Clause 7 - Power to provide for payments

Age-Related Payments Bill – in a Public Bill Committee at 2:30 pm on 25 May 2004.

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Question proposed [this day], That the clause stand part of the Bill.

Question again proposed.

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

Important issues are still outstanding. The Committee will recall that it is the ''we really do not want to have to do so this all again'' clause. It allows the Government at any time to pass regulations to bring in a new scheme of payments related to age or other factors, unconnected to those in the rest of the Bill, to anyone over 60 years of age at any time in the future. The only safeguard in terms of scrutiny is an affirmative resolution having to be passed by both Houses.

The power is too sweeping for us to allow the clause to stand part of the Bill. I observed that the Government's thinking behind the payments is that they would be ad hoc. They used that phrase in a written answer to me. It is outrageous that we are being asked to give power to them to make unlimited ad hoc payments to pensioners whenever there is a problem. The Minister said that we needed the Bill quickly because there was a problem with council tax. We do not know whether the Government are anticipating future problems, such as elections. The idea that we give them a blank cheque to write unlimited amounts to people aged over 60 is unacceptable.

I have three further objections. Nothing in the clause caps the amount provided. The Bill deals with £500 million of taxpayers' money. Given that we had the best part of a day on the Floor of the House discussing it and will have more time on Report, at least that sum will have had a day and a half of scrutiny. However, if the clause is accepted, the Government could spend any number of billions of pounds inventing a completely new scheme of payments to the over-60s with only 90 minutes of parliamentary scrutiny.

It is incredible that some Departments are scrutinised to the nth degree for their expenditure of the odd million of pounds here and there, yet the Department for Work and Pensions can shower billions of pounds around with practically no parliamentary scrutiny. Clause 7 allows it a licence to do that. At the very least, there should be a limit on the scope of a scheme that can be introduced and we

should be able to return to it on Report by tabling an amendment. At the moment, the clause is a blank cheque.

My second objection is that it allows only inadequate scrutiny of a new regime. We decided that giving £100 to everyone was as simple as it gets. Yet even that was the subject of detailed scrutiny this morning and on Second Reading, as it will be when we return to the Bill on Report. Clause 7(2) allows the Government to introduce a scheme when not only age, but any other ''specified circumstances'' can be brought into play. A fiendishly complicated scheme could be introduced, yet we would only have 90 minutes to consider not only a huge amount of taxpayers' money, but that complex scheme itself. The scrutiny proposals under clause 7 are inadequate.

My third observation also relates to scrutiny. The Committee knows that the 90-minute affirmative procedure allows us to make no amendments. It is a yes or no, take it or leave it process. It is not as though we can say that we like the principle but not the detail. The Government could come up with a scheme that requires a vast amount of taxpayers' money. Those proposals might be far more detailed than the ones that we have discussed, which are to be contained in an Act of Parliament. But after only 90 minutes of scrutiny, the Government could then say, ''Take it or leave it. Lump it or not.'' That is an unacceptable way for the Department to approach the spending of taxpayers' money. We are unhappy that the clause found its way into the Bill.

Photo of David Tredinnick David Tredinnick Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee), Chair, Statutory Instruments (Select Committee), Chair, Statutory Instruments (Joint Committee)

On a point of order, Mr. Pike. I appeal to you: is it possible for the blinds to be raised? The sun has gone in and is now off the Terrace. It is cloudy outside and all the lights are on.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

I am sure that that can be arranged, although it is not a point of order.

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Economic Affairs

As much as it grieves me to say it, I largely agree with the hon. Member for Northavon (Mr. Webb). The more I examine the clause, the more I wonder whether we should have a Division on it. As I said in my remarks on amendment No. 7, the clause sticks out like a sore thumb. We have the Government's stated intention of the one-off ad-hoc—whatever phrase they want to use—payment to pensioners. We all have views on the real motivation behind that. However, buried in the Bill is the power to make payments on almost any grounds as long as the recipient is over 60. We know that people over 60 are four times more likely to vote in an election than 18 to 25-year-olds, so it remains to be seen whether there is any connection. I suppose it depends who they vote for.

We are very suspicious of the clause and I share many of the hon. Gentleman's concerns about the process. If the Minister wants to get it through without a Division, he will have to be more forthcoming. The most we got out of him during his introduction to this far-reaching clause was that it would be implemented if the Government judged that there was a need. That is not good enough. He must specify the need that he

is talking about and what bases he has in mind. If, as just a vague twinkle in his or the Secretary of State's eye, there is the idea that at some time in the future the Government might want to shove a load of money in the direction of the over 60s, why on earth are we debating it at all? If that need arises, we can go through this process all over again. We are pretty flexible; we can always turn up for another day and do all the things involved in producing laws.

The Government are asking for a blank cheque. What do they have in mind? As we see the inexorable rise of means-testing, will the Government become more and more hooked on giving one-off gifts—bounty—to older people and pensioners in our society, rather than doing the sensible thing and adopting our policy of restoring the link with earnings?

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Economic Affairs

If the Minister looks to the future, rather than the past, he will see that by the middle of this century more than 80 per cent. of pensioners will be on means-tested benefits according to his projections. It already stands at 59 per cent., and that figure will rise inexorably. Perhaps he can tell us whether that is just a side effect or a central aim of his policies to give the Chancellor more and more control over more and more individuals in our society.

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

I intervene to bring the hon. Gentleman back to the subject of the clause and the relevance of the Bill. On Second Reading, he objected to the measure being introduced in primary legislation; now, he is objecting to a clause that will allow for secondary legislation. Which does he object to most?

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Economic Affairs

For the record, I did not object to the proposal being introduced in primary legislation. I just wanted to know when the Minister realised that it needed primary legislation. I made some ill-judged remark about expletives at the time, but I would still love to have been a fly on the wall when some hapless official came to see him or, more likely, the Secretary of State, and explained that they would have to tell the Chancellor that the measure would require primary legislation. If it needs primary legislation, I do not object to that—who could, if that is what it needs? However, having decided to give this bung to people over 70, it is a bit rich that the Government have now decided to plant in the Bill the alien idea that the so-called one-off payment can be replicated on goodness knows what grounds at some time in the future.

Ministers must come clean. If there is just a vague notion that at some time the Government may need—to use the Minister's word—to make another payment, they must say so. Perhaps we should abandon the clause and wait for the need to arise. Things can move fast if they need to, as we are demonstrating with our proceedings on the Bill. On the other hand, if there are plans—perhaps only half-formed ones at the

moment—we ought to be told, particularly as the clause refers to the over-60s, whereas the rest of the Bill addresses only the over-70s.

There is an important consideration, which goes to the heart of the Government's attitude of giving pensioners one-off payments to try to make up for the fact that they are having a pretty raw deal. Mr. Duncan-Jordan of the National Pensioners Convention, stated that it was his belief

''that the Chancellor's statement was made simply to gain publicity'', and to gain votes, he might have added. He went on to say, rather more to the point,

''One-off payments such as this are not the answer to pensioner hardship. They are often seen by the public as just cynical attempts to grab votes.''

Heaven forfend, of course, but does the Minister not understand that simply giving pensioners one-off gifts makes them a part of the Government's client group? Perhaps that is what the Chancellor has in mind, but is it really what the Department for Work and Pensions should be about? If its real intention is that the payments become an annual event like the Christmas bonus, why not say so? We all understand the political difficulties of trying to take things away from people, so why be so bashful if this is intended to become an annual gift to pensioners along the lines of other existing gifts? I do not understand why the Minister is being so coy. If the Government have no developed plans to make use of clause 7, the Bill would be better off without it.

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

I thank the hon. Member for Eastbourne (Mr. Waterson) for shedding some light on the debate. I will try to deal with his points and those raised by the hon. Member for Northavon.

Opposition Members are making a great meal out of this. It is the most innocent of provisions. I add only two things to my earlier remarks. First, in recent years lump sum payments, through winter fuel payments, have become a feature of the social security system. This Bill will introduce a £100 payment against the criteria that we have discussed.

As such payments have become a feature of contemporary social policy, and nobody can predict what their future use will be with any great certainty, we feel that it is not unreasonable for us to take powers so that we can introduce them in secondary rather than primary legislation. We were able to introduce the winter fuel payments through existing powers because of the cold weather payment provision in the social fund. However, that related to issues about the cold weather in winter and the need to help elderly people in that way, whereas this £100 is for an altogether different situation.

Secondly, there is a need for speed. It is more expensive to introduce primary legislation than secondary legislation, but it can also take four and a half months or so to get a Bill through Parliament. We can do things more quickly through secondary legislation, albeit with proper scrutiny, and the Social Security Advisory Committee can play a role as well.

There is not much more than that to this provision. It is sensible, and I hope that hon. Members support it.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 6, Noes 3.

Division number 2 Adults Abused in Childhood — Clause 7 - Power to provide for payments

Aye: 6 MPs

No: 3 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly agreed to.

Clause 7 ordered to stand part of the Bill.