Clause 7 - Power to provide for payments

Age-Related Payments Bill – in a Public Bill Committee at 11:00 am on 25 May 2004.

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Photo of Nigel Waterson Nigel Waterson Shadow Minister, Economic Affairs 11:00, 25 May 2004

I beg to move amendment No. 7, in

clause 7, page 4, line 15, leave out 'may' and insert 'shall'.

Even compared with what has gone before, this part is really interesting because it seems to have landed in the middle of the Bill from some other dimension or planet. It flies in the face of the rest of the Bill and what Ministers—in particular this Minister—have been saying.

On 30 April 2004, the Minister, in a written answer to the hon. Member for Northavon, talked about

''ad-hoc payments to pensioners''—[Official Report, 30 April 2004; Vol. 420, c. 1369W.]

In a reply to my hon. Friend the Member for Chichester (Mr. Tyrie) on 4 May 2004, the Minister made it abundantly clear that this is a one-off payment to people over 70 resulting from the Budget statement. One would have thought that that was where the matter would rest. It was a one-off payment motivated by worries about the council tax.

We are told that the Government are in the process of coming up with some proposals for the reform of Government finance, which are promised in July. The Minister may or may not be privy to the options that

are being considered. It would be fascinating to hear, as far as it is in order to do so, how that debate is developing in the Government. People might think that that would be the end of the matter.

We also heard an argument about the 70-years cut-off point. The Minister argued why that would cost too much and be inappropriate. It seems that all the help is being directed at older pensioners because they deserve it more and are likely to have less money. Then, barrelling out of nowhere, comes clause 7(1), which contains two things that are at odds with what has been said.

The Government intend to make regulations. I wonder, just for a laugh, whether there is any chance of the Committee seeing draft regulations, but I will not hold my breath. The Government say that they will make regulations to provide for further one-off payments in the future, if that does not sound too Irish, and—blow me!—those will apply to people who have reached the age of 60, not 70. I do not know what the Minister is getting at.

Amendment No. 7 is the mother of all probing amendments, as it changes the word ''may'' to ''shall,'' which is simply designed to tease out what is going on. Are we talking about an annual event? Recent political history suggests that when we start giving pensioners Christmas bonuses or payments to cover cold weather or winter fuel, they become, as with the free television licences for certain pensioners, fixtures—[Interruption.] I hear a murmur of assent from the Labour Back Benchers. There will come a point when the Government will have difficulty saying, ''We gave it to you one year, but we'll not give it to you in another.''

The only way out for the Government would be for them to come up with some impressive proposals to amend the system of local government finance. We should not get into the detail of that. We know that the Liberals want to get rid of council tax and replace it with something called local income tax, which would be wholly unworkable, with a lot of pensioners ending up paying more than they do now.

The £100 figure is popular in this context. We all remember the promises made at the Brent, East by-election when we saw pictures of the Liberal Democrats giving a £100 cheque to pensioners. Just for the record, that policy has been abandoned. The following article, referring to the Liberal Democrat leader, appeared in The Guardian:

''The Lib Dem insisted that he had not broken his promise, although he admitted that the pledge would not now be met. 'It is not a matter of breaking a promise. It is a matter of saying that we have been reviewing policies'.''

We all know about the kind of policy that pops up in time for a high-profile by-election and dies afterwards, although, as we discovered in a debate the other day, the promise still features on the website of the hon. Member for Brent, East (Sarah Teather).

Photo of Derek Conway Derek Conway Conservative, Old Bexley and Sidcup 11:15, 25 May 2004

Order. I have been reasonably lenient with the hon. Gentleman, but he is steering a considerable way from his amendment. He might be able to make such remarks in the stand part debate, but not in a debate on his amendment.

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Economic Affairs

I have made my point.

The amendment would require the Secretary of State to make regulations. It is a probing amendment. We would like to know what is going on. The Government, in particular the Minister, have consistently said that this is a one-off, ad hoc payment. Now, suddenly, it is not: it will become a fixture. All that clever stuff about the payment applying only to the over 70s, which the Minister came up with earlier to slap down another of my amendments, is no longer relevant because the provision now applies to the over 60s, at a cost, I think, of £350 million extra. He owes us more of an explanation of what he is doing in clause 7(1).

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

I am heartened by your indication, Mr. Conway, that you will allow us a stand part debate on clause 7. Indeed, we tabled amendment No. 14 to flag up our desire for such a debate. I am still not entirely sure what amendment No. 7 is about, so I shall sit down and look forward to the stand part debate.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

I will not be drawn into the banter about the Liberal Democrats and their £100 Brent, East by-election cheque, although we are obviously amused, as is the hon. Member for Eastbourne, by the fact that it seemed to have a very early cut-off date. There is some inconsistency there.

Clause 7 provides a regulation-making power so that, if circumstances warrant it, future payments that are related to age or other circumstances may be made to people aged 60 and over. The power enables the Department to act swiftly to legislate for additional future payments, should the need arise. There are no draft regulations because the clause is a regulation-making power; it does not say that any regulations are coming. There will only be regulations if the need arises.

As the amendment would oblige the Secretary of State to make future payments to those aged 60 and over, I cannot accept it—I do not honestly believe that the hon. Member for Eastbourne would accept it, either. It is not clear what the payments would be or how they would be costed by the Conservative Opposition. We have not seen their draft regulations on that, either.

We have said that we propose to make a payment this year only, in order to meet a specific need that has arisen as the result of the impact of recent council tax increases on the fixed incomes of older pensioners. This year's average increase of 5.9 per cent. is less than half of last year's and is the lowest in almost a decade. We will use the regulation-making powers in future if we judge there to be a need. Regulations made using the powers in clause 7 will be subject to affirmative procedure in both Houses and will be scrutinised by the Advisory Committee on Social Security, which has

powers to consult and make recommendations to the Secretary of State. I ask the hon. Member for Eastbourne to withdraw his amendment.

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Economic Affairs

I have said that this is a probing amendment, and I will withdraw it, but I do not think that the Minister really dealt with one of my major points, which is why the age of 60 suddenly popped up. Perhaps we can debate that more fully in the stand part debate. Also, he said that there would be regulations if the Government judged there to be a need. What is that need? Is it the Government's need to shore up their support, having failed properly to reform the local government finance system or following a further surge in council tax? That is a complete mystery. In a sense, I am slightly relieved to hear that there are no draft regulations waiting in the wings.

Is the Minister really saying that the provision is just a power that the Government are putting behind glass, with a ''break in an emergency'' notice underneath, in case it occurs to them to use the power in future? If such an urgent need arose, we could hold another of these jolly one-day sittings on another emergency bit of legislation. I am not sure that I fully accept that the Government have nothing in mind and that the power has to be available just in case they suddenly decide that they want to use it. We will explore the issue in much more detail in the stand part debate. The Government should make their case when such a need—to use the Minister's word—arises. However, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

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

I suspect that we will return to this subject at greater length this afternoon. The question is whether we need the power in clause 7. The hon. Member for Eastbourne is right to describe the Bill as emergency legislation. He referred to a written answer that I received on the purposes of the clause which referred to the making of ad hoc payments. It really has come to something if, when things go wrong, Britain's pensioners have to depend on ad hoc payments to ensure a decent standard of living. That seems an admission of defeat. One would have thought that we already had a mechanism for making payments to people over 60: it is called the pension. I grant that men aged 60 to 64 do not get it, but pretty much everyone else over 60 does.

As we are all concerned about the living standard and welfare of pensioners, we should not deal with such issues in a Bill that is trying to do something else, and through an ad hoc clause that says, ''We don't really want the trouble of having to go through all this again, so we'll put in a sort of reserved power.'' A far better strategy would be to ensure that the pension is good enough in the first place. That way, as I put it on Second Reading, pensioners would not have to wait every year for that final moment of the Chancellor's Budget speech in which he suddenly produces the rabbit from the hat. None of us would want our living standards to depend on that. Instead of the ad hoc payments, there should be a decent system of support for older people.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.