State Pension Age: Women

Lord Harrington of Watford Excerpts

Wednesday 30th November 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I have been to quite a few Opposition day debates in my six and a half years here, but I have never known one when there were no Back-Bench speeches from the party that brought the motion forward. I found that very sad. [Interruption.] I do apologise to the hon. Member for North Ayrshire and Arran (Patricia Gibson)—there was one.

That does not mean that we have not heard extensively from the hon. Member for Ross, Skye and Lochaber (Ian Blackford), who opened the debate. He has kindly referred to me in the past as an honourable man—in fact, a principled man—and I would say exactly the same thing to him, as I would, indeed, to my shadow from the Labour party, the hon. Member for Stockton North (Alex Cunningham). However, they painted the Government as heartless and as people who are not interested in pensioners, and that is absolutely untrue.

We have had a lot of platitudes and clichés about how taxing millionaires more could fund the WASPI pensioners. Everybody says, “We believe in equalisation.” Everybody says what the problems are. Everybody talks of hardship. Everybody talks of examples from their constituencies. But when it comes to it, the Opposition have a licence to say anything they want—the Government have to make hard decisions. This Government and their predecessor—

[Andy Burnham]

Will the Minister give way?

[Richard Harrington]

I am sorry, but, for the moment, there is not time to take interventions.

Governments have to take hard decisions. The can that was kicked down the road for many years by the Labour party had to be dealt with by the coalition Government. I would just like to refer to some of the fallacies mentioned by Opposition Members. The hon. Member for Ross, Skye and Lochaber, in moving the motion, talked about the 1995 Act as if there was absolutely no communication from the Government—as if the DWP and everybody else suddenly forgot to talk about it. Well, that is not true. There were leaflets produced. There was an extensive advertising campaign. There were articles in women’s papers. In addition, millions of people, who decided they were going to sort out their pension, applied, quite properly, to the DWP; in fact, more than 14 million people applied and received full details of what their pensions were. I mention that because it would appear that there was absolutely no communication whatever. After the 2011 Act, that was a direct mail campaign, where individual letters—

[Ian Blackford]

rose—

[Andy Burnham]

rose—

[Richard Harrington]

I will not give way. I have a very short time left.

There was actually very good communication. However, I would like to mention the various contributions we have had. My hon. Friend the Member for Mid Bedfordshire (Nadine Dorries), who was among many speakers from the Government side, said that women, including herself, were not informed following the 2011 Act. In fact, as I have just shown, millions of letters were sent between January 2012 and November 2013. She said it is difficult for women over the age of 60 to find employment, and she said nobody would employ her. Actually, more than 4 million women in her age group are in employment—more than ever.

From the Opposition, we have had the argument, which I have had to deal with on many occasions, about the state pension being a contract. It is not a view but a question of fact that the state pension is a benefit, not a contract. As my hon. Friend the Member for North West Cambridgeshire (Mr Vara) said, promises are cheap. The Government have to actually deal with facts.

I have much sympathy for Members who spoke of constituents who are finding it difficult to access the benefits system. [Interruption.] Someone has shouted from a sedentary position, “What are you going to do about it?” As hon. Members will be aware, and as the Secretary of State mentioned, we have a system of helping through the benefits system people who may need looking at. We have older claimants’ champions, and we are getting more of them. We will find a way to help people to find their way into the benefits system. For any constituents who are finding this difficult, if the Department can have their name, address and national insurance number—I have asked for this on many occasions—I will be very happy to personally see what the position is and get them the help they need to get through the benefits system. We hear a lot of talk from hon. Members about their constituents, but the actual factual details I get are few and far between.

Let me move on to the famous economic report from the Scots Nats. I commend my hon. Friend the Member for Gloucester (Richard Graham), who described it as irresponsible and inaccurate. I really could not have put it better myself, because it is, as my hon. Friend the Member for North West Cambridgeshire said, raising false hopes by saying to our constituents that this is a small problem that can quite easily be dealt with. I remind hon. Members that even the SNP costs this at £8 billion, and the Department, as I have written to the hon. Member for Ross, Skye and Lochaber, has assessed it at nearer £30 billion. We have looked at every alternative. We have looked at more than 25 options that have been mentioned to us about the WASPIs, and there simply is not a viable option, either because of cost, complexity or practicality.

The luxury of opposition is promising everybody money without having to consider how to pay for it. I view this as very irresponsible.

[Ian Blackford]

I must tell the House that the figures in this report, which has been produced by Landman Economics, are based on the Institute for Public Policy Research model, which has been tried and tested. It really ill behoves the House to traduce the economists who have produced these figures based on a Treasury model. When we had the debate two weeks ago, the Minister said that the cost was £14 billion. How come we have gone from £14 billion to £30 billion? It is the Government’s figures that do not make any sense.

[Richard Harrington]

I apologise to the hon. Gentleman—I could not hear the end of what he said because of the noise. I am not disputing that this was produced by proper economists—I accept that fact—but it is about what timescale they look at, in this case going to 2021, and how they brief. But okay, fair enough: even by the SNP’s calculations the figure is £7.9 billion, which should apparently come from millionaires or from Trident. Government is not like that; these are completely separate issues. This country has a proud record on state pensions. This Government, and the predecessor coalition before it, did not have the luxury, partly because of the economic mess Labour left us in, of kicking the can down the road and ignoring these very, very serious issues.

The benefits system is available to people, and if they are not having the access to it they should, we will help them. I give an undertaking to look at every way that the benefits system can be used to help people who are in difficulty. Contrary to what some hon. Members have said, my door is open to people so I can speak to them. I hope I have shown that. I took this job to help pensioners, not to not help pensioners. It has been irresponsible to imply—

[Mike Weir (Angus) (SNP)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.

Oral Answers to Questions

Lord Harrington of Watford Excerpts

Monday 21st November 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

The Government will not be introducing further transitional protection beyond the £1.1 billion already in place. Going any further could not be justified, given that the underlying imperative must be to focus public resources on those most in need.

[Diana Johnson]

That is a very disappointing response. There are 10,000 WASPI women in Hull, and with 4,100 names, Hull’s was the largest WASPI petition presented to the House last month. Labour has suggested changes to pension credit that could be financed by clawing back handouts to the wealthiest in order to help these women. Is it not about time that the Minister understood that these WASPI women will not go away until justice is done and they get a fair deal?

[Richard Harrington]

As the hon. Lady has mentioned, Labour proposed using pension credit as a transition mechanism for helping these women. This was discussed extensively during our debates on the Pensions Act 2011 as it went through Parliament, and it was decided that £1.1 billion would instead be used as transitional relief.

[Carolyn Harris]

It is quite obvious from the Minister’s response that he is fed up with these questions, but I will keep asking them so long as I have women, such as my constituent Gillian Purcell, coming to me and saying, “I’m 60. I’ve worked all my life, but my body is telling me I can’t do it any more without a pension”. When will the Government do the honourable thing and start looking after the WASPI women?

[Richard Harrington]

The cost of reversing the changes varies depending on whom one asks. The different political groups have come up with different amounts, varying between £7 billion and £30 billion, and that is quite apart from the substantial practical problems, such as risk of legal challenge, deliverability and all the problems associated with such options.

[Tracy Brabin]

I recently spoke to a constituent working in a care home who was incredibly distressed at the thought of having to work another seven years in an increasingly physically demanding job, especially as she had made retirement plans to look after her daughter’s children so that her daughter could go back to work. What assessment has the Department made of the implications not only for the women affected but for their families too?

[Richard Harrington]

As the hon. Lady implies, the Department has considered this matter long and hard. The current average age of exit from the labour market for women is 63.1 years, which is well above the previous women’s state pension age of 60.

[Mr Peter Bone (Wellingborough) (Con)]

I just want to make it clear that it is not just on the Opposition Benches that there are concerns about this matter. Of course we do not know what the autumn statement will say on Wednesday, but we ought at least to keep options open, because the current state of affairs is not very satisfactory.

[Richard Harrington]

As my hon. Friend knows, the public finances are very complicated, and I know that he intends to wait until Wednesday to hear what the Chancellor has to say, but this matter has been looked at long and hard and transitional funds of more than £1.1 billion have been allocated. The change to the state pension age was discussed and enacted in 1995. Since then, there have been further Acts and all this has been extensively discussed.

[Andrew Bridgen (North West Leicestershire) (Con)]

I understand that reverting to the 1995 state pension timetable would cost something in the region of £39 billion. Does the Minister agree that it is easy to criticise the Government over this policy, but more difficult to explain where the money would come from for any policy changes?

[Richard Harrington]

I thank my hon. Friend for that question, and I totally agree with him.

[Richard Graham (Gloucester) (Con)]

Does my hon. Friend agree that the difficulty with Labour’s proposal on pension credit is that it does not reflect what is actually sought by the WASPI campaign, which goes right back to the Pensions Act 1995? That would almost certainly be illegal—[Interruption]—under the rules of fair progress for both sexes on pensions, and it would cost an absolute fortune?

[Richard Harrington]

I totally agree with my hon. Friend. I heard a Labour Member shouting, “Tell that to the destitute.” Well, we have a very good benefits system in this country, and I am sure that those people who are destitute are very familiar with it.

[Alex Cunningham (Stockton North) (Lab)]

The Minister has made it very clear that the Government will not act further to help those affected by the ill-managed change to people’s pension age. Will he tell us whether he or the Secretary of State have had any discussions with the Chancellor ahead of the autumn statement about whether there might be additional help for those most affected?

[Richard Harrington]

As the hon. Gentleman knows, I can do no better than repeat that the transitional arrangements have taken place and that Government policy is very clear. I would not want him to think or believe that there will be any change on this.

[Alex Cunningham]

Clearly there have been no discussions with the Chancellor. In the Westminster Hall debate on the issue, we heard about many people who have been left destitute and are living in poverty as they care for elderly relatives who may be unwell, but not ill enough to qualify for employment and support allowance, and about many others who are in dire straits. The Government have no intention of doing anything to help them and they have rejected Labour’s first-step proposal of extending pension credit to both women and men who are being denied their state pension for years to come. I ask the Minister to think again. Assuming that his hands are tied by the Chancellor and the Prime Minister, will he set up a dedicated proactive helpline for those affected so that they can access the social security benefits that the Minister says are sufficient to meet their needs?

[Richard Harrington]

As the hon. Gentleman is aware, there is a very good benefit system in this country and people in every area are well aware of how to access it. There are Jobcentre Plus offices and help available in every local area. If right hon. or hon. Members wish to write to me about individual constituents, as they do, I will be happy to refer them to the places in their local areas.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

8. What discussions he has had with the Chancellor of the Exchequer on the potential effect of the autumn statement on his Department.

--- Later in debate ---

[Mike Freer (Finchley and Golders Green) (Con)]

24. What steps the Government are taking to ensure that people have the opportunity to save into a reliable workplace pension.

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

Automatic enrolment will give about 11 million people the opportunity to save into a workplace pension scheme, all of which must meet qualifying criteria and minimum requirements. I am pleased to say that just under 7 million people have already been enrolled by more than 293,000 employers.

[Mike Freer]

It is welcome that more people are joining pension schemes, but the Pensions Regulator issued 3,700 penalty notices in the quarter to September, up from 861. Does that perhaps suggest that this process is becoming a bit too cumbersome for small businesses?

[Richard Harrington]

The vast majority of small employers are meeting their automatic enrolment duties on time and without the need for any enforcement action. My hon. Friend is absolutely right to say that the regulator has issued more fixed penalty notices this quarter, but this is proportionate to the number of employers now implementing automatic enrolment.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Craig Williams (Cardiff North) (Con)]

T2. I continue to work with small businesses across my constituency while auto-enrolment is rolled out. I was heartened by last week’s Institute for Fiscal Studies report, which showed that that 22 to 29-year-olds in particular have seen a massive boost in pension coverage. What are the Government doing to ensure that everyone in my constituency and across the United Kingdom has the opportunity of saving for a good-quality workplace pension?

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I can reiterate the fact that plans to expand auto-enrolment are happening, and hundreds of thousands of people are signing up, which is a significant improvement. As for the self-employed and other people who are not in the scheme, that is just the sort of thing that we should be looking at in our 2017 review of automatic enrolment.

[Daniel Zeichner (Cambridge) (Lab)]

T6. Given that the Department promised to increase the number of people supported by the Access to Work programme, will the Minister tell us why fewer people are now in receipt of Access to Work than in the last year of the previous Labour Government?

[Mr Nigel Evans (Ribble Valley) (Con)]

T4. These days, many more people seem to be working until they are much older, and few things are more depressing than such people retiring after having worked and put into their private pensions and then getting hammered with taxation until they drop. Is the Department in discussions with the Chancellor about imaginative ways of rewarding people who have worked all their lives and have just done the right thing?

[Richard Harrington]

I sincerely hope that my hon. Friend does not work until he drops, but I take his main point that people are retiring later. As part of the policy of continually reducing taxation on people, I am sure that the Treasury will be looking at the matter in future. With pension freedoms and the tax-free element that pensioners enjoy, the good news is that there is much more scope for pensioners to do the kind of thing he mentions.

[Mr Speaker]

I call Kelvin Hopkins. Not here.

State Pension Age: Women

Lord Harrington of Watford Excerpts

Tuesday 15th November 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

It is a great privilege to serve under your chairmanship, Mr Nuttall. It is also pleasing to see so many Members present, which shows the importance of the issue. The Westminster Hall debates that I address usually have a much smaller audience. It is also fair to say that Members from all political parties have been present at different times in the debate.

[Mr George Howarth (Knowsley) (Lab)]

The Minister studied jurisprudence at university and had a career in the retail industry, so he will recognise the concept of good faith. Does he accept that the women concerned in this matter entered into a contract with the state about their pensions in good faith and that the Government’s actions amount to bad faith? If so, what is he going to do about it?

[Richard Harrington]

I thank the right hon. Gentleman for his intervention, which I will attempt to answer in a moment, after I have thanked the hon. Member for Ross, Skye and Lochaber (Ian Blackford) for opening the debate and hon. Members from both sides who contributed.

I must say that this is the first time that my rather limited attempts at jurisprudence between 1976 and 1979 have been mentioned in the House. At least they will now be recounted in Hansard rather more than they are by my tutors of the time. The serious point that the right hon. Member for Knowsley (Mr Howarth) makes is that hon. Members feel that the Government have broken some form of contract, presumably non-written, with state pensioners generally or WASPI women specifically. I have heard that point made several times today, but the Government’s position is very clear: this was not a contract. State pensions are technically a benefit. I add no value judgments to that, but since he made a legal point, I felt I should place the answer to it on the record.

[Ian Blackford]

Will the hon. Gentleman give way?

[Richard Harrington]

I think I should continue, but the hon. Gentleman will have time at the end.

[Mr George Howarth]

I am sorry, but—

[Richard Harrington]

I am very sorry, but to allow time for the hon. Member for Ross, Skye and Lochaber to wind up, I have to continue. I am happy to discuss the matter—although not my jurisprudence degree—outside the Chamber.

I have been quite clear in public and in the House that the Government will make no further changes to the pension age of those affected by the 1995 Act and the 2011 Act, nor pay them financial redress in lieu of pension. I know that Members present do not agree with that, but I feel it is right to state our position clearly without leaving any doubt. That view has not changed.

It is important to acknowledge that state pension age increases cannot be looked at in isolation. The acceleration of the state pension age is a consequence of serious and fundamental changes that continue to affect the wider state pension system, such as the significant changes in life expectancy in recent years, the huge progress made in opening up employment opportunities for women and the wider packages of reforms that we have introduced to ensure a fair deal for pensioners.

Life expectancy, as everyone knows, has been increasing for a number of decades; people are living much longer. However, the increase in life expectancy over time has not been linear. Between 1995 and 2011—in just 16 years—remaining life expectancy at age 65 increased by 3 years for women and 4 years for men, an unprecedented increase compared with past decades. There are significant variations across council authorities and within Scotland, for instance. I could spend a lot more time going into those differences, but I feel I have made the point.

Employment prospects for women have changed dramatically since the state pension age was first set in 1940, especially for women affected by the acceleration of the state pension age. The number of older women aged 50 to 64 in work in 2016 stands at more than 4 million —a record high. Some 150,000 more older women are in work than this time last year, and 580,000 more than five years ago. In addition, independent research by the Institute for Fiscal Studies has shown that employment rates for women aged 60 and 61 have increased as a direct result of the changes in state pension age. Furthermore, to help older women remain in work, the Government have abolished the default retirement age.

[Karl Turner (Kingston upon Hull East) (Lab)]

Will the Minister give way?

[Richard Harrington]

I am really sorry but there is not enough time. Members should hear me out.

Some women may wish to continue to work but be unable to do so. The welfare system provides a safety net for those of working age, which has been ignored by many speakers, and there are a range of benefits tailored to individual circumstances. The system is designed to deal with problems ranging from difficulty in finding work to disability or ill health making work difficult, and to help those with increasing caring responsibilities.

[Alex Cunningham]

Will the Minister give way?

[Richard Harrington]

I am sorry, but there is not enough time. [Hon. Members: “Oh!”] Well, okay, out of respect for the hon. Gentleman.

[Alex Cunningham]

I am grateful to the Minister for giving way. I took eight minutes, leaving him with around 15.

I gave the example of a 61-year-old woman in dire straits, and we heard many other examples of individual women who are not being looked after by the state benefits system. What can we do together so that the most vulnerable can live a life?

[Richard Harrington]

I know about the eight and 15 minutes, but I was asked by the Chairman to leave some time for the hon. Member for Ross, Skye and Lochaber; I was not being discourteous at all.

Benefits are a complex subject that I am sure we will have plenty of time to discuss elsewhere. Suffice it to say that the range of benefits is quite wide. If the hon. Member for Stockton North (Alex Cunningham) feels that there are gaps in the benefits system, I would be pleased to discuss them with him, but obviously not now because there is not enough time. I am trying to make progress, as you requested, Mr Nuttall.

The hon. Member for Strangford (Jim Shannon) and many other MPs shared cases of hardship, and of course I am sympathetic to them.

[Ian Blackford]

Will the Minister give way?

[Richard Harrington]

indicated dissent.

[Ian Blackford]

I will be very specific.

[Richard Harrington]

Okay.

[Ian Blackford]

The new information that I provided in my introductory speech was that a woman who was born in July 1953, who would have expected to retire in July 2013, was told by the DWP only in January 2012 that she would not be retiring until 2017. When did the Government and the Minister know of those facts? Why will they not now listen on that basis? The statement is that there will be no further changes, but these women have been seriously negatively impacted. The Minister must respond.

[Richard Harrington]

I shall respond in due course. I want to finish my point about the welfare system. The Government are spending £60 billion on supporting people on low incomes, £50 billion on supporting disabled people and £15 billion on incapacity benefits for working people. According to some of the contributions we have heard, it would appear that the Government are really not spending any money at all.

[Carol Monaghan (Glasgow North West) (SNP)]

Will the Minister give way?

[Alison McGovern]

Will the Minister give way?

[Richard Harrington]

I really cannot take any more interventions, simply because of the time. It is not in my nature, because I like interventions, but I really cannot.

The hon. Member for Paisley and Renfrewshire South (Mhairi Black) and others mentioned a notional national insurance surplus fund. The fact is that, in order to maintain the minimum work balance of the national insurance fund, a Treasury grant of £9.6 billion was made in 2015-16. Public sector finance is complicated. It is easy just to pick out one bit.

I wish to spend a little time discussing the Scottish National party’s proposals. Its independent report suggests rolling back the 2011 Act and returning to the timetable in the Pensions Acts of 1995 and 2007, but that is simply too expensive for the Government to consider. The report puts the cost at £7.9 billion, but my Department’s direct comparison for the same period is £14 billion. We can discuss it however many times, but our modelling is comprehensive and no one is trying to take advantage of anybody else. I really believe that the SNP report has underestimated the impact by somewhere in the region of 50%. It has done so by ignoring most of the costs and applying costs only to the five-year window from 2016-17. Costs beyond that horizon have simply been ignored.

The Pensions Act 2011 not only increased the female state pension age to 65 sooner, but brought forward the increase to 66 for both men and women. The increase to 66 generates significant savings of more than £25 billion, yet such an important element of the Act is omitted from the paper, along with the associated costings.

John Ralfe Consulting, which is independent, reviewed the SNP option. Mr Ralfe concluded that:

“Sadly, the SNP has not managed to pull a Rabbit out of its Hat. The real cost of Option 2”—

the SNP’s preferred option—

“is almost £30bn…The SNP can claim the cost is much lower simply because it has chosen to ignore most of the costs.”

I hope that demonstrates that that option is simply not deliverable.

In the limited time remaining, I shall address the notification issue. In answer to the hon. Member for Fermanagh and South Tyrone (Tom Elliott), between 2003 and 2006, the DWP issued 16 million unprompted products called automatic pension forecasts. People contacted the Department and it gave out all those forecasts. In 2004, the Department ran a pensions campaign that included informing people of the future equalisation of the state pension age. The Government made sure that the information was there, but I accept that it was not communicated by individual letter, as it was later when, as I am sure Members will be aware, millions of letters were sent out.

To say that nothing happened is not true. I have seen a leaflet on equality in the state pension age that was widely circulated, with many, many copies printed. A summary of the changes was issued and the general public were advised, although I accept that they were not informed by specific direct mailing in the way mentioned by some Members.

[Lady Hermon]

It is very kind of the Minister to give way. He will recall that in an earlier intervention I quoted the Prime Minister, whom he serves. Does he appreciate that his words make the Prime Minister’s words sound extremely hollow? This is not a nation in which the Prime Minister appears to care about all the people of the United Kingdom. Will the Minister please take that message back to the Prime Minister?

[Richard Harrington]

I certainly will not take that message back to the Prime Minister, because I do not accept that anything I have said today is incompatible with what the Prime Minister said on the steps of 10 Downing Street. Governments have to make difficult decisions, and the allocation of public spending is one of the most difficult.

It is not fair to say that the acceleration of the women’s state pension age has not been fully considered. It went through Parliament, there was a public call for evidence and there was extensive debate in both Houses. The Government listened during the process and made a substantial concession worth more than £1 billion. Finally, Parliament came to a clear decision. As it stands now, it would cost more than £30 billion to reverse the 2011 Act.

[Alison McGovern]

Will the Minister give way?

[Richard Harrington]

I am very sorry but I cannot give way because there are only three minutes remaining.

I conclude by reiterating what I have told the House and, indeed, the public before: we will not revisit the policy or make any further concessions. The acceleration of state pension age was necessary to ensure the system’s sustainability in the light of increasing life expectancy and increasing pressure on public resources. Mr Nuttall, I have left three minutes, as requested.

AEA Pension Scheme

Lord Harrington of Watford Excerpts

Wednesday 26th October 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

It is a pleasure, as ever, to serve under your chairmanship, Ms Dorries. I thank right hon. and hon. Members for their contributions.

As a junior Minister in Government until July, I recall that one of the great fears we all had, for very good reason, was of being summoned before my right hon. Friend the Member for West Dorset (Sir Oliver Letwin). When he applied for this Westminster Hall debate, I realised that it was an issue to be taken very seriously. I hope that after my remarks he will agree that the Government have indeed done so. In the first instance, it is clear that no Minister—or indeed anyone else—could have anything but sympathy for the constituents who have suffered in these circumstances. There is absolutely no question about it; that is reflected by the morality of the issue and by the fact so many people have come to hear this debate and other debates that have taken place.

I hope to shed some light on the Government’s position, but I am not in a position to answer the questions in the way that my right hon. Friend and other contributors to the debate might expect, which is to provide a solution to the problem. The Government do not believe that we should compensate members of the AEA Technology pension scheme above what is being provided by the Pension Protection Fund. That is very clear. I would rather not be grey about it; that is the Government’s position. We do not accept that the loss of the pensions was the Government’s fault.

As my right hon. Friend said, the note has been widely circulated. I read it. Whatever it may or may not be, the note clearly states at the beginning that it was a note by the Government Actuary’s Department on the options available in respect of accrued benefits. It states that clearly. I do not wish to be pompous about the word “advice”, which means different things in the financial services world than in the general context of conversation between people and in guidance, but it was not designed to be advice. It provides three options and outlines the main factors that people should take into account when reaching their decision on which option to accept.

I accept that on behalf of the Government I may select particular pieces from the note, and other right hon. and hon. Members may select pieces that suit their argument. That is natural and I have tried not to be like that when considering these comments. However, the note specifically and explicitly said that it did not intend to suggest that one course of action was better than another, and that if anyone was in doubt, they should seek independent financial advice. It stated that very clearly in the final note. It said that the intention was not to suggest one option was better than the other.

[Sir Oliver Letwin]

I entirely understand that the Minister needs time to reach the rest of his argument, but he has hit the nub of the question. Does he accept that if the Government Actuary’s Department calculated on an actuarial basis that the two schemes were equivalent financially, and if it stated, as he rightly said it did, that it was not suggesting that one was superior to the other, but if it was, in fact, the case that one was risk-free and the other was risk-bearing, it follows as a proposition of business logic and economics, as taught in any business school, that the thing that is financially equivalent but is risk-free is superior to the thing that is financially equivalent but risky? Therefore, it should have suggested that one was superior to the other—namely, that remaining was a superior option, because it was.

[Richard Harrington]

I thank my right hon. Friend for those comments. It is certainly true to say that the area of risk is not discussed explicitly and it is reasonable to argue that there should have been a box with a health warning saying that one piece of advice—or not advice, but information—was different from another because of the risk element, but it is also fair to say that the note does not attempt to assess risk. It may imply by default that one was less risky than the other, but it certainly does not say anything that could be interpreted as misleading the people who received it, in my view.

I understand the position of constituents in the Public Gallery today, some of whom are understandably shaking their heads, given their views about what I have just said, but it is very easy, years later, to pick pieces out of documents. If it said that this was advice, that would be one thing, but it clearly says that people should take independent advice.

My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), the former Secretary of State for Work and Pensions, said that independent advice would not cover the risk of transferring. Please do not misunderstand me: I am not saying that I have no reason to believe him, but I cannot understand why an independent financial adviser would be more or less likely than anybody else to comment on the risk or the lack of risk in giving advice. As I said, I accept that it is easy for us to say things all these years later, but the note does not seem to me to be intended to cover every eventuality. It was eight pages long and it was not intended to cover everything. It does not completely ignore the subject of insolvency.

[Richard Fuller]

I am struggling with something that the Minister said. He indicated that the advice of the actuary was able to be second-guessed by someone then going to an independent adviser. My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) talked about the role of the PHSO and said that it did not investigate the rulings of the actuary so that it could not second-guess the advice the actuary gave on liability. So which way should we have it?

[Richard Harrington]

My hon. Friend knows very well that I did not say that. I said that an independent adviser is no more or less likely to consider the idea of risk. I was actually referring to the view of my right hon. Friend the Member for Preseli Pembrokeshire that suddenly Government advisers did assess risk, but independent advisers could not possibly do so. I will have to make progress, because we are running out of time. I believe that the note was intended as a helpful starting point but did not constitute advice for members.

I will move on to the parliamentary ombudsman—I must deal with the ombudsman service generally and the choice of ombudsman, because they are so important in this case. It is correct that the actions of the Government Actuary’s Department fall generally outside the parliamentary ombudsman’s remit. I understand, however, that is only one of the reasons that the parliamentary ombudsman gave for deciding not to investigate. I hope I am not misrepresenting what she said—I have tried to look into this in some detail—but it seems to me that her decision was made partly on the basis that the complaints were not about the actions of a Government Department in relation to a citizen, which is what the ombudsman service is for. She has concluded that the complaints are about information provided in relation to employees and employees’ pension rights. That is why it is not the concern of the parliamentary ombudsman. If that is a correct interpretation of her opinion, changing the legislation to allow her office to have greater oversight of GAD would not solve the difficulty raised in this debate.

[Sir Oliver Letwin]

Will the Minister give way?

[Richard Harrington]

I really think I should make progress.

As for the pensions ombudsman, which I have some responsibility for and some knowledge about, members of a pension scheme can complain to the pensions ombudsman, who has the power to investigate, and does investigate, public sector pensions schemes as well as private sector schemes.

The pensions ombudsman looks at maladministration —for example, when a trustee or a manager has been given incorrect advice or information. The previous pensions ombudsman investigated a complaint last year concerning the AEA Technology pension scheme. GAD was not a party to that complaint. In the determination, the ombudsman specifically said that he was not ruling on whether the actions of GAD came under his jurisdiction and that no inference should be drawn from his comments about whether it did or did not, or about the likelihood of a successful complaint about GAD.

I understand that the current ombudsman has since considered some AEA complaints and the ombudsman’s office has decided not to investigate. I cannot comment on any particular complaint, but I have been informed that, in accordance with the usual procedures, all the complaints were looked at individually. Many reasons for not investigating the complaint were given, but they did not include that GAD was outside the pensions ombudsman’s remit.

It is possible, of course, to challenge the pensions ombudsman’s decision through the courts by judicial review or by appeal. I would briefly like to mention the Equitable Life case, which has been discussed during the debate. The parliamentary ombudsman did an investigation and asked the Government to expand the jurisdiction for this case alone. She informed us that public sector pensions are beyond her remit, so it seems to me that it is in the pensions ombudsman’s remit. He has looked at these two cases but has said that GAD was not a party. As far as I can see, however, there is nothing to stop people from going to the pensions ombudsman and naming GAD as a party to the case. If they are still not satisfied, there is the system of judicial review in the Court of Appeal, because the pensions ombudsman is a quasi-judicial body. I meet the pensions ombudsman regularly, and I am prepared to bring the subject up straightaway and ask whether he has difficulties within the scope of his existing jurisdiction in dealing with complaints brought to him.

[Mr Vaizey]

Will the Minister give way?

[Richard Harrington]

I am afraid there is not time. I am really sorry, but I only have three minutes left.

The Government have announced their intention to bring forward a draft Bill to create a new public service ombudsman, the focus of which remains the resolution of complaints from individual citizens who claim to have suffered injustice. The response to the consultation said that the ombudsman should operate a “no wrong door” approach, which is referring individuals and possibly transferring their complaints when they fall wholly or partially within the jurisdiction of another body. As for whether GAD should be included in its remit, the Government’s commitment at the moment is that it should take on just the jurisdiction of the parliamentary, health service and local government ombudsmen, but if right hon. and hon. Members believe—as my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) does—that there will be gaps, the Government are willing to listen to their concerns. After I found out about this debate, I spoke at some length with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Kingswood (Chris Skidmore), and he would be pleased to meet my right hon. Friend the Member for West Dorset to discuss this and other relevant issues.

I realise, Ms Dorries, that you are about to tell me that my time is up. I am sorry that I do not have more time to go into details, but I hope that I have given some indication of the Government’s thinking.

Plumbers’ Pensions

Lord Harrington of Watford Excerpts

Tuesday 25th October 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

It is a huge pleasure to serve under your chairmanship, Mr Bailey. I thank and commend the hon. Member for Perth and North Perthshire (Pete Wishart) for securing this debate. I am delighted that I can pronounce his constituency name without assistance. I also thank other hon. Members for their contributions.

This is a serious matter and not one the Government take lightly. I am quite new to this job, but it seems to me that the real lobbying from constituents through their Members of Parliament to the Government is an example of how things should work instead of teams of lobbyists coming to formal meetings. I commend hon. Members who are representing their constituents. They are not facing a heartless Government who treat the matter as a minor detail. The examples the hon. Gentleman gave of Mike and Kyle are typical and I would be pleased if he would send me details because I have seen similar examples and the question is how we deal with them.

I have listened carefully to what has been said about this worrying situation faced by small employers. As the hon. Gentleman said, they are fantastic people who have been going about their business for many years. The Government have received and listened to representations asserting that there is a simple solution. There is not. The issue is complex and, unfortunately because of the way government works, we cannot react quickly because the unintended consequences that have happened can lead to others. I hope hon. Members will not think this is just Government waffle.

Before I came into the Government I thought things were much simpler than they are and that is part of our democratic system, but it does not mean that we treat them lightly. I am well aware of the difficulties facing small employers in these schemes when managing their own pension commitments in the current economic climate and their responsibility for other people in the scheme.

[Alan Brown]

I appreciate what the Minister is saying about the matter being complicated for technical reasons and that the Government are sympathetic, but we need to know about the timescale. Some of these plumbers have already triggered section 75, so there is debt coming at them at a rate of knots. Timescales and assurances are required.

[Richard Harrington]

The hon. Gentleman has made a very reasonable point, which I hope to come to. By the way, my door is open to hon. Members and, if they feel it necessary, their constituents or representatives. This is not something that we are avoiding. I had better make progress now if the hon. Member for Kilmarnock and Loudoun will excuse me.

We have been talking to a lot of stakeholders about aspects of the operation of employer debt for some time. I have read the files. The hon. Gentleman asked for urgency, and he is right, but the matter is in hand. Last year, there was a call for evidence, which is an official mechanism for seeking views, on the operation of the current regime, the effectiveness of the current easements and the impacts of proposed changes. My officials are reviewing the responses that we received and exploring what further flexibility we could introduce to help employers to manage precisely the kind of debt that has been referred to, but as many respondents to the call for evidence highlighted, there is no easy or quick solution. Quite a few different ones have been mentioned.

My original thought was, as I said, that the issue was much simpler and that a change to the system of valuation could deal with it—the hon. Member for Perth and North Perthshire made a point about that in his opening speech. However, all of this has consequences. The reason why these laws were in existence in the first place was to protect the very people who otherwise could have found themselves retiring with no pension because of all the surrounding circumstances, but we are not saying that this is something that will just go on for years and years; we hope to do a formal consultation very soon.

I should like to state again on the record that the current employer debt legislation is there for a very good reason: to protect members of occupational pension schemes and ensure that, when they retire, they receive the pension that they have been promised. We cannot let that aim disappear. We have to find a way to ensure that the injustices mentioned by hon. Members contributing to the debate are dealt with, but at the same time we must not do anything to threaten the pensions of the other people.

The Government have made a significant number of changes to the legislation in response to representations made by employers. A number of mechanisms are in place whereby only part of the debt, or no debt at all, may be payable. The hon. Member for Perth and North Perthshire may be aware that there are currently eight such mechanisms in legislation, which reflects the wide variety of circumstances that can arise with diverse scheme structures and the equally diverse range of employer types. For example, the existing scheme and flexible apportionment arrangements permit an employer debt attributable to the departing employer to be shared among the remaining employers or taken over by them, so reducing the debt to nil or a nominal amount. Those can be useful provisions in cases in which an employer ceases to employ members or undertakes corporate restructuring.

For small employers, which we are talking about today, that are participating in a large non-associated multi-employer scheme such as the plumbers scheme, a period-of-grace arrangement provides for the situation in which an employer temporarily ceases to employ active members but intends to do so again in the future. The regulations provide for a period of grace of up to 36 months when no debt triggers, giving time for new employees to be recruited.

The high proportion of orphan members has been mentioned. The scheme would like the liabilities that relate to such members, whose employers no longer participate in the scheme, to be passed elsewhere rather than be shared among remaining employers. The requirement to meet a share of orphan liabilities is common to all schemes and an important part of member protection. Although it would be very difficult to make a special case for a particular scheme, we are looking more widely at the challenges faced by defined-benefit schemes and want to encourage a wide debate about the challenges facing those schemes and what the solutions might be, including that one. We are well aware that some parts of the pension sector are stressed, but the situation is very mixed and the problems are far from universal. We are trying to build a better understanding of those, using the call for evidence and all the meetings with stakeholders, to form an opinion on what the Government intervention should be.

[Alan Brown]

I thank the Minister for giving way again. The topics that he is covering involve wider pension issues. Does that not underline yet again the fact that there should be an independent pensions regulator to help to address these matters?

[Richard Harrington]

That is a whole different argument, as the hon. Gentleman knows. I would be very happy if we could have another debate on that and I am happy to check with him informally about it because it is something that has been proposed, particularly by his party. Respectfully, however, as far as this issue is concerned, that is irrelevant. I am not saying that the argument has merits or does not, but as far as this issue is concerned, we do not have a standing commission. The Government are here to try to deal with the issue and it is our intention to do so. We will produce a Green Paper very soon. We have said that that will be in the winter, which will certainly be before the leaves reappear, even in Scotland. We will do it as quickly as we possibly can.

[Pete Wishart]

The Minister is very reassuring today, and I am grateful for the very generous responses given to the concerns. I get the sense that we are trying to resolve this, and the Green Paper is a great opportunity to do that. May I just make this plea to the Minister and seek clarity from him? Will there be retrospection to ensure that any plumber or anyone who is caught up in this situation before the change is enacted is not left out and left high and dry with the huge debts that may have accrued?

[Richard Harrington]

I cannot give the hon. Gentleman that undertaking, precisely because it is exactly the sort of thing that we will be discussing in the Green Paper, but I would like to state that there is not a plan to ensure that these people do not get what is very logical and right. I am very conscious of the fact that we are not dealing with some offshore hedge fund, but with people who did not really want to be in the pensions business and did not want the liability—they just wanted themselves or their employees to have an ordinary pension. There is a difference, and it is right that Members of Parliament represent their constituents in this way, although I will just say that as far as the pensions industry is concerned, some of the bodies, such as the Pensions and Lifetime Savings Association and others, are also very knowledgeable on these subjects.

My door is open. We want to get this right. I ask the hon. Member for Perth and North Perthshire and his colleagues, who have made such passionate and decent contributions, to be a little more patient, but I would be very happy to be summoned back here or to the Floor of the House if they feel progress is too slow.

Question put and agreed to.

Ministerial Correction

Lord Harrington of Watford Excerpts

Tuesday 25th October 2016 Written Statements

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

An error has been identified in a reply to a written question given to the hon. Member for North Thanet, Official Report, 9 September 2013: Column 612W.

The reply given was:

Sir Roger Gale: To ask the Secretary of State for Work and Pensions which French tropical overseas territories were included in his Department’s average temperature calculations in respect of winter fuel payments to expatriate UK citizens living in the EU member states. [167864]

Steve Webb: From 2015-16 winter fuel payments will no longer be payable to individuals in countries where the average winter temperature is warmer than the warmest region of the UK (South-West England). The Government have worked with the Met Office to analyse comparable winter temperature data across all EEA countries. The Met Office used recognised administrative regions for each country. For France this was the 27 regions, including French Guyana, Guadeloupe, La Reunion, Martinique and Mayotte. It does not include the French overseas territories, which are not part of the EEA.

It should have said:

From 2015-16 winter fuel payments will no longer be payable to individuals in countries where the average winter temperature is warmer than the warmest region of the UK (South-West England). The Government have worked with the Met Office to analyse comparable winter temperature data across all EEA countries. The Met Office used recognised administrative regions for each country. For France this was the 27 regions, including French Guiana, Guadeloupe, La Reunion and Martinique. It does not include the French overseas territories, which are not part of the EEA.

[HCWS213]

Oral Answers to Questions

Lord Harrington of Watford Excerpts

Monday 17th October 2016 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

16. Whether his Department plans to take steps to introduce transitional protection for women adversely affected by the acceleration of increases in the state pension age.

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

Transitional arrangements are already in place. We committed £1 billion to lessen the impact of the state pension age changes on those who were affected, so that no one would experience a change of more than 18 months. In fact, 81% of women’s state pension ages will increase by no more than 12 months, compared with the previous timetable.

[Carolyn Harris]

Last week, I and more than 100 cross- party colleagues presented petitions in support of the Women Against State Pension Inequality campaign. Will the Minister acknowledge that those women have been subject to a grave injustice and that now is the time for the Government to introduce appropriate transitional payments for the women most affected by the pension changes?

[Richard Harrington]

I can only reiterate to the hon. Lady what has been said many times before. The Government made transitional arrangements that came to more than £1 billion. [Interruption.] She is chuntering at me from a sedentary position. I could not hear, but will try to imagine what she was saying. The Government have made the transitional arrangements, and no further moves will be made to assist those women, all of whom will benefit in time from the significant increase in the new state pension.

[Gill Furniss]

There are shocking reports of women affected by the changes introduced last April being left destitute. Many of them who have been on low pay all their lives where occupational pension schemes were not open to them have taken on caring responsibilities, saving this country lots of money. What immediate measures will the Government take to address this appalling situation and put these wrongs right?

[Richard Harrington]

Those women, or indeed those men, under the state pension age who are in the position of destitution the hon. Lady mentions are fully entitled to a comprehensive benefits system, of which I am sure she is aware.

[Nic Dakin]

I pay tribute to Rosemary Jordan and the north Lincolnshire WASPI group. The Minister is better than the answers he has just given. These women are being badly affected. The Prime Minister has given a commitment to this nation to look after those people who are just managing, and the women I have seen in my surgery are just managing as a result of these pension changes. The transitional arrangements that were made back in 2011 are not good enough. I urge the Minister to go back to the Department and improve the offer.

[Richard Harrington]

As the hon. Gentleman is aware, I have said many times, as have other Ministers, that the transitional arrangements have cost more than £1 billion and there are arrangements in place for those people in destitution. It becomes a question of the public money that is spent. At the moment, the new state pensions are costing £89 billion a year, plus pension credit and everything else, and there is no further money available.

[Alex Cunningham (Stockton North) (Lab)]

I am very surprised that no Government Members want to ask questions about this topic. The Prime Minister celebrated her 60th birthday earlier this month, making her part of that sisterhood of 1950s-born women who have been so shabbily treated by her predecessor’s Government. My hon. Friends the Members for Swansea East (Carolyn Harris) and for Scunthorpe (Nic Dakin) have already referred to the mass petitions organised by WASPI, and we have heard about the amazing change of mind of not one but two previous pensions Ministers, who have acknowledged that the whole thing was wrong and a bit of a mess. Unlike other members of the special sisterhood, the Prime Minister will probably not have to rely on the state pension, but will the Minister appeal to his boss to use the power she has and to compensate some of the most needy women in our society?

[Richard Harrington]

I find it strange that the hon. Gentleman and his party were in the House when the Pensions Act 2011 was passed, yet their 2015 manifesto made no mention whatsoever of negating it.

[Tom Pursglove (Corby) (Con)]

5. What support is available for people who require assistance to complete personal independence payment application forms.

--- Later in debate ---

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

15. What steps the Government are taking to help protect the pensions of long-serving employees.

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

We have a well-established regime of checks and balances in place, for example the Pension Protection Fund and the Pensions Regulator. The Government keep this framework for pensions under constant review, and amend it when evidence demonstrates that such change is needed.

[Stephen Metcalfe]

As I have stated previously, one of the welcome provisions in the Pensions Act 2014 was the raising of the Pension Protection Fund cap. Will my hon. Friend update the House on when that clause might be implemented, because two years on it has still not been put in place and pensioners in my constituency are suffering the consequences?

[Richard Harrington]

Let me first acknowledge the work that my hon. Friend has done to ensure that the long service cap was established. Pensions legislation is, as he knows, a very complex and technical area, and it is important that the secondary legislation for the cap operates as it was intended in all circumstances. This process can take time. However, I can assure him that this has been a priority for me from my first day in office. As I recently announced, I intend the long service cap for the PPF to come into force in April 2017.

[Kelvin Hopkins (Luton North) (Lab)]

My own personal occupational pension scheme has just been reduced. It is not a problem for me personally with my generous parliamentary salary, but it is symptomatic of the problems facing occupational pension schemes and pensioners. Is not the real long-term solution to establish a compulsory universal state earnings-related scheme for all, with defined contributions and defined benefits?

[Richard Harrington]

As the hon. Gentleman knows, this was looked into by the Turner review and by many people and institutions since. Automatic enrolment is in place, which is a great step forward. Millions of people have now enrolled. I hope that, as time evolves, this will become the main form of pension for people other than the new state pension.

[Mr Philip Hollobone (Kettering) (Con)]

17. What proportion of (a) personal independence payment and (b) employment support allowance applications are awarded on appeal to a tribunal.

--- Later in debate ---

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

Dozens of Women Against State Pension Inequality petitions with thousands of signatures have been presented already across the UK, with more on the Order Paper today and tomorrow. The Secretary of State needs to accept that these women are not going anywhere and a solution is needed. Does the Minister agree that if there is no money for pensions, there is no money for weapons of mass destruction?

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

The Government have already made a concession to the WASPI women. The state pension is very much part of public expenditure and always will be, and it is absolutely not the case that defence expenditure and that on the state pension can be compared.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

The most recent Her Majesty’s Revenue and Customs figures show that my constituency now has the highest level of child poverty in the country, and we know that two thirds of children living in poverty live in working households. For my constituents this is not a country that works for everyone. Will the Secretary of State now agree that he must come to this House and reverse the cuts to universal credit so that my constituents and others are supported, rather than penalised for this Government’s choices?

Pension Protection Fund/Financial Assistance Scheme: Long Service Caps

Lord Harrington of Watford Excerpts

Thursday 15th September 2016 Written Statements

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I am pleased to announce that today I will launch a consultation on the draft regulations needed to ensure the long service cap in the Pension Protection Fund—the PPF—will operate as intended in all circumstances. The consultation will last for eight weeks and, after I have considered the responses, it is my intention to put before Parliament amending regulations, with the expectation that the PPF long service cap will be in place from April 2017.

I am also pleased to announce that it is the Government’s intention to introduce an equivalent cap for the financial assistance scheme—the FAS—from April 2018.

The PPF provides compensation based on 90% of the person’s accrued pension if they are below the scheme’s normal pension age when the company becomes insolvent. This 90% is subject to a maximum, which would, currently, mean a maximum amount of compensation of £33,678 per annum at age 65.

The Pensions Act 2014 contains provisions to increase this cap in the PPF at 3% for every year of pensionable service in the scheme above 20 years, subject to a new maximum of twice the standard cap. This legislation has not yet been brought into force, as some changes were needed to secondary legislation. It is these changes on which I am now consulting.

The FAS provides financial support for those who lost significant amounts of pension because their defined benefit occupational pension scheme collapsed underfunded. Generally the FAS helps those schemes which were affected before the introduction of the PPF and ensures a person gets at least 90% of the pension due at the point the scheme collapsed. This calculation is subject to a maximum cap. It is our intention to amend this cap so that it will, like the PPF cap, increase by 3% for each full year of pensionable service, over 20 years subject to a new maximum of twice the standard cap.

I will, in due course, be putting before Parliament regulations to implement this new cap. So that the FAS scheme manager has sufficient time to plan for these changes, it is our current intention that the FAS changes will apply from April 2018. Those already being paid assistance will get the uplift applied to their cap amount from the implementation date although, as in the PPF, this increase will not be backdated.

A copy of the consultation document will be placed in the Library.

[HCWS163]

Social Security

Lord Harrington of Watford Excerpts

Wednesday 14th September 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I beg to move,

That the draft Pensions Act 2014 (Consequential Amendments) Order 2016, which was laid before this House on 4 July, be approved.

This order implements a small number of further minor consequential amendments in connection with the introduction of the new state pension. It does two things. First, it ensures that existing administrative arrangements that are designed to facilitate the annual uprating exercise will continue to operate as they do now. Secondly, it gives appeal rights to decisions about national insurance credits that count for new state pension purposes.

Let me deal first with the amendments to do with uprating. Article 2 amends the Social Security Administration Act 1992, which deals with alterations in the payable amount of certain income-related benefits due to uprating: that is, income support, income-based jobseeker’s allowance, income-related employment and support allowance, universal credit, and pension credit. These provisions allow an existing award of these benefits to be altered automatically to take account of the uprating of another benefit in payment to the claimant or their partner, without the need for a further decision by a decision maker. They can also enable the decision maker to take account of the new rates from the uprating date when he or she is determining a new award that begins before the uprating order has come into force, rather than having to revisit the award to apply the new rates at a later date. Article 2 retains long-standing administrative easements that support the annual uprating exercise. It is simply a case of delivering business as usual in a case where a person or their partner’s benefit income is the new state pension. These amendments will therefore apply for the first time in April 2017, with the first uprating exercise for the new state pension.

I turn to the amendment to do with appeal rights for national insurance credits. Article 3 amends schedule 3 to the Social Security Act 1998, which lists decisions that carry the right of appeal. This schedule already includes decisions on credits awarded under the old 1975 credits regulations, and also needs to include those provided for under part 8 of the new State Pension Regulations 2015. The policy intention is that decisions made in relation to those credits should carry the right of appeal. That should have been enacted with effect from 6 April 2016, but I regret to say that it was overlooked and that, as the law stands, they do not have that right. The amendment makes good that omission and it will come into force on the day after the order is made.

Of course, that means that there will be a period in which decisions will be made that were intended to carry the right of appeal but that cannot in law be appealed. Those decisions are made by Her Majesty’s Revenue and Customs officials on behalf of the Secretary of State for Work and Pensions, so my officials have been working very closely with HMRC to find a solution.

That solution involves a workaround. Once the order comes into force, any decisions made under the provisions in part 8 of the State Pension Regulations 2015 will be appealable. HMRC will revisit any decisions made before the order comes into force, and when fresh decisions are made they will carry an appeal right. There will be no substantial difference in outcome between an original decision, had it been appealable and successfully appealed, and a fresh decision that is successfully appealed. A successful appellant will have credits awarded to them.

Importantly, I reassure the House that, to date, no one has in practice been affected. That may seem unlikely at first glance, but there are a number of reasons for it. First, the omission can affect only certain decisions made since 6 April 2016. Secondly, it affects only credits for which a person has to apply.

The practical impact of this gap in the law relates only to decisions about credit that a person has applied for since 6 April 2016. They include new credits that cover past periods in which a person was accompanying their armed forces spouse or civil partner on an overseas posting. Ordinarily, credits awarded for the tax year 2016-17 would be taken into account only in the assessment of new state pension awards that will be made after 6 April 2017. However, those new credits could affect state pension awards made since 6 April 2016.

A further mitigation is that, before a person can lodge an appeal, they have to ask for the decision to be reconsidered by a decision maker—a process known as mandatory reconsideration. Mandatory reconsideration enables a decision maker to reconsider the decision and the facts taken into account in making it. If, on reflection, it is considered that the decision should be changed, it can be revised without the claimant having to go through the whole appeal process. HMRC data from the last tax year, 2015-16, tell us that fewer than 10 cases where a credits decision under the 1975 regulations was disputed ended up progressing to appeal.

Finally, out of 324 applications for the new armed forces partner credits that have been refused up to 5 September, 201 of those refusals were because the tax year being applied for was already a qualifying year for other reasons, so the applicant would not need the credit in order to establish their new state pension entitlement.

It is an unfortunate situation, but I hope that I have reassured the House that, even if a case did materialise, we have measures in place to ensure that, while justice may be delayed, it will not be denied. We are confident that no individual will be disadvantaged by the oversight.

I am sure you will be delighted, Madam Deputy Speaker, that I can confirm that I am satisfied that the instrument is compatible with the European convention on human rights, and I commend the order to the House.

--- Later in debate ---

[Richard Harrington]

I am grateful to the hon. Members for Oldham East and Saddleworth (Debbie Abrahams) and for Ross, Skye and Lochaber (Ian Blackford) for their contributions to the debate and for their kind words, which I appreciate. I am sure this will be the first of many occasions when we take part in such debates.

Let me deal briefly with the points that the hon. Gentleman made. I am aware that he has spoken many times on the frozen pensions issue, but the policy on that is unchanged. It has been in place for almost 70 years, under all sorts of Governments, and there are no plans to change it. The Government comply with their legal obligations where reciprocal agreements exist with other countries. There are no plans to change that and I would not like to mislead the hon. Gentleman by saying that there are.

On the triple lock, I will happily send the hon. Gentleman a copy of the Conservative party manifesto, if he is interested. I am sure it is still available from all good bookshops, and probably some bad bookshops as well. The Government are committed to retaining the triple lock throughout this Parliament. They have said so several times in the past and I am happy to repeat it for him.

The hon. Lady commented on the statutory instrument. On the transitional arrangements—for example, on ending the choice for mixed-age couples—the choice is ending because it is not right that a working-age customer should be exempt from any work-related conditionality just because they have a pension-age partner. Couples in receipt of pension credit at the date that the change is introduced will continue to be eligible for pension credit unless entitlement ends for some other reason—some change in their circumstances.

The hon. Lady asked me if I could indicate the number of claimants to date who had been denied a right of appeal as a result of the omission that we have mentioned. I will check and, if necessary, respond to her in writing. To my knowledge, we do not hold that information because administrative data are not routinely collected by HMRC on volumes of all clerically administered credit applications, but I am happy to get back to her on that point.

Very briefly—hon. and right hon. Members have had a lot of patience with this statutory instrument—the credits affected include applications predominantly for spouses and civil partners of members of the armed forces, as the hon. Lady said, but also for partners of recipients of child benefit where entitlement to the credit is transferred to the applicant, for people providing care for a child under the age of 12—that is called grandparent credit—for being a foster parent and for persons approaching pensionable age.

I have explained what the order covers and these consequential amendments, and we have been through them both in quite some detail. We have acknowledged the gap in the law. This is the first time we have dealt with that gap in the law, but we have put mechanisms in place to make sure that no one is disadvantaged. Fortunately, we have not yet needed to employ them because no one has sought to appeal.

I hope I have provided the clarification that the hon. Members required, but I am very happy to speak to them separately, should they require further clarification. I commend this order to the House.

Question put and agreed to.

[Madam Deputy Speaker (Natascha Engel)]

We now come to motion 4 on local government. I remind the House that as the Speaker has certified that this instrument relates exclusively to England and is within devolved legislative competence, this motion is subject to double majority. If a Division is called, all Members of the House are able to vote in the Division. Under Standing Order No. 83Q, the motion will be agreed only if, of those voting, both a majority of all Members and a majority of Members representing constituencies in England vote in support of the motion. At the end, the Tellers will report the results, first, for all Members and, secondly, for those representing constituencies in England.

Oral Answers to Questions

Lord Harrington of Watford Excerpts

Monday 9th March 2015 Commons Chamber

[Esther McVey]

The Government do not make estimates because they would be wildly inaccurate, like the figures that the right hon. Gentleman has given. That is because only a maximum figure could be given that did not take into account hardship payments, which could be 80%, or that people already had a job, and there would be so many inconsistencies. The last Government—he was a Minister in the Department—did not make such estimates either.

[Richard Harrington (Watford) (Con)]

Question 5, Mr Speaker.

[Mr Speaker]

No, no. I was calling the hon. Member for North West Leicestershire (Andrew Bridgen) to ask about Question 4. Several hon. Members were on their feet in respect of this question.

--- Later in debate ---

[Richard Harrington (Watford) (Con)]

5. What progress has been made on reform of the Child Support Agency.

[The Minister for Pensions (Steve Webb)]

I am pleased to tell my hon. Friend that the 2012 child maintenance scheme is now open to all applicants and is delivering a more efficient statutory service, including the option of direct payments, for those who cannot make a family-based arrangement. From January 2015, closure of existing CSA cases began.

[Richard Harrington]

I thank the Minister and want to ask him a further question. For most MPs starting in 2010, this issue provided a lot of constituency casework for us, and the agency in question was often felt not to be fit for purpose, despite the good intentions in setting it up. What progress have the Government made in dealing with the fraud and error that has been so well publicised as existing in the system?

[Steve Webb]

We recognise that further incremental reform would not deal with the long and deep-seated problems with the Child Support Agency. That is why we are closing all the cases on the existing system and moving towards a much more streamlined system. To provide one example of the improvements, we now get data direct from Her Majesty’s Revenue and Customs rather than having to wait for non-resident parents to provide payslips, so we have prompt and accurate information to avoid arrears building up.