Pensions Bill

I, too, join the Minister in welcoming the Kindertransport provisions, in particular, and pay tribute to the group of MPs whom she mentioned who were instrumental in bringing those provisions on to the statute book. I would like to concentrate on the so-called Baroness Hollis amendment. I also pay tribute to her and to the others who have campaigned on the issue. The amendment will make a welcome difference to a defined group of women who will be able to buy back an extra six years to improve their basic state pension—quite considerably in some cases. The Government tell us that the measure will be cost-neutral. As has been noted already, there will be an increase in the cost of the class 3 national insurance contribution to reflect the increasingly significant value of those contributions, given the reduced number of qualifying years needed for a full state pension. We understand from Lord McKenzie of Luton, the Minister's colleague in the other place, that around 110,000 people are expected to benefit from the package. So far, so good. I noted with interest that Lord McKenzie also pointed out that the true actuarial value of a week's class 3 national insurance contribution is around £45. It is worth making the point that, even though the cost has gone up from £8 last week to £12.05 now, that is still pretty good value for the whole category of men and women who will benefit. That does not include everyone, but the people who will benefit should look to take advantage of the offer. However, my attention was drawn to some comments on the proposals from Ros Altmann, who is a very respected commentator on pensions issues. Indeed, I believe that she is a former adviser to HM Treasury on pensions matters. For some of the time, she has perhaps been a thorn in this Government's side, but many people would say that she has done sterling service for pensioners generally. Ros Altmann welcomes the fact that the extra years can be bought back and points out that this is not just the women's pensions issue that it is sometimes called. It is important to put on the record that men who were carers or disabled will also be able to benefit. She points out that it is not a free offer: those pensioners or people about to come to pension age who wish to take it up will be paying slightly more for the privilege. However, she also says that the offer is aimed at a quite narrowly defined group of people—specifically, those who already have 20 years of national insurance contributions. Only they will be able to buy back the extra six years, so the offer emphatically does not apply to all women. I know that that is the subject of the amendments from the hon. Member for Northavon (Steve Webb), to which I shall come shortly. It is also worth making it clear that people who retired before April 2008 cannot buy any extra state pension entitlement at all. Any existing pensioners who retired before April 2008 who may think that this is good news need to know that it is not an offer for them. I have some questions for the Minister, and some of them were asked by my colleagues in the other place. I am not exactly clear what the answers are, so I would be grateful if she tried to address these points when she comes to reply. If she is not able to do that, perhaps she will write to me with the information, but I should be grateful for an answer if that is at all possible. First, I should like an assurance that the increased revenue that the Government will get from the increased cost of class 3 national insurance contributions will be no more than the extra payments made. I ask that because if, through the extra costs that they are charging pensioners, the Government gain more revenue than they pay out, this would be a revenue-raising measure. I am not suggesting for a moment that that is the Government's intention, but I should be grateful for some clarity that the extra revenue raised will be paid out. Secondly, have the Government made any estimate of how much pension credit may be saved as a result of these provisions? If they believe that there will be a reduction in pension credit, has the Department considered the possibility of incorrect targeting? I ask that because, of course, the group of people who would lose out on pension credit entitlement should not be the ones who take up the offer in this set of amendments. Thirdly, will the Minister give the House more information on the information campaign that the Department intends to launch on this matter? As has already been established, there are groups of people who clearly will benefit, and others who should not take advantage of the offer. We know that pensions already mystify a lot of people. It was suggested in the other place that the national insurance recording system could be looked at so that those identified by Pension Service officials as likely or certain to benefit from this offer—the 110,000 people to whom the Minister's colleague in the other place referred—could be written to. While I am on the subject of those 110,000 people, will the Minister confirm that that is indeed the figure? I noted that Baroness Hollis said in the other place on 29 October:"““My Lords, something like 550,000 women could benefit””—[Official Report, House of Lords, 29 October 2008; Vol. 704, c. 1597.]" Perhaps the Minister could also explain the difference between the figures of 550,000 and 110,000. Will the Minister tell the House who will run the information campaign? Is it intended to be the Pension Service, or will it be a joint campaign with Age Concern, Help the Aged and the other organisations with which the Department often works in partnership? These are important issues: if the offer is not to confuse people further, they will need help to understand what is a very complex area. Indeed, Ros Altmann has suggested that people should consult an independent financial adviser or go to a citizens advice bureau or the Pensions Advisory Service. She makes the point that it might be best for people to wait until just before retirement before they make a decision, as their situation is likely to be clearer then. She also sounds a warning note to those women who may qualify for a full pension by virtue of their husbands' contributions. That point needs to be borne in mind as well. I turn now to the amendments tabled by the hon. Member for Northavon. In my speech so far, I have alluded already to a number of his concerns, and specifically to the groups of people who are not covered by the offer. We need to be clear about that. I have looked at his proposals, and I understand where he is coming from. I have general sympathy for the point that he wants to flag up to the House, but the cost—between £3 billion and £5 billion—is pretty high, as the Minister has said already. We need to be clear about what new money would be raised through taxation or what expenditure would be forgone to meet that pretty substantial financial commitment. The Minister in the other place said that the price tag for what the hon. Gentleman was seeking was ““very substantial”” and, indeed, ““unaffordable””. I turn now to the issue of sharing data on pension credit details with energy companies. We in the official Opposition support data sharing, because we realise that many people in the country are greatly worried by the serious nature of their fuel bills. We want to do all we can. We want the Department to play its part in relieving fuel poverty, which will dominate many of our constituents' minds this winter in particular. We therefore welcome the move to ensure that the relevant vulnerable groups are able to benefit from the social tariffs that the energy companies are offering. However, the data sharing needs to be subject to two specific considerations. First, it must be done with the agreement of the pensioners concerned. The release of data about a pensioner or any other benefit recipient is the release of personal and private information, and all citizens should have a right to know that it will not be divulged to third parties without their express agreement. I noted with concern that in the other place, Lord McKenzie of Luton said about the agreement of pensioners to data sharing:"““A potential opt-out is being considered and worked through””.—[Official Report, House of Lords, 17 July 2008; Vol. 703, c. 1393.]" He was referring to an opt-out for pensioners who did not want their details to be passed on to the energy companies. The word ““potential”” worries me greatly. Can the Minister give us some clarity about that? Can she tell us in clear language that if a pensioner does not want their details passed on to an energy company, that will not happen? The second concern is hardly a surprising one. The official Opposition want to see robust safeguards to protect the security of the data that are transferred. There has sadly been a catalogue of lost Government data in recent years, going back to earlier this year when the child benefit data were lost. Sadly, we know from questions asked by my hon. Friend the Member for Welwyn Hatfield (Grant Shapps) that virtually every Government Department has lost often fairly significant amounts of personal data. I therefore again have a couple of specific questions for the Minister. Can she give us some assurance that if data are on memory sticks and laptops they will not be taken out of DWP or energy company offices? That is how many leaks seem to arise. Can we have an assurance that the data will be encrypted so that if laptops or memory sticks are stolen or lost, at least there is some chance that it will not be possible to read the information? The Minister said that the matter would be subject to full parliamentary scrutiny. Well, I and probably others in the House would like to see a bit of that full scrutiny now, and we look forward to hearing what the Minister has to say. I would appreciate some answers now; I do not want to be told that the issues will be dealt with in regulations. The matter is before the whole House and it would be good to have some reassurances. I should like to ask the Minister about the pensioners and others whose data will not be passed on to the energy companies. I am a little confused about amendment No. 204 because it refers purely to passing on the details of those who are currently receiving pension credit. Yet in the other place reference was made to those receiving pension credit over the age of 70. Obviously there are pensioners under the age of 70 who are in receipt of pension credit, so why are they being left out? Does the Department have any plans to leave out that group of vulnerable pensioners, who feel the cold as much as those over 70? What about those who are entitled to pension credit but do not claim it? The Department has details of those people; it knows who they are. I know that it tries hard to contact them, but as my hon. Friend the Member for Eastbourne (Mr. Waterson) has just told the House, about 1.8 million people who are entitled to it do not receive pension credit—roughly a third of all those who are entitled to it. More generally, what are the Department's longer-term plans in this area? Does it intend to extend data sharing to all those in fuel poverty or on other benefits? Is it the intention to offer a social tariff to those on specific benefits? If the intention is to tie the offer of a social tariff to those on a benefit, has the Department undertaken any research into benefit traps and work disincentives? If eligibility for a social tariff is withdrawn when someone gets into work, they may not want to start work until the winter is over because they would have to pay higher fuel bills. I have asked a number of questions on important issues. I apologise in advance to the Minister. I know that she is new to the Bill, but these important matters—eligibility, the Baroness Hollis issue and data sharing—are of great concern to all our constituents.