Age-Related Payments Bill

Public Bill Committee, 25 May 2004.

Standing Committee D

Age-Related Payments Bill

Derek Conway (Conservative, Old Bexley and Sidcup)

Before I call the Minister to move the programme motion, I want to say that it is in order for hon. Members to remove their jackets, if they so wish.

Malcolm Wicks (Labour, Croydon North)

I beg to move,

That—

(1) during proceedings on the Age-Related Payments Bill, in addition to its first meeting on Tuesday 25th May at 9.25 a.m., the Standing Committee shall meet on Tuesday 25th May at 2.30 p.m.;

(2) consideration of the Bill by the Committee shall (so far as not previously concluded) be brought to a conclusion at 7 p.m. on Tuesday 25th May;

(3) it be a recommendation of the Standing Committee that proceedings on consideration and Third Reading should (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on consideration or, if earlier, at the moment of interruption.

It is a pleasure to serve under your chairmanship, Mr. Conway. I think that it is my first such experience. The Bill is short, but important. It has one clear and simple objective in mind. It has been agreed through the usual channels that the Committee does not need to sit for two days, but that two sittings today will be adequate. Optimists may consider that we could finish our deliberations on the Bill this morning but, looking at members of the Committee, I am more on the pessimistic side.

Nigel Waterson (Conservative, Eastbourne)

I also welcome you to the Chair, Mr. Conway, and, in due course, your colleague, Mr. Pike. The Bill is short. It is good to see the old firm reunited after our discussions on the Pensions Bill a short time ago. I told my agent that I was not willing to debate Bills with fewer than 300 clauses, so the Bill under discussion today is a bit of a come down for me. I am reflecting on what to do with the four volumes of the Committee Hansard report that landed on my desk yesterday.

The Bill is interesting and there is much technical detail that we still want to drag out of the Minister. Incidentally, now that he has had chance to reflect on matters since the Bill was discussed on Second Reading and consult his diary, we are keen to find out whether he learned about the proposal at the same time as the rest of the nation, which was during the Budget speech. As the Committee will have gathered, the Bill has all the hallmarks of panic, hurried legislation. One thing that the Minister and I agree on is that the Bill has a clear and simple objective. Sadly, however, we do not agree about what that is.

The Bill's clear and simple objective is to save the Government's electoral bacon. From my canvassing and my visit to the pensioners' parliament in Blackpool a few days ago, I can assure the hon. Gentleman that that is not working. It is welcome that he is shoving half a billion pounds in the direction of those who are over 70. They will raise a glass to him, but I doubt whether it will gain a single vote or draw attention away from the enormous increase in council tax throughout the country, especially in the south, since the Government came to power. However, we can return to such issues in Committee. I am content with the programme motion and it is now time to get on with the Bill.

Steve Webb (Liberal Democrat, Northavon)

Good morning, Mr. Conway. I hope that our deliberations will be one of the least onerous duties that the House has to perform and that we will be shot of this shabby and opportunistic Bill by the end of the day. We have entered into the spirit of scrutinising the Bill by breaking a tradition and tabling a few amendments to keep the hon. Member for Eastbourne (Mr. Waterson) busy. Although we have tabled amendments to clauses that will enable certain issues to be discussed, it would be helpful if the Minister could say a few words about those clauses to which no amendments have been tabled. I do not wish to detain the Committee. Let us hope that we can scrutinise the Bill expeditiously and enjoy the spring evening later today.

Question put and agreed to.

Derek Conway (Conservative, Old Bexley and Sidcup)

I remind the Committee that there is a money resolution in connection with the Bill, copies of which are on the Table. Adequate notice should be given of amendments. As a general rule, my co-Chairman, Mr. Pike, and I do not intend to call starred amendments, including those that may be reached during the afternoon sitting.Clause 1 ''Qualifying individual'' and ''relevant week''

Clause 1 - ''Qualifying individual'' and ''relevant week''

Steve Webb (Liberal Democrat, Northavon)

I beg to move amendment No. 10, in

clause 1, page 1, line 6, leave out from 'attains' to end and insert

'was born on or before 31st March 1935.'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss amendment No. 1, in

clause 1, page 1, line 6, leave out '70' and insert '60'.

Steve Webb (Liberal Democrat, Northavon)

Amendment No. 10 is relatively straightforward. It says that entitlement to the payment of £100 should not merely be restricted to those people who have attained the age of 70 by the relevant qualifying week in September, but extended to cover those people who can be expected to reach the age of 70 by the end of 2004-05. We have defined that as individuals who were born on or before 31 March 1935.

In a sense, we are suspending disbelief and are supposing that what the Government say about their purposes in bringing forward the Bill is true. I appreciate that that might not last for the whole day,

but we will humour them for now, take them at their word and assume that the Bill's purpose is to help older pensioners to pay their council tax. We will leave aside the fact that the payment that we are discussing is made irrespective of whether anybody has any council tax to pay. Something of a fiction is involved, but that is the Bill's stated basis and we will go along with it for now.

The question then is whether it is appropriate to say to people who reach the age of 70 in October or November 2004-05, which would be before most of the payments are even made, that they do not qualify. Anybody who reaches the age of 70 by the end of 2004-05 will have been 70 during a year in which they have to pay the inflated levels of council tax that people up and down the land are being asked to pay. If the Government are true to their word and are worried about the impact of the council tax on pensioners, particularly on older pensioners, why would they want to exclude people who are 70 at some point during a year in which they have to pay council tax?

The Minister could say that there are operational reasons for that and that the Government have chosen the dates in September because that coincides with the winter fuel payments. I believe that they think that they need to know in good time who will be applying for such payments so that they can work out how much those people are entitled to. Surely, in the case of the payments that we are discussing, we know at the start of 2004-05 when people were born. We know who is alive and was born on or before 31 March 1935. Therefore, in a way, we are doing the Government a favour. We are not saying that they must wait until September before they can work out to whom they should pay the money; we are telling them now. We will ease their administrative burden and help them to deliver those payments on time. I am sure that they will welcome the amendment.

The other objection that they might have is that some of those people might die before the end of the year. In other words, they might be paying money to widows, estates and so on. Anybody who, under the Government's rules, would have been 70 by the qualifying week would have spent at least six months paying their council tax in any case. Given that such people would have had to contribute to the vastly inflated council tax bills that pensioners must pay, why should they not be entitled to a payment? Paying that money to widows of people who were over 70 seems entirely unobjectionable. Presumably, widows are hit particularly hard by the council tax. If the amendment is accepted, the money will be payable to the estate, the widow or the widower of some people who will be dead before the end of the financial year. That does not seem to be a problem.

I would be interested to know what the Minister thinks it would cost to expand the scheme in that way; I am sure that he has costed it. Given that the whole scheme costs nearly £500 million, extending it for six months and involving people who are between 69 and a half and 70 on the qualifying date would be a relatively marginal change. I am sure that he will enlighten us on that point.

I will comment on amendment No. 1 now so that I do not need to return to it. I am sure that the hon. Member for Eastbourne will make his remarks in due course. I must admit to having been rather startled to see it on the amendment paper. In the normal modest way of the Liberal Democrats, our amendment, if it were to be accepted, would make an incremental spending commitment, whereas the Conservative amendment would make a socking great spending commitment—I hope you will forgive the use of a technical term, Mr. Conway. It says that everybody between 60 and 70 should get the £100. That would doubtless add hundreds of millions of pounds to the cost. I am not sure whether the hon. Member for Eastbourne has cleared it with his revered leader in this area, the hon. Member for Havant (Mr. Willetts), and whether has the authorisation to splash money around like confetti. That is obviously what he has in mind. Anyone would think that local elections were coming up in his constituency and that he potentially had a high pensioner vote. I do not know whether that is true or not, but it might be.

Given that the business of the £100 being to do with council tax is something of a fiction, the idea that we should extend the principle and that we should do so in the run-up to an election seems strange. I hope that when the hon. Member for Eastbourne speaks to amendment No. 1 he will tell us where he would find the money for the scheme, because I find wild, reckless tax and spend difficult to cope with.

Nigel Waterson (Conservative, Eastbourne)

I am delighted to speak on the hon. Gentleman's amendment, and on mine. The Liberal Democrats are in their fiscal purity phase, but I doubt it will last. I would feel more genuinely chastised by the hon. Member for Northavon (Mr. Webb)—I suppose we should really call him a learned Member; after all, as far as I am aware, he is the only professor on the Committee—if I were not convinced that, in some part of the country, Liberal Democrat leaflets are circulating that promise to pay £100 to anyone over 15. Anyway, I shall not get too carried away by what he says.

The hon. Gentleman answered his own query. We are talking about a fantasy land; we would not introduce such a measure if we were in Government because it is not the way to address the problem, just as is the case with capping. The problem was caused by the Government's ramping up council tax, particularly in areas of the country that they do not represent, and do not expect to represent. That is the real difficulty.

Claire Ward (Labour, Watford)

Will the hon. Gentleman give way?

Nigel Waterson (Conservative, Eastbourne)

Let me finish my point first. Piled on top of that difficulty, of course, is the problem faced by those of us who have suffered under Liberal Democrat-controlled councils. The hon. Member for Northavon was good enough to try to help the Liberal Democrat campaign in my constituency, but I can tell him from my canvassing last night that it is not working.

Claire Ward (Labour, Watford)

If the hon. Gentleman is fundamentally against the Bill and the concept of giving money to pensioners over 70, why does he want to extend the principle and give money to persons over the age of 60?

Nigel Waterson (Conservative, Eastbourne)

I was coming to that. We are not opposed to giving some extra dosh to over-70s; why not do that? We just want to ensure that pensioners are not taken in by this largesse, and do not think that it is linked in any way to levels of council tax in their area. If the pensioners' parliament is anything to go by, we will not have to try very hard to ensure that.

Ours is, of course, a probing amendment; if we were in Government, we would not approach the issue in this way. However, what I am trying to probe into—the issue was raised by many hon. Members on Second Reading—is why the Government have decided on 70, and not 65. What is the logic of paying the £100 only to those aged 70 and over? To row in behind the amendment, if not the rhetoric, of the hon. Member for Northavon, is there not some rigidity in the Bill on the matter of when people qualify that could be removed? I shall also have something to say about subsection (2) when we come to clause stand part.

Why should over-65s be excluded, and why should a family in which someone, typically the husband, turns 70 during the year but then sadly passes away lose the £100? That seems to make no sense. It would be interesting, as an academic exercise—and that is certainly what it is from our point of view—to discover how much extra such changes would cost. Presumably, cost was the driver behind the decision to draw the line at 70, but we simply see no logic to that. Many pensioners over 65—indeed, over 60—suffer just as much because the council tax is high in their area as those over 70, and I fail to see why they should be excluded. However, that may be a point for stand part.

I appreciate that the Bill was cobbled together in a great hurry when the Government realised, belatedly, that they needed a Bill to introduce the measure, and so I make no complaints about draftsmanship; that would be churlish, and the Minister knows from 22 sittings on the Pensions Bill that that is the one thing of which I could never be accused. There is no logic to the 70-year cut-off; or, if there is, I am sure that we will now hear what it is.

Malcolm Wicks (Labour, Croydon North)

There has been a little outbreak of election fever here. It is a little early in the morning for it, but I will leave the Opposition parties to their debates on that and will talk about the Bill.

The Bill makes real the promise in the Budget to pay all eligible households in which there is someone aged 70 or over an extra £100. I emphasise that that will be delivered through the winter fuel payment process, which is a tried and tested method of delivery. It may not be without controversy, but issues relating to today's debate are very much about the winter fuel payment process, including the qualifying week. Evidence shows that this group of older people are likely to have been living on a fixed income for longer, as they are less likely to be economically active. Those in older households have, on average, lower incomes

and are more likely to be living alone. Council tax takes up often a large portion of their income in comparison with younger elderly households. The £100 payment recognises that.

Steve Webb (Liberal Democrat, Northavon)

There is a factual misconception here. The Minister will recall a written answer that he gave me, which expressed council tax net of any benefits as a percentage of income—the burden of council tax. I asked for the figures for the over-70s and for all pensioners. They were 3 per cent. in both cases; there was no difference.

Malcolm Wicks (Labour, Croydon North)

But the income figures are instructive. I do not need to lecture the hon. Member for Northavon on the fact that the older elderly tend to be poorer. I am not absolutely clear about the Liberal Democrat pensions policy at the moment, but for some time at least it has been to give rather more pension to the older elderly—that is an interesting argument, although we reject it as a mainstream pensions policy. I am therefore intrigued that the hon. Gentleman is presenting me with figures that undermine his own policy.

Clause 1 sets out the eligibility criteria for the payment. Individuals must be aged 70 and ordinarily resident in Great Britain at a time no later than the end of the relevant week—20 to 26 September 2004. Opposition amendments Nos. 10 and 1 would extend entitlement to people aged under 70. Amendment No. 10 would extend the payment to all those who were born on or before 31 March 1935, which removes the requirement to reach the age of 70 before receiving the payment. Amendment No. 1 lowers the qualifying age for the payment from 70 to 60 years at an additional cost of around £330 million—an increase of almost 70 per cent. The hon. Member for Northavon has already gently chided the shadow Minister about whether that is just a pre-election gesture or a spending commitment. The sum of £330 million is significant, and it would be useful to know whether it is a new spending commitment. The people of Eastbourne look forward to the answer—I might add that that is somewhere we would all like to be today.

We are targeting those pensioners who, because they are older and have long since stopped work, are likely to be on lower weekly fixed incomes. They are pensioners with little or no opportunity to increase their incomes. Only 4 per cent. of women and 11 per cent. of men in that age group are employed or self-employed. The average net weekly income for a couple over 70 is £309, compared with £361 for couples under 70—a difference of 14 per cent. Pensioners with private pensions receive, on average, less the older they are. Those under 70 receive an average of £104 a week; those over 70 receive an average of £83 a week.

Steve Webb (Liberal Democrat, Northavon)

I know that the Minister is keen on intellectual coherence. When in another place his noble Friend, Baroness Hollis, responded to this argument about older and younger pensioners, she said that that was a misunderstanding and that the discrepancies among pensioners within one age group

were much greater than the discrepancies between older and younger pensioners. Does the Minister agree with his noble Friend?

Malcolm Wicks (Labour, Croydon North)

I always agree with my noble Friend. This is an interesting debate in that on other occasions we have discussed the pros and cons of income-related measures such as pension credit. The truth is that universal provisions—we are introducing a universal provision for those of the relevant age group—have advantages and disadvantages. By definition, they are not sensitive to specific income details. Similarly, income-tested benefits have advantages and disadvantages. It is true that, as a generalisation, the older elderly tend to be poorer and more disadvantaged in all sorts of ways—they are more likely to live alone, for example—than the young 60-somethings, if I may describe them so.

However, within any age band—for any age group, not just the elderly—there are many divergences. That is the truth. I do not know why the hon. Member for Northavon is smiling; that seems a self-evident truth, and it should help guide our social policy. We argue that by targeting the over-70s, we are concentrating extra help where it will do most good.

I have given that explanation and tried to find the answer to the question put by the hon. Gentleman, which I think is £20 million. The Liberal Democrats are out-modesting, if that can be a phrase, the Tories' reckless spending commitment by proposing £20 million as opposed to £330 million.

Given the intellectual coherence of my arguments, which I think have charmed Liberal Democrat Committee members at least, I hope that they will consider withdrawing the amendment.

Steve Webb (Liberal Democrat, Northavon)

I smile because I am delighted that the Minister's responses will be in Hansard and quoted extensively in our forthcoming policy document, which will argue for higher state pensions for older pensioners. The Minister has given a cast-iron defence for that policy, and I am grateful to him for that.

The amendments are about what a rational cut-off point would be. The Government are all over the place on that. They say that that 60 is the point for the pension credit; that 65 is the point for the savings credit; that 70 is the point for this age-related payment; that 75 is the point for the TV licence; and that 80 is the point for the enhanced winter fuel payment.

The Govt do not have a clue; there is no coherence. That list is indicative of the fact that the Chancellor thinks up a wheeze, sticks it in the system, works out how much money he can spare and puts down an age cut-off on that basis. There is no rationale for why 70 should be significant or appropriate, or why we would make these payments at 70, but TV licence payments only at 75. There is no coherence at all, but perhaps that is in the nature of Government policy making.

In the past, I have suggested that the Minister might, as he lies in bed at night, allow the following fact to gnaw away at him: he has admitted to me that the council tax burden, which is what we are talking about,

is precisely the same on the over-70s as it is on all pensioners because of the operation of the rebate system. Why should we highlight only the over-70s when the council tax burden is identical for the under-70s? Again, presumably because the Treasury only had so much money, and that was where the cut-off came.

As the Liberal Democrats are in an era of fiscal purity and corset-like financial discipline, I find spending even £20 million with gay abandon too much. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

I want to make a couple of more general points on clause 1. However, I would still like an answer to two questions. First, when did the Minister initially know about the proposal? Secondly, when did he realise or when was he told that it would need primary legislation? Perhaps we can return to those points more than once if we need to.

Apart from the age 70 cut-off point, one of the problems is the way in which people qualify. We will discuss that later. My amendment No. 9 did not make it through the filtering process. It proposed an alternative to the relevant week, which is the model for the winter fuel payments, by which a relevant week is selected, during which people qualify.

I assume that that is a throwback to the initial winter fuel payments, when it was a matter of measuring temperatures around the country. There was this bizarre notion that people could be up to their armpits in snow but would not qualify because, in the relevant part of the country on the relevant day, it was not very cold.

Malcolm Wicks (Labour, Croydon North)

I think that that was the cold weather payment, which the former Prime Minister, John Major, got into some difficulty with during one very severe winter.

Nigel Waterson (Conservative, Eastbourne)

That is right. It is good to be surrounded by academics, or ex academics—

Malcolm Wicks (Labour, Croydon North)

People who know what they are talking about.

Nigel Waterson (Conservative, Eastbourne)

People who know what we are talking about, but who possibly do not know what real people are talking about.

The payment is a throwback to the cold weather payment. It is not immediately clear to Conservative Members—or to Liberal Democrats, as is apparent from their earlier amendments—why there should be a relevant week at all. The intention of my lamented amendment No. 9 was to ensure that if someone is 70 at some point during the relevant year up to the end of March 2005 they would qualify for the payment. That comes at the problem from a different direction. There is still a perceived unfairness as to why 69-year-olds do not qualify, but we have dealt with that. However, it would be fairer to say that if someone qualifies at any point within the given year, they should be able to claim the payment if it is going to be made.

On subsection (2), why do we have the relevant week at all, and why do we have it on these particular dates in September? Is that to do with the mechanics of how it is to be paid, or is there a special significance—a particular magic—to that week in September? We will come on to other qualifications, such as someone being in hospital and whether they have other people living with them, but I want to know the point of subsection (2) in its entirety. Does it add anything to what the Government are proposing? Would it not be fairer to make the proposal much broader? If they are going to stick to the 70 years position, why not just make it apply to anyone who is 70 at some point during the relevant financial year?

Malcolm Wicks (Labour, Croydon North)

I promised the hon. Gentleman a letter on when I knew that the proposal would require primary legislation. I thought that I had sent it, but I now have a feeling that I did not, and if that is the case I apologise. We were clear before the Budget announcement, when these matters were being discussed with colleagues in the Treasury, that there might be a problem with how we could deliver the payment legally and that there might be a case for primary legislation, but we had to think through the legal options on that.

This is not an answer to the hon. Gentleman's question but, as he knows, our position on the relevant week follows that for the winter fuel payments. Essentially, it is about ensuring effective delivery. We promised to get the winter fuel payments out before Christmas with only a very few exceptions, and we promise the same with this. That means that we need to know who is eligible for the benefit some weeks in advance.

I used the phrase ''rough justice'' in the House recently, and I recognise that an element of rough justice is involved. If in the future it is possible to be more sensitive to individual circumstances, in principle it would be good to move in that direction, but I cannot promise that that will be easy to do, and there are always associated costs, often significant, to such moves. That is the rather boring but simple answer to the question of why we have to have a relevant week in September; it is about getting the money out.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2 - Entitlement: basic cases

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 2, in

clause 2, page 1, line 18, at end insert 'and'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss amendment No. 3, in

clause 2, page 1, line 19, leave out from 'credit' to end of line 20.

Nigel Waterson (Conservative, Eastbourne)

These are fairly minor probing amendments. They are intended to get at the thinking behind the various conditions that apply to the £100 payment.

Amendment No. 2 would, as I understand it, mean that under subsection (2) someone would get the reduced payment of £50 only if they were single,

''in receipt of state pension credit''

''living with another qualified individual.''

I am not sure whether that is clear in the clause, but I should be grateful if the Minister clarified it.

Amendment No. 3 would remove the qualification in subsection (2)(c) of

''he is living with another qualifying individual.''

Is the provision a read-across from the winter fuel payment conditions? Is there a particular reason for it? Is there an issue around the basis on which someone is living with another qualifying individual? There is a reference to ''a couple'' in subsection (3). Has this provision been prepared with a view to the Civil Partnership Bill? What is the basis on which subsection (3) is included?

Malcolm Wicks (Labour, Croydon North)

Clause 2 sets out the conditions under which a person is eligible for a £100 or £50 payment, whether they are single or a member of a couple. The hon. Gentleman is right to say that that follows the procedure and definitions of winter fuel payments. The short story is that we start off with a £100 payment to a relevant household, which looks simple, but when household composition and one or two other issues are considered, it starts to get a little bit more complicated—although I hope that it is not too complicated.

A single person who is the only qualifying person in the household, or who, regardless of who else is in the household, is in receipt of state pension credit, will be eligible for a £100 payment. A single person who is not receiving state pension credit and is living with another qualifying person will be eligible for a £50 payment. In other words, this is an attempt to even out the £100, rather than assume that the money should always go to the male in the household, and so on. A £100 payment will be made to a qualifying member of a couple when the other member does not qualify, or to the qualifying individual when either member of the couple is in receipt of an income-related benefit. A £50 payment will be made to members of the couple who both qualify for the payment, where neither of them is receiving state pension credit.

These conditions follow what we are doing with the winter fuel payment. In practice, although the payments sound complex, they enable us to have a simple process. In reducing their entitlement from £100 to £50, the amendment discriminates against single pensioners who are not receiving state pension credit and live alone. That would mean depriving around 1.1 million older pensioners of half their entitlement. Many of those people will be older pensioners with incomes that are only just above pension credit level. I assume that the hon. Member for Eastbourne intended that, but I am not certain.

Steve Webb (Liberal Democrat, Northavon)

Perhaps the Minister could clarify something that I have not understood. Would a brother and sister who live together under the same roof, although not as husband and wife, get £100, or does it depend on whether they receive pension credit?

Malcolm Wicks (Labour, Croydon North)

I think that if one of them were a pension credit householder, he would get £100. If the sister were over 70, I think that she would get £50. If no one was on pension credit, I think that they would receive £50 each. Although hon. Members might not want such detail, I should be happy to write to them with some examples of household composition, if it would help.

Steve Webb (Liberal Democrat, Northavon)

That would be helpful. The brother and sister example is not far-fetched or fanciful. It had not dawned on me until we got to this point that being in receipt, or otherwise, of a means-tested benefit in any sense affected how much of the so-called universal payment people would receive. Obviously, it does, but I had not grasped that. If a sister and brother both received pension credit in their own right, what would they get?

Malcolm Wicks (Labour, Croydon North)

I am wondering whether the answer is £100 each, if they are both pension credit households; I think that that is the logic of the position. The rationale behind the measure is partly administrative, in that it deals with benefit units; however, as a generalisation, the people we are talking about tend to be the poorer group in the age profile. If hon. Members would find it interesting, I shall try to set out some household circumstances to clarify the situation.

Nigel Waterson (Conservative, Eastbourne)

Interesting might be putting it a bit high, but that would be useful.

Is it not a tad worrying that we are making up measures as we go along? We are talking about real people in real situations. I thought that the rationale behind the Bill—if that is not putting it too strongly—was that the payment had no relation to the tax system or the benefit system, and that the Government were just saying, ''Here you are: here is £100 if you meet these simple requirements, whether you are a duke or a dustman'', to use a phrase that used to be bandied around in relation to the poll tax. If, as it now appears, there is read-across to the benefit system, we need to know about it sooner rather than later.

Malcolm Wicks (Labour, Croydon North)

As we will see later, there is no read-across in the sense that the £100 is not taxable and is not counted as income for income-tested benefits. However, the benefit system is relevant in that a pension credit household will receive the £100. Again—this will become a refrain—that mirrors the treatment of winter fuel payments for those with pension credit. However, I will write to hon. Members about the matter, even if, in one or two cases, they may find it only slightly interesting.

Obviously, our policy honours the Chancellor's commitment to pay pensioner households in which there are people aged 70 or older all the extra £100 this

year. The payment is not linked to benefit entitlement, as I said, and is not income-tested. It is paid to households rather than individuals. Through that policy, we are ensuring that that group, which is poorer and more vulnerable in many respects than the younger elderly, will receive the extra £100.

Claire Ward (Labour, Watford)

As the level of payment appears to be tied to whether someone receives pension credit, can the Minister give an assurance that those pensioners who receive the lower amount will be sent details on whether they qualify for pension credit? I am sure that he will agree that some people not receiving pension credit, and who therefore receive the reduced amount of £50, may actually qualify for it.

Malcolm Wicks (Labour, Croydon North)

I am grateful for that question; my hon. Friend makes an important point. We argue that the development of pension credit is going well. Almost 3 million people now benefit from it. However, many who are eligible are not yet claiming, and we are doing our utmost to improve take-up. Later, we will discuss an amendment suggesting that we take the opportunity to increase people's awareness of their welfare rights when we send out the payments this winter. I hope that Opposition colleagues will consider withdrawing their amendments—or have they done that already?

Derek Conway (Conservative, Old Bexley and Sidcup)

Not yet.

Nigel Waterson (Conservative, Eastbourne)

The Minister needs to slow down a bit; we are not making progress quite that rapidly.

These are certainly probing amendments, but when I rose to speak to them, it was beyond my wildest dreams that they would probe quite so deeply. It now appears that, contrary to what we have been told—indeed, contrary to a criticism that I advanced on Second Reading—this stand-alone payment is not unrelated to the benefit system. I have just broken the habit of a lifetime and reached for the explanatory notes in the hope that they might tell me the answer, but as far as I can see they do not. This is an important issue. The examples put forward by the hon. Member for Northavon are by no means fanciful; they are real-life situations. Members of this House will receive correspondence, and people will come to their advice surgeries, saying, ''I have only had £50; why did I not get £100?'' Out in the country, people over 70 will all expect to get £100.

If the parameters are not yet clear, they need to be cleared up very quickly, and certainly by Report stage. It would be helpful if the Minister wrote to us soon, so that we could digest what he has to say, think about it in relation to these groups and think of any new points that can sensibly be debated next week.

My amendments have more than served their purpose. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 ordered to stand part of the Bill.

Clause 3 - Entitlement: special cases

Malcolm Wicks (Labour, Croydon North)

The clause is about special cases and deals with the less straightforward conditions under which a person would be eligible for payment. Those conditions are that each qualifying member of a couple will be entitled to a £50 payment if they live in the same household as another qualifying couple or couples, and if none receives an income-related benefit. If only one member of a couple qualifies, a £50 payment, rather than the full £100 household payment, will be made for that qualifying individual, and the same will happen for the other qualifying couple.

On Second Reading, the hon. Member for Spelthorne (Mr. Wilshire) asked why we treated couples living together in this way. The payment is made to households; where two or more couples share a household, it is right that they should be treated individually, in the same way as single people who share their accommodation with others. If a couple both qualify for the payment and are receiving pension credit, the one who receives a winter fuel payment will be entitled to the payment. They will be treated as one unit.

A person living in a care home, and who has been there for the 12 weeks prior to the relevant week, will be entitled to a £50 payment if they are not receiving pension credit. There will be no entitlement if they are receiving pension credit. On Second Reading, I was asked why we were using the 13-week cut-off date for people in care homes. It mirrors the provision for care home residence in the winter fuel payments. If someone is in a care home for a minimum of 13 weeks, it is fair to draw the inference that their stay is other than a temporary arrangement. In essence, the care home has become their home. The conditions follow principles applied to winter fuel payments, with which the payments will be made, to ensure fairness and smooth administration.

Steve Webb (Liberal Democrat, Northavon)

I want to get the issue of people in care homes straight. As far as I can see, this is more means-testing; it is even more confusing. If I were 71—wearing well, but 71—and I lived in my own home, I would get £100, whether I was on pension credit or not. However, if I had become ill, needed to be looked after and went into a care home 13 weeks before the qualifying date, I would not get £100; the maximum I could get would be £50, if I read the clause correctly. However, if I were poor and on pension credit, I would not even get £50; I would get nothing.

Where is the logic in that? If people in care homes do not make a contribution to their council tax, and the Bill is about helping people with council tax, why have the Government decided to give them anything? Why do they get £50 if they are not on benefit, but nothing if they are? There is no logic in that. Will the Minister

clarify the way in which people in care homes are being treated and the means-testing element in what he described earlier as a universal payment?

Mr. Waterson rose—

Steve Webb (Liberal Democrat, Northavon)

Does the hon. Gentleman wish me to give way?

Nigel Waterson (Conservative, Eastbourne)

I did not mean to wave the hon. Gentleman back to his seat, but I think that he had finished, or puffed out, as it were. I endorse his points: there is a real perversity here. Leaving aside the care home issue—we all know the problems with take-up—the fact that a pensioner was on full council tax benefit would make no difference; in theory, he would still get the £100. There is clearly a view that we are not going to pay any attention to the benefit system, even that part that is most closely related to the problem that the Government seek to address, albeit from the wrong direction, in our view, which is council tax rises. We are saying that people can get full council tax benefit and still get the £100, yet there is a bizarre distinction for people in care homes.

It is almost as if Ministers start off by saying, ''This is what we want to do. It is all very simple. We are going to give £100 to every pensioner over 70 and hope that we will avoid Armageddon on 10 June,'' but then the officials and draftsmen get to work. They start bringing in complexities that Ministers thought they could avoid by simply saying, ''We are going to give all of them £100.'' I have some sympathy with that problem because I suspect it happens in government regardless of which party is in power.

There appears to be a bizarre distinction. Let us take as an example the reasonably well 71-year-old guy living in his own home who gets full council tax benefit. He has gone to the trouble of filling out the forms and so forth. He gets the whole £100, yet some people in care homes will not get anything. Where is the logic in that?

Malcolm Wicks (Labour, Croydon North)

A person living in a care home for the specified period who is in receipt of pension credit at any time in the relevant week will not be entitled to the payment because their care and accommodation needs are being met through public funds. All their daily requirements, apart from a few items covered by their personal expenses allowance, are provided by the care home, which is paid for by public funds. That is another method of looking after that group of frail people. A provision which, broadly speaking, is about council tax will not apply. However, a wife or husband left behind when those people go into the care home will be eligible for the £100.

Steve Webb (Liberal Democrat, Northavon)

Would not the same argument apply to someone living in a private home on their own where the taxpayer is paying all of their rent, all of their council tax, and income support? Why do they still get £100, if this other person gets nothing?

Malcolm Wicks (Labour, Croydon North)

I recognise that there is a broad brush element to this, but the situations are not the same. I understand the hon. Gentleman's point, but if someone is living in their own dwelling, albeit with that

kind of support, most of the other living expenses are being paid by that elderly householder. That is not the case in the care home.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.

Clause 4 - Disqualifications

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 4, in

clause 4, page 3, line 12, leave out paragraph (a).

This is a probing amendment. Those are famous last words, but I am sure that there is a simple explanation, probably on the piece of paper that the Minister is proudly waving at me.

The clause states that people are disqualified from any of the £100 if they have been a hospital in-patient

''throughout the period of 52 weeks ending with the relevant week''.

Foolishly, I reached for the explanatory notes, which in their wonderfully delphic way state that

''subsection (1) prescribes the conditions under which individuals who would otherwise qualify for a payment will be disqualified from receiving a payment. These are (a) receiving free in-patient hospital treatment continuously for 52 weeks including the relevant week''.

All that does is recite the clause, which is all very helpful, but which does not take matters much further forward. I am sure that whoever produced the explanatory notes was working under great pressure, because there was no thought that they would have to produce them—or even the Bill—when this process started.

I am sure that the Minister is going to tell me that this is simply a read-across from council tax or other benefit regulations, and if that is the case, that is fine—although judging by the length of the reply that he is thumbing through, it might not be that simple. However, let us take as an example somebody with a chronic condition who could have been in hospital for the whole of the preceding year and then have come out. We would come back to the problem of the relevant week—of having a qualifying week in the first place. Perhaps that person had been bed-blocking, which is a massive problem in my local hospital. Apart from all these fines whizzing between different organisations, thanks to the ludicrous legislation that the Government have passed, there is the human problem of people who are perfectly fit to go home, but who cannot get out of hospital.

The Government have created a waiting list not only to get into hospital but, miraculously, to get out of hospital. It would be very unfair for somebody who was in hospital for the 52nd week and then discharged to get nothing, even if it were down to the failing of Government policy that they were in hospital when they were perfectly fit and ready to be discharged. There is a potential unfairness, and I will be interested to hear the Minister's explanation for it.

Steve Webb (Liberal Democrat, Northavon)

I have a lot of sympathy with the amendment. The rationale for saying that people in hospital should not get social security benefits is sometimes that certain of their costs do not exist because they are in hospital. I have never been convinced by that argument, but in the case of council tax policy I am rather confused. The clause appears to be less of a problem for couples, because I think I am right in saying that so long as one of them is not in hospital, the £100 can go to that person. However, with a single person, whose house is presumably unoccupied for a year while they are in hospital long term, it would depend on the local authority whether they had to pay council tax. Perhaps I am wrong, as the Minister is looking rather chipper.

Malcolm Wicks (Labour, Croydon North)

Rather than keep the hon. Gentleman in suspense, which I like to do on less charitable days, I should tell him that an unoccupied dwelling will be exempt from council tax liability where the owner or tenant of the dwelling has their sole or main residence in a hospital, residential care home, nursing home or hostel, in which they are receiving care or treatment. If the patient has left behind a partner, the partner will be entitled to a 25 per cent. single person's discount on council tax.

Steve Webb (Liberal Democrat, Northavon)

That was the assumption I was working on.

The other reason why this is a good amendment is that there is incoherence at the heart of the Bill. The Government say that it is about helping with council tax; they then say that people who are not paying council tax—ordinary people on pension credit in ordinary homes, who are getting their full council tax paid—can have £100 because the Government want to give them £100. People in hospital, however, who are not paying council tax either, will not be given £100 because, the Government ask, why do they need it when they are not paying council tax? It is rubbish. Why discriminate against old people who do not pay council tax because they are ill by saying that they cannot have any help while saying that healthy old people who do not pay council tax because they are on council tax benefit can have help?

Malcolm Wicks (Labour, Croydon North)

The Opposition amendment would have the effect of paying the extra £100 to the 6,000 people aged over 70 who have been in hospital for more than a year. That would cost £600,000.

Before I go into the detail of the amendment, I shall set it in context. Clause 4 prescribes the circumstances in which a person may be disqualified from receiving a payment. That includes those who have been receiving free in-patient hospital treatment continuously for 52 weeks, subject to this amendment, those who are in custody and those who are subject to immigration control. Again, that mirrors the criteria for the winter fuel payment system. The clause also provides for an eligible partner of the disqualified person to be treated as a single person for the purposes of this payment, so they will not lose entitlement because of their partner's disqualification.

To provide some statistical backing to the clause, the vast majority of people who are admitted to hospital—97 per cent.—are discharged within six weeks. Until April last year, benefits and pensions were reduced initially after six weeks with a further reduction at 52 weeks. Hospital downrating was the subject of controversy and, obviously, policy development, so I hope that members of the Committee recognise that there has been a massive improvement in the situation.

People in hospital can now keep their benefits in full for the first 52 weeks. Housing benefit and council tax benefit usually stop altogether after 52 weeks unless, of course, the patient has a partner still living at home. As I said earlier, patients who were previously living alone and still have a property will not have a council tax liability. An unoccupied dwelling is exempt from council tax when the owners or tenants have their sole or main residence in a hospital while receiving treatment or care. If the patient has left behind a partner, the partner will be entitled to 25 per cent. single person discount. If patients have partners, the Bill makes provision after 52 weeks for their eligible spouses to be treated for the purposes of the payment as a single person. They will receive £100 in their own right if they were the only eligible person in the household.

Steve Webb (Liberal Democrat, Northavon)

Let us take the case of a 71-year-old person who is married to a 69-year-old. Will the Minister confirm that if the 71-year-old was in hospital, the 69-year-old who had to put up with her husband being in hospital for a whole year would not receive a penny of help?

Malcolm Wicks (Labour, Croydon North)

We have explained that the Bill will bring forward £100 or variations of that to members of households who in the eligible week are over 70 years old. I am sure that the hon. Gentleman knows the position. We cannot change the rules because of the hospital circumstances of one's partner. [Interruption.] I do not know what the hon. Gentleman is pointing at. I am sure that he will enlighten us.

It is fair to draw the inference that the small number of people who remain in hospital for 52 weeks or more do so other than as a temporary arrangement. In essence, the hospital has become their home. The patients' day-to-day living expenses and food are provided through public funds by the national health service. They retain an entitlement to only a residual amount of state pension and benefits to meet their personal day-to-day expenses—toiletries, magazines and so on. The £100 payment is intended to help pensioners pay their council tax bills. People who live permanently in hospitals do not have a council tax liability. In view of my explanation, I hope that the hon. Member for Eastbourne will withdraw the amendment.

Nigel Waterson (Conservative, Eastbourne)

When I got up this morning, I thought that the Bill was little, simple and straightforward, despite its bizarre basis, but it is unravelling before our eyes. I shall withdraw the

amendment. What good will it do not to? Matters are becoming far too complex. If it is the Government's intention to give £100 to everyone over the age of 70 in the hope that they will receive an electoral benefit in return, why do they not just do it? They lambasted us for considering the over-60s and they lambasted the Liberal Democrats, although less so, for considering people who could qualify within the year, which was another £20 million. It is not for me to advise the Government. I think that it was Napoleon who said, ''Never interrupt your enemy when he is making a mistake.'' Having failed to achieve an electoral boost, why are the Government nitpicking? It is extraordinary.

Malcolm Wicks (Labour, Croydon North)

I am confident that, at the end of today's proceedings, it will be the hon. Member for Eastbourne who will have met his Waterloo. I emphasise that hospital downrating does not now occur until after 52 weeks. Under a previous Administration, it was only a few weeks. Does the hon. Gentleman agree that the situation now is a vast improvement on what we had during those leaner and meaner days?

Nigel Waterson (Conservative, Eastbourne)

I do not know about leaner and meaner days. As the hon. Member for Northavon said with his usual acuity, the Bill will discriminate against people who are ill. I cannot see the point of that. What the Government are setting out to do might be wrong-headed or ill-intentioned, but it is simple. Simplicity is its one saving grace; if one is over 70, one will get £100. Suddenly, complexity starts popping up. I slightly despair of the Department, but I beg to ask leave to withdraw the amendment.

Clause 5 - Procedure

Steve Webb (Liberal Democrat, Northavon)

I beg to move amendment No. 11, in

clause 5, page 3, line 31, at end insert—

'(1A) The Secretary of State shall send information about claiming council tax benefit to every person to whom he makes a payment.'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss amendment No. 13, in

clause 5, page 4, line 5, at end insert—

'(6) The Secretary of State will take steps to ensure that a person who needs to make a claim under sections 2 or 3 is informed about his entitlement to the payment, and will encourage him to make a claim under subsection (3).'.

Steve Webb (Liberal Democrat, Northavon)

Two issues are involved in this group of amendments. They relate to the take up of council tax benefit and to the take up of winter fuel payment, and, by extension the one-off age-related payment.

Amendment No. 11 is intended to ensure that when people receive the so-called universal payment, which we have discovered is means-tested, they also receive information about council tax benefit. Again we must suspend disbelief and assume that the Bill is being introduced for the reasons given by the Government rather than for the real ones. That is to say, we must assume that it is intended to help pensioners pay their council tax, although one might have thought that encouraging people to claim the benefit that covers council tax was the best way to help with that. It is indicative of the fact that the Government have more or less given up on ever making headway on that front that they are introducing a separate payment to help old people to pay it. They do not think that council tax benefit will ever reach all the people that they want it to get to.

I am sure that the Minister will tell us about the Under-Secretary of State for Work and Pensions, the hon. Member for Gravesham (Mr. Pond), and all the wonderful work that he is doing to encourage pensioner take-up of council tax benefit. However, I think that the percentage of eligible pensioners claiming it has fallen under this Government. The absolute numbers have increased, but that is partly because council taxes have gone up. That is not a reason for celebration, although the Minister seems to think that it is. No doubt, he will tell us that the situation is great because the Government are paying more council tax benefit to more pensioners.

Malcolm Wicks (Labour, Croydon North)

Does the hon. Gentleman recognise that entitlement to council tax benefit has increased because of the development of pension credit?

Steve Webb (Liberal Democrat, Northavon)

There are two main reasons.

Malcolm Wicks (Labour, Croydon North)

The hon. Gentleman was coming to that.

Steve Webb (Liberal Democrat, Northavon)

Indeed.

There are two main reasons why the number of pensioners on council tax benefit has increased. It need not have done. One is that the thresholds increased when the pension credit was introduced, which further indicates the complexity of the Government's means-testing approach. The other is that council taxes have increased. I forget the exact figure, but it something like 70 per cent. under this Government. They should not claim too much credit for driving more people into poverty and the need to claim council tax benefit, then say that that is a policy triumph. Under this Government the proportion of pensioners who get the

help with council tax that the state believes they need has fallen. That is critical. The take-up rates, as a percentage of those who are eligible, have fallen.

Anne Begg (Labour, Aberdeen South)

I am interested in what the hon. Gentleman is saying. More pensioners are eligible for council tax benefit in Aberdeen, because the new Liberal council has increased the council tax way above inflation, with the second largest increase in Scotland. Would not it be better if information about council tax benefit were sent to people with the council tax information? That is much more appropriate than what is done now, because it is easier for people to relate the benefit that they might receive, or the claim that they might make, with the tax.

Steve Webb (Liberal Democrat, Northavon)

I have no problem with that. I suspect that the vast majority of local authorities do that. In the glory days in South Gloucestershire, when the council was run by the Liberal Democrats, council tax information was sent out with the bills. That is right. However, the system is not working, and we want one that works.

The £100 payment is testimony to the fact that council tax benefit is not working. If the council tax benefit system worked, everybody who needed help with council tax would get it, and we would not need a separate bureaucratic system to deliver a separate payment to poorer pensioners. Then we could have a decent pension and a decent system of help with council tax. Obviously, we would prefer to scrap the council tax, but that is beyond the scope of the amendment. We need to make council tax benefit work for as long as we have to put up with council tax.

Amendment No. 11 would ensure that people are reminded about benefits when they receive the payment under the Bill, which is allegedly something to do with council tax. Given that that would come more or less in mid-year, or towards the end of the calendar year, or two thirds of the way through the financial year, it would be a good complement to the sort of information that the hon. Member for Aberdeen, South (Miss Begg) said should be sent to people at the start of the financial year, or just before it. It will provide a reminder and further information, roughly six months on, which can only help.

Meanwhile, the Bill is trying to redeem the irredeemable. We have an unfair local tax system and an ineffective rebate system, and we need a third payment to deal with those two problems. We are trying, through amendment No. 11, to make the best of a bad job by saying, ''If we must have this ineffective, complex system, let's at least ensure that people claim what they are entitled to.'' I hope that the Minister will accept amendment No. 11.

Amendment No. 13 gnaws away at a slightly different issue. The Bill mirrors the winter fuel payments system, and age-related payments will be delivered through that mechanism. However, there is a problem of small take-up with the winter fuel payment. Two groups are worried. First, there are the men aged 60 to 64, who suddenly became entitled

through a court case, although we are not talking about that group here, because we are dealing only with the over-70s. Secondly, a small number of people who do not receive winter fuel payments automatically have to make a claim, but fail to do so. We are talking about thousands of people.

Amendment No. 13 encourages the Government to be proactive, because they are failing to get winter fuel payments to thousands of people over 70 in the specific circumstances in which they have to make a claim. Under the amendment the Government would be required to encourage people who fall in that fairly narrowly defined category to claim the payment. That is a rather different take-up point.

Amendment No. 11 is the main amendment because it is meant to tackle the woeful take-up of council tax benefit among pensioners. From what I can gather, the hon. Member for Eastbourne often slips in at dinner parties the fact that council tax benefit has the lowest take-up of any means-tested benefit. I have met people with whom he has had dinner, and they say that he slips that out at every opportunity. That fact is true, particularly among pensioners. Council tax benefit, which is intended to relieve the burden of council tax, is not working. The amendment would at least ensure that a few more of Britain's hard-pressed pensioners would get the help to which they are entitled.

Nigel Waterson (Conservative, Eastbourne)

I do not support amendment No. 11, because I agree with two parts of what the hon. Member for Aberdeen, South said. She and I, and a lot of other Committee members, share the problem of having a Liberal Democrat council. In our case, there has been a 45 per cent. increase in its element of the council tax in two years, which is disgraceful. Although, philosophically, I am not a capper, if any council deserved to be capped, it was Shepway district council, which had the highest increase this year of 28 per cent. We all know who runs that council at the moment.

I also agree with the hon. Lady about timing. As part of the laudable attempt to try to improve take-up of council tax benefit, the obvious time to send out a form or leaflet is at the same time as the council tax demand, because that is when people are hit, particularly by a big increase by a spendthrift Liberal Democrat council.

I am sure that the hon. Member for Northavon never goes to anything as frivolous as a dinner party, and I cannot remember trotting out the latest figures for take-up of council tax benefit, as he put it, but it is extraordinary that they show a substantial decrease. The situation is worse than it appears, because within those figures—this is the point at which guests at this fictional dinner party start to see their lives flashing before them—there are other, hidden problems, which I explain on these occasions, such as that older pensioners are less likely to claim than younger ones and that older owner-occupiers are particularly unlikely to claim. I assume that that is because in many

cases owner-occupiers cannot imagine that they qualify. There is no point banging on about this because it is in the statistics.

It is good that the Government are having another campaign to try to increase take-up, but they are attacking the problem from the wrong end. The real solution is not to have great surges in council tax as a direct result of Government policy.

What the Government are trying to do is absurd. Let us assume for a moment that the average pensioner was not born yesterday—far from it, of course—and fails to see through what the Government are up to. They are not going to be wildly impressed with getting the £100 about eight months after they get their council tax demand. This is another strange feature of the proposal.

Because of the Government and Labour and Liberal Democrat councils, council tax bills for the average band D home have increased by 70 per cent. The typical household pays almost £500 extra a year under this Government. The problem is that that has the greatest impact on pensioners, which is why we are here today, and, as I have explained, that is compounded by the low take-up of council tax benefit.

If we want to help older pensioners and to mitigate the effects of big increases in council tax, why develop a system that does not give them the money until many months later? They get their council tax demand at around Easter, and they get the money at around Christmas. There is no logic to that. It is another example of the Government not having thought things through.

I do not blame the Minister for that. I blame the Chancellor. If he had taken the Minister a bit more into his confidence about what he had in mind, we might not be in the mess that we are in at the moment.

Malcolm Wicks (Labour, Croydon North)

I am just trying to work out the relevance of all of this to the amendments.

Nigel Waterson (Conservative, Eastbourne)

Let the Minister try to do his job properly before he starts trying to do yours, Mr. Conway.

I am trying to explain to the Minister—in words of one syllable or less, because these concepts can be quite punishing—why I do not support amendment No. 11, and why I think that it is bizarre that there will be such a big time lag between council tax demands and payment. That is a simple point.

The Minister has a great wad of briefing that I am sure he often trots out at his own dinner parties. The Minister, the hon. Member for Northavon and I are very sad people; we bore for Britain on these issues because we think that they are important. However, on this occasion I think that the Minister has got it wrong again.

Malcolm Wicks (Labour, Croydon North)

I will not follow that, because there is nothing to follow. I shall speak to the amendments. Is there a problem with the take-up of council tax benefit? Yes, there is, although I do not discuss it at dinner parties, as I prefer to talk about the prospects for Crystal Palace football club at the weekend.

Nevertheless, there is a major problem with the take-up of council tax benefit, which is why we are in the middle of a major campaign about it. There are excellent examples of good practice. For example, there has been much success in the Wirral. I shall not spend time describing it, however, because I accept the proposition.

Given that relatively few people might not automatically receive the £100 payment, I accept that we must do everything possible to inform them about it. As part of our campaign for winter fuel payments, we plan to advertise the new £100 payment. I shall not go wider because, as the hon. Member for Northavon said, it is not within our powers this morning , even if we wanted to, to abolish council tax, to introduce a local income tax or to inaugurate a new Gladstone Administration. For good or ill, such matters are outside the scope of the Bill.

The most interesting point that has been made is whether we might use the fact that we will be mailing the winter fuel payment to all pensioners to better publicise council tax benefit. That has occurred to us; it is a useful idea. I cannot promise that we will definitely do it. There may be administrative complications, but I am keen on the idea. If we can implement such practice, we do not need to stop at council tax benefit but can include pension credit and issues relating to energy efficiency. It would not be appropriate to put such information in the Bill, but I hope, given my reassurances, that the hon. Gentleman will withdraw the amendment, although I accept its spirit.

Steve Webb (Liberal Democrat, Northavon)

The Minister's response was statesmanlike. I was puzzled by his football peregrinations, but I shall leave that for another day. I was convinced that he was a Wolverhampton Wanderers supporter until the team was relegated. I am delighted that he has embraced the spirit of our proposal, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Steve Webb (Liberal Democrat, Northavon)

I beg to move amendment No. 12, in

clause 5, page 3, line 36, leave out subsection (b).

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss amendment No. 5, in

clause 5, page 3, line 36, leave out '31st March' and insert '30th June'.

Steve Webb (Liberal Democrat, Northavon)

The amendment is simple. Why do we need a deadline or, as under amendment No. 5, why cannot the period be three months after the end of the financial year? When the winter fuel payment was introduced, there was no deadline for claiming. Although winter had long gone, people were still allowed to claim. I think that I am right in saying that it is still not too late to claim winter fuel payments for 1997-98 and 1999-2000. There are certainly some historic years for which a claim can be made. There was the case for several years, although I do not know whether that loophole has been closed.

When winter fuel payments first came in, the Government did not feel the need to have a claiming date. There is now a claiming date for the payments. The question is whether we need one and, if so, what it should be. I accept that the Government would not want a completely open-ended liability although, if they were confident of delivering the money to people, there would be no liability. In other words, the amendment would have no practical effect if the Government succeed. If they achieve 100 per cent. take-up, it will not matter what the cut-off date is for claiming. Everyone will receive it and there will not be a great, lurking liability.

In practice, because the measure is bolted on to the winter fuel payment mechanism, I imagine that there will not be a big take-up problem in relation to the £100 payment; that seems reasonable. The number of people who fail to claim by 31 March will be tiny, so the Department's exposure to people claiming the following summer or a year later will be minuscule in the scheme of the Department's spending. I really cannot see the case for a cut-off point. That is my argument for Amendment No. 12.

Amendment No. 5, with which amendment No. 12 is grouped, is in the same spirit; it says that the deadline in the Bill is too soon, and should be three months after the end of the financial year. That, too, is an attractive amendment, in that it mirrors the current process for backdating national insurance benefit claims; the deadline for that has hitherto been three months. My understanding is that 12 months' backdating of retirement pension claims will be allowed. If that is so, why should we not allow 12 months' backdating for age-related payments?

How do the provisions of the Bill cohere with the rest of the system? People will be paying council tax right up to 31 March 2005. The claim is relevant until that date; why should not people have at least three months after that date to claim the payments that, if we believe what we are told, are supposed to help them pay that tax? Why should not the provisions mirror those for national insurance benefits, or be extended to 12 months to reflect the backdating provisions for retirement pensions? At the very least, people should have more time than up until the last day on which they might pay the council tax; after all, it is the council tax with which they are trying to obtain some help.

One assumes that the vast majority of people will get the money; we are all happy about that. However, I hope that the Minister recognises that there will be a small number of people who, for whatever reason, fail to make a claim. One can think of the reasons why some people might not claim; those people might be the most elderly or the most confused, or people who have had health problems. In general, that makes them more deserving, in many ways. I hope that the Minister recognises that having a cut-off at the end of March and the end of the financial year is quite draconian. I hope that he is willing either to abolish the deadline or, at the very least, to extend it by three months.

Nigel Waterson (Conservative, Eastbourne)

In a sense, the hon. Gentleman has spoken to my amendment for me; that was very decent of him. Amendment No. 5 approaches the problem in a slightly different way to his amendment. It would include a further three months for backdated claims.

The hon. Gentleman is absolutely right to say that the provision will affect only a relatively small proportion of people. We have all come across cases in our constituency surgeries of unfairness—particularly concerning older people—arising from backdating rules, particularly the more draconian ones introduced early on in the period of office of this Government. At an age when, broadly speaking, people are looking for less complexity in their lives, they suddenly have a lot more complexity. They have the pension credit to think about, as well as other concerns, and council tax benefit, if they get round to claiming it. In the Bill, there is a new one-off payment that is wholly out on its own.

If a pensioner loses a spouse or experiences some other major life incident, they lose track of paperwork and may let time go by before they get round to claiming, so there should be some flexibility in the rules. We lighted on a deadline three months after the end of the financial year, but there may be other ways of addressing the issue. Given the confusion beginning to emerge about who is entitled to the £100 and who is not, it is quite possible that some pensioners who are entitled will not get it automatically, and may not get round to claiming it for some time.

I am now attracted, more than I was when drafting the amendment, by the idea of having no cut-off at all; I do not see that that can cause any great problems. I hope that the Minister has, in his wodge of papers, an estimate of the number of people who would have to claim later, and would not automatically get the money through the system. We can only be talking about relatively small amounts of money. However the Government want to approach the issue, if they accept the spirit of one or both amendments, we can move forwards. I do not see any particular reason why there should be a firm cut-off such as the one in the Bill.

Malcolm Wicks (Labour, Croydon North)

There was some sedentary puzzlement on the part of the Liberal Democrats when I mentioned Crystal Palace. For the historic record, I should say that I am a passionate supporter of Wolves. However, given that that team will, sadly, be spending some time in the first division, I am hoping that it will be replaced by my constituency team—the boys from Selhurst Park, Crystal Palace.

I hope that that is clear; I would not want there to be any mistake about that. I have not even mentioned that I come from a four-generation Arsenal family. That would complicate things. I should explain to the hon. Member for Eastbourne that this is not the game in which one picks up the ball and runs with it, but we can talk about that later.

Both the amendments relate to the very small number of households that will not receive the payment, along with the winter fuel payment, automatically. The only people who are required to claim the payment will be those who, for whatever reason, have not claimed their winter fuel payment for

2004. It is difficult to envisage why that would be the case, but none the less we need to cater for it in the legislation.

Amendment No. 12 would remove the cut-off point for making a claim, so that in theory a claim could be made any time in the future. There would be nothing to prevent a claim being made 10 or 20 years after the event. The hon. Member for Eastbourne did not think that there ever needed to be a cut-off point. If that were the case, we would have to set up arrangements for dealing with such claims, even though the numbers would probably be tiny. That would be impracticable and expensive.

The 31 March 2005 cut-off point applies to winter fuel payments. The rationale is that that payment covers the winter just gone, and that claims need to be finalised before work commences on the following winter's payments. The end of March cut-off date provides what I would argue to be a generous time frame for people to complete and return their claims, and for the Department to establish reliably that the qualifying conditions were met during the relevant week in September.

Allowing the claim period to run for more than six months would mean that people were not rushed into completing their forms—an important consideration for those who rely on help from relatives, friends, carers and neighbours, or who may have spent some time away from home for whatever reason.

Steve Webb (Liberal Democrat, Northavon)

Neither of those arguments would apply to the one-off payment to help with council tax bills. The Minister said that there was a deadline three months after winter because it is a winter payment and people are given three months. However, if people are still paying council tax in March, they should also be given three months for a payment that helps with council tax.

The amendment tabled by the hon. Member for Eastbourne would do that. The Minister says that the deadline allows the Department to get going on the next year's payment. In this case, there ain't going to be a next year's payment.

Malcolm Wicks (Labour, Croydon North)

I was talking about the winter fuel payment regime, which we are following for this—rightly, I think.

Nigel Waterson (Conservative, Eastbourne)

I am now getting confused. The idea is that the vast majority of over-70s will simply get this money; it will pop up. I am not sure what the mechanism will be. Will the payment come as a separate cheque, or will it pop up as part of their pension payment? Perhaps the Minister could develop that a bit more.

In answering a question recently, he said that it had not been decided what mechanism was to be used. Now he is talking about a form. Will he tell us more about that? What form is that form going to take?

Does he envisage that all pensioners will fill it in to get the £100—or just the tiny minority who have slipped through the net? Will the form be long; will there be the prospect of a phone call to a call centre a la pension credit? How will it work?

Malcolm Wicks (Labour, Croydon North)

People will get their £100 added to the winter fuel payment. I thought that I had emphasised that enough to imply that that would be the delivery mechanism.

Amendment No. 5 would move the closing date to nine months after the last person had qualified. Again, realistically, there always has to be a cut-off point, and there will always be people who fall on the wrong side of it. The cut-off date for claiming affects very few people.

Anne Begg (Labour, Aberdeen South)

I make two points. First, a cut-off date often concentrates people's minds and ensures that they get their claim in; often an open-ended cut-off point means that people do not claim at all because they do not get round to it. Sometimes a deadline will resolve that.

Secondly, if a pensioner pays council tax by direct debit, the last payment will be in February, because such debits are normally spread over a 10-month period. Therefore, the March payment gives them at least a month or two, depending on how the money is taken out of their bank account.

Malcolm Wicks (Labour, Croydon North)

I thank my hon. Friend for those points, which remind us that the starting point for this policy was the council tax liability. More than 99 per cent. of pensioners who are over 70 will receive the payment automatically. We know that they qualify and we have the information because they already receive the winter fuel payment. Only a tiny number of those who are 70 and over will need to make a claim, and they will have a good six months in which to do so. By making the overwhelming majority of payments automatically by November, our older pensioners will receive a lump sum in good time to provide real and welcome support in paying this year's council tax bill. That relates to the point that my hon. Friend made.

That is not all. By combining the payment with the winter fuel payment we are providing those older households with the optimum flexibility in deciding how to spend the money. As I have said, the cut-off date for claims mirrors what we have for the winter fuel payment system. I understand the points that colleagues have made. There will always be a few—very few, I hope—who fall the wrong side of the date. We must publicise this measure in the way that we have discussed.

The issues are difficult. In any kind of regime or organisation some administrative factors favour cut-off points. I hope that I have never been insensitive about the matter. I remember that when I was an Under-Secretary in this Department there was particular concern that some people did not apply for the £2,000 bereavement payment within the then three-month period. I was moved by hon. Members writing to me on behalf of constituents about tragic cases in which someone's husband had been killed in a crash, the woman had had a mental breakdown and she had not been able to apply within three months. It seemed to me that that administrative convenience, although it was perfectly sensible in some respects, had inappropriate human consequences. We changed that provision to 12 months. The burden of the argument

that we are discussing is nowhere near as strong as in that example, and I hope that hon. Members recognise that a cut-off point is not unreasonable.

Steve Webb (Liberal Democrat, Northavon)

I could not help observing that in the course of our discussion I became more attracted to the Conservative amendment and the Conservative Member became more attached to the one that I tabled. That was an unusual swap.

On the balance of our arguments, I think that there is some merit in a cut-off. It is all very well for the hon. Member for Aberdeen, South to talk about pensioners who pay by direct debit, but many over-70s do not pay in that way. They might even pay their council tax weekly, right up until the end of March. We are assuming that we are preserving the fiction that the payments have something to do with council tax. However, we are not giving people any time beyond the point where they stop paying council tax, which these payments are supposed to help with, to put their claim in. Three months beyond the end of the financial year ought to be the minimum, but we are not getting anywhere on this one with the Minister, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

I wish to discuss an issue that I hoped to raise by way of amendment No. 6, which does not appear to have made the grade. It involves the last line of clause 5(3)(d). We have dealt with the question of the time scale for the claimant and the specification details are all set out. Claims will be made to the Secretary of State and we know that there will be another form. I hope that it will be relatively simple and straightforward.

Malcolm Wicks (Labour, Croydon North)

Does the hon. Gentleman understand that 99 per cent. of people will receive the payment automatically and will not have to fill in a form? I thought that I had mentioned the winter fuel payment system once or twice.

Nigel Waterson (Conservative, Eastbourne)

I think that I can grasp the concept of 99 per cent. However, the Minister should also appreciate that 1 per cent. means quite a lot of cases, and some of the individuals involved in them may have been subject to some of the tragic circumstances that he described in the context of bereavement allowance. It is easy to talk in percentages, but it is more relevant to talk about individuals. If we take the Minister's figures at face value, we are still talking about 1 per cent. of all the relevant people over 70.

I want to make a different point on the requirements for the claimant. There must be

''a declaration that the claimant was ordinarily resident in Great Britain on at least one day in the relevant week.''

The amendment that I had a stab at would have removed the phrase

''on at least one day in the relevant week.''

I can see the importance of being ''ordinarily resident''. That is a standard concept that is not difficult to prove—or disprove. However, why does there have to be this reference to just one day in the relevant week when the person could be in a different country for six of those seven days and for long periods either side of the relevant week? Is there not some scope for abuse here?

When we address pensioner organisations such as the National Pensioners Convention we tend to get into discussions about comparisons between different systems in different countries. I am always being told that some countries, such as Spain, give pensioners free holidays. There are enormous variations in how pensioners are treated by different national systems in the European Union, let alone elsewhere.

Someone who has a home in Spain or elsewhere might need to be here only for that one day in the relevant week. I hope and expect that the Minister will be able to tell me that there are other anti-avoidance provisions—that is a term that has come to be known and loved in discussions on the Pensions Bill—which will stop that abuse being perpetrated. However, it is odd that there is this artificial requirement of one day in the relevant week when the concept of being ordinarily resident, or even domiciled in the country, would happily suffice.

Malcolm Wicks (Labour, Croydon North)

To become entitled to this payment, an individual has to be

''ordinarily resident in Great Britain on at least one day in the relevant week.''

The amendment that has not been moved but the subject of which has been raised on stand part removes the requirement for the claimant to show that that criterion was met during the period.

The term ''ordinarily resident'' is backed up by a considerable body of case law. The ordinary residence test is one of the standard tests that we routinely use in the benefits system. There is no statutory definition of ''ordinarily resident'' but there is a body of established case law and each case is decided on its facts. Whether a person is resident or ''ordinarily resident'' in the United Kingdom is primarily a question of fact and degree. An individual is ''ordinarily resident'' if there is a degree of continuity about their residence so that it can be described as ''settled''. If they live mostly in the UK but also live elsewhere from time to time, they may remain ordinarily resident in the UK throughout their shorter period of residence elsewhere. The burden of proof is on the individual; they must prove that they meet the residency test. The reference to one day is not intended to allow someone to pop over to this country to be here in a particular week. There is a body of case law on being ''ordinarily resident''.

For someone to meet the ordinary residence test, they must prove that there is a degree of continuity to their residence and that the residence is settled. Factors such as where the rest of the family live, the sort of accommodation inhabited, and where furniture and

personal effects are, are taken into account. Day trippers coming into Great Britain will not be entitled to the £100 payment.

The legal issue about ''one day'' currently escapes me. I know that there is a reason why we refer to one day, but I hope that the hon. Gentleman will be happy if I write to him on that.

Nigel Waterson (Conservative, Eastbourne)

I absolutely agree—indeed, I made the point—that the concept of ordinary residence has a well accepted definition, not least in the context of tax. I have no difficulty with that. My only difficulty with the clause, as I hope I have made clear, is its mention of

''at least one day in the relevant week.''

That seems to open up the possibility of the day tripper receiving the payment. The clause does not say ordinarily resident or here on one day in a given week; it says ordinarily resident on that one day. I suspect that the day tripper would be ordinarily resident on one day in that particular week, and that is why the problem might arise.

Malcolm Wicks (Labour, Croydon North)

I shall write to the hon. Gentleman. It is a complicated issue, not least because somebody who was ordinarily resident in Britain, but who had a fortnight's holiday in France or Italy during that September period, would not be debarred from the winter fuel or the £100 payments.

The problem of the one day is technical. People who have moved to the United Kingdom permanently—British people returning from abroad after a number of years, for example—may only be qualified for that one day in the qualifying week. The one-day issue relates to that specific eventuality.

Nigel Waterson (Conservative, Eastbourne)

I am grateful to the Minister for his offer to write to me. That will be helpful. It may assist him if I pin down my concern and express it a little more clearly. At the moment, we are all knocking on doors and are very conscious of the cut-off date for postal votes and proxy votes. There is the problem of people being abroad on the qualifying date or when the form arrives. That is why I am even more puzzled by the clause. If a person goes away on holiday and is abroad during that relevant week, but is otherwise ordinarily resident in the country, will that person still get the money? I suspect that the answer is yes. We will need to see the reasoning behind that ''yes'' in the letter.

Malcolm Wicks (Labour, Croydon North)

I was temporarily confused by the one day myself. However, as I said, this is not about everyone having to return to this country, or about Britons of 80 years' standing having to come back from south America to get their £100 from the Government. Those people are ordinarily resident here.

I now realise that this is a much more technical issue. Let us say that a British family had lived on the continent for several years and came back here to retire. If the family members were judged ordinarily resident, being at this cut-off point in September for just one day, subject to other criteria, would make

them eligible for the winter fuel payment and the £100. I think that that is the explanation. However, I will write to clarify it.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.

Clause 6 - Payment to be disregarded for tax and social security

Malcolm Wicks (Labour, Croydon North)

This clause deals with the treatment of a payment for tax benefit and tax credit purposes. In line with our commitment that the payment will be non-taxable and will not affect other benefits that a pensioner may receive, the clause ensures that the payment will be disregarded when considering tax liability and entitlement to other benefits. The payments will be made in full to help older people in the way that I have described.

Nigel Waterson (Conservative, Eastbourne)

I want to hark back to an earlier debate. It is the ringing tones of the words

''No account shall be taken'',

as stated in the clause, that I want to probe a bit more.

One of the odd concepts of this payment is that, as originally designed, it was going to be a wholly one-off, free-standing payment with no strings attached. No tax was to be payable on it. It would not matter how rich a person was, or how little they needed the money, they would get it, subject to other matters already debated. Even if a person was getting complete council tax benefit, they would still get it, more or less no questions asked. That was the original idea.

There are two arguments on two sides of the coin. One wonders what is the justification for the payment if it bears no relation to council tax levels and rises in different parts of the country, or to the ability of individuals to pay. On Second Reading, I teased the Government slightly by suggesting that they were finally coming around to our way of thinking about restoring the earnings link, which, sadly and unaccountably, we did not get around to debating and voting on when we reached the Report stage of the Pensions Bill.

The best way to help the poorest pensioners is to ensure that all pensioners receive a decent state retirement pension and to restore the earnings link. However, I do not think that the Bill is to do with that. I assume that the attraction of the measure was its simplicity. I understand that. The Chancellor, on a basic political level, wanted to make an announcement, so there was no time to start worrying about tax, benefits, council tax or whatever—the payment was just going to be handed to people. They would, more or less, get the money as long as they were in the country, over 70 and as long as various other things happened. It could be a fraction of their daily income, or make all the difference between paying the council tax and not being able to do so. Nevertheless, broadly speaking, people would get it.

We know, as a result of earlier debates on people in care homes, nursing homes and hospital, that it is not so simple. There is a point at which people can become entangled in the benefits system. The tax issue is fairly clear, unless we stumble across a new surprise in Committee. People do not pay tax on the payment and there is no basis for paying tax at all—end of story. That is clear. However, it is not clear whether, as it says in paragraph (b), no account should taken of

''entitlement to benefit under an enactment relating to social security''

and, as it says in paragraph (c), ''entitlement to a tax credit.'' We know that there is an involvement with pension credit and the benefits system in the context of care homes and hospitals. Given its absolute drafting, is the clause still relevant or accurate?

Malcolm Wicks (Labour, Croydon North)

I do not think that the hon. Gentleman has understood. Clause 6 clearly sets out that the money will not be taken account of for income tax purposes or count as income for income-tested benefits. That does not have much to do with our earlier discussion about when pension credit is relevant for certain households.

I, too, regret that we never discussed the earnings link because it would have been fascinating to behold the hon. Gentleman's explanation of why it was abolished by a previous Conservative Government in 1980.

Question put and agreed to.

Clause 6 ordered to stand part of the Bill.

Clause 7 - Power to provide for payments

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 7, in

clause 7, page 4, line 15, leave out 'may' and insert 'shall'.

Even compared with what has gone before, this part is really interesting because it seems to have landed in the middle of the Bill from some other dimension or planet. It flies in the face of the rest of the Bill and what Ministers—in particular this Minister—have been saying.

On 30 April 2004, the Minister, in a written answer to the hon. Member for Northavon, talked about

''ad-hoc payments to pensioners''—[Official Report, 30 April 2004; Vol. 420, c. 1369W.]

In a reply to my hon. Friend the Member for Chichester (Mr. Tyrie) on 4 May 2004, the Minister made it abundantly clear that this is a one-off payment to people over 70 resulting from the Budget statement. One would have thought that that was where the matter would rest. It was a one-off payment motivated by worries about the council tax.

We are told that the Government are in the process of coming up with some proposals for the reform of Government finance, which are promised in July. The Minister may or may not be privy to the options that

are being considered. It would be fascinating to hear, as far as it is in order to do so, how that debate is developing in the Government. People might think that that would be the end of the matter.

We also heard an argument about the 70-years cut-off point. The Minister argued why that would cost too much and be inappropriate. It seems that all the help is being directed at older pensioners because they deserve it more and are likely to have less money. Then, barrelling out of nowhere, comes clause 7(1), which contains two things that are at odds with what has been said.

The Government intend to make regulations. I wonder, just for a laugh, whether there is any chance of the Committee seeing draft regulations, but I will not hold my breath. The Government say that they will make regulations to provide for further one-off payments in the future, if that does not sound too Irish, and—blow me!—those will apply to people who have reached the age of 60, not 70. I do not know what the Minister is getting at.

Amendment No. 7 is the mother of all probing amendments, as it changes the word ''may'' to ''shall,'' which is simply designed to tease out what is going on. Are we talking about an annual event? Recent political history suggests that when we start giving pensioners Christmas bonuses or payments to cover cold weather or winter fuel, they become, as with the free television licences for certain pensioners, fixtures—[Interruption.] I hear a murmur of assent from the Labour Back Benchers. There will come a point when the Government will have difficulty saying, ''We gave it to you one year, but we'll not give it to you in another.''

The only way out for the Government would be for them to come up with some impressive proposals to amend the system of local government finance. We should not get into the detail of that. We know that the Liberals want to get rid of council tax and replace it with something called local income tax, which would be wholly unworkable, with a lot of pensioners ending up paying more than they do now.

The £100 figure is popular in this context. We all remember the promises made at the Brent, East by-election when we saw pictures of the Liberal Democrats giving a £100 cheque to pensioners. Just for the record, that policy has been abandoned. The following article, referring to the Liberal Democrat leader, appeared in The Guardian:

''The Lib Dem insisted that he had not broken his promise, although he admitted that the pledge would not now be met. 'It is not a matter of breaking a promise. It is a matter of saying that we have been reviewing policies'.''

We all know about the kind of policy that pops up in time for a high-profile by-election and dies afterwards, although, as we discovered in a debate the other day, the promise still features on the website of the hon. Member for Brent, East (Sarah Teather).

Derek Conway (Conservative, Old Bexley and Sidcup)

Order. I have been reasonably lenient with the hon. Gentleman, but he is steering a considerable way from his amendment. He might be able to make such remarks in the stand part debate, but not in a debate on his amendment.

Nigel Waterson (Conservative, Eastbourne)

I have made my point.

The amendment would require the Secretary of State to make regulations. It is a probing amendment. We would like to know what is going on. The Government, in particular the Minister, have consistently said that this is a one-off, ad hoc payment. Now, suddenly, it is not: it will become a fixture. All that clever stuff about the payment applying only to the over 70s, which the Minister came up with earlier to slap down another of my amendments, is no longer relevant because the provision now applies to the over 60s, at a cost, I think, of £350 million extra. He owes us more of an explanation of what he is doing in clause 7(1).

Steve Webb (Liberal Democrat, Northavon)

I am heartened by your indication, Mr. Conway, that you will allow us a stand part debate on clause 7. Indeed, we tabled amendment No. 14 to flag up our desire for such a debate. I am still not entirely sure what amendment No. 7 is about, so I shall sit down and look forward to the stand part debate.

Malcolm Wicks (Labour, Croydon North)

I will not be drawn into the banter about the Liberal Democrats and their £100 Brent, East by-election cheque, although we are obviously amused, as is the hon. Member for Eastbourne, by the fact that it seemed to have a very early cut-off date. There is some inconsistency there.

Clause 7 provides a regulation-making power so that, if circumstances warrant it, future payments that are related to age or other circumstances may be made to people aged 60 and over. The power enables the Department to act swiftly to legislate for additional future payments, should the need arise. There are no draft regulations because the clause is a regulation-making power; it does not say that any regulations are coming. There will only be regulations if the need arises.

As the amendment would oblige the Secretary of State to make future payments to those aged 60 and over, I cannot accept it—I do not honestly believe that the hon. Member for Eastbourne would accept it, either. It is not clear what the payments would be or how they would be costed by the Conservative Opposition. We have not seen their draft regulations on that, either.

We have said that we propose to make a payment this year only, in order to meet a specific need that has arisen as the result of the impact of recent council tax increases on the fixed incomes of older pensioners. This year's average increase of 5.9 per cent. is less than half of last year's and is the lowest in almost a decade. We will use the regulation-making powers in future if we judge there to be a need. Regulations made using the powers in clause 7 will be subject to affirmative procedure in both Houses and will be scrutinised by the Advisory Committee on Social Security, which has

powers to consult and make recommendations to the Secretary of State. I ask the hon. Member for Eastbourne to withdraw his amendment.

Nigel Waterson (Conservative, Eastbourne)

I have said that this is a probing amendment, and I will withdraw it, but I do not think that the Minister really dealt with one of my major points, which is why the age of 60 suddenly popped up. Perhaps we can debate that more fully in the stand part debate. Also, he said that there would be regulations if the Government judged there to be a need. What is that need? Is it the Government's need to shore up their support, having failed properly to reform the local government finance system or following a further surge in council tax? That is a complete mystery. In a sense, I am slightly relieved to hear that there are no draft regulations waiting in the wings.

Is the Minister really saying that the provision is just a power that the Government are putting behind glass, with a ''break in an emergency'' notice underneath, in case it occurs to them to use the power in future? If such an urgent need arose, we could hold another of these jolly one-day sittings on another emergency bit of legislation. I am not sure that I fully accept that the Government have nothing in mind and that the power has to be available just in case they suddenly decide that they want to use it. We will explore the issue in much more detail in the stand part debate. The Government should make their case when such a need—to use the Minister's word—arises. However, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Steve Webb (Liberal Democrat, Northavon)

I suspect that we will return to this subject at greater length this afternoon. The question is whether we need the power in clause 7. The hon. Member for Eastbourne is right to describe the Bill as emergency legislation. He referred to a written answer that I received on the purposes of the clause which referred to the making of ad hoc payments. It really has come to something if, when things go wrong, Britain's pensioners have to depend on ad hoc payments to ensure a decent standard of living. That seems an admission of defeat. One would have thought that we already had a mechanism for making payments to people over 60: it is called the pension. I grant that men aged 60 to 64 do not get it, but pretty much everyone else over 60 does.

As we are all concerned about the living standard and welfare of pensioners, we should not deal with such issues in a Bill that is trying to do something else, and through an ad hoc clause that says, ''We don't really want the trouble of having to go through all this again, so we'll put in a sort of reserved power.'' A far better strategy would be to ensure that the pension is good enough in the first place. That way, as I put it on Second Reading, pensioners would not have to wait every year for that final moment of the Chancellor's Budget speech in which he suddenly produces the rabbit from the hat. None of us would want our living standards to depend on that. Instead of the ad hoc payments, there should be a decent system of support for older people.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee D

Clause 7 - Power to provide for payments

Steve Webb (Liberal Democrat, Northavon)

Important issues are still outstanding. The Committee will recall that it is the ''we really do not want to have to do so this all again'' clause. It allows the Government at any time to pass regulations to bring in a new scheme of payments related to age or other factors, unconnected to those in the rest of the Bill, to anyone over 60 years of age at any time in the future. The only safeguard in terms of scrutiny is an affirmative resolution having to be passed by both Houses.

The power is too sweeping for us to allow the clause to stand part of the Bill. I observed that the Government's thinking behind the payments is that they would be ad hoc. They used that phrase in a written answer to me. It is outrageous that we are being asked to give power to them to make unlimited ad hoc payments to pensioners whenever there is a problem. The Minister said that we needed the Bill quickly because there was a problem with council tax. We do not know whether the Government are anticipating future problems, such as elections. The idea that we give them a blank cheque to write unlimited amounts to people aged over 60 is unacceptable.

I have three further objections. Nothing in the clause caps the amount provided. The Bill deals with £500 million of taxpayers' money. Given that we had the best part of a day on the Floor of the House discussing it and will have more time on Report, at least that sum will have had a day and a half of scrutiny. However, if the clause is accepted, the Government could spend any number of billions of pounds inventing a completely new scheme of payments to the over-60s with only 90 minutes of parliamentary scrutiny.

It is incredible that some Departments are scrutinised to the nth degree for their expenditure of the odd million of pounds here and there, yet the Department for Work and Pensions can shower billions of pounds around with practically no parliamentary scrutiny. Clause 7 allows it a licence to do that. At the very least, there should be a limit on the scope of a scheme that can be introduced and we

should be able to return to it on Report by tabling an amendment. At the moment, the clause is a blank cheque.

My second objection is that it allows only inadequate scrutiny of a new regime. We decided that giving £100 to everyone was as simple as it gets. Yet even that was the subject of detailed scrutiny this morning and on Second Reading, as it will be when we return to the Bill on Report. Clause 7(2) allows the Government to introduce a scheme when not only age, but any other ''specified circumstances'' can be brought into play. A fiendishly complicated scheme could be introduced, yet we would only have 90 minutes to consider not only a huge amount of taxpayers' money, but that complex scheme itself. The scrutiny proposals under clause 7 are inadequate.

My third observation also relates to scrutiny. The Committee knows that the 90-minute affirmative procedure allows us to make no amendments. It is a yes or no, take it or leave it process. It is not as though we can say that we like the principle but not the detail. The Government could come up with a scheme that requires a vast amount of taxpayers' money. Those proposals might be far more detailed than the ones that we have discussed, which are to be contained in an Act of Parliament. But after only 90 minutes of scrutiny, the Government could then say, ''Take it or leave it. Lump it or not.'' That is an unacceptable way for the Department to approach the spending of taxpayers' money. We are unhappy that the clause found its way into the Bill.

David Tredinnick (Conservative, Bosworth)

On a point of order, Mr. Pike. I appeal to you: is it possible for the blinds to be raised? The sun has gone in and is now off the Terrace. It is cloudy outside and all the lights are on.

Peter Pike (Labour, Burnley)

I am sure that that can be arranged, although it is not a point of order.

Nigel Waterson (Conservative, Eastbourne)

As much as it grieves me to say it, I largely agree with the hon. Member for Northavon (Mr. Webb). The more I examine the clause, the more I wonder whether we should have a Division on it. As I said in my remarks on amendment No. 7, the clause sticks out like a sore thumb. We have the Government's stated intention of the one-off ad-hoc—whatever phrase they want to use—payment to pensioners. We all have views on the real motivation behind that. However, buried in the Bill is the power to make payments on almost any grounds as long as the recipient is over 60. We know that people over 60 are four times more likely to vote in an election than 18 to 25-year-olds, so it remains to be seen whether there is any connection. I suppose it depends who they vote for.

We are very suspicious of the clause and I share many of the hon. Gentleman's concerns about the process. If the Minister wants to get it through without a Division, he will have to be more forthcoming. The most we got out of him during his introduction to this far-reaching clause was that it would be implemented if the Government judged that there was a need. That is not good enough. He must specify the need that he

is talking about and what bases he has in mind. If, as just a vague twinkle in his or the Secretary of State's eye, there is the idea that at some time in the future the Government might want to shove a load of money in the direction of the over 60s, why on earth are we debating it at all? If that need arises, we can go through this process all over again. We are pretty flexible; we can always turn up for another day and do all the things involved in producing laws.

The Government are asking for a blank cheque. What do they have in mind? As we see the inexorable rise of means-testing, will the Government become more and more hooked on giving one-off gifts—bounty—to older people and pensioners in our society, rather than doing the sensible thing and adopting our policy of restoring the link with earnings?

Malcolm Wicks (Labour, Croydon North)

Dropped in the 1980s.

Nigel Waterson (Conservative, Eastbourne)

If the Minister looks to the future, rather than the past, he will see that by the middle of this century more than 80 per cent. of pensioners will be on means-tested benefits according to his projections. It already stands at 59 per cent., and that figure will rise inexorably. Perhaps he can tell us whether that is just a side effect or a central aim of his policies to give the Chancellor more and more control over more and more individuals in our society.

Malcolm Wicks (Labour, Croydon North)

I intervene to bring the hon. Gentleman back to the subject of the clause and the relevance of the Bill. On Second Reading, he objected to the measure being introduced in primary legislation; now, he is objecting to a clause that will allow for secondary legislation. Which does he object to most?

Nigel Waterson (Conservative, Eastbourne)

For the record, I did not object to the proposal being introduced in primary legislation. I just wanted to know when the Minister realised that it needed primary legislation. I made some ill-judged remark about expletives at the time, but I would still love to have been a fly on the wall when some hapless official came to see him or, more likely, the Secretary of State, and explained that they would have to tell the Chancellor that the measure would require primary legislation. If it needs primary legislation, I do not object to that—who could, if that is what it needs? However, having decided to give this bung to people over 70, it is a bit rich that the Government have now decided to plant in the Bill the alien idea that the so-called one-off payment can be replicated on goodness knows what grounds at some time in the future.

Ministers must come clean. If there is just a vague notion that at some time the Government may need—to use the Minister's word—to make another payment, they must say so. Perhaps we should abandon the clause and wait for the need to arise. Things can move fast if they need to, as we are demonstrating with our proceedings on the Bill. On the other hand, if there are plans—perhaps only half-formed ones at the

moment—we ought to be told, particularly as the clause refers to the over-60s, whereas the rest of the Bill addresses only the over-70s.

There is an important consideration, which goes to the heart of the Government's attitude of giving pensioners one-off payments to try to make up for the fact that they are having a pretty raw deal. Mr. Duncan-Jordan of the National Pensioners Convention, stated that it was his belief

''that the Chancellor's statement was made simply to gain publicity'',

and to gain votes, he might have added. He went on to say, rather more to the point,

''One-off payments such as this are not the answer to pensioner hardship. They are often seen by the public as just cynical attempts to grab votes.''

Heaven forfend, of course, but does the Minister not understand that simply giving pensioners one-off gifts makes them a part of the Government's client group? Perhaps that is what the Chancellor has in mind, but is it really what the Department for Work and Pensions should be about? If its real intention is that the payments become an annual event like the Christmas bonus, why not say so? We all understand the political difficulties of trying to take things away from people, so why be so bashful if this is intended to become an annual gift to pensioners along the lines of other existing gifts? I do not understand why the Minister is being so coy. If the Government have no developed plans to make use of clause 7, the Bill would be better off without it.

Malcolm Wicks (Labour, Croydon North)

I thank the hon. Member for Eastbourne (Mr. Waterson) for shedding some light on the debate. I will try to deal with his points and those raised by the hon. Member for Northavon.

Opposition Members are making a great meal out of this. It is the most innocent of provisions. I add only two things to my earlier remarks. First, in recent years lump sum payments, through winter fuel payments, have become a feature of the social security system. This Bill will introduce a £100 payment against the criteria that we have discussed.

As such payments have become a feature of contemporary social policy, and nobody can predict what their future use will be with any great certainty, we feel that it is not unreasonable for us to take powers so that we can introduce them in secondary rather than primary legislation. We were able to introduce the winter fuel payments through existing powers because of the cold weather payment provision in the social fund. However, that related to issues about the cold weather in winter and the need to help elderly people in that way, whereas this £100 is for an altogether different situation.

Secondly, there is a need for speed. It is more expensive to introduce primary legislation than secondary legislation, but it can also take four and a half months or so to get a Bill through Parliament. We can do things more quickly through secondary legislation, albeit with proper scrutiny, and the Social Security Advisory Committee can play a role as well.

There is not much more than that to this provision. It is sensible, and I hope that hon. Members support it.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 6, Noes 3.

Clause 8 - Interpretation

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 8, in

clause 8, page 5, line 17, leave out subsection (2).

I apologise to the Committee in advance. I could not resist tabling the amendment because, hidden among much more mundane definitions, part of the subsection leaps off the page. The bit that gets me is ''with any necessary modifications''. I wonder what wealth of real-life detail that encompasses.

Apparently, the prospect of polygamous marriages is among the detail that has been examined in advance. I did not know that they were legal in this country, but assuming that they are, one wonders how many people we might be talking about—not how many people are in a given marriage, but how many in total might be affected. Legally or otherwise, if one were Polynesian or Mormon, one could have several wives all living under the same roof, but they would be treated as constituting one couple and would receive only £100.

Malcolm Wicks (Labour, Croydon North)

They could have several husbands.

Nigel Waterson (Conservative, Eastbourne)

I believe that that is possible in theory. In this enlightened modern age, some modern men might be happy to be one of several husbands of a modern woman. I do not know for sure, but the provision is interesting and we need to be told a bit more about it. How would it work? Is there any basis on which the £100 should be divided up between them? How are polygamous marriages to be defined?

I was under the distinct impression that such marriages are not permitted in English law, although I might be wrong. Why should they be singled out? If they are permissible and legal, and, indeed, encouraged under a particular set of religious beliefs, why should not all the people involved be entitled to their £100 providing that they are all over 70? We must remember that they must all be over 70, so we are talking about a long running polygamous marriage.

That just seems to be another layer of complexity which the Government seem intent on adding to the Bill.

Sitting suspended for a Division in the House.

On resuming—

Steve Webb (Liberal Democrat, Northavon)

Just before we suspended, the Conservatives made a shameless bid for the polygamous vote among the over-70s. That is obviously part of a new strategy for targeting the electorate. There were also yet more examples of tax and spend. The hon. Member for Eastbourne implied that he would shower the £100 on any number of wives. It was quite shameless.

I am unclear whether the amendment would help or hinder those in polygamous marriages. It would take the provision for such marriages out of the Bill completely, leaving the question of what the default position would be. On one reading, the default position might be that each partner will get 50 quid, so not having a specific provision for polygamous couples to be treated as one might therefore result in multiple £50 payments. I am not sure whether that was the hon. Gentleman's intention or whether he did not want to provide for this group at all.

It is worth including the provision for this rare group so that we know where we stand. Having it in the Bill is probably preferable to not having it. However, I want one thing clarified, which arose during discussions on previous social security Bills. Is polygamous in this context taken to mean polyandrous as well?

Malcolm Wicks (Labour, Croydon North)

The answer to the last question is yes.

The amendment would remove the provision to treat the members of a polygamous marriage as a single couple for the purposes of the £100 payment. I was not entirely clear what the Opposition were getting at—whether they wanted to be more generous than us or meaner. The hon. Member for Northavon took the more generous interpretation. I am sure that things will be clarified later.

The clause is largely technical. Its purpose is to define words used in the Bill and to set out, among other things, that members of a polygamous marriage will be treated as forming one couple. The provision clarifies what is to be paid to members of a polygamous marriage. They will be treated as one unit and receive £100, however many of them are over 70.

There are not many polygamous marriages in Britain, although I understand that there are no firm figures. Anecdotal evidence suggests that there may be a few hundred such relationships among the elderly. I must check that—if anecdotal sources can be checked. The numbers are reducing because since August 1988 immigration legislation—section 2 of the Immigration Act 1988 to be specific—has prevented a polygamous wife settling in Britain with her husband if another wife is already in the country. It has been a long-standing

convention that benefit rates for couples are lower than twice the single rate because two can live more cheaply than one. Equally, we believe that three can live more cheaply than two. Our approach takes into account one household, one council tax bill and one payment.

As this matter is of interest to the Committee, I can inform hon. Members that valid polygamous marriages that are contracted outside the UK are recognised for certain social security benefits. Obviously, polygamy cannot be initiated in this country. Second and subsequent wives are treated as dependants for income-related benefits, but polygamous marriages are not recognised for contributory benefits. Given that we are only talking about one payment, our approach follows the position set out on winter fuel payments.

I hope that I have clarified that this is about polygamy in the general sense, so it is also about polyandry, where a woman would have more than one husband, should she choose to take that step. Polygamy is where a man has more than one wife. The provision is all-encompassing. Despite the Opposition's concerns about the wide-ranging nature of clause 7, we would not use the provision to make the situation compulsory.

Nigel Waterson (Conservative, Eastbourne)

I am grateful for the Minister's explanation. I am surprised, if not slightly alarmed, to hear that there may be several hundred polygamous marriages among the over-70s, although he was good enough to say that he was not sure whether that was across the board.

On reflection, the generation of hippy commune dwellers from the 1960s may produce a boom in indigenous polygamous relationships as they get older. There are a lot of ageing hippies around, usually with long pigtails and bald heads. They are an historic group and must be recognised as such. However, the Minister was right to remind us that polygamy is against the law, except for those marriages that were initially contracted outside the country. I am relieved to hear that.

On balance, although my amendment would have been more generous to people in polygamous marriages, I do not want to upset the shadow Chancellor, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

I have a couple of points to make, although I know that everyone is anxious to get back to the Gender Recognition Bill in the Chamber.

The definition of a couple seems a little out of date, given the Government's Civil Partnership Bill. It refers, in a rather dogmatic and old-fashioned way, to

''a man and a woman who share a household''.

Although I have not looked at the detail of the Civil Partnership Bill, I assume that sooner or later an amendment will be needed to bring this Bill into line with it, or vice versa, unless the Government are reverting to the more traditional approach of a couple, meaning a man and a woman.

Malcolm Wicks (Labour, Croydon North)

I think that I am right in saying that because this is a one-off payment, the Civil Partnership Bill will not apply to the £100 that will be paid later this year.

Nigel Waterson (Conservative, Eastbourne)

But it might arise in the context of future payments as set out in clause 7. I would not like the Minister to be taken to the European Court of Human Rights by a homosexual couple who felt that they were missing out on their payments.

Another thing that slightly puzzles me, although it may just be me, is the definition of ''single'', which

''in relation to an individual, means not part of a couple''.

That seems to raise issues of policing and so on. To go back to the Civil Partnership Bill, there is a school of thought that says that the potential benefits to be gained under that legislation, particularly in relation to inheritance tax, will mean that it becomes a source of tax planning for better-off and better advised gay couples. In the context of this Bill, how is one to define whether someone is part of a couple?

Presumably, the term involves some sort of sexual relationship—or does it? I hark back to what the hon. Member for Northavon said in a different context about a brother and sister. Indeed, one could talk about two friends, male or female, who happen to have lived together for a long time and are now over 70. The provision needs a bit more clarification. I am sure that the term has to be put in the broader context of social security legislation generally. It would be nice to have some further background.

Malcolm Wicks (Labour, Croydon North)

Although the provision once again essentially replicates winter fuel payment provisions, it has regard to different forms of household composition and relationships, hence our need to detain ourselves with the slightly esoteric issue of polygamy. Having arrived at definitions of criteria, we must be on our guard to ensure that, where appropriate, those can be adequately policed, just as we have to take action, with appropriate evidence, if someone says that they are single for income support purposes, but turn out to be cohabiting. In most of the provisions, there is not much scope for abuse, but there is always possible abuse in the social security system, and we must be on our guard against it.

On the hon. Gentleman's remarks about all the '60s hippies, now past the age of 70, still living together in communes, my guess is that some of those relationships did not last beyond the first track of a Rolling Stones album, let alone stand the test of time.

By and large, cohabiting relationships are less likely to be secure than those based on marriage; that is a matter of fact.

Question put and agreed to.

Clause 8 ordered to stand part of the Bill.

Clause 9 ordered to stand part of the Bill.

Clause 10 - Extent

Steve Webb (Liberal Democrat, Northavon)

There can only be one question about clause 10: what about Northern Ireland? Presumably, the argument is that there is no council tax there, and so the payments do not apply, or will the Northern Ireland Office, through an Order in Council, make a corresponding provision for domestic rates there? Presumably, that would be quite a burden on the over-70s. I hope that the Minister will clarify that.

When I draft amendments, I like to get things right, so could the Minister explain why the clause is drafted so as to say

''(a) England and Wales, and (b) Scotland'',

rather than ''England, Wales and Scotland''?

Malcolm Wicks (Labour, Croydon North)

I am not sure of the answer to the last question. In terms of law and constitutional arrangements, notwithstanding the Welsh Assembly—and I do not want to get into trouble with anyone—England and Wales are often grouped together. The Scottish system is rather different; the answer could simply be that. I do not think that the issue affects the payment of the money, so I do not want the hon. Gentleman to worry too much about it.

The hon. Gentleman was right to suggest that an Order in Council will be introduced as soon as possible to provide for payments to be made to eligible pensioners in Northern Ireland at the same time as payments are made to pensioners in Great Britain. I should add—as we currently do on such occasions—that, in the event of a return to devolved Government

in Northern Ireland before the Order in Council is made, the issue would of course become a matter for the Northern Ireland Assembly.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clause 11 - Citation

Nigel Waterson (Conservative, Eastbourne)

It would not be right to let the Bill's relatively short passage through Committee not be marked by a return to the central criticism that many of us made on Second Reading and earlier today. It is misleading to call this legislation the Age-Related Payments Act; it should be the election-related payments Act.

Although it might have failed miserably in its intent, the Bill is clearly designed to buy off trouble over council tax increases, which are in large measure a result of Government action or policy, and to try to get them out of a hole on 10 June. I do not think that it will win them a single extra vote; it will just cost £500 million. We do not begrudge £100 to the over-70s, whether they need it or not. I hope that those who get it make good use of it. It is only a pity that they will not get it until eight months after they need it. On that basis, I have serious reservations about whether it is in order for this to be called the Age-Related Payments Act rather than the election-related payments Act.

Peter Pike (Labour, Burnley)

I remind the Committee that the debate is narrow, but the Minister can respond to that point.

Malcolm Wicks (Labour, Croydon North)

I will not be provoked, Mr. Pike.

Just occasionally—every two minutes, in fact—the hon. Gentleman wanders off into the long grass, much of it political. I think that the people of the United Kingdom who are in eligible households will be pleased to receive £100. Given the concern about council tax, that is important.

Question put and agreed to.

Clause 11 ordered to stand part of the Bill.

Bill to be reported, without amendment.

Committee rose at seventeen minutes past Three o'clock.