Pensions Bill

moved Amendment No. 11: 11: After Clause 3, insert the following new Clause— ““Review of pension credit entitlement (1) The Secretary of State may from time to time, and shall when required by subsection (2), lay before each House of Parliament a report on— (a) current rates and coverage of pension credit entitlement; (b) likely future rates of pension credit entitlement; and (c) such other matters as he considers to be relevant as affecting the present and future take-up of and eligibility for pension credit. (2) The Secretary of State shall lay such reports— (a) five years after the coming into force of Part 1 of this Act; and (b) thereafter at intervals of not more than five years.”” The noble Lord said: I briefly mentioned pension credit at Second Reading and I should like to return to the issue again now. When debating this topic, the Government are always quick to remind us about the benefits of the pension credit scheme. The system has the potential to do a lot of good for quite a lot of people, which is why we on these Benches have no intention of abolishing means-testing or the pension credit scheme, although improvements are badly needed. These benefits are often trumpeted by the Government to hide the unfortunate effects of pension credit on many other people—people who do not claim the credit to which they are entitled and see their small personal savings result in swingeing cuts of their benefit levels, and the huge number of people who will become subject to intrusive means-testing. Your Lordships will note that this is a problem that will persuade some people not to invest in the new national pensions saving scheme, but that thought will get further discussion later. There is no doubt that pensions credit is formidably—not to say intimidatingly—complicated. Every report and research study shows that the problem is getting worse. Nearly £2.5 billion goes uncollected, which means that more than 1.5 million pensioners do not receive what they are owed. Indeed, the problem is so bad that the Government calculate the cost of pension credit on the assumption that huge amounts of benefit will not be claimed and so do not need to be funded outside public expenditure. How magic! Means-testing is also failing those who do take up the benefit at that end. The current levels of means-testing, even after reforms in this Bill, will still leave 30 per cent of pensioners eligible for pension credit, and that is the best possible outcome. That is still 30 per cent of pensioners who have no incentive to save, because what money they can put aside will immediately be clawed back by the system and the Government. This amendment is not hugely radical. The Department for Work and Pensions already produces lots of information, and covers that information in an annual report. However, that is clearly not enough. We must be clear that the reforms in the Bill will reduce pension credit entitlement as promised and that take-up must be improved. I beg to move.