Pensions Bill

My Lords, having worked in the Treasury for more than 30 years, four years as Permanent Secretary, I shall now try to make amends. We should imagine Britain partitioned, not north-south, as it is now, but east-west. The east is run by the Revenue and Customs Party, which believes that when you have accumulated a certain amount of wealth, it should be turned into an annuity to provide a better pension. The west is run by the Department for Work and Pensions, which has a different philosophy. As women there approach retirement or pension age, the department sends them a deficiency notice telling them how many years they are short of being able to get a full pension and explaining that they can buy back up to six of them. So in the east we have compulsory annuitisation while in the west we have compulsory limitation of annuitisation. Does this make any sense? The answer is, no it does not. But let us look at it another way and suppose that this amendment has been passed and its provisions are in force, and someone comes forward with a proposal to move to the present position. Can you imagine anyone giving house room to that, even for a moment? The truth is that people make decisions in ignorance and in conditions of uncertainty, and they make mistakes. A number of examples of change of circumstance have been referred to. Why should we not try to help people rectify those mistakes, particularly when they are claiming something to which they were at one time entitled? What could the arguments possibly be? One argument could be that it is expensive to stimulate take-up. However, the DWP spends millions of pounds encouraging people to claim the benefits to which they are entitled. It does not use the costs of take-up as an argument against doing that, and I hope that it will not be deployed as part of the argument about cost here. People should be able to claim that to which they were entitled. The second argument could be about administration. Is it difficult to track down the records? Obviously not, because all that information is in the deficiency notice. However, it is completely unacceptable that you send someone the information when it is too late for them to act upon it. If you want to retain the present system, the only way in which you could make it defensible is that every year someone is reminded what their deficiency is so that they then have the opportunity to rectify it. Perhaps there is an argument that the deal is priced wrongly actuarially. However, that objection applies to all back years bought, not just to back years bought some time ago. Why should we allow a well advised trust fund kid to buy back years but restrict the opportunities to women who may have been informal carers, but below the level which would formerly have earned them a credit? I hope that the Minister will explain the principle that is being defended here, because I cannot see it. The current proposals seem to have no logic other than that they have grown up over time. As I indicated, the measure is inconsistent with rules in other areas of pensions and it is inconsistent with the philosophy that we should encourage people to claim the rights that Parliament has voted for them.