Pensions Bill

moved AmendmentNo. 26: "26: Clause 7, page 8, line 35, leave out ““This section has”” and insert ““Subsections (2) and (3) have””" The noble Lord said: I shall speak also to Amendments Nos. 27, 28 and 29. These amendments make changes to Clauses 7 and 8 as a result of recommendations made by the Delegated Powers and Regulatory Reform Committee in its ninth report. Clauses 7 and 8 deal with the removal of the link between the lower earnings limit and the rate of the basic state pension. Because of that link, the level of the lower earnings limit currently increases in line with prices. However, the link means that withoutthe changes made by Clauses 7 and 8, the lower earnings limit would increase in line with earnings once the earnings link is restored because it is connected to the rate of the basic state pension through legislation. Our view is that the lower earnings limit should not automatically increase in line with earnings simplyas an unintended consequence of restoring the link between earnings and the basic state pension. Therefore, Clause 7 amends the existing delegated power contained in Section 5 of the Social Security Contributions and Benefits Act 1992 so that where regulations prescribe the level of the lower earnings limit, the level will no longer be linked to the weekly rate of the basic state pension. Clause 8 amends corresponding provisions in the Social Security Contributions and Benefits (Northern Ireland) Act 1992, as national insurance falls to be legislated for in respect of the whole of the UK. We believe that the provisions that govern the setting of the lower earnings limit should allow for flexibility, which is what Clauses 7 and 8 achieve by providing the Treasury with the discretion to set the amount of the lower earnings limit. The Treasury will separately consider the appropriate uprating of the lower earnings limit once the link with the basic state pension is broken. However, the Delegated Powers and Regulatory Reform Committee, in its ninth report, highlighted the significance of the lower earnings limit as the entry point to contributory benefit entitlement. In light of that, it considered that once the link between the lower earnings limit and the rate of the basic state pension is broken, regulations that set the rate of the lower earnings limit should no longer be subject to the negative procedure, but rather to the affirmative procedure. It also recommended a parallel change in Clause 8 which makes provision for Northern Ireland. I am pleased to say that we unreservedly accept the committee’s recommendations. We therefore tabled Amendments Nos. 27 and 29, which ensure that those recommendations are fulfilled. A couple of small tidying up amendments—Amendments Nos. 26 and 28—are necessary as a result. I beg to move.