New Clause 9

Welfare Reform Bill – in a Public Bill Committee at 4:00 pm on 3rd March 2009.

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Grandparents national insurance credit

‘(1) The Social Security Contributions and Benefits Act 1992 (c. 4) is amended as follows.

(2) In section 23A(3)(c) (Contributions credits for relevant parents and carers), after first “in”, insert “unpaid care for 20 hours in that week or more of a grandchild under the age of 12 or of an ill, frail or disabled family member, friend or partner, or (d) otherwise in”.’.—(John Robertson.)

Brought up,read the First time, and motion made (this day), That the clause be read a Second time.

Photo of John Robertson John Robertson Labour, Glasgow North West

This is the first time I have spoken under your chairmanship, Mr. Amess. I feel I should have something like in a Perry Mason court case, where one can ask the stenographer to repeat the last sentence the last person said. I was getting so enthusiastic about my speech that I forgot to mark exactly where I did finish. I know you have missed the whole thing, so perhaps I should start from the beginning—and then again, perhaps I had better not. I suspect that people have heard it before.

But let me just recap what I was trying to say: “Government wrong, me right” would be a short summary. Grandparents are most important: as one myself, as I said earlier, I may have a vested interest, but I think that interest has certainly opened my eyes to something important. I was going to say that there is obviously a question of fairness and equality to be looked at.

When a person is caring for a child in a family instead of working, whether it is a parent or a grandparent, why should we discriminate in regard to their pension? I know that has been said, but it should be repeated: why do we discriminate against grandparents? Perhaps my right hon. Friend the Minister will be able to tell me in his reply. This new clause is not about paying someone for the care; after all, there is no gain for someone who is already receiving the full state pension.

The current situation means that, if a mother stays at home to care for a child, she will get a weekly credit toward her pension. But if she returns to work and her own mother provides the child care, the grandmother will get nothing. It is not clear to me why that should be the case, and I hope my right hon. Friend will explain. The mother in that scenario is in work, and will probably be paying tax and national insurance, and not claiming. Working parents also help to raise the family’s income and tackle child poverty, one of the Government’s fundamental goals.

It might be suggested that there is an element of double claim here. But grandparental child care means that the mother will not be claiming child care tax credit, because informal child care does not qualify. It seems as though we have got the incentives wrong.

The Pensions Act 2007 was groundbreaking, giving unpaid care the same status as paid work for the first time. That was particularly welcome to women, who bear the brunt of caring roles in our society. Only 35 per cent. of women currently retire with the full basic state pension. That is a shockingly low percentage, and I am glad to say that my Government and my party are trying to do their best to alleviate the problem. This is the kind of reform for which we sometimes do not receive the credit we deserve. I am now looking for my Government and my party to pass this new clause, in order to look after grandparents in the same way we look after everybody else.

Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

It is a great pleasure to welcome you in the flesh as well as in the spirit, Mr. Amess, as I am sure you were with us this morning. As my hon. Friend has said, new clause 9 seeks to give contribution credits to help people caring for a grandchild under 12 to build up their state pension. It seeks also to give similar rights to people caring for 20 hours a week for a partner, relative or friend who is sick, frail or disabled, which is in fact already Government policy.

I would say to my hon. Friend in the nicest way possible that his new clause is deficient in a number of ways on both counts—in terms of grandparents and carers of the disabled. Let me explain why and review them both in turns. As he said, a wide power exists in section 23A of the Social Security Contributions and Benefits Act 1992. That allows regulations to be made to define people engaged in caring with a view to awarding them credits. He also perfectly fairly said that regulations are currently being drafted under the provision, which will be laid before Parliament this year. We think those draft regulations will go further than his new clause does in terms of the part about caring for a sick or disabled person.

The regulations propose that contribution credits be awarded to someone caring for one or more persons for a total of 20 hours a week where each person is receiving one of a range of attendance-related benefits, or where the need for care is certified by a health or social care professional. They also propose cover for periods when care ceases for a time to allow for, among other things, holidays, respite care and sickness. In that respect, therefore, the new clause offers nothing more and will almost certainly restrict the conditions under which credits can be given to someone caring for a sick or disabled person.

I turn now to the proposals to award credits to grandparents caring for a grandchild under 12. We recognise the significant contribution—as my hon. Friend has said—that grandparents make to the community. However, they are not a homogeneous group. Many grandparents will be over state pension age and unable to benefit from credits; many of the younger grandparents will be combining caring with employment. We sincerely believe, like my hon. Friend, that the improvements we have already introduced will greatly increase the likelihood that those younger grandparents will qualify for a full  basic state pension. In most cases they will have received home responsibilities protection when bringing up their own children, and that is to be converted to qualifying years of credit from 2010. That, together with the reduction in the number of qualifying years for a full basic state pension to 30, and the opportunity introduced in the most recent Pensions Act to buy voluntary contributions for past periods, will mean that very few grandparents will need additional credits. It is estimated that by 2025 almost half a million extra women over state pension age will be entitled to full basic state pension as a result of these reforms. I will, therefore, ask my hon. Friend the Member for Glasgow, North-West to withdraw the clause.

I am, however, aware of the strength of opinion favouring some special recognition for grandparents who may, in some cases, give up their own prospects so that they can help their children. We are considering whether any further provision is needed for them and we will not limit that consideration to grandparents since similar care may equally be given by aunts, uncles and older siblings. We are satisfied, though, that if we do conclude that such provision is useful, there is already scope to provide that within secondary legislation. I am happy to work with my hon. Friend both on the forthcoming regulations and on any consultations we make in terms of a special recognition of grandparents and other groups. In that spirit I ask that he withdraw the new clause but am happy to continue working with him on the matter because I agree with the sentiment and thrust of his argument.

Photo of John Robertson John Robertson Labour, Glasgow North West

I thank my right hon. Friend for his gracious offer, which I am glad to take up. I will consider what he has said and in the same spirit of helpfulness, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.