My Lords, in speaking to Amendments 1 and 2, I look forward to a productive time in Grand Committee. I assure the Minister that there will be cross-party consensus over the direction of travel; this very much carries on the direction that Labour took in government, and I look forward to being able to debate the detail. This first group has already highlighted a number of the issues that we are going to want to explore over the next few weeks. The point about cost made by the noble Lord, Lord Flight, and my noble friend Lady Hollis is an important one, and I hope that the Minister will be able to give us an indication of both the cost of bringing all these people into the system but also the cost drivers that might help us to understand better my noble friend’s point. If he could cost her ingenious scheme before we got to the end of this stage of the Bill, that would also be very helpful.
The point made by the noble Lord, Lord Kirkwood, about operational issues is going to become very important. There are amendments later on in which we will begin to explore how the department will communicate with people, and that will surface many of those issues. The Minister may want to be prepared before we get to that stage.
I, too, have heard concerns from all kinds of people. I know that Age Concern has been very worried; it has been getting letters, e-mails and phone calls from people who are anxious about the fact that they will not get this new pension that they have read so much about. One of the requirements on the Government from a very early point is going to be to try to manage their communication better, as I will say later on when we come to discuss information. The Select Committee found a huge amount of confusion among the public about who would get what and when. It is not surprising, therefore, that people are as anxious as they are.
Will the Minister reassure the Committee that the Government are alive to the concerns of those who have already reached state pension age or will do so before implementation, and will carry on listening? Will they consider the impact on those pensioners as the system is brought in? Will the Government, maybe at the next Committee day, take the opportunity to explain to us the impact of the new amendments tabled in the wake of the autumn Statement? That could be helpful, and we could look at it later this week.
Will the Minister help the Committee to reflect on the position of those who retire before implementation on modest incomes? Will he clarify that those who have saved with the second state pension or its predecessors will find that any amount they get in future which is above the single-tier pension is in fact uprated only by CPI? There is a perception that everybody before the
transition gets one thing and everybody after it gets another, when in fact, as we will unfold, it is going to be a lot more complicated than that.
Is the Minister concerned at all about the distributional impact for those in that area of modest earnings? He will know that S2P is distributive because it treats anyone earning between the lower earnings limit of £5,668 and the lower earnings threshold of £15,000 as though they earn £15,000. That distributive element is quite important in protecting those on modest incomes and making sure that they can save for the future.
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I also wonder whether the Minister can tell us something about what will happen in the future to passported benefits for those who reach state pension age before implementation. For those who are currently passported to benefits on savings credit, I understand that that will carry on being available to them because they will get there before 6 April 2016. However, can he assure us that both the savings credit and the access to those passported benefits on the back of it will carry on being available to them for as long as they live? That may be a source of assurance to those people as well.
Amendment 2 in the name of the noble Baroness, Lady Greengross, also raises the question of how the Government monitor the impact on pensioner poverty. Pensioner poverty is something that we on these Benches take very seriously. As I indicated at Second Reading, when Labour came to office in 1997 we inherited unacceptably high levels of pensioner poverty and took to addressing it in a range of ways—through the minimum income guarantee, by pegging pensions to earnings, by introducing the very pension savings credit that is shortly to bite the dust, by bringing low earners and carers into the second state pension and also, crucially, by reducing the number of years of national insurance contributions needed for a full state pension. It was 44 years for men and that came down to 30, and it was 39 years for women, which came also down to 30. As a result of all that, pensioner poverty fell to the lowest level for 30 years.
The Government may well accept the amendment from the noble Baroness, Lady Greengross, but, if not, can the Minister tell the Committee how the Government propose to monitor pensioner poverty and what steps they will take to ensure that we do not end up back in the situation in which we found ourselves in 1997?