to get pension credit without having to get involved with social services?

Sally Keeble (Northampton North, Labour)

I do not want to go on about amendment No. 61 for too long because it is not robustly worded, and I do not intend to press for a Division. I am asking that my hon. Friend the Under-Secretary have a look at the issues raised, come back, and perhaps move a little on the measures.

There are probably no circumstances in which a person would be seeing a doctor when they did not also require some kind of care assessment that would go  through social services. I find such circumstances very hard to envisage. A person may want assessments made for adaptations to their house, or a special needs assessment for a child who is in school. There are a range of circumstances in which, if any kind of caring, as opposed to medical treatment, is needed, the social services authority would be the appropriate body to provide an assessment. I am sure that my hon. Friend will confirm whether that is the legislative position.

No doubt we can all think of a few cases where a person will not be able even to work the reduced hours that are needed now to qualify for the state benefit and the reduced years. Such a person may also be looking after a number of people with substantial needs, although not with the level of need that entitles them to benefits. A person in such a complex situation would effectively fulfil the requirements to get the carers credit. The amendment might provide a way to soften the edges of what is otherwise a tick-box exercise.

The clause is important and will transform things for a lot of people who are currently left out and find themselves unable to get a pension because they have to give up work to care for relatives.

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

This group of three amendments and two new clauses touches on some important issues and there is a lot to say about it.

Amendments Nos. 26 and 63, tabled by the Liberal Democrats, and amendment No. 61, tabled by the hon. Member for Northampton, North, would allocate contribution credits to more people from 6 April 2010 than are provided for in the Bill and there will be public expenditure implications from 2010 onwards. Those implications will be small at first but will become increasingly significant over time. I hope that the Minister will tell the Committee what the costs ofthe three amendments will be, because it is difficult for the Official Opposition to find precise costings for them. It would be useful if we could find out what we are talking about.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

The hon. Gentleman says that the additional number of people who would be eligible for the credit would increase over time. Would that not justify the argument that says that, because such people are being left out, even more people will be unfairly treated than before? I acknowledge his point about the financial implications.

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

I actually said that the costs would increase over time. However, the hon. Lady is right: if we are to believe some of the estimates from some of the special interest groups that follow this matter carefully, the number of carers is likely to increase as well. If she will bear with me for a little while as I develop my argument, she will see that one of the new clauses that I tabled deals specifically with that point.

I was saying that the three amendments in the group have public expenditure implications. Unlike the Liberal Democrats and the hon. Member for Northampton, North, we in the Official Opposition take our financial responsibilities to the taxpayer   slightly more seriously. We are not prepared to make significant spending commitments many years ahead without considering other demands on the Exchequer and understanding that the money to pay for those commitments will need to be raised in a sustainable way through increased taxes.

In contrast to the other parties, our approach in new clause 15 is to ensure that this matter, which is important—as the hon. Members for Solihull and for Northampton, North said—is brought before the House of Commons annually. Because this is a significant matter, we have called for a report to be made annually—rather than once in every Parliament or once every five years—that would require the Secretary of State to tell the House of Commons about the number of carers caring for 20 hours or more and not receiving contribution credits. This matter is disputed. I understand that the Equal Opportunities Commission says that about 50,000 carers would be excluded from the pension system, and I believe that Carers UK thinks that about 40,000 would not be included, even though they are caring for more than20 hours.

I was interested to see a number of parliamentary written questions tabled on 7 November and 17 January by a former Work and Pensions Minister, Baroness Hollis of Heigham. She asked:

“What percentage and number of those on incapacity benefit are in receipt of: (a) lower rate disability living allowance; (b) middle rate disability living allowance; and (c) higher rate disability living allowance”,

and how many of them are estimated to receive between 20 and 35 hours of care a week. Lord Hunt of Kings Heath answered that

“no estimates are available for the number of incapacity benefit and disability living allowance claimants who receive care.”—[Official Report, House of Lords, 8 November 2006; Vol. 686,c. WA164-166].

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

I may be intervening on the hon. Gentleman too early, but does his new clause not run the danger of being something of a tease? It appears to indicate that he thinks there might be a problem, but he has not proposed so far to do anything about it. Does he agree in principle with the concerns of the two hon. Members who have spoken this afternoon that some people with caring responsibilities will be excluded? Is he sympathetic in principle to those individuals in giving the carers’ credit?

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

Of course I am sympathetic to them. The purpose of new clause 15, specifically subsection (d), is to report annually to the House of Commons the precise cost of increasing the scope of the eligibility criteria. If that information is put before Parliament annually and we are informed how many people are affected and how severe their circumstances are, that will inform all parliamentarians of the severity of the issue in relation to other needs and demands on the public purse.

The hon. Gentleman had only to turn on his radio this morning to hear of problems in the Court Service, to give just one topical example. There will be a demand for money to be spent on the Court Service to ensure that the criminal justice system functions properly. You will be pleased to hear that I do not intend to develop the analogy any further, Mr. Taylor, other than to give that one example from today’s news.  

As responsible parliamentarians, we all know that there are innumerable demands on the public purse. They are worthy and important demands, but it is also vital that we are informed of the number of people who do not qualify. New clause 15 would put that information before the House with a clear price tag so that it can take its place and MPs have an informed basis for the hard decisions that we are called to take in relation to the competing demands of special interest groups from every departmental area.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

The hon. Gentleman is being helpful and clear. To avoid doubt, will he confirm that he accepts the substance and principle of our two amendments and that, for him, it is an issue simply of what price tag will attach to the changes when, not if, a Conservative Government—assuming we are to see one—introduce them?

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

We would all like to do many things in various areas of government on behalf of our constituents, but some of us take seriously our responsibilities to the taxpayer and the general level of tax that can be sustained to pay for such demands. I have said that clearly and I have nothing more to add.

Baroness Hollis of Heigham tabled three questions more recently in the House of Lords—references HL604, HL605 and HL606—seeking the number and percentage of people on the different levels of benefit, both included and excluded under the current eligibility criteria, who receive more than 20 hours of care a week. I shall read parts of the answer as it is relevant to the amendments. It states:

“Estimates from the Family Resources Survey (FRS) 2004-05 indicate that approximately 100,000 people are in receipt of incapacity benefit, but not the middle or higher rate care component of disability living allowance, and are receiving care for 20 hours or more a week.”

Those 100,000 people would not be eligible for contributions credits under the eligibility criteria defined in the Bill. The answer continues:

“These data also suggest that approximately 300,000 people are receiving the lower rate of disability living allowance and are receiving care for 20 hours or more a week.”—[Official Report, House of Lords, 17 January 2007; Vol. 688, c. WA153.]

That makes 400,000 people in total. Their carers might be caring for 20 hours or more a week as well as holding down a full-time job and therefore paying national insurance contributions. I am not saying that there are 400,000 people whose sole activity is caring and who are not part of the pensions system by virtue of making contributions. However, unless we have a detailed breakdown, it will be impossible for us to estimate the scale of the problem to which the hon. Members for Yeovil and for Solihull have rightly drawn our attention. If we do not know the size of the problem, we do not know the price tag either. We need the basic information to be set out annually, and I am grateful to have had the questions asked by Baroness Hollis drawn to my attention.

As I have said, the reason why we have called for an annual report is the importance of the issue. Carers UK estimates that there are 6 million carers in the UK, a quarter of whom—1.5 million—care for 50 or more hours a week. I suspect that many of them find it extremely difficult to pay national insurance  contributions as well, although no doubt some of them do so. As has been mentioned, Carers UK estimates that there could be as many as 9 million carers in the UK by 2037. We know that 1.5 million carers are more than 60 years of age and that one fifth of carers over60 report that their health is not good. Those people face severe stress and strain in the their everyday lives.

Any of us can be a carer at any time. Carers are not a separate class or group of people, detached from the rest of us, who have a caring vocation. Some of us in the Committee may even have been carers. I had a disabled mother when I was younger and, although I am not sure whether I would have classed myself as a carer as such, I certainly knew what it was like as a child to care for an adult. It will probably be the common experience of most of us in the room to care for aged parents or relatives in the future.

I am also grateful to Carers UK for raising with Committee members six different examples in which people would be excluded from the eligibility criteria for contribution credits as specified by clause 3 or by the related regulations. For example, there are people with mental health issues who are advised to claim the relevant disability living allowances, but because of their state of mind do not do so. The people who care for the mentally ill people in that group would not qualify for credits.

What about someone caring for several people,none of whom is on the prescribed benefits? The responsibility on that carer could be—in fact, is likely to be—even greater than that on a carer of just one person who is on the prescribed benefits. What about those people who overturn on appeal their rates of benefit so that at some point in the future they receive the benefits that make them eligible for credits? When they were on the lesser benefit, their carer would not have been entitled to contribution credits. Does the carer have any right of eligibility to the contribution credits from those missed years? They are all practical cases, the type of case that all Members might have brought to them at their constituency surgery on any given Friday of the year.

What about those people who need significant care but do not receive disability living allowance? What about those people with fluctuating conditions, who sometimes have severe needs but at other times are relatively well and do not need care? If one is a close family member who cares for them, one knows that there is a possibility of remission and that they will need serious care later on. It is not easy to go back into the labour market while the person for whom one has cared is well, knowing that at any moment they will slide down into illness and need full-time care.

What about those people going into hospital long enough to lose their benefits? There are reasons for the withdrawal of benefits when one goes into hospital. One is fed, does not have central heating bills and so on. I understand the rationale, but again I speak from family experience. When my mother was in hospital on various occasions, there was an acute necessity for my sister and for other members of the family to be in close attendance because my mother was severely  disabled. Will such carers also lose out because someone has gone into hospital long enough to lose their benefits?

I am grateful to Carers UK for providing Committee members with those six examples. Is the Minister’s mind still open to suggestions about how to ensure that all carers have a better pensions safety net? He, like me, attended a meeting of the all-party parliamentary group on ageing and older people on 5 December. I do not know whether the minutes of that meeting are accurate, but they certainly say that the Government were still open to suggestions about how to ensure that all carers had a better pensions safety net. If that is true, I shall listen with interest to the Minister’s response.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I congratulate the hon. Gentleman on his clarity and on the tremendous case he makes for the amendment tabled in my name and that of the hon. Member for Yeovil. Why does he not support the amendment, given that he clearly understands the injustice, and the necessity for the amendment?

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

The hon. Lady still has difficulty understanding the relationship between the worthiness of a cause and the price attached to it. I am surprised that she cannot understand the link between the two. I am sure that on a Saturday morning, when she goes down to her local supermarket or shopping centre, she wants to buy many items that are worthy and that would add to her life, but, like the Government and my party which aspires to Government, she will have a budget. This concept is no different.

Overall, we welcome the fact that carers will be eligible, under the criteria in clause 3, for a full basic state pension, even though they have never worked. That is a significant change, which the Committee should recognise, as have Carers UK and the Equal Opportunities Commission.

Sally Keeble (Northampton North, Labour)

We must not say that carers have not worked. The whole point is that they have worked—it is just a different type of work. They have looked after family members. They have worked, just like other carers.

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

I stand duly and correctly rebuked. The hon. Lady is quite right and I am grateful to her for picking that up. I meant to say nothing bad about carers and I hope that, given what I have said about them up until now, she will accept that that was a slip of the tongue. I meant the payment of national insurance contributions. I agree with her that parents and carers do some of the most important work in the United Kingdom. She is quite right—that cannot be said too strongly or often. I thank her for pulling me up on it.

I shall move on to new clause 17, which is in my name, that of my hon. Friend the Member for Eastbourne and that of my hon. Friend the Member for North-East Milton Keynes—our esteemed Whip. I confess that I wrote the new clause, in my own hand, on Second Reading. I was prompted to do so by the powerful and persuasive speech from the hon. Member for Burton (Mrs. Dean). She happens to be a Labour  Member, but her point could have been made by any Opposition Member and would have been, I hope, if such a case had been brought to one of us by a constituent.

Briefly, without going over the whole of the hon. Lady’s speech on Second Reading, the case to which she drew the House’s attention related to a Mr. and Mrs. Cartwright—she named them so I feel free to do so—who contacted her in August 2005 about the payment of child benefit into their joint back account. Mrs. Cartwright was not in paid employment making national insurance contributions, but looking after their children. However, Mr. Cartwright’s was the first name on the joint bank account and, therefore, their child benefit was deemed to have been allocated to him rather than to Mrs. Cartwright. That was despite the fact that he was making national insurance contributions and had a paid job, and Mrs. Cartwright was at home looking after their children.

Apparently, Mr. and Mrs. Cartwright should have received form CH718 which, when child benefit is being paid into a joint bank account, enables a couple to specify to whom the child benefit should be paid, which, of course, triggers the allocation of home responsibilities protection to the correct member of the couple. The Cartwrights said that they never received form CH718 which, some 20 years later, is almost impossible to prove. The question that the hon. Lady asked is whether anyone knowingly would waive their right to home responsibilities protection when shehad been caring for her children and not in paid employment earning national insurance contributions.

I gather that such a case is not isolated. The hon. Member for Burton is one of your fellow Chairmen on the Chairman’s Panel, Mr. Taylor. If I am not mistaken, I have had the pleasure of serving under her in Committee. She went on to say:

“Pensions Advisory Service produced a document entitled ‘Report on Women and Pensions Helpline’, which was theresult of a pilot helpline available from 18 October to10 December 2004.”

It was clear that the problem was widespread. The hon. Lady cited the report:

“Some enquiries came from individuals where the child benefit was being paid to the working partner rather than the partner who had given up work or was working reduced hours to look after the couple’s children.”—[Official Report, 16 January 2007; Vol. 455, c.721-22.]

We are rightly gender-neutral in Committee, but there were cases when a stay-at-home husband had not received the allocation of home responsibilities protection. Whether it is a matter of fathers losing out on HRP or mothers such as Mrs. Cartwright doing so, the case is the same. We cannot really believe that anyone would willingly lose out on £32 a week in pension entitlement, as happened to the Cartwrights, if it had been easy to establish early on who wished to be allocated home responsibilities protection.

I understand that the hon. Lady has raised the matter with the Minister. Indeed, she has discussed the case with him. I hope that it will not again be a matter of the computer not being able to rectify the problem. In all seriousness, I understand the difficulties that surround information technology. The issues are serious; I am not making light of them. However, when there has been an administrative mistake of such a  nature, I should have hoped that, even with a manual override, it could be solved. Given the evidence of the Pensions Advisory Service, clearly the problem has affected more than one couple. I hope that it has not happened in hundreds of thousands of cases.

It should not be beyond the wit of the Department and its staff to do something about the problem. I am not talking about a matter that would cost the Government any money. It is about unfairness; it is about making sure that what happens is what should have happened and what the couple intended to happen. It is a minor technical point, but exactly the sort of matter that should be properly raised in Committee. I, for one, am pleased to have been able to bring the hon. Lady’s concern before hon. Members.

Mark Pritchard (Wrekin, The, Conservative)

My hon. Friend mentioned “staff”. Does he share my worry that, to date, the Government have not given any details on how they will deliver all the key fundamental changes to the pension system, given that they are laying off hundreds, if not thousands, of staff of the Department for Work and Pensions throughout the nation?

David Taylor (North West Leicestershire, Labour)

Order. Will the hon. Member for South-West Bedfordshire return to the subject of the new clause? I rule the question out of order.

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

I shall follow your guidance, Mr. Taylor.

I was about to conclude my remarks. The problem that was raised on Second Reading was serious. My new clause, on which we shall vote in several weeks, would be a remedy and I shall listen with great interest to what the Minister has to say on new clause 17 as well as on the other three amendments and new clause 15.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

This has been another important debate and I want to respond to the many points that have been made. If I do not reply to some, I shall be happy to write to hon. Members particularly about the six cases that were mentioned so rapidly. I shall pick them up in writing, if I may do so.

I want to start on the theoretical money grotto—rather than tree—from where the hon. Member for Solihull was planning to fetch her money to pay for the commitments that the Liberal Democrats are making. I am afraid that she will be sorely disappointed if she goes there because half of the money that she has identified is extra money that the Department would be spending if every single person who is eligible for pension credit took up its benefits. That is clearly not money that is sitting around in a vault ready for the Liberal Democrats to spend—not an uncapped source of it—but extra money.

The hon. Member for Eastbourne was quite right to say that estimates of the contracted-out rebates have changed since the White Paper. We set that out inthe regulatory impact assessment—the figure was£1.6 billion. It is worth noting that the contracted-out rebate needs to be seen in the context of the long-term spending implications of the system, specifically long-term spending on the state second pension that  would be incurred if more people were to contract into the system. Therefore it is again not possible to say that we can take that money and spend it as we wish.

Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)

I do not want to interrupt the Minister while he is dragging the Liberal Democrats back to the real world, but will he give an undertaking that when discussing that part of the Bill, he will have at his fingertips an explanation for where this £2 billion has gone? It has not been very long between the White Paper and the drafting of the regulatory impact assessment and while these sums may not mean a lot to the Treasury in the great scheme of things, it does seem a lot of money to have overstated.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I am happy to do that. It is not an overstatement but different trends in people contracting into the system. We have also received updated figures which we fed into our projections. However, I do not want to test your patience, Mr. Taylor, on the definition of the clause so I will move rapidly on to the costs of these proposals.

Compared to the basic state pension figures, these are relatively modest single-figure millions because we are talking about a very small gap in the number of carers that could be covered. However, there would be a significant long-term cost to these proposals. On the state second pension side, we would be accruing£400 million by 2050. The key point in looking at individual amendments is whether they effectively target the 40,000 people who we do not think are currently covered by these proposals.

It is worth restating that the major part of the progress on carers is achieved by reducing the number of qualifying years to 30. That is the change that achieves the greatest increase in entitlement for people who are caring. We have been consistently clear that our research suggests that that would not, on its own, meet carers’ needs.

This provision is about a specific proportion ofthe people who are caring. Those who care for over35 hours a week are already entitled to carer's allowance because they received class 1 national insurance credits. Those who care for less than 20 hours a week appear to have similar work patterns to the rest of the population and can therefore build up their entitlement through their own national insurance contributions.

However, our evidence suggests that those who care for more than 20 hours a week do have their job opportunities affected and therefore the carer’s credit is aimed at that group. It is an important backstop for those who would have less than 30 years’ contributions without it.

Information from the family resources survey suggests that around 160,000 people will be caring for more than 20 hours a week but not building up entitlement to the basic state pension in 2010.

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

I apologise if I am pre-empting the Minister but I should be grateful if he would respond to the figures from the written answers raised by Baroness Hollis because he has already mentioned   40,000 people not being eligible but the figures were somewhat higher in the answers received by Baroness Hollis.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

The hon. Gentleman may wish to consult the gender impact assessment that we published, which set out the figures in detail. The figures that were published in the May White Paper were then updated in November. There were more people who were eligible, again on the basis of new information that we had received. So there is a higher overall proportion of people who we think could benefit from the change that we are introducing.

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

The gender impact assessment is reasonably recent, but I doubt that it is as recent as the questions raised by Baroness Hollis on 17 January—that is really very recent indeed.

I said that it is entirely possible that those 400,000 people are paying some form of national insurance contribution. We know that they are all caring for more than 20 hours a week, but we need more detail on exactly where they fit; whether they are in work and paying national insurance contributions, or if they are purely carrying out a caring role. On the basis of the definitions in the clause, they would miss out on contribution credit. If the Minister is unable to give more information on that issue now, perhaps he would agree to write to every member of the Committee with a little more analysis regarding the answers received on 17 January.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I am happy to give the hon. Gentleman that assurance.

The measure is precisely targeted and we have been clear all the way through that it could still leave 40,000 carers who might not be entitled. Of course, that does not mean that they will miss out on a full basic state pension. Other provisions in the Bill, such as the measure requiring 30 qualifying years, will ensure that they are more likely to get close to the full basic state pension than they would under the current system. Furthermore, research suggests that not all carers will remain in that position for the whole of their working lives.

We have not put the definition of “caring” in the Bill. That is because we are introducing a new credit and we believe that it is essential to use the flexibility offered by secondary legislation so that we can make changes if we find that the definition is not meeting the needs of carers. However, we have set out our current plans for that definition in the delegated powers memorandum. Our intention is to provide the credit for someone who is caring for 20 hours or more each week for one or more people in receipt of attendance allowance, the higher or middle rate care component of disability living allowance, or constant attendance allowance.

It is important to explain why we have chosen that option. When we were consulting on this new credit, the lobby groups involved clearly said to us that they did not want us to create an overly bureaucratic system, in which people would have to demonstrate the number of hours for which they were claiming, there would potentially be inspections of that number of hours, and   there would be a significant amount of paperwork for the carer. Therefore, we have sought to design a system that will be based on self-certification. However, to ensure that there is a safeguard against misapplication of this credit, we are requiring that the person being cared for is claiming a benefit that would typically require the level of care of 20 hours a week.

This is not a perfect measure, but it is a good fit with our policy objective, and balances simplicity and targeting. It is because of the existence of the benefit being claimed by the person being cared for that we can be flexible in the way that the carer self-certifies, so that they can receive the credit.

Amendment No. 63 would extend radically the range of benefits that could be identified. I do not intend to go through each benefit that is listed, but in most cases I do not think that significant care is a condition for receiving the benefit. In fact, the majority of people in receipt of the other benefits covered in the amendment will not require care for 20 hours a week. In trying to extend coverage to the 40,000 or so carers, the amendment would widen the eligibility to a vast number of carers. The amendment is clearly out of proportion with the issue that we are seeking to address.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

It may be that the Minister was going to do this in his speech, but can he indicate whether he is still sympathetic to the possibility of introducing, perhaps later in the stages of the Bill, additional amendments that seek to target those 40,000 carers,or does he feel that the Government, because of practicalities or other reasons, have for the time being reached the end of the line on their generosity in this area?

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I shall come to that later in my remarks.

Although I sympathise with the intention to ensure that as many carers as possible are eligible for the credit, I am not at all persuaded that the blanket approach proposed is an appropriate way forward.

Amendments Nos. 26 and 61 suggest that the level of and need for care should be certified by either a health or social care professional, or local social services authority. We are happy to explore this option. It has the attraction that it could be effectively targeted at carers who might fall between the gaps of the benefits that are identified in the Bill. However, I must warn the Committee that there are significant issues about how it would be implemented that would need to be addressed before we could be confident that itwould work. Those issues include whether health professionals would have the expertise to quantify the hours of care, whether they would require payment and how the new requirement on local authorities would fit into our overall approach to carers. In any case, there would need to be consultation of representatives of those who would carry out the new duties before we could decide how to proceed.

We are discussing the issue with the Department of Health and will report back before the end of the passage of the Bill through both Houses of Parliament. The important point is that any extension of eligibility along these lines could be done under regulations made possible by the Bill as drafted.

New clause 15 would impose a requirement to publish an annual report on whether the provisions to bring more carers into the state pensions system constitute the right approach. These reforms are a coherent package and there are a number of ways in which they benefit carers. I suspect that the new clause is a probing one, but I urge my colleagues to resist it if it is pressed to a vote. That is because the information is already available from a number of sources, including the departmental report, the Government Actuary’s Department quinquennial review and the departmental publication “Contributions and Qualifying Years”. I see the hon. Member for South-West Bedfordshire stirring.

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

I do not think I can quite let the Minister get away with that. Our debate already this afternoon has illustrated more than amply the fact that the figures are not readily available in one place. We need only look at the written answers that Baroness Hollis dealt with in the House of Lords in relation to what is in the gender impact assessment and what was said in the White Paper. The situation is developing. I do not think that it is too much to ask for information to be put together in a coherent form once a year by a Department that has the statistical ability to do so.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

We produce regular reports on carers and their position as part of our policy. I take the view that using primary legislation to require a report on that would be slightly over the top, but if the hon. Gentleman wants to divide the Committee on the issue, he is obviously within his rights to do so.

The same argument applies to new clause 17. The hon. Gentleman was obviously very impressed by the case made by my hon. Friend the Member for Burton, as I was when she came to see me. She has campaigned on the issue assiduously. I made it clear at the conclusion of the debate on Second Reading that we were convinced of her argument and would introduce measures in regulations made under the Bill to allow the problem to be rectified. The hon. Gentleman is welcome to look at the end of that debate to see that I made that clear, but I will set the position out in some detail to give him the reassurance that he wants.

It transpired that, for various reasons, unusually the parent who took time out of work to look after their children was not awarded the child benefit; instead, it was awarded to the parent who was working. The effect was that the parent who needed home responsibilities protection did not get it because a person is entitled to HRP only if they have been awarded child benefit. The new clause is designed to correct the outcome that such inflexibility may produce.

As I said, we made it clear on Second Reading that we intend to deal with the problem through powers taken in the Bill, but we so not want to include in the Bill the level of detail proposed. We intend to build an element of flexibility into the new regulations, so that eligibility for the new credit will continue to be linked to the award of child benefit. Where it is evident that one member of the couple has missed out on the credits because the other member of the couple is the child benefit payee but does not need the new credits—for example, because they are working—our intention is to allow the parent who has been caring for the children to benefit from the credits.

In addition to introducing greater flexibility through the regulation-making power in the clause, we will work with colleagues in Her Majesty’s Revenue and Customs to ensure that people are made aware of the new contribution credits that will replace HRP, and consider carefully what more can be done to increase awareness of the changes that the Bill will bring.

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

I am grateful to the Minister, but I want to be absolutely clear. Is he saying that he will produce a statutory instrument relatively soon to give him the power to make provision in that area? If so, will he give us a rough idea of the time scale?

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I am saying clearly that we can deal with the matter under regulations made under the Bill. Obviously, the Bill has to be passed first.

The hon. Gentleman made a point about appeals. In cases in which the benefit is awarded retrospectively on appeal, the carer could benefit from the credit as well. If I have not answered any of his points, I am happy to do so in writing. I hope that I have reassured the Committee and I urge hon. Members not to press their amendments.

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

I understand that we will not vote now on new clause 15, but I wish to express my intention to press it to a Division at an appropriate time.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

That was an extremely helpful and interesting exchange. The hon. Member for South-West Bedfordshire made a number of interesting points regarding figures. He wants them to be produced annually, to which we have no objection. That would be helpful, but it would not solve the problem. He is sympathetic to the new clauses that we have proposed, but he is constrained—he is not to spend any money—so he is pushing the Government to make changes that he is not in a position to support.

The hon. Gentleman has once again upbraided the Liberal Democrats for their profligacy. I make the point that if the individuals concerned do not receive pension credit, they will end up on pensioner credit, so the Government will pay one way or another. Of course, 20 per cent. of people who are entitled to pension credit do not claim it, so it would be a hollow saving, as those people would not be claiming money to which they were entitled. The point is that such people are missing out. They are not scrounging; they are earning the right to pension credit, but they do not meet the criteria that the Government have set out of an understandable desire to achieve simplicity of application.

The hon. Member for South-West Bedfordshire put his name to new clause 17, following the arguments made by the hon. Member for Burton on Second Reading. We support the new clause and we are pleased to hear reassurances from the Minister that the issue will be tackled.

The cost of our proposal has been described even by the Minister as hardly huge. It will be in the millions, certainly.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

Four hundred million pounds.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

May I seek clarification from the Minister? He translates the implementation of credits for 40,000 people into a cost of £400 million. Will he confirm that that is what he said?

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I gave the hon. Lady the figures, and I am happy to write to her setting out the details. It is the state second pension that will create that figure; she may not have heard when I spoke about it.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I am grateful. Perhaps I can reassure the Minister that what we are proposing relates at this stage to entitlement only to the basic state pension and not to the second state pension.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I am afraid that that is not what her amendment will do, so she might want to withdraw it.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I am grateful to the Minister. I was about to say that in view of the remarks he made on amendment No. 61, we find the Government’s approach helpful and useful. I beg to ask leave to withdraw the amendment.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I beg to move amendment No. 27, in clause 3, page 3, line 40, leave out ‘52 Class 3 contributions for each tax year’ and insert

‘Class 3 contributions for each tax week’.

David Taylor (North West Leicestershire, Labour)

With this it will be convenient to discuss Government amendments Nos. 47 and 48.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

This is a simple amendment that would apply fairly to individuals, particularly women, who change their entitlements to different benefits and go in and out of work within a tax year. Currently, women who receive home responsibilities protection do so only for full tax years during which they do not work. The amendment would allow women to be granted the new pension credit on a much fairer week-by-week tax basis that would reflect more closely the periods for which they ought to be granted pension credit.

A woman who returns to work will lose any entitlement to home responsibilities protection for the whole tax year unless she returns on 6 April. Our proposed system would mean that her pension income for that tax year would be protected at whatever point she decides to return to work. It should not be more complicated to implement, as national insurance contributions are calculated weekly anyway. I hope that the Minister is prepared to reflect on it. Women’s employment tends to be a lot more sporadic than men’s. We discussed earlier the need for flexibility regarding times when caring is needed and when women can return to work. I hope that the Government will agree to this small and inexpensive adjustment to restore fairness.

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

As the hon. Lady said, amendment No. 27 would retrospectively convert existing home responsibilities protection records into weekly  contributions. It would clearly be helpful to those concerned and enable periods spent caring, either as a parent or as a carer, to be converted into the equivalent number of weeks’ worth of contribution credits.

We understand what the hon. Lady is trying to achieve, but it is none the less retrospective legislation and, like a number of Liberal Democrat amendments, would come with a price tag. She did not say in her remarks how much it would cost; I fear I shall have to rely on the Minister yet again to supply a price tag for a Liberal Democrat policy proposal. It will not be the first time, and I do not suppose that it will be the last. I would also be interested to know from the hon. Lady how it would be paid for.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I thank the hon. Member for Solihull for the amendment as it gives us an opportunity to set out our proposals for replacing the present scheme.

We all agree that, since 1978, home responsibilities protection has played an important role in improving the entitlement of women and carers to the basic state pension. However, HRP is complicated and hard to understand because, rather than adding qualifying years, it reduces the number of years required for a full basic state pension. Our proposals are intended to change that. Clause 3 will replace HRP from 2010 with a simpler and more generous system of credits for parents and carers to help them to receive an enhanced basic state pension. Those credits will ensure that the state pension system recognises contributions from caring on a par with contributions from working.

It may be easier for the Committee if I first explain Government amendments Nos. 47 and 48. They are minor technical amendments that seek to remove any ambiguity around the number of HRP years that will be converted to qualifying years under the new crediting arrangements. It would be difficult to combine a HRP system that reduced the number of qualifying years with a reformed system of credits for parents and carers that would help people build up qualifying years. We are proposing to convert HRP years acquired before 2010 to qualifying years. That means that each HRP year that someone has before 2010 would derive 52 class 3 contribution credits. However, under the current system, a person can only get HRP for up to half of the requisite years in their working life. That means that a man reaching state pension age in 2010 would be able to build up a maximum of 22 years of HRP—half the 44 qualifying years currently needed for full basic state pension. So far, so relatively simple, but for women the position is more complicated. A woman reaching state pension age in 2010 would be eligible for up to 19 years of HRP, rising to 20 between 2010 and 2012 and 22 by 2020, in line with the equalisation of the state pension age.The Government amendments seek to remove the ambiguity around the maximum number of years that people can build up HRP.

Amendments Nos. 47 and 48 will allow a maximum of 22 years of HRP acquired before 6 April 2010 to be converted. That is more generous for women than the present upper limit. We set the maximum at 22 years because that is the upper limit for men and will be the upper limit for women in 2020. If we did not set such a maximum upper limit, there might be some doubt  about the number of HRP years that could be converted into credits. These technical amendments address that.

On amendment No. 27, I hope that the hon. Lady will be reassured by my comments. As I mentioned, HRP has been available for complete tax years in which a person is caring and unable to work—either because they are caring for severely disabled people or for children. The majority of people benefiting from HRP receive it for their parenting contributions. The hon. Lady is right to say that many people do not get full years of HRP when they first have a child. Part years of parenting or caring do not attract any HRP; they are therefore not recorded as part of someone’s contribution history. That is, of course, precisely why we are moving to a system of weekly credits.

We have already said that we intend to treat all years of HRP as qualifying years. The amendment would, however, make a further transitional change to the way in which HRP has operated by recognising part years through the new crediting arrangements. Committee members should remember that the changes we are making through clause 3 are being made alongside a raft of other beneficial measures, including the introduction of a single contribution condition through clause 1.

Those reaching state pension age on or after 6 April 2010 will need just 30 years for a full basic state pension. Combined with what we are doing through clause 3, that will mean that approximately three quarters of women will reach state pension age in 2010 with a full BSP. More than half of the remainder will get more than 60 per cent. of the full rate—more than the category B so-called married person’s pension.

My key point to the hon. Lady is that her amendment would have very little effect on top of that significant change; the reduction to 30 years achieves her goal. Awarding credits for part-years of HRP would have little or no extra effect. Under the current system, most people would normally have only two incomplete years in which they had not been covered by HRP—one when they started caring for their child and one at the end. The reduction in qualifying years to 30 more than makes up for that possible gap in their contribution history.

No doubt the hon. Lady will say that her amendment involves something marginal and ask why we do not agree to it. The problem is that the administrative burden would be extremely significant. What she argues for is not worth doing; her overall goal is already achieved through the reduction to 30 years. Accepting the amendment would create significant administrative work. A person’s work and caring history of the past 30 years would have to be looked into to uncover gaps in an individual’s contribution history.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

The Minister said—and it may be true—that the matter is not entirely simple. As a consequence, has it been difficult for his officials to estimate what the effect of the change would be? He said that it would be very small, but can he quantify that in any way?

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

The effect would be very marginal. Given that we would not know the individuals, we would have to go through everyone’s contribution history to see whether there were any gaps. Most people would go up to a full basic state pension through the reduction to 30 years in any case. The effect would be marginal and any benefit would be significantly outweighed by the administrative burden of having to go through people’s individual contribution histories.

John Penrose (Weston-super-Mare) (Con) rose—

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I know that the hon. Gentleman wants to intervene, but I should like to finish this section of my response; he can come in if I have not answered his point by the end.

The hon. Lady’s amendment would put parents in a more advantageous position than people who get HRP because of other caring responsibilities, because we could use child benefit records to award credits for each week spent parenting. That is what we would have to do under the hon. Lady’s proposal. However, we have no similar mechanism allowing us to identify and credit past weekly caring activities, beyond those for which HRP had been awarded under the current rules. We have that information for only four years, so it would be unfair.

John Penrose (Weston-Super-Mare, Conservative)

I carry no brief for the hon. Lady’s amendment, but I am intrigued by one of the Minister’s comments. He said that people who have missing part-years tend to have just two—one at the start and one at the end. I think that he was basing that on the assumption that the majority of people qualifying will be parents and that the missing part-years would be at the start and end of parenting time.

Has he thought about how many might be affected because they were caring for people with remitting, relaxing or fluctuating conditions such as multiple sclerosis? Such carers might have multiple missing part-years; I was intrigued by the Minister’s statement that only a small number of people would be affected.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

Such people would make up a very small proportion of the total. I think I am right in saying that 99 per cent. of HRP years relate to carefor children; the people whom the hon. Gentleman mentions would be a small percentage of a small percentage.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I am substantially reassured by the Minister’s comments so far. If we are talking about only a small number of people, would it be possible for individuals not eligible for their basic state pension by a small margin to have their cases looked at?

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I do not want to be unduly unhelpful, but the problem is that in my experience opt-in systems for pensions end up being expensive because people ring up and lots of inquiries can be generated. A lot of people could ring up to find out whether they were involved. The cost of manually going through all those cases would be significant. It would be an unnecessary   administrative burden. My core point is that the reduction to 30 years substantially achieves the goal; the administrative exercise that the hon. Lady’s amendment requires would thus not be justified. If I have reassured her, I ask her to withdraw her amendment.

Lorely Burt (Shadow Minister (Small Business), Trade & Industry; Solihull, Liberal Democrat)

I am very grateful to the Minister for his helpful comments, the majority of which I take on board. I still have a fear and a concern for a small number of people, and it would have been helpful to be able to investigate whether an individual had a specific concern. However, in view of the Minister’s comments, I beg to ask leave to withdraw the amendment.

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

I promise not to revisit territory that we have already gone around in debating this clause. I know that you would not permit it, Mr. Taylor, but I must reassure you none the less. I would not want you to be worried on any account.

However, there is one quite interesting issue inclause 3 that we have not debated at all, and I would like to tease out from the Minister the departmental thinking behind the change. If members look at proposed new section 23A(3)(a) to the Social Security Contributions and Benefits Act 1992 in clause 3(1), they will see that it refers to the award of

“child benefit for any part of that week in respect of a child under the age of 12”.

That is a change of four years from the existing law, in which home responsibilities protection is awarded for parents who are receiving child benefits for a child under the age of 16.

I would like to understand some of the thinking in the Department behind that change. Is it purely financial? Do the Government have a view on the importance of caring for and parenting children up to the age of 12, as opposed to over that age? I see the Minister smile at me, as we are perhaps getting into deeper, more general philosophical waters than we have so far on the narrower technical issues. However, that raises interesting and important points.

Members of the Committee will also note that proposed new section 23A(3)(b) refers to someone being “a relevant carer” if they are,

“a foster parent for any part of that week”.

Having looked into that with the help of the excellent House of Commons Library, I would be grateful if the Minister could confirm my understanding that this will apply to children under the age of 18 as far as foster parents are concerned. So, within this proposed new subsection, we have children under 12 being eligible on one hand, and children under 18 being eligible on the other.

I know that the Government sometimes have to be careful. They have made statements in pre-Budget reports—and elsewhere, in the associated notes—talking of their view that adult dependency is an outdated concept. I think that is more or less a quote from a pre-Budget report document. A carer looking after either children or an ageing or sick family member may by nature be a dependent relative on some other family member who is in paid employment. So, that touches quite important, wider social issues. It may be purely the financial cost, which I would not say was wholly unreasonable, but the Committee need to probe slightly to find out Government thinking on this particular point.

John Penrose (Weston-Super-Mare, Conservative)

This clause is an essential step towards the righting of an essential wrong relating to the unfair treatment of women’s pensions over many yearsand, more broadly, the pensions of carers, who are predominantly women. It is one of the best aspects of the Bill.

In particular, I was delighted to see that the clause involves a degree of simplification. As the Minister said earlier, almost everywhere else, the language of pensions and the contributory principle is about adding years—building up a pot of rights and contributions—and creating a sense of saving for one’s retirement. Almost uniquely, the HRP talks of reducing years. Not only is that a complication of language, but of administration and systems as well. Clearly, it makes sense to put the new equivalent to that system—I appreciate it is a like-for-like comparison in terms of being fiscally neutral and so forth—and related language on all fours with the rest of the pensions world.

It also makes sense to put across a notion of equivalence to paid employment. The hon. Member for Northampton, North picked up on what we were saying earlier in order to ensure that we were not talking about people who were working, but those in paid and unpaid work. Such unpaid work is tremendously important, and the clause not just symbolically, but actually ensures that it is valued and put on the same basis as paid work. For that reason alone, the clause is to be welcomed, as well as for its simplification of the systems and processes involved, particularly given the fact that we have one of the most complicated pensions systems in the entire developed world.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

I do not want to detain the Committeefor long, but the hon. Member for South-West Bedfordshire raised an important point. Rather than  interrupt the Minister in mid-flow, I would like to reinforce our interest in hearing an explanation of how the proposal relating to the care of and responsibilities for children at particular ages ties into other parts of the Government’s thinking on the responsibilities of parents. Parents in the UK are allowed to remain on income support until their youngest child is 16, without work responsibilities or having to go on to jobseeker’s allowance. I wonder whether this change is a precursor to wider changes in the way that the Government interpret parents’ responsibilities towards their children and towards work.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

To answer the specific point about foster carers, registered foster carers are covered until the child that they are caring for is 18 because of payments being made to them. They may have to provide more significant care for older children than might be the case for other families and it is not untypical for their working patterns to be affected by their responsibilities as a foster carer. The principle is to examine how people’s ability to work is affected.

There is nothing particularly theological about the age specified. I sense the waters in which those on the Opposition Benches are tempting me to swim, but I shall stay firmly on the shore. The clause is simply intended to simplify the system: there were different conditions for the basic state pension and the state second pension. We have increased one and reduced the other. I hope that I will be able to explain how that makes the overall system much more generous for those who care for parents. It is not in any way a restriction on the support we give to parents.

Andrew Selous rose—

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

The hon. Gentleman looks poised to intervene again, so I shall give way.

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

The Minister is generous, as always, in giving way. I said that I thought the change was purely financial, if I can put it like that. I think that is what the Minister is saying. Perhaps he could reassure me once more that the clause does not herald the wider thinking of the Government on the role of parents looking after children up to the age of 12 and beyond.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I am not heralding, if that gives the hon. Gentleman the reassurance that he seeks.

We have covered the fact that the system will be much more transparent than it is now. HRP is complicated, and one of the further complications is that it was possible to get a basic state pension contribution for a child under the age of 16, but with a state second pension that was possible only for a child under the age of six. Under the proposals, a class 3 contribution will instead be credited for each week in which a person is either awarded child benefit for a child under 12, classed as an approved foster parent or engaged in other forms of caring, which I shall come to later.

As has been rightly pointed out, the age is currently 16. We have lowered that, but it is important to note that no one will lose out from those changes, for two  reasons. First, the move to 30 qualifying years for a full basic state pension in clause 1 more than compensates for the move to age 12. Secondly, for the first time, through the provisions in clause 9, there be will a credit in respect of the state second pension for those awarded child benefit for a child aged between six and 12. Taken as a whole, the Bill therefore improves state pension outcomes for parents and carers. As before, foster parents will need to make a claim to ensure that they build up entitlement to the basic state pension, although under clause 9 they will also accrue entitlement to the state second pension.

As I promised, I shall say a couple of words about those engaged in caring. I assure hon. Members that the clause indeed makes provision for HRP years acquired before 2010. As we have discussed, there will be a maximum of 22 years, which we can convert. The clause includes a regulation-making power, in proposed new section 23A(3) of the Social Security Contributions and Benefits Act 1992, to prescribe those who may be said to be engaged in caring. The reason we have done that and resisted earlier amendments is to give ourselves flexibility, which this debate has again demonstrated will be necessary. The goal of helping carers to build up contributions when they cannot do so through national insurance contributions is widely shared, but the way of doing that might change over time. It is therefore important to give ourselves the right flexibility.

For example, the regulations will allow the flexibility to ensure that carers can continue to be awarded the credit for up to four weeks during which such conditions are not satisfied, such as where the carer has fallen ill. There will also be a range of other technical details in the regulations, to allow us successfully to deliver class 3 contribution credits for those engaged in caring. Copies of the delegated powers memorandum, which sets out further how we intend to use the power in the clause, have been placed in the House. I therefore propose that the clause as amended stand part of the Bill. I also thank the hon. Member for Weston-super-Mare for his kind comments about the clause.