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The Committee showed me great indulgence on the previous amendment, so I shall very briefly say that I support this amendment. However, the difficulty is that this provision remains very fluid. None of us doubts the intention and good will of the Government in this respect, but it depends on the carer’s strategy coming through and being embodied in regulation. Indeed, it depends on Ministers in the department—who may or may not be the same people after any reshuffle—being persuaded of the same position. We have seen the Government desirably change their views on this during Committee, and I would like to see that embedded in the Bill. However, I accept that this may, more appropriately, be a matter for regulation, so can my noble friend show us the draft regulations that are due to be published within, say, six months of the Bill, so that we can at least have the assurance that the intention is covered if not in the Bill, in regulations? If my noble friend feels unable to accept the amendment as currently described, can she at least help us on that?

Baroness Morgan of Drefelin: I am delighted to respond positively to the debate on behalf of the Government. This is not a personal response, so I hope that it will be a long-lasting response.

Clause 3 has the effect of replacing home responsibilities protection with a new more generous system of contributions credits for carers. Before turning to the amendments, I shall set out how the provisions in the clause achieve that. It is important to take a few moments to do so for the reasons raised by the noble Baronesses.

The pensions system has recognised the valuable contribution of full-time carers since the mid-1970s. Home responsibilities protection—or HRP, as it is commonly known and has been referred to today—recognises three broad groups of carer: first, those undertaking a parenting role, including parents awarded child benefit for a child under 16; secondly, registered foster carers since 2003; and, finally, those caring for severely disabled people.

Although at first HRP was a ground-breaking recognition of other ways of contributing to society alongside working, aspects of it make carers less certain about the state provision they will get when they reach pension age. In order for HRP to protect someone's basic state pension, that person must be in one of these categories for a complete tax year, as has already been mentioned. For example, if a woman had a child in May and was subsequently awarded child benefit, from that point she would not necessarily qualify for HRP that year. HRP provisions would take effect from the following tax year, with each complete year of HRP reducing the number of qualifying years needed for a full basic state pension.

HRP has worked well, but it is difficult for people to understand. Clause 3 will be much simpler. It introduces new contributions credits for relevant carers. And, as with all national insurance credits, they will be available to people from age 16—and I hope that offers some reassurance—until they reach state pension age. I shall speak more about 16 year-olds in a minute.

Moving to a system of credits will address the more negative aspects of HRP. People can combine part years spent caring with time spent working, or some other credited activity, in order to accrue sufficient contribution credits for a qualifying year. Each qualifying year is recorded against the 30 needed for a full basic state pension, making the system simpler to understand.

I turn to Amendment No. 7. There are three groups of carers—not so very different from those recognised under HRP—who will benefit from the contributions credits under Clause 3. These are set out in subsection (3) of the clause, the subsection that the noble Lord, Lord Skelmersdale, seeks to remove—although I appreciate his amendment is probing.

The first and second groups are persons awarded child benefit for a child under the age of 12 and approved foster parents. The third category of carer is those “engaged in caring”, and the definition of this group will be set out in regulations. I shall explain more about this group and the approach we are taking. I wish to offer as much reassurance to the Committee as possible. The Government are very proud of this area and to be moving forward providing additional support for carers.

Currently, HRP can be awarded to someone looking after a severely disabled person for at least 35 hours a week. However, very few people claim it. Only about 1 per cent of HRP is awarded for care of severely disabled people, as most people who provide this level of care receive credits through the carer’s allowance. However, we recognise that those providing at least 20 hours of care a week can be disadvantaged in the labour market. For this reason, the proposed regulations will ensure that anyone in this group will be able to claim the new carer’s credit.

When we introduced the Bill, we stipulated in the accompanying delegated powers memorandum that the person or persons being cared for should be entitled to the attendance allowance, the middle or higher-rate care-component disability living allowance, or the constant care attendance allowance. We did this originally so that we could take a light-touch approach to determining entitlement to the credit, but we have listened to representations from a number of organisations and to the debate in another place. That is why my noble friend reiterated at Second Reading the Statement on the carer’s credit made by my honourable friend James Purnell, the Minister for Pensions Reform.

To be absolutely clear, there will be two routes by which people will be eligible for the carer’s credit, and they will both be covered in the regulations. First, as I have stated, the carer’s credit will be available to those caring for at least 20 hours a week for one or more severely disabled people with certain qualifying benefits. Secondly—this is the important point—a person will be eligible for the carer’s credit if they are certified by a health or social care professional as caring for at least 20 hours a week, irrespective of whether they are caring for someone with or without benefit entitlement. Through this second route, we are providing even more flexibility to deal with the situation whereby the person being cared for is not entitled to one of the specified benefits or chooses not to claim it. In this case, the carer will get the carer’s credit if they are certified by the health or social care professional as caring for at least 20 hours a week. We plan to explore this process fully through the review of the national carer’s strategy, in which carers’ organisations are actively engaged. I stress that this is a consultation on how the process will work and not on whether the regulations will include this alternative route. This has been stated in the Commons and restated here on Second Reading, and I make these points for the record now.

We do not believe that it is necessary to put a separate definition in the Bill to recognise those certified by health or social care professionals as caring for at least 20 hours a week, which Amendment No. 8, tabled by the noble Lord, Lord Oakeshott, seeks to do. The same effect will be achieved through the regulation-making power that is already set out. Importantly, the regulation-making power will give this and future Governments the flexibility to reflect the changing nature of care over time and the needs of an ageing population.

I hope that I have been able to reassure noble Lords. The noble Lord, Lord Skelmersdale, made a point about child carers. I, too, recognise the enormously important role that young carers play. I should state for the record that children under the age of 16 who may receive the carer’s allowance will receive credits in the same way. Young adults of 16 and 17 also receive starter credits. I, too, believe very strongly that young adults of 16 and 17 should be advised of their entitlement and moved swiftly and confidently on to these credits. The Children Act has provisions for local authorities to pay particular attention to the needs of child carers and to their needs when they turn 16 and become young adults. That should be in place, particularly for children who are being treated as children in need. I hope that I have offered the reassurance that noble Lords seek, and that the noble Lord will withdraw his amendment.

5 pm

Lord Skelmersdale: I, for one, never intended to press my amendment, but I think that there will be universal approval for the Minister’s speech. On my amendment, I am particularly glad to hear that carer credit will be available to young adults of immediately post school-leaving age. However, I am not sure that the local authority is the right body to tell them. If a young adult has been in receipt of care allowance previously, the department would be in a good position. If they have not been in receipt of such an allowance, it is rather difficult to think who would be the best person to advise them or to whom they should apply for advice. Perhaps the GP or the healthcare professional might be the appropriate person, but we can all think on that because there will be time before the regulations are laid before us.

On whether the noble Baroness’s amendment should be in regulations or not, yes it should. Since everything else in this clause is being done by regulations, it is perfectly logical that this should be too. With those remarks of praise to the Minister, who I note is unisex because I called her the noble Lord a few minutes ago, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

Baroness Hollis of Heigham moved Amendment No. 9:

(a) a Category A retirement pension in a case where the contributor concerned attains pensionable age on or after 6th April 2010,(b) a Category B retirement pension payable by virtue of section 48A in a case where the contributor concerned attains pensionable age on or after that date,(c) a Category B retirement pension payable by virtue of section 48B in a case where the contributor dies on or after that date without having obtained pensionable age before that date,(d) a widowed parent’s allowance payable in a case where the contributor concerned dies on or after that date,(e) a bereavement allowance payable in a case where the contributor concerned dies on or after that date.(a) applying to be so credited in accordance with the prescribed requirements, and(b) complying with the prescribed requirements as to the provision of information to the Secretary of State.

The noble Baroness said: This amendment is necessary if Amendment No. 4 concerning added years is not acceptable to my noble friend. Amendment No. 9 proposes that a relative, probably but not essentially a grandparent, who cares for a child under 12 for 20 hours a week or more, to be specified in regulations, would be eligible for credit to his or her BSP. Clearly, this is a probing amendment at this stage. Why? The average age when a woman becomes a grandmother is now 49 or 50. She provides childcare in order that her daughter, who may be a lone parent, can work. Some 2.33 million women in work have children under 12 years old and they pay tax and national insurance.

Theoretically, those women would be eligible for HRP if they were not already paying for their own full stamp. They work because they have childcare. For one-third of them, their primary child minder is the grandparent. Why? Childcare is a matter of trust. You feel comfortable and less guilty working. Most women I know who work with young children have an edge of guilt and concern. They feel less guilty if their young child is looked after and loved as they would do, and they get that from their own mother. If a child is poorly, a woman would trust their mother to take him or her to the GP in a way that a registered child minder—certainly, a nursery—probably could not or would not do. Because the grandparent is childminding, the daughter can and does work. I have been briefed on this by the West Norfolk Women and Carers’ Pensions Network. It can be an issue particularly in a rural community where travel to work is harder, wages are lower, commercial childcare is less available, families are less mobile and there is therefore much more likely to be reliance on grandparent care.

However, that care comes at a huge price to the grandparent who may, in her fifties, otherwise have been able, finally, to work full time. But if she does, her daughter may not be able to do so. The grandmother loses any potential income from a full-time job and, with it, loses any entitlement to a BSP. Yet, although the daughter gets HRP, in theory, and pays a stamp—a double-qualification—neither can be transferred to the mother. What is worse—which is why this really is a problem—is that, because the childcare is provided by a grandparent, the grandparent cannot be registered as an official childminder and cannot be paid childcare tax credit. That is extremely unfortunate; indeed it is daft. I hope that no one will talk about the commercialisation of family care. We do it all the time when we call it the carer’s allowance for older people. The result is that grandmothers still undertake the care, but daughters cannot claim childcare tax credit for their mothers and therefore can seldom afford to pay for that care, unlike the position if their child is cared for by a relative stranger. Instead the daughter may do her best to help with grocery or petrol expenses. Both the mother and the daughter are stuck. Let us be clear: without care by grandmothers, many daughters would not and could not contemplate work. With that care they do work, but courtesy of a degree of loving exploitation gracefully given by a woman in her fifties who loses income and pension.

The amendment proposes that where 20 hours of care are established and the parent is in work, the notional HRP that has been forgone should effectively be transferred and become a childcare credit for pension purposes for the carer. It then becomes something of a win-win situation: a secure, stable and loving environment for the child; a less guilty and stressful working life for the mother; and even if income is forgone by the grandparent, the pension has not been lost.

I know how receptive and responsive my noble friend has been to the issues faced by some grandparents, so I hope he will recognise that this is yet one more problem encountered by women in their fifties. It would disappear if Amendment No. 4 were embraced, but in the absence of that, I wonder whether my noble friend can help me on Amendment No. 9. I beg to move.

Lord Oakeshott of Seagrove Bay: I pay tribute to the West Norfolk Women and Carers’ Pension Network, part of the Equal Opportunity Commission’s pensions network, for raising this important point on behalf of mothers and grandmothers. In her thoughtful speech, the noble Baroness, Lady Hollis, gave us some interesting statistics, and I have one or two more. The 41 per cent of women who work part time earn on average 41 per cent less per hour than men working full time. That gives us some idea of the gap. Further, parents in a weak labour-market position, such as unskilled workers, often find it harder to negotiate family-friendly working arrangements with employers and to find jobs that fit in with their parental responsibilities. Their bargaining power in the labour market is clearly not high. We agree with the West Norfolk Women and Carers’ Pension Network that more work needs to be undertaken nationally to discover the full effect of how grandparents miss out on state pension provision.

Like us, the noble Baroness, Lady Hollis, supports a universal citizen’s pension, but to be honest, we are sceptical about whether this amendment is on the right side of the line of how far one should go down the route of introducing lots of individually tailored changes. That is what worries us. If I may put it this way, the more tweaking and complexity introduced to try to patch up this broken system, the more complicated it gets. On balance, and with reluctance, we feel that this is probably a complication too far. We would prefer to go for more universal amendments short of a citizen’s pension. However, I pay tribute to the pensions network for raising the issue. It is something we need to keep a close eye on.

Finally, I was struck by the way the noble Baroness talked about loving exploitation, particularly the edge of guilt in the relationship between mothers and grandmothers and the issue of childcare. Just last Saturday lunchtime, my daughter, who is not even married yet and so far as I know has no immediate plans to have children, casually said to her mother, “Mum, when I have kids, would you look after them for two days a week, please?”. I hope that my daughter is going to be a well-paid barrister and thus able to afford childcare, and my wife is a doctor with no plans to give up work. She said, “Certainly not. At least, not unless there is a problem”.

Baroness Greengross: I speak as chair of the All-Party Group on Grandparents and Extended Kin. I agree completely with the noble Baroness, Lady Hollis, that it would be better if we did not have to make small adjustments. Anything that can help grandparents to retain their pensions rather than suffer the tremendous disadvantage that so many of them face at the moment when compared to non-family carers would be welcome. It is grossly unfair. In many instances social services will come round with the child and say to the grandparent, “Will you look after this child?”. The grandparent will obviously say, “Yes”, and therefore exclude herself—it is usually “herself”—from the benefits that would have been available to someone who was not a relative. That is only one example of the awful things that happen to grandparents. At least we could help them through the amendment not to lose out on an entitlement to a pension. I support the amendment with the same reluctance as the noble Baroness—we would prefer something better—but, in the circumstances we face, anything to help grandparents would be welcome.

Baroness Howe of Idlicote: I support the amendment, not with reluctance but because it is crucial to face this issue. A huge number of grandparents are now involved in supporting their daughters and sons—usually it is their daughters—so that they can have a full working and parenting life and not be in the same position the grandparents are in now. There may be a better way of doing this—I accept that—but we are asking the Government to find a better way to deal with this situation and, at the same time, to acknowledge the amazing extra sacrifice being made by this generation. I very much support the intentions of the noble Baroness, Lady Hollis.

Lord Skelmersdale: I do not want to go into my family history in the same way as the noble Lord, Lord Oakeshott, but, on these Benches, we fully support the idea that government benefits should not unintentionally penalise those families who support each other with the upbringing of a child. So, to that extent, I go along with the amendment. Having a grandparent or other close relative to rely on for help with childcare, whether it be on a regular basis or for emergencies only, can be a critical factor for a parent in deciding whether or not to go back to work. That, of course, is the best way of ensuring that a child is not brought up in poverty.

There is also, unfortunately, a rising number of families in this country where neither parent is capable of bringing up a child for one reason or another. In this situation it is almost certainly the case that it would be better for the child to be looked after by the extended family rather than to be sent into care. But—and there always seems to be a “but” in my responses to the noble Baroness’s amendments—I see a small problem in the amendment, to which I am sure the Minister will allude. The amendment appears to make contribution credits payable twice for the same child, once for the parents and once for the grandparent. I have tabled a later amendment that relates to the reallocation of child benefit—which, in a sense, is linked—and it might be a more appropriate way of dealing with the situation. I am sure the Minister will tell me, perhaps before the noble Baroness tells me I am wrong.

Baroness Hollis of Heigham: I take the point that the amendment may be inappropriately and badly drafted but it is intended to apply to those daughters who are in work, paying national insurance and tax, and who have a child under 12. It would qualify them if they were not drawing down HRP because they are already covering themselves through NICs. That is the point about the double provision and why I did not think the amendment contained the error suggested by the noble Lord.

5.15 pm

Baroness Dean of Thornton-le-Fylde: I, too, support the amendment. It was interesting to hear the comments of the noble Lord, Lord Oakeshott, but, with all due respect, many grandparents are not in a position to respond in that way. With the increasing fragmentation of the family in the UK, this is a growing problem. The amendment is not an ideal way of dealing with this situation—we would prefer something in the Bill that took out some of the complications—but it is a way of raising the issue. All of us who support the amendment would love dearly for the Minister to come forward with a solution. If we do not raise this issue in this Bill, we will have no other opportunity to do so.

There are grandparents and parents out there who are acting as carers, but not because they want to. I think most grandparents would love to say no, but they do not have the opportunity. That is certainly the case in our family. I shall be interested to hear the Minister’s reply to this discussion and I hope we will see some movement on the issue.

Baroness Turner of Camden: I support the amendment and what has been said succinctly by my noble friend in moving it. It seems that every effort has been made in the amendment to try to ensure that the extended family is covered. Subsection (5), for example, describes what is meant by a “relevant other relative”, but it also says, “shall not include a registered childminder”. In other words, it is clearly directed at the grandparents and the extended family, which is terribly important in the current situation. It may be important for ethnic minorities, where the extended family is important and there may not be any other form of benefit for the people who look after the child, such as the grandparents.

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