Pensions Bill

My Lords, I referred in Committee to the fact that your Lordships’ campaigns eventually become law, so I am sure that everyone in the House will join me when I say how delighted I am to congratulate the noble Baroness, Lady Hollis. Her perseverance in this matter has been quite outstanding even by the standards of your Lordships’ House, where many of us are dedicated to seeing a particular injustice eradicated, and I am sure that no government concession has ever been more deserved. The battle has certainly been hard won. Right up until last week there was little indication that the Government would ever accept that the inequality which persists between the sexes in attaining full eligibility for the state pension warranted a move of this kind. The battle has also been protracted because of the ever present concern for cost. The Minister has managed to present us today with a package which he claims to be cost-neutral. There is no doubt that if such an apodictically beneficial result as the one sought by the noble Baroness could have been delivered without regard to cost, we would have wrapped up the issue long ago. That brings me to the contribution of the noble Lord, Lord Clarke. When one is making changes to social security benefits—in essence, a state pension is a social security benefit—there are always, alas, cliff edges. The trick among policy makers is to make sure that the cliff is as low as possible. I am afraid that I cannot remember a single occasion in the years that I have been studying this matter when there has not been a cliff edge of some kind in any changes that have been made. Perhaps the noble Baroness, Lady Hollis, will be able to correct me on that statement. The Minister has stated that the price of Class 3 NICs will be raised soon anyway to account for the fewer years that will now be needed to qualify for a full state pension. As I understand it, the 110,000 or so people who might benefit from the move initiated by the noble Baroness, Lady Hollis, will be included among the many more who will benefit from the new requirement to pay NICs for only 30 years rather than 39 or 44. I cannot express absolute, totally unqualified approval because, although these amendments are claimed to be cost-neutral as regards the government purse—which was my objection to the original suggestion of the noble Baroness, Lady Hollis, last year—they will not be cost-neutral for contributors. No doubt more people will be receiving a full state pension, but they will have paid for such a benefit themselves. I would not be doing my job if I did not ask several more questions that need to be asked on this matter. In particular, by how much does the Minister envisage the price of Class 3 NICs rising? Can he confirm that this price rise will be implemented in the next Budget, or will it be implemented in 2010 when the operation starts? Will the rise be extended across all classes of NICs or just be restricted to one? Above all, can he assure us that the increased revenue the Government will receive will be no more than the extra payments they will make? If this is not to be the case, then what we are seeing here is not a cost-neutral proposal but a revenue-raising one cunningly attached to the delivery of a genuinely praiseworthy aim. Are we therefore—I hope to goodness we are not—looking forward to another stealth tax? I would also be interested to hear from the Minister how much of a saving the Government expect to make on pension credit payments as a result of these provisions. I am interested to hear how many of those eligible to make these contributions the Government are expecting to participate. Concerns have been aired in the media—after all, it is too much to expect that such a positive news story for the Government would be postponed until Parliament had heard of their intentions—about both too high and too low a take-up. Not only have commentators noted that some who would benefit from making these extra contributions might be unable to find the money to do so, but quite rightly there is a real possibility that some of the 40 per cent of pensioners likely to be eligible for pension credit might waste their money on voluntary contributing, only to realise that that will result in no additional retirement income. We often raised this subject in the early stages of the Bill. I hope that the Minister will go into some detail about what kind of information campaign the Government intend to wage to ensure that neither of these unwelcome outcomes comes to pass. Who will conduct it? Will it be the pensions agency or some other body? Will the Minister also confirm that all the restrictions that currently apply on who may buy Class 3 NICs will be extended to these extra contributions as well? Will those with the married women’s stamp or those who contracted out even for a short period be able to take advantage of the provisions? I realise that I have spoken for quite a long time but these questions need to be asked in order to make a proper assessment of this welcome outcome.