The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I am aware that the noble Lord, Lord McKenzie, cannot be present today for personal reasons. Given the circumstances, I should be happy to have further discussions with him about his Amendment 7.
Baroness Sherlock (Lab)
My Lords, I know that my noble friend would wish to bring back his amendment at Third Reading. Would that be okay with the Minister?
Lord Freud
“In section 1 (outline of contributory system), in subsection (1)(a), after “this Act” insert “or any other Act”.
In section 13 (Class 3 contributions), in subsection (2), omit “contribution”.
After section 19A insert—
“19B Extended meaning of “benefit” etc in Part 1
In this Part references to “benefit” or “contributory benefit” include benefit under Part 1 of the Pensions Act 2014.””
Lord Browne of Ladyton (Lab)
My Lords, it is a pleasure to follow my noble friends Lady Turner and Lord Whitty, who have robustly set out a fundamental challenge to Clause 24 and Schedule 13, which I think the Minister is required to engage with. Would the noble Lord and the Pensions Minister argue that the loss of the rebate, without some consequential provisions, would lead to the closure of defined benefit schemes? In short, my noble friends argue that this is where it will lead, even with the override which is designed to prevent their loss. There is a fundamental difference which deserves to be addressed in the way specifically asked for by my noble friend Lord Whitty. I am sure that the Minister will be conscious of that.
On the issue of protected persons, I welcome the Government’s concession, set out in Amendment 14, confirming that they will honour the specific undertaking given to the members of these schemes to encourage them to accept privatisation of the industries for which they worked. That is exactly why this undertaking was given to them. It has been promised for some time. Belated it may be in its delivery, but it is none the less welcome and it will be a relief to the 60,000 or more members of those identifiable schemes who have been awaiting this decision.
My noble friend Lord Whitty raised an interesting question about whether this concession can be made to apply in some form to gas workers who have a similar undertaking, but which was enshrined in a different way. I would be interested in what the Minister says about that.
Were my noble friend Lord Whitty’s Amendment 11 enacted it would ensure that:
“The power conferred … on employers to amend occupational pension schemes does not override the powers and duties of Trustees of such schemes nor any duty to consult members of such schemes and their representatives”.
To the extent that this amendment requires consultation with trustees, we support it. We had an extensive debate on these issues in Grand Committee and I made clear then that our position is one of broad agreement with the change to a single-tier pension and the aim of introducing simplicity into the state pension system. We also accepted that this required an end to contracting out. However, we agreed with the arguments put forward in Committee by my noble friend Lady Drake that statutory overrides are strong measures and should be used with care in all cases, at the very least requiring an employer to consult pension trustees before exercising the power to amend a pension scheme.
It would be to the benefit of understanding the Government’s position if the Minister would make clear in his response why the Government had set their face against consultation with trustees, especially when it is preserved in the statutory requirement to consult scheme members. It surely cannot be the case that the different approach to these forms of consultation is that consultation with trustees would be meaningful, but that consultation with individual members would be anything but—indeed it would be pointless. Like my noble friend Lord Whitty, I hope that the Minister’s response to Amendment 12 will be that it is unnecessary. It is my view that this is an expression of the current state of the law.
Finally, my noble friend raised an interesting point about public sector pensions, from his knowledge of the understandings that appear to have been implied by the meeting with the LGA. We would all be interested to know when further follow-up can be expected.
Lord Freud
My Lords, under the current system it is possible for defined benefit schemes to contract out of the additional state pension, giving up entitlement for additional state pension in return for a broadly similar occupational pension and payment of a lower national insurance rate for both employer and employee. When single tier is introduced, there will no longer be an additional state pension for defined benefit schemes to contract out of. Employers with such schemes will therefore no longer receive a national insurance rebate in respect of contracted-out members.
Employers will need to find ways to recoup the costs that the loss of the rebate brings. Unless they are able to do that, many employers will be forced to close their schemes. Clearly, members are not served by their pension schemes closing and the Government are committed to supporting the continuation of defined benefit pension provision. To that end, we are providing a statutory override to allow private sector employers to make limited changes to their schemes to adjust for the additional cost due to the end of contracting out. This is part of our wider state pension reforms. The majority of contracted-out workers in the private sector who reach state pension age in the first two decades of single tier will get enough extra state pension to offset the increase in national insurance they will pay over the rest of their working lives and any potential adjustments to their occupational pension schemes.
Noble Lords have made clear their concerns that the override is not abused by employers and that trustees and members are properly consulted about any changes. I fully recognise those concerns. The override allows for limited changes to future accruals and/or future contributions where the scheme rules would otherwise prevent that. I make it absolutely clear that the override does not permit the employer to ignore other rules about how the scheme operates. For example, it does not mean that an employer can avoid notifying trustees or members of a change, or refuse to carry out a consultation, if scheme rules would require this. Indeed, existing legislation requires that members are consulted on any significant rule changes before they are made. In response to the query from the noble Lord, Lord Whitty, that will remain the case. In addition, we have every reason to believe that employers will want to engage with trustees about how best to respond to the end of contracting out and believe it is in their best interest to do so.
Schedule 14 provides important safeguards, such as limits on the use of the override to prevent an employer from making changes beyond those necessary to recoup their increase in national insurance contributions, the need for an actuary to certify the changes and protection for members’ accrued rights. We will put further safeguards in regulations—for example, to ensure that the employer cannot create their own assumptions for the purposes of the calculation but must draw on existing assumptions used by the scheme.
Amendment 11 concerns protection for trustee powers and duties. As I have said, the override does not prevent the scheme operating normally. The only powers or duties that the override applies to—and therefore that the amendment would protect—are those that require trustee consent to changes or provide that only trustees can change scheme rules. Where these powers stay in place, they would make the override unusable, which in turn could encourage employers to close their scheme. Amendment 11 also seeks to ensure that the statutory override does not trump any duty to consult scheme members and their representatives. Such an amendment is unnecessary as scheme rules and existing legislation requiring member and representative consultation are not affected by the override.
The Government recognise that a trustee’s fiduciary duty to the scheme’s members may put them in a difficult position if they are required to agree scheme changes that, at face value, are detrimental to the member. However, the statutory override does not prevent the employer from engaging with the trustees on any scheme changes they are considering. It is in the employer’s interest to engage with trustees on proposed changes. Trustees are responsible for administering the pension scheme. All schemes need lead time before any changes can take place, to allow for IT systems to be updated and changes to the title deed to be made.
Part of Amendment 12 seeks to protect current members’ accrued rights. The Government absolutely agree that any accrued rights should be protected and preserved, and I reassure the noble Lord, Lord Whitty, and other noble Lords that the Bill already provides such protection by way of paragraph 3 of Schedule 14. This refers to the protection of “subsisting rights”—the term used in pension legislation—for both scheme members and their survivors.
Amendment 12 would also remove the stipulation that changes made in respect of future members have to correspond to changes made in respect of current members. It is important to remember that the override will enable employers to offset the additional cost of national insurance that arises from April 2016. The amendment would broaden the override. An employer could set different contribution rates or different rates of accrual for current and future members. I do not believe that that would be right. The increased national insurance costs to the employer from 2016 will be the same for both groups of members, and the Bill as drafted ensures that the override reflects that.
Lord German (LD)
Will my noble friend allow me a moment’s intervention? I was present at that meeting, and I found it very interesting to have a representative of HMRC there. One of the principal conclusions I drew from that meeting was that there was an agreement between the LGA and HMRC that they would examine up front any arrangement for the distribution of additional funds from HMRC to local government pension funds, and would get the process sorted out in advance so that if money became available the method of distribution would be quick and would help them in their procedure. Can my noble friend confirm my understanding that HMRC is onside with this?
Lord Freud
My noble friend is probably way ahead of everyone in this Chamber at this moment on this matter, but I think I can simply answer yes to his understanding. As he says, whereas final decisions tend to get taken at a relatively late moment, if the processes are well organised, that matters less and they can be effectively activated.
The ending of contracting out is an inevitable consequence of the state pension reforms. We want to manage this as smoothly as possible and to minimise impacts on employers, schemes and individuals. I have set out why the override is necessary and why the amendments tabled by the noble Baroness and the noble Lord would make the override unworkable. Amendment 11 would in many cases allow trustees to block changes to the scheme and would increase the risk that employers would simply close their schemes. That is why I urge the noble Lord to withdraw his amendment.
Lord Whitty
My Lords, I thank the Minister for that. There is quite a lot in there which has cheered me up slightly—not everything, but bits of it. I am grateful for this update on the LGA position. We will watch this space. I am interested to see that there are other sectors that could be involved in that. I welcome the Minister’s statement in relation to the consultation of members of the scheme. I think I am quoting him correctly that the override does not affect the duty to consult, that the Government support the continuation of DB schemes and that the rules of such schemes on consultation are not affected by the override.
That deals with the consultation with members of the scheme, but it does not effectively deal with the trustee position, and the role of the trustees is very important in the future of the schemes and in future faith in them. The Minister said that trustees are bound to consult; yes, they are possibly bound to consult. The override clearly applies in his mind, and I presume the intention of the override is that in those schemes that require trustee consent, the employer, using Clause 24 and Schedule 14, can override the need for that consent. That seems a pretty fundamental alternation in the role of trustees. I hope that, even at this late stage, the Government would reconsider that position.
I am grateful for the Minister’s view on accrued rights and the fact that Amendment 12 is not, therefore, needed. I am less grateful for his indication that “protected workers” will not apply to those who are protected on the word of the Government of the day but not actually embedded in statute. This applies principally to the gas workers and I suspect I will be in correspondence with him about that.
The central point of this group of amendments is that, in this clause, the Government have, effectively, overridden the governance structure of work-based occupational schemes by attacking the very fundamentals of trusteeship. That is a mistake. Over the years, many changes have been made at the behest of employers and with the agreement of trustees. Some of these were detrimental to future members because of the financial position of the scheme or legislative changes. Trustees are unlikely to be unable to recognise the need for such changes, but to override and delete trustee consent is a very serious step which the Government should be much more hesitant about taking. However, for the moment, I beg leave to withdraw the amendment and thank the Minister for some of his other remarks.
Lord Freud
“(4) The power may not be used—
(a) to make amendments that apply to a member who is a protected person in relation to a scheme, or(b) to amend a public service pension scheme or a scheme of a description specified in regulations under this paragraph.(5) Regulations must define what is meant by a protected person in relation to a scheme for the purposes of subsection (4)(a).”
Baroness Sherlock
My Lords, in speaking to Amendment 16, I shall also speak to Amendment 17 in my name and that of my noble friend Lord Browne. We on these Benches agree with the principle of raising the state pension age to reflect longevity. We accept the need for periodic reviews of the state pension age. Where we differ from the Government is on how best to do that.
Fixing the state pension age is never easy. There is always an issue of fairness at stake. Having a careful, evidence-based review before taking any future decisions on changes to the state pension age is a crucial element of ensuring fairness between generations. However, sometimes fairness requires a consideration of difference, particularly differences in longevity and health. The Government are setting considerable store by actuarial information on average life expectancy. However, while average life expectancy tells us something—mostly quite a lot about medical advances and their ability to keep us alive for longer—it does not tell us very much about our health in retirement or differential mortality rates.
We heard a great deal of evidence in Committee to inform our debate, and I certainly will not rehearse it all here, noble Lords will be relieved to hear. However, maybe the headlines are worth briefly restating. People are living longer, but the proportion of years in full health is not keeping track at the same rate. We have significant inequalities in health within the UK, and significant variations in mortality as a result. There are clear socioeconomic differences. There is a class divide, as managerial and professional classes live longer than manual workers by 3.8 years for women and 3.1 years for men. There is a clear geographical divide.
There is then the effect of this differential life expectancy on state retirement incomes, with the irony that those living the shortest lives post-retirement—the poorest and least skilled workers—will receive less in state pension than their better-off counterparts, but they may well have contributed for longer as a result of having spent less time in education.
If we want people to save for retirement, they need to trust the Government, to trust Parliament and to believe that their pensions are safe in our hands. The public need to know that they will not be at the mercy of political expediency, and that they will be protected from any adjustments that need to be made by ensuring that they are not made too quickly. Rather than simply being a matter for the Secretary of State, as the Bill proposes, we need a genuinely independent panel which has the kind of cross-party and independent representation that will reassure the public and give confidence to parliamentarians from across the spectrum. Our amendment proposes simply that the review body should include representatives of the opposition parties and of the Cross Benches of this House to ensure that Parliament as a whole is at the heart of this process. It would also include representatives of trade unions, who are themselves the representatives of those who are spending their ever-longer working lives saving for retirement. This broader representation will give people confidence that a wide range of views will be heard. I urge the Minister to accept it.
Lord Freud
My Lords, as your Lordships know, the purpose of the review of state pension age is to inform the Government. The reports from the Government Actuary and the independently led review, which will feed into the review, should collect and analyse the latest data, and give the Government of the day the information they need to make what will always be a difficult and contentious decision.
We are all keen that the Secretary of State receives a report that is impartial. Because we are requiring that all reports compiled as part of the review are published and all future changes to state pension age continue to go through primary legislation, any proposal based on a report that is not impartial, credible and comprehensive will quickly fall apart when scrutinised by stakeholders and both Houses of Parliament.
Turning first to the substance of the amendment tabled by the noble Baroness, Lady Sherlock, and the noble Lord, Lord Browne, if one thing is apparent it is that there is no clear consensus on who should sit on the review, what they should look at, or how they should collect the necessary evidence. We have been clear in Grand Committee and in the other place that this Government’s vision of the review is one similar to the independent review of public service pensions. That review was run by the noble Lord, Lord Hutton, a member of the opposition Benches and an expert in his field. It was transparent, comprehensive, independent and established a consensus.
Noble Lords will also be aware that the Pensions Commission, set up by the previous Government, had three commissioners from the areas of business, trade unionism and academia: not a single politician or Cross-Bencher. That commission gained support through comprehensive and open debate about the issues and trade-offs, rather than being based on the inherent characteristics of the commissioners’ backgrounds.
In short, the amendment tabled by the noble Baroness, Lady Sherlock, and the noble Lord, Lord Browne, would preclude these two successful models. It would result in a body of at least six individuals from stakeholder groups, the other place and this House. It would not necessarily have the expertise to review the relevant data and would effectively create a mini parliamentary process before the parliamentary process proper. We do not think that is the right way to run a review designed to inform the Government. In the Bill as currently drafted there is nothing to prevent a future Government running the review in whatever way they think best. That is a key point underpinning our approach to the review—getting future Governments to take active ownership of and responsibility for all aspects of the review, instead of just going through the motions.
Turning to the factors to be considered as part of any review, I must note that in response to the recommendation made by the noble Baronesses, Lady Turner and Lady Sherlock, we do not have the data regarding the relationship between specific occupations or types of work and life expectancy and healthy life expectancy. Beginning to collect such data would be both burdensome and, I imagine, for some professions simply impossible. More generally, we do not think it is necessary to specify any factors to be considered in legislation. We have already consulted stakeholders on what factors they think are important, and stated the factors we expect to be considered in the White Paper. The Opposition are worried that by not specifying the factors in legislation, future reviews simply will not consider important variables. However, what kind of support would such a review generate?
We want to encourage all interested parties to feed in their thoughts and contributions to better involve them. Specifying factors in the Bill could send out the message that we have already thought of everything important, and that future Governments do not need to consider additional factors as they are not set out in primary legislation. Such an approach could lead to a tick-box mentality, with Governments simply going through the motions instead of taking a proper, considered approach to each review. My point is illustrated by the fact that another factor has been added to the Opposition’s amendment since its predecessor was tabled only a month or so ago. Other noble Lords have also previously suggested additional factors, including life expectancy of the lowest income decile, prevalence of smoking and quality of diet. This demonstrates that the determination of relevant factors should take place after a thorough and extensive consideration and on an iterative basis for each review.
I turn now to the review’s remit. We believe that the Government should maintain control of this to keep it focused on the task at hand. There is nothing in the Bill to prevent the Secretary of State of the day updating the remit of the review, and we—or, more importantly, stakeholders—would fully expect him or her to do just this if new and compelling factors were identified during the course of the review.
The amendment of the noble Baroness, Lady Sherlock, also requires evidence to be gathered in public sessions. Although there is nothing in the Bill to prevent some evidence being taken orally—rather as Select Committees do—noble Lords will be aware that the nature of the analysis around state pension age, such as the myriad tables, charts and graphs, does not lend itself well to public sessions. Underpinning our approach is the idea that each Government will fully own and be responsible for the review. Setting out membership and factors to be considered restricts rather than increases that responsibility. It would instead limit the scope of reviews and reduce engagement by stakeholders. I therefore urge the noble Baroness to withdraw her amendment.
Baroness Turner of Camden
I thank the Minister for his response. It does not surprise me, but, on the other hand, I still think that the type of work that people do is very important. There are, of course, already industries in this country in which there are different ages of retirement for different types of work. It is not unusual for that to happen; indeed, it is quite a common practice, if an industry is particularly stressful or difficult, for there to be a lower retirement age for that kind of work. It is not an unusual state of affairs but one that is highly regarded where it applies—and people accept it. They think, “Oh well, that sort of work is very tough, but at least you go a bit early for it. You don’t have to stay and work there—after a certain time you can go”.
My husband, who was a pilot in the war, tried to stay in the Air Force because they were recruiting people to fly civil aircraft when the war ended. He tried to get into civil aircraft because he was a pilot, with decorations, but he was disappointed to find that he could not do so. He wanted to get into the civil air force because they had an early retirement age; he thought that he could retire at 50 and start becoming a full-time artist, which is what he had always wanted to do. But he did not manage to do that. I give that as an example, because the age of retirement was different than for general people. So it is not an unusual situation.
I still think that it is quite sensible to have a provision under which it is possible for a review to take seriously into account the type of work that is involved. However, I note what the Minister has said this evening and I shall study it with interest. In the mean time, I beg leave to withdraw the amendment.
Baroness Sherlock
My Lords, in Committee the Minister came under sustained pressure on this matter from my noble friends Lady Hollis and Lord McKenzie, among others, and I am sure that he did not expect to emerge unscathed from Report. Many noble Lords pressed the Minister in Committee to try to understand what the consequences of this increase in means-testing would be. In particular, they were concerned about what would happen to those older pensioners who inadvertently, or perhaps negligently, fail to report changes of circumstances.
The Minister could not assuage our fears in Committee but wrote to us subsequently. That was helpful as it made clear what would happen. The letter he sent to us, dated 20 January, noted that claimants of any age who commit benefit fraud can be prosecuted. However, it also says:
“DWP may offer an Administrative Penalty as an alternative to prosecution. That penalty is 50% of the overpayment with a minimum value penalty of £350 and a maximum of £2000”.
When a claimant makes an error resulting in an overpayment, the letter explains that,
“a DWP decision maker will consider the full circumstances of the individual case … taking into account the reasons that led to the error”.
The letter then referred us to the guidance for decision-makers. I read this guidance so that noble Lords would not have to, and that is an hour of my life that I will not get back, so anyone who feels that he would like to buy me a drink at any point to say thank you is most welcome to do so. However, having done so, I then discovered the following. Incidentally, CPen means civil penalty and DM means decision-maker. The guidance states:
“Before imposing the CPen, the DM must establish that the claimant
1. has acted negligently and
2. has failed to take any reasonable steps to correct the error that led to the overpayment”.
I accept that the word “negligently” implies something serious. However, on the “Meaning of ‘negligently’”, the guidance continues:
“DMs should note that negligently should be taken to mean acting carelessly, not paying sufficient attention to the task in hand, or disregarding the importance of what is required to be done in relation to the claim or an award”.
In other words, that is a pretty low bar.
A number of noble Lords expressed concerns—as has been done very clearly by my noble friend just now—about what happens to pensioners who might struggle to keep the paperwork together or report every relevant change. The letter from the Minister said that robust safeguards are in place to ensure that matters such as mental capacity are considered. However, the guidance also makes clear that misrepresentation can involve simply leaving a section blank, perhaps because someone cannot figure out how to fill it in at that point and forgets to go back and do so later. The guidance also states at paragraphs 09206-7 that a claimant cannot avoid responsibility for misrepresentation just on the grounds that they claim they did not know what they were doing. It states:
“Non-responsibility is limited to those who are blind, illiterate or do not fully understand a particular form they have signed. Poor education, illness or inborn incapacity alone is not sufficient to show non-responsibility. People are expected to take reasonable steps to understand what they sign”.
This is exactly the sort of reason why so many pensioners dread means-testing and do not claim benefits to which they are entitled. If the Minister does not want to accept this amendment tonight, I plead with him to do one thing. Will he please take this guidance away urgently and have it revised before this legislation ever is introduced, so that pensioners are not expected to follow these kinds of rules?
Lord Freud
My Lords, assessed income periods were introduced by the noble Baroness, Lady Hollis, during the passage of the State Pension Credit Act 2002. At that time it was assumed that income and capital for those above pensionable age remained relatively stable and it therefore made good sense to relax reporting requirements, both for the individual and the department in terms of running costs. This was still the case in 2007 when the Government of the day introduced indefinite assessed income periods for those aged 80 or over.
The noble Baroness said just now that income and capital do not fluctuate by much. We have now tested those assumptions, analysed around 100,000 cases and come to the conclusion that there is actually a greater degree of volatility in people’s financial circumstances than she and the department had anticipated at the relevant times. In some cases, assessed income periods have allowed people to continue to receive pension credit following a change in their circumstances when they would not have been entitled to it had they made a new claim at that point. The evidence means that we have had to think again about the viability of the policy and have concluded that AIPs should be abolished. Ultimately, if we were to allow AIPs to continue, the taxpayer would be providing support to people who no longer need it. It would mean retaining a system in which we can only apply changes to retirement provision that would increase an award but cannot take account of windfalls that would otherwise see a reduction in or loss of benefit.
Let me be clear, we are not changing entitlement rules. We are changing the reporting system so that people’s benefit entitlement reflects their circumstances at the time. To that end, we are looking to simplify the reporting requirements so that we are able to support those who need it most and best target our benefit expenditure. I am of course mindful that by changing reporting requirements some people may find it more difficult to adjust, particularly those of the most advanced years who may have the greatest difficulty in contacting us. This is why existing indefinite assessed income periods in place prior to 2016 will continue.
For those new recipients, or those on fixed-term AIPs, we will have the opportunity to explain clearly what does and does not need to be reported at the point of claim or when their existing claim is reviewed. I stress that pension credit is already designed in such a way as to minimise reporting requirements. For example, changes to capital only need to be reported if their total amount exceeds £10,000. Currently, only 12% of people on pension credit have capital above that level. People would need to report new income streams, but we will continue to take into account annual increases in pensions automatically, based on what people tell us. We will also encourage people to tell us if their capital falls below £10,000 or if any income stops, to ensure that we capture beneficial changes.
Lord Freud
Take-up of pension credit guarantee credit, which is aimed at the poorest pensioners, is already high at 82%. However, I think that it would be better if I offered to write to the noble Baroness on the exact nature of the evidence which I do or do not have. Actually, I do not need to write because I can tell her that her second supposition is correct. We do not have any evidence either way. With that covered, I ask her to withdraw the amendment.
Baroness Hollis of Heigham
My Lords, I am not going to pretend that I am not disappointed with the Minister’s reply. I thought that he showed a degree of sympathy and understanding in Committee, particularly of the plight of older pensioners in their late 70s or their 80s, or perhaps older still, who are getting increasingly frail and confused. I thought he understood that. That is why in this amendment I dropped the idea of periodic assessments and simply suggested that, while the Minister does what he thinks is appropriate or is required to do on this in terms of having annual means-testing until the age of 75, at least from 75 onwards he could abandon the annual means-testing system.
I really do not think that the Minister has addressed the issue. He said, first, that he thinks that the savings would be reduced by 30%. I suspect that that is a slightly arbitrary figure, arrived at by dividing the number of years and the percentage of savings, but it takes no account whatever of the fact that means-testing will already have excluded pensioners at an earlier stage. I suspect that at least half his savings will come from the fact that pensioners do not claim what they are entitled to, rather than them not getting what they otherwise would by having annual means-testing.
The Minister said that if those under 75 were annually means-tested but those over 75 were not, that would give rise to appeals and disputes. What evidence does he have for that? After all, we have had periodic means-testing since 2008. How many appeals have there been from people under the age of 75 against the “no further means-testing at 75” rule, and what has been the result of those appeals? I shall give way to the Minister. He ran that argument, so I presume that he has some statistics for us.
Lord Freud
I shall have to supply the statistics separately and will do so in writing.
Baroness Hollis of Heigham
My Lords, forgive me, but trying to persuade the House that this would generate appeals and disputes and not presenting to noble Lords what is already a firm basis of evidence from the existing situation does not seem acceptable. I rather doubt that the Minister has more than a couple of handfuls of cases but we will see when he digs out his statistics. I just do not think that it is a valid argument and I have not had a shred of evidence from him or the Box to support it, although I have plenty of anecdotal evidence to the contrary.
However, my deepest concern—and it is one that I do not think the Minister has addressed—is just how profoundly unfair this is. I am baffled that he does not seem to accept that argument. He is quite deliberately building means-testing out of the new state pension, and I welcome that wholeheartedly. However, every reason he adduces for building it out of the new state pension applies equally for not continuing to means test after 75. Every argument that supports the new state pension works to support the amendment and not continuing means-testing after 75. If means-testing is so innocent, why get rid of it in the new state pension? The Minister knows, as we all know, on the basis of good and effective DWP research, that means-testing is loathed by pensioners and they do not take up the benefits they are entitled to. That is what the Minister is counting on for his savings and it is profoundly unfair.
Pensioners slightly younger are built out of means-testing because the whole lot of pension credit has been thrown out of their new state pension. One day older and they are not only going to be means-tested but means-tested annually until the day they die, until they are 90. That is shameful. The Minister is widening the gap between younger pensioners, who will be much better off and with no means-testing, and the pensioners who will be staying with the old system, who are already older and poorer and who will have a lower pension and face means-testing. He is widening the disparity rather than narrowing it.
That is not good enough. It is not decent. The Minister is profoundly wrong on this but, given the lateness of the hour, obviously I will not seek the opinion of the House at this time of night. I will withdraw the amendment but with a heavy heart because it is profoundly wrong to widen the gap between older and younger pensioners at a time when we are trying to build means-testing out of the system and the Minister is reinforcing it back in again. I beg leave to withdraw the amendment.