Schedule 2 - Minor and consequential amendments

State Pension Credit Bill [Lords] – in a Public Bill Committee at 3:45 pm on 25th April 2002.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 3:45 pm, 25th April 2002

I beg to move amendment No. 39, in page 26, line 5, at end insert—

'National Assistance Act 1948

24A In section 22(4) of the National Assistance Act 1948 (charges to be made for accommodation), at end insert ''and an amount of savings credit under the State Pension Credit Act 2002 to be prescribed in regulations''.'.

I see that we have the remainder of today and all of Tuesday to discuss this amendment.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

The amendment would answer a simple question: what is the position of pension credit recipients in residential and nursing homes with regard to the savings credit? We may have got the wrong bit of the wrong Act. The Government claim that the Bill will make savings pay, yet we have already thought of a number of instances—for example, for women aged 60 to 64—where savings will not pay. I received a written answer the other day, which stated that 200,000 recipients of pension credit will be living in residential care or nursing homes. I presume that that includes those people who are there on income support and getting all their fees paid. As I understand it, they will get what would colloquially be called pocket money, although that may be slightly

pejorative. They get an expenses allowance of about £15 a week.

I have raised that issue in the House. An issue of dignity is involved if people get £15 a week for pocket money in their declining years. As the pension credit comes along, should people who have saved and are now living in residential or nursing care have every penny of saving credit taken off them too, and just be left with the pocket money? Or should we simply say, as the amendment does, that those who have saved will receive a reward even if they are living in a residential or nursing home, because in addition to the pocket money they will get some savings credit? Two people in a residential home could both be getting the pocket money when one has saved and the other has not. If the Government want to reward savings, should not the credit apply just as much to people in residential accommodation?

Photo of Maria Eagle Maria Eagle The Parliamentary Under-Secretary of State for Work and Pensions

The hon. Gentleman has raised a point that has come up in other parts of the Bill. It is obviously important. The amendment is a probing one but it has some faults in the sense that if it were implemented as it stands, it could have perverse effects. I therefore cannot tell him that we love his amendment. It would place an obligation on the Department to ring-fence at least part of the savings credit from the financial assessments undertaken by local authorities when determining an individual' s ability to pay for their residential care.

Local authorities' assessment of the amount that people can pay towards their care costs is a matter for them operating within the Department of Health's guidance. It is not an area of policy for which Ministers in my Department are responsible, which is why it does not appear in the Bill. When Baroness Hollis was asked about this in another place, she reminded the other House that it was a matter for the Department of Health, which indeed it is.

I want to advise the hon. Member for Northavon of the effect of his amendment on individuals and illustrate that it is not so simple to carry it out and ignore the savings credit in the assessment. Random effects would be created. The local authority means test reduces a person' s income—the hon. Gentleman referred to it as pocket money, but many elderly people find that an offensive way of putting it—to £16.80 a week. If the savings credit were to be paid on top, as the amendment suggests, a person with £100 income before the local authority applied the means test would be left with £30.60 after the income assessment. That is because they would be entitled to the maximum savings credit of £13.80 on top of the £16.80 allowed under the local authority means test.

However, a person with £115 original income who was entitled to a savings credit of £7.80, would be left with just £24.60—£16.80 plus £7.80—so some illogical and arbitrary payments would arise. That is why the Department of Health is still considering how best to deal with guidance in respect of the pension credit and its impact. We intend, however, that pensioners in residential care homes will be treated in the same way as other pensioners. The Department of Health is

looking at the detail. I cannot tell the hon. Gentleman how far it has got with solving this problem, but that is the position. I hope that that reassures the hon. Gentleman that we intend to ensure that everyone benefits and that he will not press the amendment, but he may feel inclined to do so.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 4:00 pm, 25th April 2002

I am somewhat heartened by the Minister's response. I hesitate to nit-pick, but the anomaly whereby someone with fewer savings ends up with fewer savings credit than someone with more savings is precisely the same anomaly outside residential care as inside it. It is not anomalous at all; it is the point of the scheme, so it is not a fundamental obstacle. If I have understood the hon. Lady correctly, the Department of Health will attempt to ensure that the goal of savings credit in rewarding those who saved will also apply to people in residential care, so it will not all be swiped away.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Work and Pensions)

Let me enter a boring, though necessary, reservation. If that is to happen, the detail of financing and the implications for charges and local authorities will have to be examined carefully.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I am sure that, as the hon. Gentleman says, all the intricacies will have to be examined, but I am greatly encouraged by the Minister's response. A propos the hon. Gentleman's likening me to Sven-Göran Eriksson rather than Ulrika Jonsson, I may be forced to forgo the pleasantries that normally conclude our proceedings because I have been summoned to 10 Downing street. I hope that the Committee will forgive me and not think me rude for that. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Schedule 3 agreed to.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

As part of the normalities of ending Committees, I shall be brief and I know that the hon. Member for Daventry will do the same. I do not want to detain our colleagues too long, but it is important that I make a number of points. The Committee does not simply do its work and go away again. A lot of effort is put in by many people behind the scenes, to whom I pay tribute.

You and I, Mr. Atkinson, have been rattling around the House and this Corridor for some considerable years. Indeed, in recent years, you have chaired virtually all those occasions when I have been dealing with the legislative programme as a Minister, and you have kept me on the straight and narrow. I am also grateful to your colleague, Mr. Griffiths. I hope that he will survive the consequences of chairing the Committee.

The hon. Member for Daventry and I have a similar relationship. I do not know why, but every time there is a reshuffle in the Government or the Opposition, we telephone each other to check whether colleagues are still around. For a short period, the two of us were broken apart and became broken-hearted: when I had to go to the Cabinet Office, the hon. Gentleman was not allowed to follow me. However, we have been put

together again, and I look forward to more discussions with him over many years.

On behalf of us all, I thank the Clerk and the Hansard writers. I particularly thank the Clerk for the assistance and advice that he gives hon. Members. Without that, the Committee could not operate effectively.

I thank my hon. Friends for their support. A number of them have worked on Bills with me before, but for others, it is their first time. Indeed, some of my hon. Friends are in the House for the first time, having worked in other places, including Downing street and the Labour party. They used to write my speeches; now they have to sit and listen to them, so I thank them.

That reminds me of a comment made way back in the dark years about the Labour party national executive. ''What is this committee?'', it was asked. Someone replied, ''It is a group of the unwilling, picked from the unfit, to do the unnecessary.'' I hope that that is not how people perceive this Committee. I hope that we have been fit for the purpose and have done what is necessary for pensioners.

I say to Opposition Members that the whole point of parliamentary democracy is to have accountable Governments and to enable Oppositions to hold them to account. I usually give awards on these occasions, and the award for the best Government reply on the Bill goes to the hon. Member for Northavon, who beat both me and my hon. Friend the Under-Secretary with the reply that he gave this afternoon. I have to give the award for the best Opposition speech to the hon. Member for Hertsmere for getting out of the first commitment given by the Opposition. Whatever happens in the rest of his career, he will always have the McCartney award.

This is the first Bill on which the Under-Secretary has worked with me, and I hope that it will not be the last. She has the passion of a politician, but also the guile and savvy of a lawyer. With those characteristics, she could end up as leader of the Labour party, but we shall pass over that.

I thank my Parliamentary Private Secretary, my hon. Friend the Member for Wigan (Mr. Turner), and my hon. Friend the Member for Basildon (Angela Smith). I could not have expected more from them. I also thank parliamentary counsel, all the officials, the government and parliamentary relations unit and my Bill team. We have not quite finished our activity, but I hope that their work will be well rewarded.

This is one of our flagship Bills. It is critical to the Government and to our relationship with older people. I look forward to the challenges ahead on the Floor of the House and, more important, to the real work that begins when the Bill leaves the House. That will ensure that the measure is implemented effectively and we get the pension credit to those 5.1 million pensioners in the way that we have described.

I finish by saying that I am sometimes rather dubious about the press and would therefore like to hear the Committee's view on something that was written about me last Tuesday. I always like to hear

the views of my parliamentary colleagues. That edition of The Times says that the shadow Secretary of State for Work and Pensions

''can surely never have come across anything quite so alien . . . as Ian McCartney, the Minister of State for Pensions.

Mr. McCartney is a Scottish former seaman and chef, pugnacious, entirely round''

and—I paraphrase—so short that even when he stands at the Dispatch Box he sometimes cannot be seen. The article continues:

''Mr. McCartney has a unique rhetorical style, a Tsunami''—

I thought a tsunami was one of those big, fat guys from Japan.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

I know. I looked it up in the dictionary. The piece continues:

''His native tongue is triple Dutch . . . foaming and unstoppable, he brings Hansard writers out in a muck sweat.''

I ask you, can you believe a word that the Conservative press say?

Colleagues, thank you for everything. It is unique day, as the Committee stage is finishing on my birthday. I look forward to our debate in a few weeks' time to finish the Bill. I thank you, Mr. Atkinson, and your fellow Chair very much for the wonderful way in which you have chaired the Committee.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Work and Pensions)

First, I want to speak about our lost love, the hon. Member for Northavon. We all understand why he had to leave the Committee, but he would have wanted to join in these sentiments and pleasantries, which are one of the nicest parts of parliamentary procedure. I am happy to join my hon. Friends and other associates on the Opposition Benches in supporting the Minister's kind remarks. We are grateful to you, Mr. Atkinson, and to your co-Chairman, Mr. Griffiths, for looking after our proceedings. They were less fraught than some, and certainly less extended, but no less fruitful for that.

We thank the supporting staff—the Clerk for the advice we have had, and the assistance of the Hansard writers—who are so important. There is an interesting, albeit indirect and oblique, relationship with those on the Bill team assisting the Minister, who seek to iron out the wrinkles, as we hope that they will. We also thank the police, the press, and those who briefed us.

These occasions are always pleasant, especially when the Minister is the right hon. Gentleman, and he has taken time on his birthday to be present. He can now go and enjoy the rest of the day.

I have been casting around for a suitable analogy for the Government, and as there is a fairly strong military component on the Opposition Benches, I will say that I admire immensely the military discipline of my hon. Friends who made their points with precision and efficacy where they caused maximum difficulty for the Government.

I also admire the naval traditions on the Government Benches. Those on the Back Benches appear to be in the submarine service and only occasionally break cover and hoist their periscope, but have generally done so with perspicacity and to good effect. They have done well.

Then there is the new frigate, launched on the Mersey only recently: the Under-Secretary, the hon. Member for Liverpool, Garston (Maria Eagle). She showed that she is a fast mover who can keep up with the convoy; in no sense did she fail to honour her position on the Committee.

Photo of James Clappison James Clappison Shadow Spokesperson (Treasury)

Now tell us who is the Titanic.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Work and Pensions)

Then we come to the Minister of State. I am ashamed to say that my hon. Friend the Member for Hertsmere—I owe him much thanks for his ability to explain things, and, above all, to avoid any commitments on spending or anything else—likens the Minister to the Titanic, but he is wrong. The Minister is much more like a pocket battleship; he carries heavy firepower in the shape of his eight grandchildren and in that respect I am sadly outgunned, as I have only one. Therefore, I might appear to be running away from a fight. However, we should remember what happens to pocket battleships in warfare. Sometimes, a group of lightly armed cruisers work together to hole them and do severe damage.

I say that in good spirit, because this has been a most enjoyable Committee. If a Committee can enjoy a state pensions credit Bill, its members must be a remarkably agreeable and farsighted set of people. I agree with the Minister that there are important aspects of substance in the Bill. Points made by hon. Members in our debates may eventually bear fruit in the regulations and in the administration of the Pension Service. We all have constituents who are pensioners. We know their difficulties and worries, and how important they are to our communities. We want to do the right thing by them. We may not always have agreed, but we have had some valuable exchanges and developed a better understanding and a common commitment. That is why this has been such an agreeable Committee.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

I thank the Minister of State and hon. Members for their kind words. On behalf of my co-Chairman, the hon. Member for Bridgend (Mr. Griffiths), may I say that it has been a pleasure to chair the Committee, which has been good natured and constructive. It has been as good an example of a constructive Committee as one could have hoped to find. The Bill is complex, extensive and important, and has been dealt with expediently, efficiently, and with clarity and good humour. I am impressed by the Minister's and the Opposition's command of a detailed and difficult subject.

Bill, as amended, to be reported.

Committee rose at fifteen minutes past Four o'clock.