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Oral Answers to Questions
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Duncan Hames (Chippenham) (LD)
1. What plans he has to promote new initiatives to encourage organ donation.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
Sustained work at national, regional and local level has seen an increase in donor rates by some 28% since 2008. We continue to work with a large number of organisations, such as the Give and Let Live initiative in schools, which is run by NHS Blood and Transplant. Other initiatives include requiring people to answer a question about organ donation when applying for a driving licence and to sign on the organ donor register when applying for a European health insurance card or for a Boots advantage card. We also have specific initiatives within the black and minority ethnic populations, such as working with faith groups and local radio stations.
Duncan Hames
I recently met young campaigners from Sign Up, Speak Up, Save Lives whose organ donation campaign features on Channel 4’s “Battlefront” programme. Will the Minister please meet Hope, Abby and me, together with the Minister responsible for constitutional reform, so that we may discuss with them both our idea of inviting people to join the organ donor register at the same time as they will soon be asked to join the electoral register?
Anne Milton
I congratulate Sign Up, Speak Up, Save Lives. I am happy to meet Hope, Abby and the hon. Gentleman, along with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper). The electoral registration form has been used as an opportunity. In 2000 there was a campaign called Vote for Life, which was stopped after about 15 months because of problems with the Representation of the People Act. I would be happy to revisit it and would enjoy an opportunity to discuss the matter further. Anything we can do to get those rates up matters.
Grahame M. Morris (Easington) (Lab)
The reorganisation of NHS procurement has been described in a National Audit Office report as fragmented and poor value for money. The report shows—
Hywel Williams (Arfon) (PC)
What discussion has the Minister had with Welsh Ministers who are bringing forward legislation for an opt-out system of organ donation? If she has had such discussions, what conclusions has she drawn?
Anne Milton
The Government will examine thoroughly the detail of any Assembly Bill when it is laid before the Assembly, but I urge Wales to look at the evidence. We can look back to what happened in Spain, where there was presumed consent for 10 years without any shift in organ donation rates. The issue is more complex than that. It is about organ donor transplant co-ordinators and increasing donations from emergency medicine. A number of measures need to be put in place to increase those rates.
Mr Philip Hollobone (Kettering) (Con)
Will my hon. Friend be kind enough to meet Mr Adam Crizzle, who was the original inspiration behind the Give and Let Live organ donation programme in schools, to see how the promotion of this excellent scheme might be further improved?
Anne Milton
I would be very happy to meet that gentleman. There is no doubt that promoting this in schools has a profound impact and is an opportunity to change people’s attitudes to organ donation and, more importantly, makes families discuss it, which is critical. It is not just about signing on to the register.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Last week I had the opportunity to meet members of the Ticker club, an organisation of former heart patients who continue to provide support to patients at Wythenshawe hospital, a specialist centre for cardiac and thoracic surgery, including heart and lung transplants. They have strong opinions on organ donation, so will the Minister agree to involve such groups in ongoing campaigns to raise awareness of the benefits?
Anne Milton
I thank the hon. Gentleman for raising that issue. My right hon. Friend the Secretary of State has visited that hospital, and I am happy to work with any group. I reiterate the fact that we particularly need to work with black and minority ethnic groups, in which the rates of donation are truly dreadful: 23% of people on waiting lists are from black and minority ethnic communities, but only 1.2% of those on the register are from that same group. We need to do everything we can to improve those rates.
Mr Rob Wilson (Reading East) (Con)
2. What steps he is taking to reduce NHS hospital indebtedness.
George Eustice (Camborne and Redruth) (Con)
14. What steps he is taking to reduce NHS hospital indebtedness.
The Secretary of State for Health (Mr Andrew Lansley)
The national health service is forecasting a surplus for 2011-12, but the previous Government left a legacy of up to six hospital trusts whose private finance initiative payments are a risk to their financial sustainability and up to 24 trusts with such high levels of debt, following years of bail-outs, that they might not meet tests of their future financial sustainability. We are working with all of those to identify their individual needs so that we can help trusts to achieve consistent standards of quality and financial sustainability, and I will make an announcement on that later this year.
Mr Rob Wilson
I thank my right hon. Friend for spelling out the appalling debt that some parts of the NHS inherited from the previous Government. Can he assure me and the House that this Government will deal with the root causes of hospital debt, rather than with the continuing bungs and bail-outs that the previous Government left?
Mr Lansley
My hon. Friend is absolutely right. We are determined to root out poor performance, by which I mean not only that we should deal with waste, inefficiencies and poor value for money in the NHS, but that we must identify where standards and quality of care are being met. Both are equally important, and one depends on the other. He will know from the Royal Berkshire NHS Foundation Trust how important it is to sustain finances and quality through foundation trust status. We are seeking to ensure that many NHS trusts reach foundation trust status, something that the previous Government failed to achieve and we aim to achieve.
George Eustice
The Secretary of State will be aware of the indebtedness of the Royal Cornwall Hospitals NHS Trust, and that Cornwall as a whole has suffered a disadvantage for many years as a result of the previous Government’s funding formula, having actually received less than the Department’s target budget for many years. Does he agree that such factors should be taken into account when deciding how to reschedule the debts of such trusts?
Mr Lansley
My hon. Friend will know, from our conversations and from my visit to Cornwall and the Royal Cornwall Hospitals NHS Trust, the steps that we are taking alongside other NHS trusts to bring them up to high standards of care and financial sustainability. In that regard, the 3.1% increase in revenue allocations for the Cornwall and Isles of Scilly primary care trust between last year and this year will help Cornwall as a whole towards greater financial sustainability.
Grahame M. Morris (Easington) (Lab)
I am grateful, Mr Speaker. On indebtedness, the National Audit Office has produced a report on NHS procurement in England, which it describes as “fragmented” and “poor value for money”. The report shows that £500 million could be saved each year if trusts came together to buy products more collaboratively. Is this further evidence that the Government are wrong to pursue an agenda of competition, rather than co-operation?
Mr Lansley
I am afraid that the hon. Gentleman is completely wrong about that. In procurement throughout the NHS, what we have had is fragmentation, and what we need is better co-ordination. That is precisely why, since the election, for example, we have instituted a consistent bar-coding system, allowing procurement throughout the NHS to be undertaken more effectively; and why under the quality, innovation, prevention and productivity programme, the improvement in procurement —reducing the costs of procurement—is intended to achieve those savings and more.
Andrew Gwynne (Denton and Reddish) (Lab)
Labour is proud of its legacy, with more than 100 new hospitals built to replace the crumbling Victorian buildings that we inherited in 1997, and it is not just the National Audit Office that has blown a hole in the Secretary of State’s assertion that 22 hospital trusts are on the brink of financial collapse due to PFI. John Appleby of the King’s Fund said:
“The…pressures on hospitals are not to do with PFI but…the need to generate £20bn worth of productivity improvements.”
Is not the real issue that the Secretary of State has tied up the NHS in a distracting and wasteful reorganisation that will cost more money than it will save, and take money away from patient care?
Mr Lansley
I welcome the hon. Gentleman to the Opposition Front-Bench position. We are looking forward to the exchanges with him and his colleagues, including during questions today.
Twenty-two trusts have told us, in the course of our looking at where the impediments are to their financial sustainability for the future, that the nature of the PFI contracts entered into by the previous Government is a significant problem in this respect. It is absolutely right for the NHS to build hospitals, which is why we are, for example, building a new hospital at Whitehaven in the hon. Gentleman’s constituency. [Interruption.] I beg his pardon—in the constituency of the hon. Member for Copeland (Mr Reed); we are building so many new hospitals. The nature of the PFI projects we enter into must be to provide value for money and be sustainable in the future. That is something that the previous Government failed to achieve.
Steve Baker (Wycombe) (Con)
3. What representations he has received on the reorganisation of urgent care in the past six months.
The Minister of State, Department of Health (Mr Simon Burns)
A search of the Department of Health’s database revealed that 131 items of correspondence, and five parliamentary questions relating to the reorganisation of urgent care were received in the past six months. In addition, I have received three requests to meet MPs on this subject.
Steve Baker
Wycombe hospital is currently going through a consultation on a change to urgent care services, and it is doing so in the context of the betrayal felt after “Shaping Health Services” in 2004, which removed our accident and emergency department. I would like to escape this cycle through mutuality. What is the Government’s position on mutuality? Will the Minister join my call for directly owned community health services?
Mr Burns
The Government have supported the right to request, which has enabled 45 staff-led social enterprises to be established. This policy has supported approximately 25,000 staff into social enterprises, with contracts of roughly £900 million. NHS staff have been assisted by a wide-ranging programme of support from the Department.
Mr Ben Bradshaw (Exeter) (Lab)
Has not the Government’s so-called moratorium on the reconfiguration of services put back improvements to urgent care by several years? The Minister inherited perfectly coherent plans for every region in England under the auspices of Lord Darzi’s next-stage review. How many lives have been lost and how much money has been wasted by the tearing up of those plans?
Mr Burns
I am afraid that the right hon. Gentleman is wrong. It is not holding back the national health service; it is moving it forward with things such as the establishment of the 111 service and the reconfiguration proposals, which are based on the four tests that my right hon. Friend the Secretary of State introduced in May last year. That not only links reconfiguration to the needs of the local health economy but takes into account the wishes and needs of the local community and medical staff.
Mr Stephen Dorrell (Charnwood) (Con)
Does my right hon. Friend agree that the improved delivery of urgent care right across the health service is one of the great challenges facing the new commissioning structure and one of the great opportunities to deliver more integrated services that deliver better value and better quality to patients?
Mr Burns
I am extremely grateful to my right hon. Friend; speaking with the authority of the Chair of the Health Committee, he is absolutely right. It is the way forward to drive improvements in service, raise standards and ensure that there is high-class, quality care at an urgent care level and across the acute sector.
Diana Johnson (Kingston upon Hull North) (Lab)
4. What assessment he has made of the potential effects of NHS reorganisation on the protection and improvement of public health.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
Our reforms put public health at the heart of the new system. The creation of Public Health England, alongside significant new functions and, for the first time, ring-fenced budgets for local authorities, will give public health an unprecedented level of priority. The new local authority role integrates public health with other local authority functions that impact on people’s health.
Diana Johnson
Under the previous Government, NHS Hull saw excellent results in improving public health. Under the current Government, Kingston upon Hull’s teaching primary care trust has seen a 2.6% cut this year compared with Kingston upon Thames PCT getting a 2% increase—and Hull city council has a 9% cut in its funding as well. What does the Minister think will happen to public health in areas such as Hull with those kinds of cuts?
Anne Milton
I think that public health in areas such as Hull will do exceptionally well. I point out to the hon. Lady that under the previous Government, what happened in practice was that public health budgets were raided constantly and we did not get improvements. If she looks at the figures, she will see that inequalities in health widened.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
Does my hon. Friend agree that despite the previous Government’s good intentions on public health, health inequalities have widened, as she has rightly said, obesity rates are going up, smoking among young girls is going up, and alcohol abuse is a serious problem? Does she agree that it is right to deliver services with local authorities and to get into local communities and schools if we want to address these big public health challenges?
Anne Milton
My hon. Friend is absolutely right. Local authorities have a long and proud tradition of improving the public’s health. Public Health England will bring together a fragmented system and strengthen our national response on emergencies and health protection. It will help public health delivery at a local level with proper evidence and leadership.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Contrary to the Minister’s statement that the Health and Social Care Bill will put public health at the heart of the health service, 40 directors of public health and 400 public health academics, including Michael Marmot, wrote to The Daily Telegraph to say that the Health and Social Care Bill will
“widen health inequalities; waste much money on attempts to regulate and manage competition; and undermine the ability of the health system to respond…to communicable disease outbreaks”,
and that it will
“disrupt, fragment and weaken the country’s public health capabilities.”
How can the Minister put her judgment against that of those doctors and experts? Is not the proposal that more than 40 specialist neonatal units may lose staff in the coming year an example of the weakening of public health that is involved in the Bill and the Government’s proposals?
Anne Milton
I draw the hon. Lady’s attention to the fact that the Health and Social Care Bill proposes for the first time a duty on the Secretary of State to have regard to health inequalities, which, I repeat, widened under the previous Government. I also point out to her that the letter to peers signed by Professor Marmot and others welcomed the emphasis on establishing a closer working relationship between public health and local government. I suggest that the hon. Lady gets out more, because she would hear from public health doctors and local authorities on the ground who welcome these changes.
Lorely Burt (Solihull) (LD)
5. What steps he is taking to reduce the burden on NHS hospitals of (a) PFI repayments and (b) debt.
The Minister of State, Department of Health (Mr Simon Burns)
A study conducted by the Treasury has identified savings opportunities of up to 5% on annual payments in NHS PFI schemes. The Cabinet’s Efficiency and Reform Group is rolling out a programme of work to secure savings of up to £1.5 billion across the 495 PFI contracts in the public sector in England.
Lorely Burt
Contrary to the earlier complacent comments of the Opposition spokesman, some national health trusts are paying up to 20% of their revenue to PFI contracts. What steps can we take to ensure that the payments are reduced and that the same terrible financial situation never happens again?
Mr Burns
I am grateful to the hon. Lady. I, too, recognise the small number of organisations that are reporting financial challenges. The Department is continuing to work with strategic health authorities to ensure that those organisations have robust plans in place for financial recovery, while ensuring the quality of services for patients.
John Healey (Wentworth and Dearne) (Lab)
On the subject of financial pressures on hospitals, does the Minister recall the circular to hospitals from Monitor that was smuggled out on the eve of the royal wedding, which raised the requirement for efficiency cutbacks on hospitals from 4% to 6.5%, which is more than £1 billion in this year alone? Will he admit that the service cutbacks that we are seeing in many hospitals around the country are deeper, as that circular confirms, directly because of the Government’s policies?
Mr Burns
No, I do not recognise that, because the figure that the right hon. Gentleman has used is an upper calculation, not an actual figure. I say to him that we are making efficiency savings, and that trusts should be cutting not front-line services but inefficiency, waste and excessive management, and reinvesting every single penny in front-line services.
Helen Jones (Warrington North) (Lab)
6. What steps he is taking to ensure that patients receive accurate and unbiased information on treatment options.
The Minister of State, Department of Health (Paul Burstow)
The NHS constitution gives people a right to information about their treatment options. I want everyone to get timely, trustworthy information such as patient decision aids, so that they are involved in their care decisions. The Health and Social Care Bill will ensure that the commissioning board and clinical commissioning groups secure that.
Helen Jones
In the light of that answer, will the Minister condemn the decision by GPs in Haxby to use NHS data to tout the services of their own private company and give wrong information to patients? Or is that simply a foretaste of what will happen under the Health and Social Care Bill when clinical commissioning groups decide what services are necessary, leaving private companies in which they may have an interest to pick up the slack in a privatised, marketised NHS in which patients come last?
Paul Burstow
The hon. Lady is spreading yet more myths and misconceptions about the reforms that this Government are making. If she had researched the matter more thoroughly, she would know that there is a code of conduct for the promotion of NHS-funded services, which makes it clear that providers of primary medical services cannot directly or indirectly seek or accept from any of their patients payment or other remuneration for any treatment. As a result, the PCT is questioning that clinic about how it has used patient information and will continue to pursue the matter.
David Tredinnick (Bosworth) (Con)
Does my hon. Friend agree that many patients look to NHS Choices for accurate and unbiased information? Is he aware that its site on homeopathy is both biased and inaccurate? As the Department has had a long-standing review that has not reported, will he—
Paul Burstow
If the hon. Gentleman would care to write to me setting out where he believes there are inaccuracies, we will examine them.
Andy Burnham (Leigh) (Lab)
It is good to be back. I see that in my absence, the Secretary of State has at last made some progress with his plans for a US-style health care system.
I have a letter sent by the practice that my hon. Friend the Member for Warrington North (Helen Jones) mentioned a moment ago, in which it wrote that
“we can no longer offer your procedure as one of our NHS services…I am writing to make you aware of some of the options that you have to have the procedure completed as a private patient.”
Helpfully, it enclosed a leaflet announcing the practice’s new private minor operations service. Can the Minister point me to any part of the Health and Social Care Bill that will prevent that practice in future?
Paul Burstow
I wonder whether the right hon. Gentleman could have pointed me to any such arrangements in current legislation. There is none. However, Dr David Geddes, the medical director of NHS North Yorkshire and York, has stated:
“We have some concerns about the activities of the Haxby and Wigginton health centre in York and we will be discussing these issues with them directly as a matter of urgency. These concerns are around possible breaches of the Data Protection Act and the accuracy of the information sent to patients. For example, of the eight procedures they list, three are routinely funded by NHS North Yorkshire and York”.
Let us be clear that when he was Secretary of State, that PCT was in a worse financial state.
Andy Burnham
That is total bluster, because that vision is precisely what the Government want to do to our NHS. As my hon. Friend the Member for Warrington North said, it is a terrifying glimpse of a Tory NHS in future—not a national health service but a postcode lottery writ large, in which, as we read today, random rationing is taking place around the country. The NHS is in chaos because the Secretary of State made the mistake of combining a £2.5 billion reorganisation, at a time when every ounce of energy should be focused on the NHS front line. This Secretary of State has placed our national health service in the danger zone, and he has lost the confidence of GPs, nurses and midwives. Is it not time that he stopped digging in, listened to NHS staff and dropped this damaging Bill?
Paul Burstow
That was a good example of bluster—perhaps that is what we will see from the Opposition under the right hon. Gentleman’s stewardship.
The right hon. Gentleman ought to be aware, because it happened on his watch, that primary care trusts and strategic health authorities have seen their management costs increase by more than £1 billion. There was a 120% increase from 2002 to when this Government took office. That is why we are determined to cut overhead costs in the NHS, so that we can reinvest every penny in the front line.
Adam Afriyie (Windsor) (Con)
7. What recent representations he has received from Berkshire East primary care trust on the future of Heatherwood hospital in Ascot.
The Secretary of State for Health (Mr Andrew Lansley)
I have received no such representations.
Adam Afriyie
My constituents are shocked to discover that yet again, the future of Heatherwood is under threat. I have had sight of a major petition, and I am actively campaigning with hard-working local councillors, activists and residents to uncover why Heatherwood’s future is under threat when the funding from the Government to the region has increased. Does my right hon. Friend agree that the Berkshire East PCT must cut its bureaucracy costs and introduce efficiencies before threatening the money to Heatherwood hospital and other local services?
Mr Lansley
I am grateful to my hon. Friend and completely understand what he is saying. In this financial year compared to the previous one, revenue available to Berkshire East PCT increased by £16.3 million. That is just one part of the £3.8 billion increase in revenue resources available to the NHS this year compared with last year.
Although I very much welcome the shadow Secretary of State to his new position, we will miss his predecessor. We welcome the new shadow Secretary of State not least because he might begin to explain to the NHS why he thought it was irresponsible to increase resources to the NHS in real terms by about £3.8 billion—
Mr Speaker
Order. I am grateful to the Secretary of State, but we have a lot to get through. He will resume his seat—and I know he will do so happily.
Fiona Mactaggart (Slough) (Lab)
One reason for those increases in resources is the growing birth rate in that part of Berkshire. Slough mums who want to use the Ascot birthing centre at Heatherwood have been locked out since the end of September because of a lack of midwives. If the Government had provided the 3,000 midwives they promised, that centre would not be shut. What does the Secretary of State say to that?
Mr Lansley
As the hon. Lady knows, I am very familiar with Heatherwood, because I have two daughters who were born there in the days when it had an obstetrics service, which disappeared under the previous Government. She also knows that I visited Wexham Park in September last year to announce support to the trust in the form of loans, based on commercial principles, totalling £18 million. There is no shortage of midwives under this Government compared with the previous one. Since the election, 522 additional midwives have been recruited, and we are maintaining a record level of midwifery training places.
Decisions made locally are a matter for local commissioners. If they seek to change services, they must meet the four tests that I set out shortly after the election.
Mr Jamie Reed (Copeland) (Lab)
The hon. Member for Windsor (Adam Afriyie) is absolutely right to raise concerns about the future of Heatherwood hospital, as are Members on both sides of the House who raise such concerns about their hospitals, such as Chase Farm.
The Health Service Journal reports that the Department of Health is discussing a hospital closure programme, and yet the Prime Minister has promised to fight bare knuckled against any hospital closures. Will the Secretary of State tell us today categorically—yes or no—whether it is still his policy to have a moratorium on hospital closures? If so, for how long will the moratorium last?
Mr Lansley
I welcome the hon. Gentleman to his position. The Government are rebuilding his hospital, so it is slightly ironic that he attacks us on that point.
The answer to the hon. Gentleman’s question is that the Government are pursuing no plan for hospital closures. We are doing precisely what I said we are doing: we are working with hospital trusts across the country to ensure that before they reconfigure their services, they must meet key tests on patient access and choice, local authority support, commissioners’ views, and the clinical safety and evidence base. We are working with many of the NHS trusts that the previous Government left in a serious position to ensure that they reach quality and financial sustainability.
Andrew Jones (Harrogate and Knaresborough) (Con)
8. When he expects to make a final decision on the safe and sustainable review into children’s heart surgery units in England.
The Secretary of State for Health (Mr Andrew Lansley)
This is a clinically led, independent review, within the NHS. The joint committee of primary care trusts, on behalf of NHS commissioners, will make decisions on the future pattern of children’s heart surgery services in England. The review is expected to report before the end of the year.
Andrew Jones
I am sure that the Secretary of State recognises the huge and spirited campaign by local people to retain the children’s heart unit at Leeds general infirmary. Will he confirm that option E, which would retain the Leeds unit, will receive full and equal consideration by the joint committee of primary care trusts?
Mr Lansley
The review will develop the recommendations to ensure that children’s heart surgery services deliver the very highest standard of care for children and their families. The joint committee of primary care trusts will consider all the relevant evidence before making a decision on the future configuration of children’s heart surgery services, and I hope that that will reassure my hon. Friend.
I should emphasise that no aspect of this review is driven by money: it is entirely about how to ensure sustainable high-quality surgery. The issue is in how many and which centres surgical teams should be based in order to maintain that high-quality care.
Angela Smith (Penistone and Stocksbridge) (Lab)
There is a deep-rooted belief that this review is biased against the survival of the Leeds unit. Will the Minister therefore please assure the House that the decision will be made purely on the evidence, and not on the basis of any preconceived idea of which units should survive and which should not?
Mr Lansley
It is an independent review and I can assure the hon. Lady that that is indeed the case. It will be based on the evidence. I am sure that she will have heard the response to a debate earlier in the year by the Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), who said that while the review has put forward options for consideration, it should not be constrained to consider only those options.
Nicky Morgan (Loughborough) (Con)
Will my right hon. Friend confirm that the criteria for the review remain the same; that the rather strange remarks—about more people having voted for one option but more organisations having voted for another—have not affected them; and that those criteria will be used to judge the decision?
Kerry McCarthy (Bristol East) (Lab)
This review came about as a result of the tragic Bristol heart babies scandal in the 1990s, and it is a measure of the quality of services at Bristol children’s hospital that it is now being considered for all four options under the consultation. A few weeks ago, I abseiled down the children’s hospital for Wallace & Gromit’s Grand Appeal, which is an excellent charity. However, will the Secretary of State assure me that, with the move to fewer and larger specialised units, they will be properly funded and will not rely on MPs throwing themselves off tall buildings?
Mr Lansley
I am grateful to the hon. Lady. All the representations that we have received in the debates in this House are ample evidence of the high regard and support that Members have for their children’s heart surgery services. None of this is about saving money or resources. It is entirely about what delivers the best quality surgical services for children with cardiac problems. To that extent, the intention is that those services—once the decision has been made—are fully funded.
Chris Skidmore (Kingswood) (Con)
9. What progress he has made on reducing the number of foreign nationals using NHS services without payment.
The Minister of State, Department of Health (Mr Simon Burns)
We have updated and simplified regulations and guidance on identifying and charging visitors who must pay. Immigration rules now before Parliament will allow the UK Borders Agency to refuse entry to visitors with an unpaid debt to the NHS, and we are now reviewing this area more fundamentally to identify further improvements.
Chris Skidmore
I thank the Minister for that answer. On 19 July, I spoke in the House about foreign nationals using the NHS without payment and, having entered a freedom of information request to each foundation trust and PCT, I now have a more accurate picture of the sums involved. It suggests that some £15 million has been completely written off. Will the Minister meet me to discuss the findings and what possible solutions might be found to tackle this important issue?
Keith Vaz (Leicester East) (Lab)
There is a relatively painless way to deal with this. At the time that the visa is applied for, the person should sign an undertaking that they will pay the costs of NHS treatment. Will the Minister talk to the Minister for Immigration to see whether it is possible to introduce such a requirement?
Mark Pawsey (Rugby) (Con)
10. What representations he has received on the need for effective and clear distinction in uniforms worn by fully trained nurses and other workers in the care sector.
The Minister of State, Department of Health (Paul Burstow)
The Department receives occasional representations from individuals and groups about uniforms, including the need to distinguish between staff groups. Guidance is available to help employers set sensible policies and, in line with Government policy to reduce central control, we expect decisions on uniforms to be made locally.
Mark Pawsey
There is real concern about the lack of distinction between the uniforms worn by qualified nurses and care workers. The latter are free to wear whatever uniform they like and often give the impression that they are medically qualified. This presents a risk to patients, especially because more and more vulnerable elderly patients are being treated in their homes. Will the Minister look again at this to see what action could be taken to clarify the situation?
Paul Burstow
My hon. Friend has written to me about this matter on behalf of a constituent. The responsibility sits in three places: first, providers have a responsibility to provide clear information to people receiving services from them about who is providing that service; secondly, commissioners have a responsibility for how they contract for those services; and thirdly the Care Quality Commission has a responsibility to regulate those services. Undoubtedly, however, I would be more than happy to look further at the points he makes.
Karl MᶜCartney (Lincoln) (Con)
11. What assessment he has of the provision of ventilation machines and related equipment for patients with muscle-wasting diseases who experience respiratory difficulties; and if he will make a statement.
The Minister of State, Department of Health (Paul Burstow)
Local health bodies have responsibility for ensuring that adequate provision of health services is made available to those living with neuromuscular conditions. All specialised commissioning groups have now completed their reviews of neuromuscular services, which are a priority in the annual work plans of each of the specialised commissioning groups in 2011-12.
Karl MᶜCartney
I thank the Minister for that answer, but will he also outline the steps being taken to ensure that there is adequate knowledge about neuromuscular conditions among general practitioners and health professionals in Lincoln, so that referrals to the specialist respiratory service in Nottingham can be provided as appropriate?
Paul Burstow
My hon. Friend is right to raise the issue of ensuring sufficient awareness of the pathways that exist for people to gain access to those services. I understand that the east midlands specialised commissioning group has recently carried out a review of non-invasive ventilation services. I shall ask the group to write to him in more detail.
Alec Shelbrooke (Elmet and Rothwell) (Con)
12. What steps he is taking to assist patients to access a greater range of NHS services.
The Minister of State, Department of Health (Mr Simon Burns)
The NHS constitution gives patients the right to make choices about their care. The Government are committed to empowering patients. Our goal is for patients to have more choice of treatment.
Alec Shelbrooke
What steps is my hon. Friend taking to ensure that my constituents requiring cardiac services will have access to the care that they need in Leeds?
Mr Burns
My hon. Friend raises an important and controversial issue, as he will have heard when listening to my right hon. Friend the Secretary of State earlier and the debates that he has attended in the House on this subject. We are determined that proper facilities will be made available, based not on money but on the high quality of care, particularly for children. An independent review is being carried out by the joint committee of primary care trusts, which is expected to announce its recommendations later this year.
Jim Shannon (Strangford) (DUP)
Has the Minister considered exchanging expertise with the regions of Scotland, Northern Ireland and Wales? That exchange could take place without any charge.
Mr Burns
The hon. Gentleman raises a valid point. The NHS in England has regular contact and discussions with the NHS in other parts of the United Kingdom, and will continue to do so because both the UK and the devolved authorities can learn a considerable amount from sharing views and practice.
Hazel Blears (Salford and Eccles) (Lab)
13. What recent estimate he has made of the number of midwives working in the NHS.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
There were 20,654 full-time equivalents in June 2011—a rise of 522 or 2.6% since May 2010. That is a record.
Hazel Blears
The Minister might know that the midwife-led unit at Salford Royal hospital is due to open in the next few weeks, and I want to put on the record my thanks to the midwives there who carry the heaviest work load in the north-west and are doing a brilliant job. She will not know, however, that last year there were 2,500 extra births in Greater Manchester that were neither expected nor planned for, that there are current vacancies for midwives at St Mary’s hospital and that mothers are being pressured to leave hospital sometimes within two or three hours of giving birth. What assurances can she give me that the same standards of safety and quality applying at Salford Royal will be available to Salford families in the future?
Anne Milton
We need to ensure that they are, which is one of the reasons we have asked the Centre for Workforce Intelligence to undertake a pretty in-depth study of the nursing maternity work force during 2011-12. I can reassure the right hon. Lady that the current number of midwifery students entering training is at a record level—more than 2,500—and I join her in paying tribute to our midwives.
Tim Farron (Westmorland and Lonsdale) (LD)
After the recent inquiry into the Furness General hospital maternity unit, will the Minister confirm that she will give full support to midwives across the Morecambe Bay trust area and that the excellent midwife-led unit at Westmorland General hospital in Kendal will be protected?
Anne Milton
I always give my full support to midwives, but we must not forget that this is about teamwork as well. There has been an increase in the number of maternity support workers, who also play a critical role, as do the obstetricians and gynaecologists, all of whom have increased in numbers as well.
Andrew Rosindell (Romford) (Con)
15. What progress he has made on reducing rates of hospital-acquired infections.
The Secretary of State for Health (Mr Andrew Lansley)
The NHS is making significant process toward the zero-tolerance approach that we have made it clear it should adopt in respect of all avoidable health care-associated infections. Over the past 12 months MRSA bloodstream infections have fallen by 29% and C. difficile infections have fallen by 17%.
Andrew Rosindell
I thank the Secretary of State for his reply. Will he confirm that the Government will continue with the zero-tolerance approach to hospital-acquired infections as the only sure way to resolve and eradicate this problem?
Mr Lansley
Yes, my hon. Friend is absolutely right; indeed, we are extending the range and frequency of the publication of data relating to infections to support the NHS in that work. With his commendable consistency, my hon. Friend asked a question on exactly this subject on 8 March, when he raised the issue of the Barking, Havering and Redbridge trust. I am pleased to be able to report that in the past five months C. difficile infections in the trust have fallen by 57% in comparison with the same five months of 2010, while MRSA bloodstream infections have been reduced by 25%. I expect the trust to continue to bear down on those and other infections in future.
Kerry McCarthy (Bristol East) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Health (Mr Andrew Lansley)
My responsibility is to lead the NHS in delivering improved health outcomes in England; to lead a public health service that improves the health of the nation and reduces health inequalities; and to lead the reform of adult social care which supports and protects vulnerable people.
Kerry McCarthy
In the wake of the former Defence Secretary’s resignation and the fact that 40 peers who voted on the Health and Social Care Bill have private sector health interests, and given the Secretary of State’s known connections with private health care companies, can he assure the House that he has been as transparent as possible about the influence of private health care companies on the passage of the Bill?
Mr Lansley
I am sorry, but I think the hon. Lady should withdraw that. I have no connection with private health care companies, and if I did, I would have entered it in the register of Members’ interests.
Mr Speaker
I am grateful to the Secretary of State, who has put the position very explicitly on the record.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
T2. The coalition agreement states:“Doctors and nurses need to be able to use their professional judgement about what is right for patients and we will support this by giving front-line staff more control of their working environment.” That being the case, can my right hon. Friend explain why, despite national clinical guidelines, GPs in my constituency face financial penalties if they do not meet targets for reducing the cost of the drugs that they prescribe?
Mr Lansley
I am grateful to my hon. Friend, and I understand that Kent and Medway primary care trust is working to incentivise the optimisation of medicines usage. We provide advice through the National Prescribing Centre and in other ways, and we support that work with GPs through the structure of the quality and outcomes framework. However, this is about incentivisation for best prescribing practice, not about financial penalties.
Liz Kendall (Leicester West) (Lab)
Many families will be deeply concerned about standards of care for older people in hospitals following the Care Quality Commission’s recent report. Patients and the public must be confident that all the necessary steps are being taken immediately to tackle this issue. Months after its initial inspections, will the Minister confirm that the CQC has revisited only six of the 17 hospitals that were failing to ensure that older people had enough food and drink, and if so, can he explain why?
Mr Lansley
Let me make it clear to the hon. Lady, whom I welcome to her new responsibilities, that the reason the Care Quality Commission undertook unannounced nurse-led inspections in hospitals to look at issues of dignity and nutrition was that I asked it to. As an independent regulator, it must make its own decisions about what it does, but I have been clear in my conversations with the Care Quality Commission that it is moving from the tick-box regulatory approach inherited from Labour to one focused on going out there and finding out where there is poor performance. The CQC is shining a light—not least at our request—on poor performance and poor care in the NHS, and it will continue to do so.
Mr Speaker
Order. I remind the House that there is intense interest, and therefore there is a premium on brevity from Back and Front Benchers alike.
Jeremy Lefroy (Stafford) (Con)
T4. Several of my constituents, including members of the Cure the NHS group, have raised concerns over the way in which “Do not attempt resuscitation” notices are used in hospitals. Will the Secretary of State tell the House what the NHS is doing to ensure that the national guidance is followed?
Mr Lansley
This is an area in which the medical director of the NHS, the General Medical Council and others issue guidance to the NHS. I will gladly write to my hon. Friend setting out the details.
Huw Irranca-Davies (Ogmore) (Lab)
T3. I know that I am not alone in being an MP who represents pharmacists who are struggling on a daily basis to access life-saving drugs to treat asthma, diabetes and cancer, even to the point at which some of them are running out of those products. What more can the Secretary of State do to ensure that manufacturers and wholesalers have those life-saving drugs that people’s lives depend on? This is not good enough. What more can the Government do?
Mr Lansley
The hon. Gentleman will know that we inherited significant supply problems to pharmacies from the previous Government, not least because of the exchange rate and the possibility of countertrade. We have worked with the industry to resolve those issues. The hon. Gentleman would be well advised to talk to the Welsh Assembly Government about the fact that patients in Wales cannot access the latest cancer medicines, as patients in England can do under the cancer drugs fund.
Mr Peter Bone (Wellingborough) (Con)
T6. Today is anti-slavery day, and our excellent Prime Minister will be hosting a reception at Downing street tomorrow to promote the new Government anti-trafficking strategy. That strategy includes a requirement for the health service to be proactive in identifying victims of trafficking. What progress has been made on that?
Mr Lansley
I am sure that we all share my hon. Friend’s view of the great importance of this matter. The Department of Health leads on ensuring that health care is available to people who have been rescued by the police from human trafficking. We also lead on promoting an awareness that local government has multi-agency safeguarding processes to assist in supporting people who have been abused and harmed. There is more to say, but I will write to my hon. Friend on the subject.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
T5. In the evidence session on the Health and Social Care Bill, the Secretary of State told me that he was committed to reducing health inequalities. We also heard from the Under-Secretary of State for Health, the hon. Member for Guildford (Anne Milton) on that subject a few moments ago. Will the right hon. Gentleman therefore explain why he made a political decision last December, against the advice of the Advisory Committee on Resource Allocation, to reduce the health inequalities component of primary care trusts’ target funding from 15% to 20%, in effect shifting funding from poor health areas such as my constituency to richer health areas such as his own? The Government are saying one thing—
Mr Lansley
I made no decision contrary to the advice of the Advisory Committee on Resource Allocation. If the hon. Lady cares to look at the increase in revenue allocations to primary care trusts across the country, she will see that many of the lowest allocations are in richer areas and the highest are in the most needy areas.
Mr Rob Wilson (Reading East) (Con)
T8. Last week, a survey found that 80% of people want more choice in how and where they are treated. Does that not show that the Government are absolutely right to press on with modernising the NHS?
Mr Lansley
Yes, it was absolutely clear that the public wanted choice of treatment. That is one of the reasons that we have published some of the patient decision aids for the first time, and we will continue to do more. People want a choice in the consultant-led team that will provide their treatment, and in the hospital where that will happen. In the past few weeks, we have set out the details of how we are going to give patients the choice that they seek.
John Mann (Bassetlaw) (Lab)
T7. I have noticed a growing creeping privatisation of cleaning contracts in the NHS this year. Does this signify a return to the old Tory days of longer waiting lists and dirty hospitals?
The Minister of State, Department of Health (Mr Simon Burns)
The hon. Gentleman seems to be somewhat confused. This is not about privatisation in a derogatory sense, as he is trying to suggest. For many years, including the 13 years of the Labour Government, hospital cleaning services in NHS hospitals were put out to tender, and many private companies provided the service. That is simply continuing.
Chris Skidmore (Kingswood) (Con)
T9. I am a long-standing supporter of independent sector treatment centres and of the need for commissioners to be able to bring in private and voluntary sector providers, as well as alternative NHS provision where existing services fail to improve—[Interruption.] I see that some Labour Members, including the hon. Member for Leicester West (Liz Kendall), disagree, but does at least the Secretary of State agree—
Mr Lansley
I will not interrupt the hon. Member for Leicester West (Liz Kendall) who is replying from a sedentary position. I agree with my hon. Friend. What we heard under the Labour Government appears to be very much at odds and not at all in keeping with what we hear from the Labour Opposition now. Let me remind my hon. Friend that the South Gloucestershire primary care trust has received a cash increase of £10 million, or 3%, this year. Like every other part of England, it is receiving increases in resources this year that the shadow Health Secretary opposed.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I ask the Secretary of State to look back at issues of public health? What is he doing to provide leadership in this sector, especially when we talk to people at the top of the health service who say that there are real problems with obesity in nurses and smoking among doctors? Where is the leadership coming on those issues?
Mr Lansley
Let me just give the hon. Gentleman one or two examples. In the last few days, we have published an obesity call to action, which sets out national ambitions to reduce calorie consumption to a point where people can maintain a healthy weight or reduce their weight. We have set out a tobacco control plan, which is regarded as a leader across the world. About three weeks ago, I attended the United Nations General Assembly in order to join in debates with colleagues on reducing the tide of non-communicable diseases across the world. There is also the work of Sir Michael Marmot, which we share with him; he knows that we are taking it forward nationally and internationally to tackle the wider social determinants of health. That is why we have put local government leadership on health improvement at the heart of the Health and Social Care Bill.
Stephen Gilbert (St Austell and Newquay) (LD)
Mr Paul Eccles is a constituent of mine. He is a qualified care assistant who wants to go freelance and set up his own business, helping people in their own homes. However, the annual up-front £1,000 charge of the Care Quality Commission is preventing him from starting this new venture. Will the Secretary of State meet me so we can find a way to help my constituent get his business off the ground?
The Minister of State, Department of Health (Paul Burstow)
My hon. Friend is absolutely right to highlight how well-intended regulation can sometimes be a way of blocking effective growth and the opportunities available for new people to set up businesses in the care sector. I would be very happy to meet my hon. Friend to discuss that matter.
Ann Coffey (Stockport) (Lab)
Stockport is one of only five PCTs in the country that does not provide any in vitro fertilisation treatment—in spite of recommendations from the National Institute for Health and Clinical Excellence. Does the Secretary of State think it fair that my constituents, who pay the same taxes as everybody else, do not get the same access to this treatment as people living elsewhere?
Mr Lansley
The hon. Lady will know, I hope, that the deputy chief executive wrote to primary care trusts a few weeks ago further to remind them of the need to respond to NICE clinical guidelines. It was the hon. Lady’s Secretary of State, John Reid who, when NICE published its guidelines, told PCTs in 2004 that they should not follow them.
Dr Julian Lewis (New Forest East) (Con)
The news that the Woodhaven hospital in my constituency is threatened with closure only eight years after it was opened as a state-of-the-art mental health facility is causing great concern. Will my right hon. Friend endeavour to look into what is proposed for the closure of acute in-patient beds because the “hospital at home” alternative is simply not good enough?
Paul Burstow
I am grateful for the hon. Gentleman’s question and I would certainly be happy to look further into the matter and write to him accordingly.
Tony Lloyd (Manchester Central) (Lab)
When the Minister responsible for care services wrote to me about the closure of the Edale unit in Manchester, why did he not address the issue that the closure would cost more money than it saved or the fact that the police had expressed concerns about their access in emergency times, particularly during the weekend?
Paul Burstow
I am sorry if the hon. Gentleman feels that all the issues have not been dealt with following our telephone conversation and subsequent correspondence. I will check the correspondence again, and if I find that something is missing, I will certainly provide an answer.
Andrew Bridgen (North West Leicestershire) (Con)
I welcome the policy review of the entitlement of foreign nationals to free NHS care, but will my right hon. Friend assure the House that it will examine the options relating to charges for GP as well as hospital services?
Paul Farrelly (Newcastle-under-Lyme) (Lab)
PCTs in Staffordshire are pre-empting legislation by merging and reorganising now, which has led to plans to close the high street practice in Newcastle-under-Lyme simply because it is run by salaried GPs. Is that really NHS policy? If not, what will the Secretary of State do to help 5,000 patients rescue a much-needed surgery?
Mr Lansley
Nothing that is being done pre-empts legislation. What is being done in relation to primary care trust clusters is being done under existing legislation, and was necessary not least to enable us to achieve a reduction of £329 million in management costs in the first year following the election. In contrast, there was a £350 million increase in the year before the election under the hon. Gentleman’s right hon. Friend the Member for Leigh (Andy Burnham).
I do not know the circumstances of the centre to which the hon. Gentleman referred because the decision will have been made locally and will not have involved me, but I will gladly write to him about it.
John Pugh (Southport) (LD)
The full roll-out of 111 services is now proceeding. Is the Secretary of State satisfied that imploding PCTs can get the procurement right in the time allowed?
Mr Lansley
I am confident that we will make the progress that we seek. If we are not ready in any location, we will not be able to proceed with that procurement, but the PCTs will act on the basis of an evaluation of four pilots. To that extent, the character of what they are procuring through the 111 system will be well defined through piloting.
Mr Kevin Barron (Rother Valley) (Lab)
What progress has been made since the launch of the Secretary of State’s tobacco control plan last March in changing the behaviour of people who smoke in cars in the presence of children?
The Parliamentary Under-Secretary of State for Health (Anne Milton)
The right hon. Gentleman has a long-standing interest in this subject. We are working on a number of areas, but I think that the extension of public health duties to local authorities will open up many opportunities to persuade parents to think carefully about where they smoke, whether it is in cars or in their own homes.
Mr David Evennett (Bexleyheath and Crayford) (Con)
There is real concern throughout the country about the health inequalities left by the last Government. Will the Minister confirm that funding for areas with relatively large health inequalities will not be raided, as it has been in the past under Labour?
Anne Milton
As my right hon. Friend the Secretary of State said earlier, the Health and Social Care Bill proposes the introduction of the first ever legal duty for the Secretary of State to have regard to the reduction of health inequalities. That covers both NHS and public health functions. We are also addressing the health needs of some of the most vulnerable people through the “Inclusion Health” programme.
Barbara Keeley (Worsley and Eccles South) (Lab)
My right hon. Friend the Leader of the Opposition and the officers of 12 all-party groups associated with care have urged the Government to commit themselves to the urgent reform recommended by Dilnot. Will the Minister update the House on the Government’s response to the Dilnot recommendations, and tell us when the cross-party talks will begin?
Paul Burstow
I know that the hon. Lady follows these issues closely. In September we published a plan for consultation on the proposals, which includes looking beyond the Dilnot commission’s recommendations at issues of quality, regulation, and many other aspects of how we can secure a comprehensive reform of social care. Today my right hon. Friend the Secretary of State wrote to Opposition Front Benchers with the aim of resuming the discussions across parties to ensure that we get the conversation going with the new Opposition Front-Bench team as soon as possible.
Mr David Ward (Bradford East) (LD)
In a recent ministerial response, I was informed that public health services were a matter for the local NHS and that it would not be appropriate for Ministers to become involved or intervene. The transfer of staff from PCTs to local authorities excludes staff delivering services relating to weight management, smoking cessation, physical activity promotion, sexual health, community development and diabetes awareness-raising. How on earth can local authorities pick up the responsibilities without being given the staff who would enable them to do it?
Anne Milton
The transition period is critical, and there is no suggestion that local authorities will not have all the tools in the box to enable them not only reduce to health inequalities, but to improve the public’s health. As we have stated many times, it is absolutely dreadful that under the last Government health inequalities increased rather than decreased.
Mr Speaker
Order. As usual, demand has exceeded supply, and we must now move on.
Recognition of Palestine as an Independent State
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hugh Bayley (York Central) (Lab)
I wish to present to the House the following petition, which was signed by Terry Gallogly of Lowther court in York and supported by a further 79 people who live in the city I represent.
The petition states:
The Petition of York Palestine Solidarity Campaign and the people of York,
Declares that the Petitioners note that since 1993 the Palestinian Authority has been involved in fruitless negotiations that have still not resulted in freedom; that the number of Israeli settlers living illegally on Palestinian territory has more than doubled, large areas of land have been stolen, over 600 checkpoints prevent freedom of movement to schools and hospitals, and a wall, declared illegal by an international court 7 years ago, continues to be built; and that this September, with no end to the Occupation in sight, and with the support of many countries, the Palestinian Authority will apply to the United Nations for recognition of Palestine as an independent state.
The Petitioners therefore request that the House of Commons urges the Government to formally recognise the right of the Palestinian people for self-determination and the right of Palestinian refugees to be able to return in freedom to their homes, and calls on the Government to work urgently for just solution in the region.
And the Petitioners remain, etc.
[P000964]
Proposed Cuts to BBC Radio Merseyside
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I rise to present a petition from radio listeners throughout Merseyside. The petition was collected online and on the streets of Liverpool. I am sure that many more people would have liked to have signed it, but time is of the essence, which is why I am submitting it today. Nevertheless, there are in the region of 2,000 signatories to the petition, along with many testimonials.
The petition states:
The Petition of listeners to BBC Radio Merseyside,
Declares that the Petitioners oppose the 20% cut to BBC Radio Merseyside’s budget proposed by the BBC management; that the Petitioners note that BBC Radio Merseyside is the most listened to of the BBC’s 39 local radio stations outside of London with over 300,000 listeners who tune in for an average of 16.2 hours per week to popular programmes such as the Roger Phillips Show and the Billy Butler Show; further note that there are more staff at Radio 4 who work on the You and Yours programme than the whole of the current team of BBC Radio Merseyside; and that the Petitioners believe any efficiency savings should be fairly distributed, protecting local services and jobs where possible, in order to guarantee quality of programming which remains locally relevant and to preserve a service that is depended on by millions of listeners up and down the country, rather than maintaining the budgets of bigger channels and national radio stations.
The Petitioners therefore request that the House of Commons urges the Government to encourage the BBC to reconsider its cuts to BBC local radio.
And the Petitioners remain, etc.
[P000965]
Afghanistan
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Defence (Mr Philip Hammond)
With permission, Mr Speaker, I should like to make a statement on Afghanistan.
Let me begin by paying tribute to Rifleman Vijay Rai of the 2nd Battalion The Royal Gurkha Rifles, who died in Afghanistan on Saturday. His commanding officer described him as tough, loyal, utterly professional and immensely proud to have been serving in the British Army. I am sure I speak for the whole House in saying that our thoughts are with his family at this difficult time.
The House will appreciate that I have not yet had an opportunity to visit our troops in Afghanistan. I intend to do so as soon as is practical. The purpose of this statement is to provide information on progress in Afghanistan since the Prime Minister’s statement to the House on 6 July. Our mission is to ensure that Afghanistan does not again become a safe haven for international terrorism, and the presence of our armed forces in Afghanistan to achieve this aim is supported on all sides of the House.
This mission has a cost: 383 members of our armed forces have lost their lives since operations began—eight since the Prime Minister’s statement of 6 July. I know the whole House will want to join me in paying tribute both to their sacrifice and to all those who have returned with serious injuries, and to the families who support them. I would also like to take this opportunity to pay tribute to the troops from Estonia, Denmark and Tonga who are operating under British command in central Helmand. Since 6 July, two Danish soldiers and one Estonian soldier have also lost their lives, and I am sure the House will want to join me in expressing condolences to their families.
I am clear that this is an operation to protect our national security and national interests. That view is shared by the 49-nation, UN-mandated coalition. We share a common purpose: to enhance security and build the capacity of the Afghan national security forces and the Afghan Government, so that Afghans themselves can be responsible for their own territory, their own security and their own affairs. We ensure our national security and the security of the NATO alliance by helping the Afghans to take control of theirs.
Our strategy is comprehensive, drawing security, governance and development objectives together. In 10 years, with international support and assistance, Afghanistan has come a long way. Governance and the rule of law are improving across the country. The Afghan Government are providing increasing levels of basic services, with Afghans enjoying much greater access to health facilities, and more education opportunities—including for girls—than in 2001. We welcome the Afghan Parliament’s decision on Saturday to approve the supplementary budget to recapitalise the central bank, paving the way towards agreement on a new International Monetary Fund programme of support in the coming weeks. My right hon. Friend the Secretary of State for International Development has been actively engaged with the Afghan Ministry of Finance and the IMF in support of this objective. Agreeing the new programme will reinvigorate the Kabul process, allowing donors to align themselves behind Afghan Government priorities and systems as we move through transition and beyond.
Let us not understate the tangible improvements that have taken place, but let us also not underestimate the scale of the remaining challenge. We are working from a very low base. If progress is to be sustained, the commitment of the international community, including the UK, will have to endure for many years to come, long after international troops have withdrawn from combat operations.
On the security front, progress has been real and meaningful, but it has been hard won and is not irreversible. In many areas, Afghanistan remains a dangerous place. Levels of violence vary dramatically from region to region, but the insurgency continues to be a nationwide threat. The insurgency is under considerable pressure, but its leaders remain committed to conducting a violent campaign. Over recent months we have seen them increasingly focus on high-profile attacks, such as that on the British Council in August and on the US embassy and the international security assistance force headquarters in September. The murder of former President Rabbani is a particular setback. It is important that his death does not derail efforts to engage with those willing to renounce violence and work towards peace. We will continue to support President Karzai’s efforts to promote peace and reconciliation, and are encouraging engagement to support this from all those in the region, including Pakistan.
Despite that difficult background, there is also cause for optimism. In the UK area of operations in central Helmand, there is clear evidence that the ISAF troop surge has brought security gains, limiting the insurgents’ ability to prosecute their campaign. UK troops, partnered with Afghan security forces, are having a tangible impact on insurgent activity in our area of operations. On 9 October, 20 Armoured Brigade assumed authority for Task Force Helmand from 3 Commando Brigade, who can be proud of the progress made during their tour.
The central achievement this summer has been the commencement of the formal security transition process. July saw the first group of three provinces and four urban areas across Afghanistan, covering almost a quarter of the population, begin that process. This included Lashkar Gah, the capital of Helmand province, where the Afghan national police now lead on security in this bustling community of 120,000 people. ISAF remains ready to provide support if needed, but the ANSF have been able to respond effectively to insurgent attacks and to pre-empt many. That has been a source of considerable pride, both to the Afghan security forces and to the civilian population. Here in the UK, we should remember that the ANSF have suffered very considerable losses themselves.
The process of transition is on track and will continue. The Afghan Government, with ISAF support, are continuing the preparatory work needed to begin the transition process in the next set of provinces and districts. October also saw Task Force Helmand resume responsibility for the upper Gereshk valley. That follows the temporary deployment of US marine corps to the area, during which time UK forces provided security on the strategically significant Highway 1, outside the UK area of operations. UK forces will now work with the ANSF to prepare the district to enter the transition process in the future. We look forward to the second tranche of transition and an announcement later in the autumn by President Karzai outlining which areas are to be included.
Strong Afghan national security forces are key to achieving our objectives. The ANA now stands at 169,000 men and the ANP stands at 134,000, and both are on track to meet their target levels by October 2012. But progress cannot be measured in quantity alone—it must be measured in quality too—in respect of the effectiveness of the Afghan forces and the strength of their organisation. The Afghan-led response to the attacks on the US embassy and ISAF headquarters saw the ANSF successfully complete an exceptionally difficult night-time building clearance and, for the first time, Afghan air force helicopters were deployed in direct support of troops on the ground. Operational effectiveness rates are improving, allowing the ANSF to take the lead in many operations. Literacy rates among the ANSF are also improving. All 12 of the Afghan army’s planned specialist branches are now functioning, which will, in time, improve self-sufficiency and professionalism. Measures to improve retention rates in the ANSF have also been introduced. Such measures include a pension scheme and a work cycle consisting of periods of operations, training and leave. So the ANSF are improving but, as the recent report by UNAMA, the United Nations Assistance Mission in Afghanistan, shows, there remain important areas where further improvement is crucial.
President Karzai has stated his commitment to his Government assuming lead security responsibility across the country as a whole by the end of 2014, which is a goal that we share and support. That means that British troops will not be in a combat role by 2015, nor will they be deployed in the numbers they are now. The ANSF will, however, still need support from the international community even after the conclusion of the transition process. We will continue to support their development: for instance, through our lead involvement in a new officers academy announced by the Prime Minister in the summer.
On 5 December, the Afghan Government will chair an international conference in Bonn. This is a key opportunity to advance the political track. The Istanbul conference in November and the Chicago summit next May are further opportunities for the international community to reiterate its long-term commitment to Afghanistan. That commitment is crucial if we are to deliver on our key objective of ensuring that Afghanistan does not again become a safe haven for international terrorism. Our armed forces will continue to protect our national interests with the selfless devotion to duty we have come to expect. I am sure that we in this House will reciprocate by maintaining the staunch cross-party support that has underpinned the operation from the outset, and I commend the statement to the House.
Mr Jim Murphy (East Renfrewshire) (Lab)
I echo the tribute paid to Rifleman Vijay Rai of 2nd Battalion The Royal Gurkha Rifles, who died in action on Saturday. On all such occasions it is right that we should recognise the sacrifice and dedication of our service personnel here at home and overseas. They fight for others’ security and peace in order to protect our own. They carry our pride and our patriotism and they, and their families, must be the constant in our minds. It is also right that we should pay tribute to our allies, many of them nations that have also been scarred by terrorism.
I welcome the new Secretary of State and thank him in advance for his statement. I want to put on record my personal view that, whatever other disagreements I had with the right hon. Member for North Somerset (Dr Fox), I never doubted his passion about doing the right thing in Afghanistan, his personal commitment to supporting our forces, and the skill that he showed in trying to build consensus on the operations in Libya. As I made clear to him, when the Government do the right thing we will strongly support them, while carefully scrutinising their decisions. Will the Secretary of State take this early opportunity to reiterate his predecessor’s welcome commitment that nothing in the strategic defence and security review will adversely impact on the Afghan front line, and will he say whether anyone currently serving in Afghanistan is in line for compulsory redundancy?
Media attention has understandably been on Libya in recent months, but it has been another difficult summer in Afghanistan. Despite the painful losses, British casualties have mercifully been significantly lower than in the last two years, and casualties among all international forces lower than last year. There are, however, worrying security trends, with high-profile terrorist attacks including that against the British Council, which reminded us again of the danger in which many of our people, including civilians, put themselves for the sake of stability in Afghanistan and security at home. There have also been increased targeted assassinations across the country, and signs of insurgency spreading to previously calmer areas, and mixed messages on the political track. Despite that, our forces are doing brilliant work in central Helmand, jointly with the Afghan army and police force. This remains an intense and challenging campaign and one that is in our national interest. I hope the new Secretary of State will consistently make the case for why our forces are engaged in Afghanistan.
Let me turn now to my specific questions. We continue to support the intention to end the British combat role in Afghanistan by 2014. Will the Secretary of State share his assessment of the security situation and how it has changed in the districts and provinces involved in the first phase of transition? Will he assure the House that detailed plans for troop withdrawal will always be based on military advice and conditions on the ground?
On security, last week I spent time at NATO HQ and met the Secretary-General of NATO, who was full of praise for our forces. We discussed the security situation in Afghanistan. Will the Secretary of State comment on reports that Pakistani militants are exploiting a security vacuum left by the departure of US troops from parts of eastern Afghanistan, notably Kunar and Nuristan?
This is an issue for the whole of NATO, so how does the Secretary of State think we can persuade other nations with forces in Afghanistan to bear more of the burden? Pakistan is, of course, central to the future of Afghanistan and the wider region, so could he reflect on the worrying assessment by Admiral Mike Mullen that Pakistani intelligence is currently supporting extremists in Afghanistan? The campaign of targeted assassinations has also suggested a pattern of infiltration by the Taliban into Afghan forces. Could he say what changes are being made to Afghan national army and Afghan national police recruitment procedures and effective background checks to protect against this in future?
On the political process, we all know that for progress to be made in Afghanistan, there must be inclusive politics inside and beyond the country’s borders. Within its borders, could the Secretary of State reinforce the importance of protecting the gains made in development in Afghanistan in reducing child mortality and improving education? There are more than 7 million students in schools across the country, one third of whom are now girls. Beyond Afghanistan’s borders, India has recently signed a strategic partnership with Afghanistan. What does he see its significance as being, and what does he read into Pakistan’s response? The forthcoming Bonn conference, as he suggested, can be a real moment of strategic progress. Will he share his assessment of the credible likely outcomes coming from the Bonn conference?
In conclusion, we need Afghan security forces that are strong enough to defend and sustain the political and economic progress, and a constitution that reflects a changed Afghanistan, but to do so we need genuine and deeper achievements on economic development, political reconciliation, and better involvement with neighbours. Britain fought three wars in 80 years in Afghanistan; this is our fourth, and we have no intention of there being a fifth. That is why it is essential that real progress be made at the forthcoming Bonn conference.
Mr Hammond
I am grateful to the right hon. Gentleman for his welcome, and indeed for his continuing endorsement of the cross-party approach to this issue. He asked about the impact of the SDSR on the Afghan front line and I can tell him that in the very short time that I have had at the MOD, one of the first things I have done is to ask for an assessment of the equipment and personal protection available to our troops in Afghanistan. I am satisfied that they have the best level of protection they have had since this campaign began and appropriate equipment to carry out the task that they are being asked to carry out, and I will ensure that that remains my No. 1 priority. He asked about compulsory redundancies. No troops serving in Afghanistan will be subject to compulsory procedures either while they are serving in Afghanistan or during their recovery period upon return.
The right hon. Gentleman talked about the importance of the political track, and I absolutely agree with him. If Afghanistan is to have a stable and sustainable future, there has to be an inclusive solution to the political challenges that the country faces. I recognise that there are huge issues in achieving that but it must remain our focus. He was also right to draw attention to the success of our forces. A military solution alone will not be sufficient, but without a climate of security we will not be able to achieve the nation-building and reconciliation process that is so important for the future. I confirm that I will consistently make the case for the presence of our troops in Afghanistan.
The right hon. Gentleman asked about the current security situation. In the districts and provinces that have transitioned, the experience is good and the Afghan national security forces are showing good capability. Indeed, ISAF in Lashkar Gah has had to intervene only once since the transition took place.
The right hon. Gentleman asked about Pakistani militants, and I think he was referring to Haqqani network activity in the more easterly provinces to the east of where Task Force Helmand is operational. There has certainly been an increase in activity and the pattern clearly is that there has been a reduction in military activity in Regional Command South West but a corresponding increase in some other areas, including the area subject to Haqqani network influence.
The right hon. Gentleman is absolutely right to talk about the centrality—the crucial involvement—of Pakistan in the long-term solution to the problem. We should never forget that Pakistan has borne a burden as great as that of any other country in the fight against terrorism, taking more civilian casualties than any other nation. We will continue to work with the Pakistanis to ensure that they engage in the interests of Afghan security, and indeed of their own long-term security, by ensuring that the insurgency is defeated.
The right hon. Gentleman asked me about the infiltration of the ANSF through recruits. I absolutely accept that this is a critical issue. I have been assured that progress is being made, but I do not have the details that I can give to him across the Dispatch Box. I am very happy to write to him later today.
Finally, the right hon. Gentleman asked about protecting development gains. We are clear that a long-term lasting solution must involve the securing of those development gains and building on them—enhancing them. Afghanistan has to become a viable nation capable of offering its citizens basic services that they require, and capable, in a sense, of competing in its offer with what Taliban and other insurgents have been offering at local level. We have to build on those processes. We have to secure the gains that have been made, and I hope that at the Bonn conference the international community will take the opportunity to send a very clear signal of its long-term commitment to this process, beyond the draw-down of forces at the end of 2014.
Sir Peter Tapsell (Louth and Horncastle) (Con)
I welcome my right hon. Friend to his vitally important post and wish him every success in it, but may I commiserate with him, as I have with his six predecessors, on bearing responsibility for what, despite the tremendous bravery of our troops, I have always predicted since 2002, future historians will regard as a fiasco as great as the first two Anglo-Afghan wars? The wisest thing the Secretary of State for Defence can now do is to bring our troops home as soon as possible.
Mr Hammond
I am grateful to my right hon. Friend for his views. I am sure other Members of the House are familiar with them. That is not the view that the Government take. The Government take the view that we are embarked on a process. The Afghanisation of security is progressing. We have set out a timetable for the draw-down of forces, and we will continue to engage actively with the processes of nation-building, reconciliation and Afghanisation of security over that timetable.
Mr Bob Ainsworth (Coventry North East) (Lab)
I welcome the Secretary of State to his position. Is he yet able to say anything to the House about the Government’s policy on the need for co-ordination across the whole of ISAF of the draw-down of troops between now and 2014 towards the end of the combat mission? I am concerned. We are already backfilling in the upper Gereshk valley and we are operating out of area, as he said, on Highway 1. If we take that too far, we will damage the troop density that has given our troops the ability to make the operational progress that they have made. The Secretary of State needs to watch this. Our troops are enthusiastic to help. They see a job that needs to be done and they want to go and do it. If he allows that to go too far, it will damage their ability to operate.
Mr Hammond
I am grateful to the right hon. Gentleman and thank him for his welcome. Some points of information: the operation on Highway 1 has concluded, so we are no longer operating out of area on Highway 1. We are not backfilling in the upper Gereshk valley. The upper Gereshk valley is part of the UK area of operations. The US marine corps moved into the area in order to protect contractors carrying out a blacktopping of the strategically important Highway 611. That is now complete, and we have retaken control of it.
On the crucial issue of draw-down, the right hon. Gentleman is absolutely right. We cannot talk about the profile of UK draw-down to the end of 2014 and beyond in isolation. We have to look at what the United States is doing, and we will obviously have careful regard to the announcements of US intentions and take the advice of the military in responding to those.
Sir Menzies Campbell (North East Fife) (LD)
May I, too, offer my congratulations to my right hon. Friend? Is he aware of some suggestions that there has been an adverse impact on the availability of certain equipment in Afghanistan because of deployments over Libya? That may have been necessary and even acceptable in the short term, but may we take it that at the earliest date any such equipment—I particularly have in mind Apache helicopters—will be made available for deployment in Afghanistan?
Mr Hammond
I am grateful to my right hon. and learned Friend, who will know that the news from Libya appears to be progressing, and that progress is being made towards liberation. I hope that we will very quickly be at the point where equipment tied up in the Libya campaign can be released.
Angus Robertson (Moray) (SNP)
I welcome the Secretary of State to his position, thank him for advance sight of his statement, and join in his message of condolence. Earlier today a survey of Afghan opinion was published by the Konrad Adenauer Foundation, and it found that 56% of Afghans now see the foreign troop contingent as an occupying force, and only 39% see ISAF as a guarantee of security—down from the 45% who did so only last year. Does the Secretary of State have any reason to disbelieve those pessimistic findings?
Mr Hammond
The important thing is that the ANSF are growing in size and capability, so, with 25% of the population already living in areas that have been transitioned and another tranche of transition to be announced later this autumn, Afghan civilians will increasingly find that their day-to-day security contacts are with the Afghan national security forces. As we move towards 2014, allowing foreign forces to be seen as formations that can be withdrawn without compromising the security that Afghan civilians enjoy is a positive step, so I should like to see something positive in the figures that the hon. Gentleman cites.
Mr James Arbuthnot (North East Hampshire) (Con)
I, too, welcome my right hon. Friend to his position. He has a hard act to follow, but I am sure that he will do a very fine job—and if he does not, the Defence Committee will hold him to account. Does my right hon. Friend agree that one of our key strategic aims in Afghanistan must be to bolster the stability of Pakistan? How does he think that we can manage the draw-down of our combat troops so as to bolster that stability, rather than undermine it?
Mr Hammond
I thank my right hon. Friend, and absolutely agree with his analysis that the greatest strategic challenge is security in the wider region, including security in the vulnerable cross-border area. If he does not mind, with only 48 hours under my belt, I will not give the House a lecture on how that is to be delivered, but I will confirm that I recognise it as a very important priority.
Mr George Howarth (Knowsley) (Lab)
I, too, welcome the Secretary of State to the formidable challenges that lie ahead of him. Can he assure the House that if the security situation in Afghanistan were to deteriorate after 2014, there would be sufficient flexibility to deploy British military assets in support of the Afghan security services?
Mr Hammond
The Prime Minister has made it very clear that we will have withdrawn from a combat role by the end of 2014, and that the number of UK troops remaining after that point will be very considerably fewer than are there now. The detail of the role of those few remaining troops has yet to be determined.
Richard Ottaway (Croydon South) (Con)
May I welcome the Secretary of State to his office? He rightly says that our mission is to ensure that Afghanistan does not again become a safe haven for international terrorism. When he does get out to Afghanistan, will he reflect on the possibility that, with the death of Osama bin Laden and other leading terrorists, that mission might already have been achieved? If he reaches that conclusion, will he agree that it gives him some flexibility over the rate of the draw-down?
Mr Hammond
I am sorry to say to my hon. Friend that I think that that is a slightly optimistic assessment. I do not need to get to Afghanistan to make that assessment. We know from history that areas that are subject to divided—weak—Government and poor security are likely to become safe havens for international terrorism. It is very much in our own national interests that we support the Afghan national Government to be a strong, unifying and inclusive force and secure the development gains that have been made, as well as the Afghanisation of the security process. That will be the Government’s agenda.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
2014 also happens to be the end of the second term of President Karzai, who has led us to believe that he will not seek reappointment—which would also be unconstitutional. That means that at the very time when we are withdrawing troops, we require political stability. Can the Secretary of State give us some indication of his thinking on how that political stability in Afghanistan can be provided?
Mr Hammond
The draw-down of troops will take place between 2012 and 2014, and the profile of that draw-down has not yet been decided or confirmed. At the same time, the Afghan national security forces will be taking an ever greater role in maintaining security in the country. I would like to think that by that stage the political process will be able to go on in a constitutional fashion, while the Afghan national security forces protect the security of the country and the population and create the stable baseline that will allow for that political process.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I thank the shadow Secretary of State for his kind and sincere words about my right hon. Friend the Member for North Somerset (Dr Fox). I also express my faith in my right hon. Friend the Secretary of State; I am sure that he will fulfil our expectations that he will do a good job in his new role. Is he concerned that President Karzai has, once again, ruled out any dialogue with the Taliban when it is quite obvious that any stable political settlement in Kabul is essential if security is to be maintained as we withdraw from Afghanistan?
Mr Hammond
It is clear that politicians in Kabul will have to respond to the assault on the peace process that the assassination of former President Rabbani represents. However, it is also clear that in the long run there is no alternative to an inclusive peace process that will bring all elements of the Afghan population into a durable and sustainable settlement.
Mr David Winnick (Walsall North) (Lab)
One thing that we are all united on is the sheer bravery of the British troops in Afghanistan; there is no division on that. Is it not important, however, for the new Defence Minister to realise that there is not unanimous support for a 10-year-old war that many of us consider to be absolutely unwinnable, and that it is certainly the strong feeling in the country—there is no doubt about it—that the sooner that British troops come home, the better it will be?
Mr Hammond
If I have got it wrong I will correct myself, but I am pretty sure that I said “cross-party” support, and resisted the temptation to say that there was support in all parts of the House.
Mr James Gray (North Wiltshire) (Con)
Public recognition of service and sacrifice in Afghanistan is terribly important. The good people of Royal Wootton Bassett were delighted to welcome the new Secretary of State and the Prime Minister there on Sunday. Will my right hon. Friend similarly try to find time in his diary to be at the north door of Westminster Hall on 31 October at 3.30 in the afternoon to welcome in 3 Commando Brigade as they return from Afghanistan?
Mr Hammond
That was in the diary of my predecessor, and it remains in my own diary.
Paul Flynn (Newport West) (Lab)
Instead of detonating improvised explosive devices safely at a distance, we still instruct our soldiers to dismantle them by hand in order to identify—to find the fingerprints of—the bomb makers, and then imprison them. After the escape of 500 Taliban prisoners from Kandahar, including many bombers, is it reasonable to ask our troops to continue to dismantle those bombs in such a dangerous way when we cannot keep the prisoners safely behind bars?
Mr Hammond
There are two parts to the hon. Gentleman’s question. First, we clearly have to work with the Afghans to improve detention arrangements in Afghanistan in terms of ensuring that human rights issues are properly respected and that prisons are secure. On the first part of his question regarding the technical process used for dealing with IEDs, I am afraid that I have not got to that part of my briefing pack yet, but now that he has drawn my attention to it I will ask the relevant questions this afternoon, and will be happy to write to him.
Dr Julian Lewis (New Forest East) (Con)
It is highly probable that when our troops withdraw in 2014, the insurgency will still be active. Among its top targets will be any civilians whom we leave behind to engage in nation building, and any Afghan interpreters who have helped our forces. When he has the time and opportunity, will the Secretary of State give serious thought to how those two groups are to be protected?
Mr Hammond
My hon. Friend is, of course, right. The plan for post-2014 has to include a credible way of protecting UK civilians involved in reconstruction and development, and a solution for those who have served the British forces and who might be at risk as a result.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I hope that the Secretary of State will find time in the near future to read the Defence Committee’s report, “Operations in Afghanistan”. Will he say more about what assessment the Government have made of the role of women in the future of Afghanistan?
Mr Hammond
The Select Committee’s report is in my box and I was hoping to have read it before today, but alas! I will certainly put it high on my reading list. It is clear that a sustainable future for Afghanistan has to include all parts of the population. We have to build on the enormous gains that have been made, particularly in the education of girls. That is already beginning to flow through into changing the nature of Afghan society. We must build on those gains, and we are clear that they are part of the sustainable future that we crave.
Stephen Gilbert (St Austell and Newquay) (LD)
May I join other colleagues in welcoming my right hon. Friend to his post? May I press him on the implications of the Indian-Afghan strategic partnership? He rightly talks about the need for an inclusive political process internally. Externally from Afghanistan, that must include China, Pakistan, Iran and Turkey, as well as India.
Mr Hammond
I completely agree with my hon. Friend. It is important that all Afghanistan’s neighbours are engaged in the process and that none of them should feel threatened by it.
Derek Twigg (Halton) (Lab)
To follow on from the excellent question asked by the Chairman of the Select Committee on Defence, if the Government are to meet their deadline of coming out by 2014—in other words, if we assume that the insurgency will be well under control and that the Afghan national army and police can deal with it—it will be crucial for the Pakistani security services to be in a much better position in terms of the co-operation that they give than they are now. I know that the Secretary of State has been in the job only a short time and that he may want to write to me, but can he give an assessment of whether the situation of the Pakistani security services helping the Taliban and other extremists has got better or worse in the past six months?
Mr Hammond
The hon. Gentleman will, I hope, forgive me if I say that from what I have seen so far, this is an incredibly complex and sensitive area. I would rather study it a little further before writing to him, if he does not mind.
Mr Tobias Ellwood (Bournemouth East) (Con)
I welcome the Secretary of State to his position. He inherits a well-intentioned campaign, but if we are honest, there has been a drift in mission and a lack of clarity and conviction from the international community. If we are honest, there is not the required sense of governance at a regional or a national level, which means that a lot of the good work that we are doing in Helmand may well be reversible. I ask him to examine the provinces of Kunar and Nuristan, which were handed over to the Afghan forces but are, sadly, now in the hands of the Taliban.
Mr Hammond
I will certainly look at those provinces and draw the attention of my right hon. Friend the Foreign Secretary to what my hon. Friend has said. Of course, my focus will be on the area of central Helmand, for which the British forces have direct responsibility.
Dr William McCrea (South Antrim) (DUP)
On behalf of my right hon. and hon. Friends, I welcome the Secretary of State to his new position and pay tribute to the professionalism of his colleague who served before him. Will the Secretary of State assure me, and the House, that soldiers who have returned home from Afghanistan with serious physical and mental injuries will continue to receive the best possible medical attention for as long as they need it?
Mr Hammond
The Government have put a huge investment of time, management effort and money into that exercise, and I can assure the hon. Gentleman that those who need medical help as a result of injuries that they received while fighting on behalf of their country will receive it.
Bob Stewart (Beckenham) (Con)
The battalion that I commanded, 1st Mercians, will shortly return to Afghanistan, within two years. When it was there last it lost 12 men and more than 100 were wounded. May I ask the Secretary of State to write to me, when he can, to explain how battle casualty replacements will work in the future? Commanding officers find it very difficult if they lose 100 men out of 500, and it will be especially difficult as we will be withdrawing and drawing down in the next couple of years.
Mr Hammond
I am happy to write to my hon. Friend, who of course has direct experience of handling such issues. The good news, of course, is that casualty figures are substantially down. UK forces are taking far fewer casualties than they were at the time to which he refers. However, I will write to him.
Mr Denis MacShane (Rotherham) (Lab)
The right hon. Gentleman is the seventh Secretary of State since the conflict started, and we all wish him well. The statements, though, have not changed, even if Secretaries of State have come and gone. We hear about cautious optimism, determinism, determination and some interesting development statistics, then the next Secretary of State comes along and repeats the same statements. May I urge him to be the first one to grab hold of strategy and tactics from our 250-odd generals and ensure that whatever presence we maintain in Afghanistan, there are no more funeral cavalcades through Royal Wootton Bassett? Our men should stop being Taliban target practice.
Mr Hammond
I thank the right hon. Gentleman for his question. He may detect a similarity in the statements, and I may detect a similarity in his questions. I can tell him that there has been very significant military progress in the taskforce Helmand area. Violent incidents and casualties are down dramatically this summer fighting season compared with last.
Mr Hammond
The right hon. Gentleman may shake his head, but the fact is that the number of enemy-initiated violent incidents this summer fighting season is 40% down on the number last summer fighting season. In parallel with that, governance is improving. Governor Mangal, in Helmand province, is behind an effective programme of poppy eradication that has reduced the poppy crop year on year. [Interruption.] The right hon. Gentleman says something unrepeatable, but I say to him that tackling the root causes of the problem at the level of the Afghan economy, basic public services and security is the way to create a stable situation in the future, and we will persist with it.
Patrick Mercer (Newark) (Con)
I congratulate my right hon. Friend on his assumption of his extremely challenging post. Despite the title of the statement, the questions asked today have revealed that the problem lies as much in Pakistan as in Afghanistan. Will the Secretary of State tell the House when he is likely to engage in talks with his Pakistani counterpart?
Mr Hammond
Of course the Foreign Secretary leads on our relationships with Pakistan, but I am absolutely ready and willing to engage with my military counterparts in Pakistan if he wishes me to do so.
Mark Durkan (Foyle) (SDLP)
The Secretary of State has emphasised military transition, political inclusion and stabilisation. Is he sensitive to the concerns in Afghan civil society that the imperatives for the international community, and the interests of Afghan political powers in the context of those imperatives, may not extend to sustaining the advances that there have been in the status of women? As well as insisting that Afghanistan must never again be a safe haven for terrorists, will he outline the Government’s determination that it will never again be a theme park for atavistic prejudice against women?
Mr Hammond
I think that some of the gains already made, such as the education of girls, will be irreversible changes in Afghan society. We have made it very clear that we want to ensure that those gains are consolidated. However, it is not for us to dictate to the Afghan people their agenda for the future. It is for us to ensure that there is a climate of security and stability in which they can exercise their constitutional right to determine the future of their country in a way that does not threaten the security of ours.
Mark Lancaster (Milton Keynes North) (Con)
With all due respect to the right hon. Member for Rotherham (Mr MacShane), may I urge my right hon. Friend to stick to the strategy, and leave the tactics to the soldiers on the ground? Much work has been done in increasing the capacity of the Afghan national Government, but given the need for economic development, which has been highlighted, much more work needs to be done in provincial government, where capacity remains poor, if we are to leave Afghanistan in a stable state in the long term. Will the Secretary of State say a few words on how we will address that problem?
Mr Hammond
I am sure that the soldiers would thank my hon. Friend for his intervention, and I will consider it carefully. The Government are very much aware of the need to reinforce governance at local and provincial level. My right hon. Friend the Secretary of State for International Development is focused on ensuring that the UK and the broader international package deals at all levels. I would say to my hon. Friend that the initiative to recruit Afghan local police, which is already bearing fruit in a number of provinces, will continue to help to stabilise the situation at local level.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his statement, and wish him well in his new post. A large percentage of the soldiers who have been killed or injured in Afghanistan have been killed or injured as a result of improvised explosive devices. Some progress has been made on the equipment that the soldiers are issued with, but the US army, along with private companies, has developed modern technology to combat the threat of IEDs. Will the Secretary of State confirm that that technology advancement in the US will be exchanged with, and made known to, the UK and allied armies, so that the horror of IEDs can be reduced?
Mr Hammond
We have made considerable progress in providing better equipment to reduce the risk of IEDs to the forces. However, developments are ongoing, particularly in relation to vehicles, and we will keep on top of them.
Dr Andrew Murrison (South West Wiltshire) (Con)
The last quarterly statement discussed the challenging supply route from Karachi. Can my right hon. Friend update the House on that route, and on measures to improve the supply of Helmand province from the north?
Mr Hammond
My understanding is that the US is exploring other possible routes of supply into Regional Command South West. However, for the moment the UK remains dependent on the supply route through Pakistan. As my hon. Friend says, that is a difficult, vulnerable and expensive route. The route is fragile, but it remains a vital lifeline to our operation in Helmand.
Margot James (Stourbridge) (Con)
I welcome my right hon. Friend’s observations on the importance to nation building of the progress of women and girls. Two weeks ago I met Fawzia Koofi, an MP and presidential candidate in Afghanistan, who expressed great concern about the role of women in the upcoming Bonn conference. What can his Department do to ensure, or at least to encourage, the participation of women in that conference?
Mr Hammond
I am not aware of the exact composition of the Afghan delegation to that conference, but I shall certainly take up the issue and discuss it with my right hon. Friend the Secretary of State for International Development to see whether he needs to intervene to ensure that the interests of women are effectively represented.
Kris Hopkins (Keighley) (Con)
May I welcome the Secretary of State to his extremely important position and wish him well? May I also welcome his reassurance in response to the Opposition spokesman’s question on equipment? Will he reassure the House that, unlike the previous Government, this Government will never deploy troops with inadequate equipment?
Mr Hammond
I have been saying for many years, long before I came anywhere near having a responsibility at the Dispatch Box for this issue, that it is not moral to ask troops to go into mortal danger without the best equipment that we can provide them for personal protection, and that remains my view.
Mr Julian Brazier (Canterbury) (Con)
May I congratulate my right hon. Friend both on his appointment and on the remarkable speed with which he is mastering the brief? He mentioned the importance of developing the local police force. One of the key factors for success in Helmand province and elsewhere in southern Afghanistan will be recruiting southern Pashtuns into the Afghan national army, so that it is no longer seen as an army of northern foreigners.
Mr Hammond
My hon. Friend is absolutely right. At the moment the ethnic balance in the ANA does not reflect the ethnic mix of the population, as it is heavily Tajik dominated. In the longer run, it will be necessary to achieve a better representation of the ethnic mix of Afghanistan in the forces, but that process will take time and inevitably will be a consequence of the reconciliation and reintegration process that will take place over the coming years.
Caroline Dinenage (Gosport) (Con)
I have spoken in the Chamber before about gaps in the air bridge that can mean that up to three days can be taken off the two-week rest and relaxation period that is obviously incredibly valuable to our personnel. Will my right hon. Friend look at this issue again as we approach transition, and see whether the period can start from when troops arrive back in the UK, rather than when they leave their front-line bases?
Mr Hammond
I am grateful to my hon. Friend, and I will certainly look at the issue. My hon. Friend the Minister for the Armed Forces thinks that we have already done that, but I will check and write to her.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I welcome my right hon. Friend to the role of Secretary of State. It has been an absolute pleasure to work as part of his team in the Department for Transport, and I am sure that he will make an excellent Secretary of State for Defence. Will he update the House on his plans for an Afghan national army officer training centre?
Mr Hammond
The Prime Minister announced in the summer that the UK would lead the establishment of an Afghan national army officer training centre just outside Kabul. We will provide about 75% of the staff required for the academy and we are in discussion with other nations about supplying the other 25%. The centre will be one of the UK’s lasting legacies for the effectiveness of the Afghan national forces in the future.
Henry Smith (Crawley) (Con)
I congratulate my right hon. Friend. I appreciate that he has only been Defence Secretary for a few days, but what is his assessment of unmanned drones, such as Watchkeeper, in terms of combating threats such as IEDs?
Mr Hammond
Clearly the evidence of the campaign in Afghanistan is that unmanned aerial surveillance vehicles make a huge contribution to our intelligence picture, including at the level of interdiction of IEDs. Armed unmanned aerial vehicles have also played an important part in the US campaign to attack high-value targets.
Jason McCartney (Colne Valley) (Con)
I too welcome the Secretary of State to his post, and having listened to him for some 48 minutes, I would have thought that he had been in post for four years rather than 48 hours. I have spoken to the US general responsible for training the Afghan police and army, and he put a real emphasis—as did his report—on the quality of recruits, not just the quantity. Does my right hon. Friend agree that improving the levels of literacy will be crucial if we are to leave a strong force behind?
Mr Hammond
Yes, I absolutely agree—and good progress has been made on improving rates of literacy in the ANA.
If I may, I will take this opportunity to give the answer that I could not give earlier to the Opposition spokesman. All ANA and ANP recruits are now biometrically enrolled, which will help with the anti-infiltration programme.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
In addition to our military activities, what role, if any, are our troops playing in supporting and providing the vital infrastructure that will be so important in helping Afghans develop their economy and create the stable environment in which to provide for their own security?
Mr Hammond
My understanding is that our development programme is executed via the use of private contractors, but where necessary, of course, we shall use UK forces to protect those contractors, as happened in the case to which I referred earlier involving the highway construction programme.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I welcome the new Secretary of State for Defence to his position and urge him to stay there for as long as he possibly can, because we need to break this cycle of permanently changing Secretaries of State for Defence. I thank him for agreeing to meet 3 Commando Brigade when it returns, but I ask him for two assurances: that Plymouth will remain a principal naval port in the defence of our country and that he will find time in his diary to visit the Haslar unit, which is part of 3 Commando Brigade in my constituency and which helps members of the armed forces who have been badly hurt and who sometimes have had limbs amputated?
Mr Hammond
I am happy to do my best to remain in post for as long as I can, although my hon. Friend might address his plea to my right hon. Friend the Prime Minister. It is the Government’s policy that Plymouth will remain one of the UK’s principal naval bases, and I am happy to arrange a visit to the Haslar unit at a convenient time.
Christopher Pincher (Tamworth) (Con)
May I, too, add to the bouquets of congratulations under which my right hon. Friend is being buried today? In July, President Karzai of Afghanistan accepted that his Government needed to provide a more predictable environment of security to Afghan citizens. What further can the Afghan Government do with their political and military machinery—my right hon. Friend has spoken about the recruitment of more local policemen—to help build that more predictable security environment before 2014?
Mr Hammond
If my hon. Friend could avoid the term “buried”, I would be grateful to him. It is vital that we create this climate of security—I have referred to some of the initiatives under way—but it is clear to me, from everyone I have spoken to over the past 96 hours, that nobody who knows the country believes that there can be a sustainable, durable, peaceful Afghanistan unless all its people are included. That means that reactivating the reconciliation process and the political track at the earliest possible opportunity—after the disruption suffered following the Rabbani assassination—will be of critical importance to the future.
Mr Philip Hollobone (Kettering) (Con)
May I warmly congratulate my right hon. Friend on his appointment? Although lots of NATO countries are involved in Afghanistan, only we, the United States and a few others are doing more than their fair share. The same seems to be true in other theatres, such as Libya and in the anti-piracy operations off the African coast. Will he do all that he can to ensure that all NATO members play their full part in the success of this organisation?
Mr Hammond
I am happy to take up the cudgels on this issue, which, as my hon. Friend will know, my predecessor regarded as hugely important. I pay tribute to the huge progress and consistent effort that he made in reminding our NATO allies of their obligations. However, my understanding, from talking to military people over the past couple of days, is that the contribution that the Estonians and Danes, for example, have been making under British command in Helmand has been recognised as first class and is very welcome.
Point of Order
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ms Angela Eagle (Wallasey) (Lab)
On a point of order, Mr Speaker. Further to my point of order yesterday and in view of the apparent media briefing regarding the contents of the Cabinet Secretary’s report to the Prime Minister—for example, the political editor of The Daily Telegraph had an article up at 10 minutes to 1 containing information about what is in the report—will you inform the House on whether the Prime Minister has indicated that he will be making a statement to the House on the report’s contents?
Mr Speaker
I am grateful to the hon. Lady for advance notice of her point of order. I have received at this stage no such indication, but I am well aware of the intense interest in these matters in all parts of the House and of the wish that the House should have an opportunity to scrutinise them in detail. I understand that the report will be published later today, and it is clear to me that such scrutiny will be more effective when right hon. and hon. Members have had a chance to study it. It will not require telepathy to deduce that once the report has been published, an application for an urgent question—in the absence of any ministerial statement—will be the most effective way of pursuing that end. [Interruption.] I hope that that is helpful. It is always a pleasure for me to bring some happiness into the life of the right hon. Member for Rotherham (Mr MacShane).
Royal Assent
Mr Speaker
I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Sovereign Grant Act 2011
Energy Act 2011.
Concessionary Bus Travel (Amendment)
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Paul Maynard (Blackpool North and Cleveleys) (Con)
I beg to move,
That leave be given to bring in a Bill to amend the Concessionary Bus Travel Act 2007 to broaden the definition of eligible journeys to allow people with complex mobility problems who cannot access public transport to use concessionary travel passes on community transport services; and for connected purposes.
I am sure that everyone in the Chamber is aware how much our constituents value the current concessionary travel scheme, even if we tend to argue about it come election time. Indeed, there are perhaps few issues that are more controversial. However, there is one imbalance in the application of the existing legislation that needs to be addressed—one that I fear was not in the minds of those who framed the legislation back in 2007. Able-bodied pensioners who can use existing public transport can use their concessionary travel cards without any problem, but anyone with the misfortune to be a disabled pensioner or to have complex mobility needs, who perhaps cannot even make it to the bus stop in the first place, might have to rely on dial-a-ride services, demand-responsive services or other forms of community transport. In many cases, such people will have to pay their own way because, in essence, the community transport sector does not enjoy the statutory benefits for which the concessionary card scheme allows.
To me, that imbalance seems to be not only unfair, but contrary to the spirit of human dignity. Community transport as a sector ranges from the dial-a-ride services that I have mentioned to wheels-to-work schemes for apprentices, demand-responsive bus routes and community car schemes. There are at least 60,000 community transport volunteers up and down the country. Indeed, one could argue that the sector was nothing less than the big society in action. As hon. Members may be aware, section 22 community transport services are beginning to play a crucial role in filling the gaps that are appearing in many rural bus networks. However, my proposals focus on services provided under section 19 of the Transport Act 1985, which allows not-for-profit organisations to charge for providing transport to those whom it serves, without the need to obtain a public service vehicle operator’s licence. The provisions apply to any not-for-profit body associated with educational, religious, social welfare, recreational and other activities of benefit to the community.
I understand that many councils seek to subsidise travel for those who are disabled in various ways. However, not every council does, and with increasing budgetary pressures, which Members on both sides of the House must recognise, I fear that fewer and fewer will. For example, in my constituency, which is covered by two upper-tier councils, there are two ways in which those needs are fulfilled. Blackpool, for example, has an excellent dial-a-ride charity called Ride-Ability. One needs to be a member to access its services, and any member presenting a concessionary NoWcard with a blue stripe can obtain services for a half-fare. A disabled passenger with an orange NoWcard issued by the local authority can, on payment of 50p, obtain any single passenger journey that they wish to make. In Lancashire, however, the situation is slightly different in that the system is mileage related. People pay £2 to travel any distance up to two miles, and the fare goes right up to £10 for a journey of 18 miles or more.
I understand that, even as we speak, Blackpool council is reassessing whether to continue funding the Ride-Ability charity, which it subsidises to the tune of £112,000. One option that it seeks to adopt would involve restricting access to between 11 am and 3 pm, when the council’s existing vehicles are not used by people with other forms of special transport needs. My fear is that that option would restrict individual freedom and spontaneity. I am not sure that I would like to have to live my life only between the hours of 11 am and 3 pm.
I realise that my proposal will be interpreted by many, including the Government, as a request for a spending commitment. I am often contacted by pensioners who ask why they have been given a concessionary travel card when they do not need one. They tell me that they can afford to pay their own way. I often reply, “Actually, you are not obliged to use your concessionary travel card. There is nothing to stop you paying your own way, if you wish to do so.” That might be a sensible way forward, if the Government are concerned about how to fund the proposed extension.
Given the Government’s current enthusiasm for de-ring-fencing spending, I note that they have ring-fenced £10 million to local government for community transport schemes, so they have already established a slight predisposition towards the sector. I also note the words of the Community Transport Association, which has written:
“Any person unable to make use of their concession on existing eligible transport services as a result of disability, age or other limiting factor should be permitted to use it on other transport services, with the operators of those services being reimbursed by the administrators of the local concessionary travel scheme. All eligible passengers should receive equal access to services. However, the provision of this fair level of service to currently excluded individuals must not adversely affect the level or quality of service enjoyed by existing passengers”.
That goes to the nub of the matter.
My proposals might strike some as an unwelcome and unnecessary extension of the concessionary scheme. I accept that the present system is not ideal, by any stretch of the imagination. It contains too many flaws, inconsistencies and perverse consequences. Anyone who has read the recent Transport Committee report on bus services will be aware that more and more people have a concessionary fare card, but do not have the bus services on which to use them. I would say to anyone present who disagrees with my proposals that all I am seeking to do is ensure that the welcome benefits that apply to one section of the community should apply to everyone, including those with particular complex mobility problems. This is not a matter of bus policy, or even of wider transport policy. It is simply a matter of human dignity.
Question put and agreed to.
Ordered,
That Paul Maynard, Dr Julian Huppert, Paul Goggins, Mark Lazarowicz and Mr Lee Scott present the Bill.
Paul Maynard accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 February 2012, and to be printed (Bill 236).
Pensions Bill [Lords] (Programme) (No. 2)
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Steve Webb)
I beg to move,
That the Order of 20 June 2011 (Pensions Bill [Lords] (Programme)) be varied as follows:
1. Paragraphs 4 and 5 of the Order shall be omitted.
2. Proceedings on Consideration shall be taken in the order shown in the first column of the following Table.
3. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
Proceedings | Time for conclusion of proceedings |
|---|---|
Amendments to Clause 1 and Schedule 1, and New Clauses relating to state pension age. | 7.45 pm at today’s sitting. |
New Clauses relating to Part 2; Amendments to Clauses 4 to 17; New Clauses relating to the meaning of ‘money purchase benefits’; remaining New Clauses; Amendments to Clauses 2, 3 and 18 to 33; New Schedules; Amendments to Schedules 2 to 5; and remaining proceedings on Consideration. | 9 pm at today’s sitting. |
4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 10 pm at today’s sitting.
Briefly, as you will be aware, Mr Speaker, this Pensions Bill covers a wide range of issues. The issue that has understandably attracted most attention has been the one about state pension age. The programme motion thus gives that issue the lion’s share of the time available for Report. There is a range of other important issues relating to private pensions, so the final hour or so is given over to all those issues. Rather than detaining the House by talking about talks, as it were, I commend the programme motion and hope that we can move on to debating the substantive issues.
Mr Speaker
Does Mr Timms or Mr McClymont wish to speak? There is no obligation on any right hon. or hon. Member to speak.
Hywel Williams (Arfon) (PC)
Hon. Members will have noted that in his very brief speech the Pensions Minister did not mention my new clause 8. Debate on the first group of amendments is due to end at 7.45 pm. As a consequence, we will regrettably have only one hour and 15 minutes allocated to three further matters, including six Government new clauses and three Opposition amendments on automatic enrolment, and five Government new clauses and one Government amendment on money purchase benefits, before we reach my new clause. I do not know whether we will reach new clause 8, but I am, perhaps uncharacteristically, pessimistic. If we do not do so, the issue will, under the current proposals, come back to haunt us as we see the full cumulative effect of the change from the retail prices index to the consumer prices index basis.
I do not wish to open debate on my new clause now, but I want to put it on record, as I said on Second Reading, that the CPI has more often been lower than the RPI. The figures announced today show a small difference between the two measures, with RPI at 5.6% and CPI at 5.2%. That, of course, is no guarantee for the future. I will not detain the House further on this matter now, as I hope to able to speak to new clause 8. I just wanted to make those points at this juncture.
Question put and agreed to.
Pensions Bill [Lords]
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:41 - The House divided: - Ayes: 244 / Noes: 291 - Question accordingly negatived.
22:00 - The House divided: - Ayes: 287 / Noes: 242 - Question accordingly agreed to.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
I beg to move amendment 1, page 1, line 6, leave out ‘December 1953’ and insert ‘April 1955’.
Mr Speaker
With this it will be convenient to discuss the following:
Amendment 3, page 1, line 8, leave out subsection (4).
Amendment 4, page 2, leave out lines 12 to 18 and insert—
‘6th April 1955 to 5th May 1955 | 6th May 2020 |
6th May 1955 to 5th June 1955 | 6th July 2020 |
6th June 1955 to 5th July 1955 | 6th September 2020 |
6th July 1955 to 5th August 1955 | 6th November 2020 |
6th August 1955 to 5th September 1955 | 6th January 2021 |
6th September 1955 to 5th October 1955 | 6th March 2021 |
6th October 1955 to 5th November 1955 | 6th May 2021 |
6th November 1955 to 5th December 1955 | 6th July 2021 |
6th December 1955 to 5th January 1956 | 6th September 2021 |
6th January 1956 to 5th February1956 | 6th November 2021 |
6th February 1956 to 5th March 1956 | 6th January 2022 |
6th March 1956 to 5th April 1956 | 6th March 2022.’—(Rachel Reeves.) |
Government amendments 13 and 14.
Amendment 5, page 2, line 19, leave out ‘1954’ and insert ‘1956’.
Amendment 6, page 23, line 20, in schedule 1, leave out from ‘(a)’ to end of line 22 and insert ‘delete “2024” and replace with “April 2020”.’.
Amendment 7, page 23, line 31, in schedule 1, leave out ‘6th December 2018’ and insert ‘6th April 2020’.
Gregg McClymont
In my first foray from the Dispatch Box, I would like to say that I look forward to having a continuing dialogue with the Minister on this subject. He has a formidable reputation in this field. He told me at our first meeting that one of my former students is now his researcher; that, I think, makes him doubly formidable. I would also like to pay tribute to my predecessor, my hon. Friend the Member for Leeds West (Rachel Reeves). She, along with thousands of women, has led the campaign to highlight the burden being placed on up to 500,000 women by the acceleration of the timetable for the equalisation of the state pension age. I think we can all agree that she has done a very important job of work.
We welcome the Government’s concessions as laid down in the amendments, but we do not think they go far enough. The Government are no longer condemning 245,000 women to an extra waiting period of between 19 and 24 months, and that is welcome; but it is too little, too late. The cardinal fact about the Bill remains that 500,000 women will still have to wait up to 18 months longer, and 330,000 will have to wait exactly 18 months longer, before reaching their state pension age. The Government have chosen to break the all-party Turner consensus that women’s state pension age should not reach 65 before 2020, and they have also broken the coalition agreement, which promised that women’s state pension age would not reach 65 before that year.
The Minister of State, Department for Work and Pensions (Steve Webb)
I congratulate the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont)—this is the only time I am ever going to say that—on his new post. He mentioned Lord Turner. Is he aware that following the improvements in demographic projections that have taken place since Lord Turner produced his report, he is now on record saying that if he had been writing his report then, he would have gone much further much faster?
Gregg McClymont
The Minister is of course right. I believe that since the Turner report, longevity predictions have risen by 6.5% for men and 5.5% for women. There is no doubt that the issue is complex—no one is denying that—and there may well be a case for going further faster, but the burden of my argument involves the half a million women who must wait for up to 18 months. Our view is that that is a disproportionate burden, imposed without fair and due notice.
Gregg McClymont
I should like to make a little more progress first. I shall be happy to give way after that.
In 2005, in the days when the Conservative party was trying desperately to shift the perception that it had not changed, the present Prime Minister said:
“If you put eight Conservative men round a table and ask them to discuss what should be done about pensions, you'd get some good answers… but what you are less likely to get is a powerful insight into the massive unfairness relating to women's pensions.”
Alok Sharma
I am grateful to the hon. Gentleman for acknowledging that the Government have moved some way on the transitional arrangements, but may I ask him a question that I asked his predecessor, the hon. Member for Leeds West (Rachel Reeves), in Committee? How does he expect to fund the changes that he proposes?
Gregg McClymont
Is the hon. Gentleman aware that the savings that we are discussing have absolutely nothing to do with the deficit? They will accrue from 2016 onwards.
Alok Sharma
What the hon. Gentleman has said is interesting, given that when the Labour party was last in power, it did not really bother about saving for tomorrow. This is what his predecessor said when the point was raised in Committee:
“this is outside the period of the comprehensive spending review and the budget deficit reduction plan.”—[Official Report, Pensions Public Bill Committee, 5 July 2011; c. 8.]
As the hon. Gentleman knows, we are not going to suddenly stop spending and raising money after the budget deficit has gone. If we keep making unfunded pension commitments, that will add to the deficit and the debt in the future.
Gregg McClymont
That was not so much an intervention as a speech. The fact remains that the difference between the Government’s proposals and ours is £10 billion over 10 years. That is £1 billion a year. Is the hon. Gentleman really saying that a saving of that kind cannot be found in a more sophisticated way, without placing an unfair and disproportionate burden on those women? I do not agree, and nor does any other Opposition Member.
The Prime Minister was right when he suggested that if you put eight Conservative men around a table you would get some interesting answers on pensions, but you would not get the right answer. The Prime Minister was right then, and the Government are wrong now. The Minister’s amendments are welcome, and I am sure that he would personally like to go further, but he does not sit at the Cabinet table, although perhaps pensions Ministers should be in the Cabinet. This concession thus remains too limited. Some 500,000 women will still have to wait up to 18 months longer before reaching state pension age.
Turning to a point the Minister made earlier, this is not an easy issue, and there are great challenges, including that of longevity. As people live longer, the state pension age needs to rise to ensure a decent state pension for all. Labour set in train the Turner consensus: the state pension to rise in line with earnings; the retirement age to rise to 68 by 2046; and private pensions to be opt-out rather than opt-in. Labour also maintained the timetable for equalisation set out in the Pensions Act 1995.
Members on the Government Benches ask why we did not implement that, but Labour made great strides on pensions. Some 1 million pensioners were lifted out of poverty between 1997 and 2010. That is a real achievement. The poorest pensioners were lifted out of poverty. No pensioner lives in absolute poverty any longer. I must also point out that we had to do that because the previous Conservative Government left the pension system, and particularly the poorest pensioners, in a very difficult situation.
Richard Graham (Gloucester) (Con)
The hon. Gentleman takes us back into the mists of history, but surely today’s announcement can be warmly welcomed by all Members on both sides of the House? The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) describes this announcement as “just a sticking plaster”, however. I cannot think of any other sticking plaster in history which has cost £1.1 billion and helped 250,000 people. That cannot have been the case even when the right hon. Gentleman was at the Treasury.
Gregg McClymont
Perhaps because I have a historian’s perspective, I do not consider 35 years ago to be the mists of time. I think that that era is relevant to our discussion of pensions today.
We cannot sit still and do nothing on pensions. We accept that changes have to be made; we have no complaint about that, and we accept the Minister’s point about rising longevity.
Kate Green (Stretford and Urmston) (Lab)
I am very pleased that my hon. Friend has taken up his new post. I am sure he agrees that a balance must be struck between dealing with rising longevity by having a plan to increase the state pension age over time, and offering short-term certainty to women who need to be able to plan their personal finances. We must not keep adjusting our pensions policy just because longevity keeps on rising. A sensible balance must be struck.
Gregg McClymont
My hon. Friend makes her point with greater eloquence than I could muster, and she sums up the crux of our case.
Labour set two tests for the Pensions Bill, and the Government continue to fail both of them. They fail the first test of giving fair and due notice, to which my hon. Friend just referred. Even if amended in line with the Government proposals, the Bill will not give those 500,000 women fair and proper notice of the rise in their state pension age.
Brandon Lewis (Great Yarmouth) (Con)
The hon. Gentleman did not respond to the earlier point about needing to strike a balance between what this country can afford economically and what any Government might like to do. As Age UK has said, £1 billion to help 250,000 women is a big step forward. We should welcome that, rather than play petty politics with it.
Gregg McClymont
Actually, I did answer that point very simply. This has nothing to do with the deficit, and there is a £10 billion difference between our position and that of the Government over the 10 years after 2016, which amounts to £1 billion a year. If the hon. Gentleman is saying that that £1 billion a year is a fair and balanced outcome, all I can say is that, given the greater burden being placed on 500,000 women, Labour Members disagree with him.
Mr Marcus Jones (Nuneaton) (Con)
The hon. Gentleman mentions that the deficit will be brought down by 2015-16. That may be the case, but this country will still owe £1.14 trillion or £1.15 trillion. Does he think it fair and just that our children and their children, and probably their children, will be taking on that debt?
Gregg McClymont
Does the hon. Gentleman not understand his own Government’s policy, which is to eradicate the structural deficit by 2015? [Interruption.] According to the Government, the deficit will have gone. [Interruption.] The Secretary of State, from a sedentary position, makes the distinction between debt and deficit. I can tell him that I am well aware of that distinction, but I suggest that Members on the Government Benches are not so clear on this. I say that because £1 billion a year is one 1,000th of the debt that the hon. Gentleman just—
Gregg McClymont
No, I will not give way again, because I have answered the hon. Gentleman’s question very clearly. I will restate the point: £1 billion a year is one 1,000th of the national debt figure to which he just referred.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I welcome the hon. Gentleman to his place. I am wondering whether he taught my son, who is still at Oxford, as now I am really worried. Let me ask him a simple question. The simple fact is that he is getting confused. His argument was originally about the deficit and it has now drifted, rightly, into being about debt. However, debt is not some esoteric issue. If we do not pay off that debt and have a plan to pay it off, all our interest charges rise. The key thing is that it stacks up. Whether or not it is one 1,000th—or whatever he calculates—we have to make a start. We are making a major start on debt repayment. If, as he says, we are talking about only—as he says—£1 billion a year, he needs to tell us where he is going to find this sophisticated £1 billion to replace it?
Gregg McClymont
I thank the Secretary of State for his intervention. I am sure that his son is getting a better education than I could manage to provide, as he rather ungallantly suggested. The fact is that this is one 1,000th of the £1.3 trillion debt, and the issue is one of balance and proportion. Is £1 billion—
Gregg McClymont
I am sorry, but I have given way enough and I have to make progress.
Gregg McClymont
No, I will not give way. I am sorry to be able to quote some relevant arithmetic to Conservative Members—they do not seem to like it— but these are facts. Let me continue my point: £1 billion a year for 10 years is one 1,000th of our national debt.
Dame Anne Begg
I, too, welcome my hon. Friend to his first outing at the Dispatch Box. Perhaps this exchange has just illustrated all too clearly why women are deserting the Tories in huge numbers—it is because they do not feel that they should be the ones who have to bear the burden of the debt that exists. It is that balance that the Government have failed to understand.
Gregg McClymont
My hon. Friend, with her usual sagacity, gets to the heart of the matter. Given that we are talking about a small amount of money in the scheme of things—[Interruption.] The two tests that we have set are: do the Government’s plans give fair and due notice to the women concerned, and do those plans bear proportionately on all women affected? The answer is no and no. The Bill continues to place the longevity burden disproportionately heavily on women in their later 50s.
Mr Frank Field (Birkenhead) (Lab)
Conservative Members may not be able to understand the point my hon. Friend is making, but Labour Members clearly comprehend it. The Government have given us a target for when they will have paid off the structural deficit—we are into different territory. I was hoping that my hon. Friend might tease out from the Government how much of the overall changes they are making to the social security budget will bear on women compared with on men and women.
Gregg McClymont
I thank my right hon. Friend for that very important point. This all bears on the fact that, for all the talk, the Government do not understand the difference between a deficit and a national debt. That is pretty clear from our discussion so far.
Gregg McClymont
No, I will not.
Let me restate our case. The Bill fails our two tests: first, it fails to give fair and due notice of the rise in pension age to the 500,000 women concerned; and secondly, the burden falls disproportionately on this group of women.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I thank my hon. Friend for giving way and I am conscious that people watching this debate who are affected by it will begin to wonder whether we have somehow lost the plot. I have a constituent who has taken early retirement under deficit cuts and expected to get her pension when she was 64. She will now have to wait until she is 66 and she tells me that there will be a period when her money will simply have run out and she will have nothing to fill that gap. Does my hon. Friend agree that that could not by any stretch of the imagination be deemed to be fair?
Gregg McClymont
That bears precisely on the point. We are talking about real women and we must give due credence to their fears and anxieties, especially about due notice.
On fair notice, the fact remains that under the Government’s amended plans some women will have only five years to prepare. The shock of having to adjust at such short notice to a rise in the pension age of between 12 and 18 months cannot be overestimated—this reflects the point made by my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). These women feel genuine anxiety. The 500,000 women in question made decisions based on what they thought was a contract with the Government that they had paid into the system for a certain amount of time and would get their state pension at a certain age. The Government have moved the goalposts dramatically for these women; there is no getting away from that and it is another way in which the Government are breaking the consensus we appeared to have in 2010.
The Government are going down a dangerous path with this Bill, which sets a precedent by which the principle of reasonable notice of changes in citizens’ state pension age is dramatically reduced. The precedent is important because as longevity rises and as the Minister already suggested, there will inevitably be further uplifts in the state pension age. The principle of reasonable notice is broken by this Bill.
The independent Pensions Policy Institute was very clear in its evidence to the Select Committee on Work and Pensions on that point. The 1995 Act gave women 15 years’ notice and although the Pensions Policy Institute understood that longevity is rising and that it is necessary to make changes more quickly, it still maintained that 10 years needed to be the minimum notice that any woman was given.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I am grateful to the hon. Gentleman for giving way and I share his concern that the principle that the goalposts can be shifted with very short notice is serious. Does he agree that the problem with the longevity argument is that there are huge disparities in longevity according to people’s occupations as well as geographically? I am sure that affects his constituency, as it does mine.
Gregg McClymont
The hon. Lady makes a good point. That is an issue that my right hon. Friend the Member for Croydon North (Malcolm Wicks) often raises: averages can hide great disparities in social class as well as gender. That is a very important issue and I am sure the Minister is well aware of it.
The principle of reasonable notice is broken by the Bill. The Government’s concessions do not meet the fair and proper notice test, which is a principle of crucial importance. The second test we set for the Government was the proportionality test. They are unfairly and disproportionately singling out women aged 57 and 58 for harsher treatment. I do not suggest that they have singled them out deliberately—of course not—but I do say that they are not doing enough to compensate those women who have lost out in a birth date lottery that is not of their making. These women cannot, on the whole, afford the burden that the Government are placing on them, and they have certainly done nothing to deserve it. The Government should not make those women carry the heaviest burden of rising longevity—that is unfair and unjust. Some 500,000 women will still have to wait between a year and 18 months longer than they would have to reach state pension age. As I have previously stated, 330,000 women—one third of a million—will have to wait exactly 18 months longer, with the psychological and financial burdens that imposes.
Hywel Williams (Arfon) (PC)
There is a further, regional unfairness in relation to the availability of work. If people are to work for longer, where are the jobs to come from? That will affect the hon. Gentleman’s constituency and mine as well as those in the north-east of England and many other places. Also, if people are filling jobs at the ages of 65 and 66, the knock-on effects on youth unemployment will be substantial.
Gregg McClymont
The hon. Gentleman makes a very important point. If women and men are to work for longer, we have to look at the figures for employment. My understanding is that up to 38% of women aged between 56 and 60 are not in employment at the moment. That is a real issue, which I am sure the Minister is considering.
The Bill fails the two tests, in that it is unfair and there is an undue lack of notice. It also fails the proportionality test. Take the case of Laura Davis, who is 57, single and suffers from a heart condition and acute osteoarthritis, which hampers her mobility. She works full time but her commute is a struggle. She was hoping for a dramatic revision of the Pensions Bill’s terms. Laura, from Watford, Hertfordshire says:
“It is a shame the Government could not meet us half way and say that no one in my age group would be required to work longer than a further 12 months….That would have been a better compromise.”
That is a compromise that the Opposition suggest, and it is why we seek to amend the Bill through our amendments to part 1, which I shall now address.
Our amendments do meet the tests of due notice and fair treatment for those half million women, and would ensure that no women would wait more than an extra 12 months to reach their state pension age. Our amendments would also bring forward the uplift in state pension age to 66 for both men and women, from 2026 to 2022, because we recognise that, as the Minister and other Government Members have emphasised, this is a difficult issue. There are no simple answers, and tough decisions will have to be taken. Our amendments would balance the sustainability of the pension system with the need to treat all women fairly. They offer a substantial saving of £20 billion, but not at the expense of those women. As I emphasised earlier in response to some amendments, the difference in annual savings from our amendments versus the Government’s is equivalent to 0.1% of central Government spending in 2011-12, or 1.3% of the Government’s annual pensions budget. Given the undue, disproportionate and unfair burden being placed on such women, I do not think that is too high a price to pay.
Gregg McClymont
I will give way to the hon. Member for East Dunbartonshire (Jo Swinson), followed by the hon. Member for Argyll and Bute (Mr Reid).
Jo Swinson (East Dunbartonshire) (LD)
I welcome my neighbour to his first appearance at the Dispatch Box. Given what he has just said about his party believing that this is not too high a price to pay, and given that the changes are not coming in and affecting those women until 2019-20, is he making a commitment today that were Labour to win the next election, the changes would be reversed?
Gregg McClymont
We are clear that we cannot have constant changes in pensions legislation. One of the problems that we face is precisely that— constant chopping and changing of the timetable, so we will vote for our amendments tonight in the hope that in their wisdom the Government will accept them. In that case we will all be happy, or at least those of us on the Opposition Benches.
Mr Alan Reid (Argyll and Bute) (LD)
Having been born in 1954, I need to declare an interest in the debate. The hon. Gentleman has argued for the spending of an extra £10 billion, but he cannot come to the Dispatch Box and argue for that without saying where the money is coming from. Is he going to put taxes up, cut some other spending programme or borrow more money? Will he please tell us?
Gregg McClymont
To make the position clear to the hon. Gentleman, we are proposing savings of £20 billion. The Government are proposing savings of £30 billion. These savings will come into effect from 2016. No sensible Opposition or indeed Government would set out a spending plan for the next Parliament five years before it would come into effect. If the hon. Gentleman considers his position to be credible, the difficulties that the Liberal Democrats are facing become a little easier to understand.
Mr Frank Field
Does my hon. Friend agree that it goes beyond cheek for a Liberal Democrat to question what we might be saying to the electorate in the next Parliament when that party signed an agreement a year ago and is happily voting in support of the Government Bill tonight?
Gregg McClymont
My right hon. Friend again makes a telling point. The Liberal Democrats signed a pledge on tuition fees which they immediately went into government and trashed, yet they want the Labour party to tell them what the spending plans of a future Labour Government would be five years down the line. As my right hon. Friend says, that is pure cheek.
Gregg McClymont
In the event that a modification in the timetable is necessary, and in answer to the questions about where the savings would come from, it may well be that the Government would do better to speed up the timetable for a state pension age of 67 and 68. That is something that we would consider. It is a much more sensible option than this disproportionate, unfair and unjust hit on women aged 57 and 58, of whom there are 500,000.
Lyn Brown (West Ham) (Lab)
My hon. Friend’s point is well made. The Government’s position seems to be based on an assumption that women work for pin money. There is no understanding that women take time out for child care, that their pension pots are much smaller than those of men, and that these changes will create genuine hardship for the women on whom they impact.
Gregg McClymont
My hon. Friend is right. She represents a constituency where many women will be affected, particularly low-paid women. The proposed change has a socio-economic dimension of which I am sure the Minister is aware.
The amendment would make a real difference to the lives of the women affected. It is designed to secure a limited reform, targeted at a specific group whom the Government are not treating fairly, and it would give rise to costs representing just over 1%—one 100th—of the annual pensions budget.
The Chancellor has previously said that
“we are not going to balance the budget on the backs of the poorest and the most disadvantaged,”
but the costs of this Tory-led Government’s acceleration of the state pension age equalisation timetable targets a group with limited resources.
Alok Sharma
I thank the hon. Gentleman for giving way. He is making a passionate point, and he talks about social justice and fairness, but all those on whose behalf he speaks up will ask, “If the Labour party ever get back into power, will they enact these changes?” It is a fair question for everyone to ask, and it is fair that he gives us an answer today.
Gregg McClymont
After the hon. Gentleman’s previous intervention, he did not listen to the answer; given that intervention, he did not listen to the answer I gave the hon. Member for East Dunbartonshire. He just does not seem to get it.
Harriett Baldwin (West Worcestershire) (Con)
Will the hon. Gentleman give way?
Gregg McClymont
I am happy to give way to the hon. Lady, who I know is an expert on these issues.
Harriett Baldwin
I thank the hon. Gentleman for giving way, welcome him to his post and declare an interest also as a woman whose state pension age was increased to 66 under the previous Government. Given the £10 billion—
Harriett Baldwin
Eleven billion, that’s right.
Given the £11 billion commitment that the hon. Gentleman is making, and the £12.5 billion commitment that the shadow Chancellor has made, at what point do these billions of pounds add up to real money in the minds of Labour Front Benchers?
Gregg McClymont
The hon. Lady talks about real money, but the situation is clear: we are proposing £20 billion of savings starting in 2016; her Government are proposing £30 billion of savings. This measure would involve £1 billion a year over 10 years.
I understand that the hon. Lady has some actuarial experience, so she must understand that no sensible Opposition or, indeed, Government would put down in law that five years down the line they will still be committed to the same proposal. That is just common sense.
Gavin Shuker (Luton South) (Lab/Co-op)
Does my hon. Friend agree that, as we talk about billions on one side of the House and billions on the other, the great irony is that public borrowing is up, when based on the Government’s predictions? If we are to talk about billions being out of place in terms of budgets, perhaps that is a good place for us to start.
Gregg McClymont
My hon. Friend makes a very good point. The Government are very good at finding money when they want to, yet, on issues that affect a significant number of women—half a million—and given the anxiety and financial cost involved, they just seem unmoved.
Let us reflect a little on the kind of women we are talking about. According to the Library, the median total private pension of a fit 56-year-old woman is £9,100. That is not £9,100 a year; that is £9,100 in total. The same figure for a man is closer to £53,000—and not only that: these women are more reliant than men on the state pension. Often, it is a woman’s only source of pension income, and 40% of such women have no private pension savings at all—[Interruption.] No one suggests that that is the Government’s fault, and that is a pretty simplistic suggestion from a sedentary position by the Minister, the hon. Member for Basingstoke (Maria Miller), but the fact is that 40% of these women whom the Government are going to make wait between one year and 18 months have no private pension. The state pension is all they have.
Mr Iain McKenzie (Inverclyde) (Lab)
That particularly resonates with my constituents in Inverclyde, where over 1,000 women who do not have a large pension to look forward to will be affected by this Bill. These are women who have taken time out to look after their children and are now providing child care for their sons and daughters, and perhaps looking after elderly relatives as well. These are women who can ill afford to lose out on their state pension, and also needed the time to prepare for this.
Gregg McClymont
My hon. Friend is spot on. Caring is a very important issue in this context. A third of these women are already retired, in their late 50s, and are often caring for relatives. Of course, men have caring responsibilities too, but in significantly lower numbers than women.
These women also earn less, on average, than men. They have less chance of making up for the £7,800 in lost pension income that the 330,000 women waiting for 18 months are estimated to lose. If pension credit is added to that, some women are losing up to £11,000, and that is before taking into account the benefits that accrue at state pension age, such as the winter fuel allowance, free travel and so on. This is a serious financial loss to these women.
Lilian Greenwood (Nottingham South) (Lab)
My hon. Friend has made the very point that I was going to make. These women are losing out not only on pensions, and potentially pension credit, but on the passported benefits that are so important for low-paid pensioners, such as the winter fuel allowance, free bus travel, free dental work and free prescriptions. Those things are really important to this group of women, and they will have to wait longer to receive them.
Gregg McClymont
That is absolutely right. There is no doubt that this is a significant blow to these 500,000 women. That is why we have tabled our amendments. If they were passed this evening, the 330,000 women facing an 18-month hike in state pension age would have restored to them the average amount of £7,800. If they were on pension credit, they would also have restored to them up to £11,000 and all the other benefits that accrue at state pension age that my hon. Friend mentioned. I say it again: this is a serious, significant issue for a large group of women.
Our amendments offer the Government one last chance to show women that they get it. We are all aware of the Government’s growing problem with women voters. We hear the reports of the Prime Minister huddled in No. 10 surrounded by advisers and pollsters explaining to him just how grim the news is regarding the opinions of women voters. Support for this Government among women is falling off a cliff. According to the reports from inside No. 10, the pollsters are telling the Prime Minister that 25% more women than men believe that the economy is going in the wrong direction, while 10% more women than men are saying that cuts are falling unfairly on women—and no wonder, given this Bill, among other things. According to the leaks from inside No. 10, favourability towards the coalition among women is now 12 points lower than it was 18 months ago. Women are twice as likely to think that their children will have a worse life and less opportunity than their generation. Overall support from female voters for the Conservatives and for the Liberal Democrats has slipped significantly, and we know today that the Government are falling further behind in the polls.
Our amendments offer the Government a chance to show that they get it and that they understand that what matters to women is the impact of Government policies on their lives and the lives of their families. Our amendments offer the Government a chance to show belatedly, on an issue that matters, that they understand women’s priorities. I commend our amendments to the House.
Jenny Willott (Cardiff Central) (LD)
This is slightly earlier in the debate than I expected to be called. I will speak briefly on the amendments tabled by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and the Government amendments.
I know that we will have a fuller debate later, but much of the Bill has complete agreement across the House and is extremely welcome. The changes to the state pension age seem to have overshadowed many of the other issues in the Bill. As I said on Second Reading, I and many of my Liberal Democrat colleagues were deeply concerned about the effect of these changes on women who are being asked to work significantly longer at short notice.
The hon. Gentleman who has just spoken—I will not repeat his constituency name, as saying it once was an achievement—said that the state pension age has to rise, and I think that we all accept that. We are all living longer. The gains in life expectancy have been significant and are continuing. In 1970, someone reaching 60 could expect to live for 18 years. Last year, that had risen to 28 years. That puts a significant financial burden on the state. By the time I retire, I fully expect the retirement age to be somewhere north of 70. Goodness knows whether there will even be a state pension by that point.
When we are increasing the state pension age, we need to ensure that it is done as fairly as possible. I and my colleagues, a number of whom are present, have been vocal in our efforts to change the timetable. I know that the Minister and his colleagues in the Department for Work and Pensions have been actively working within Government to ensure that the timetable is fairer and that those who are worst affected by the changes are protected. In my view, the initial draft timetable was not fair to the women who were worst affected. I am pleased that the Government have listened to the concerns that were raised by many people and have tabled today’s amendments. I am sure that the Minister will tell us more about them in his summation.
Lilian Greenwood
I hear what the hon. Lady says, but will she explain to the 300,000 women who will have to wait longer than anybody else to receive their state pension—between a year and 18 months longer—why they should have to pay more of the burden than anyone else?
Jenny Willott
Later in my speech I will move on to comments that relate to the hon. Lady’s point.
Capping the state pension age increase to a maximum of 18 months will protect 250,000 women, as we have heard, and 250,000 men. Therefore, 500,000 people will be better off as a result of the Government amendments. As we have heard, that is costing more than £1 billion. I am grateful to the Secretary of State and the Minister for managing to get £1 billion out of the Treasury. That is no mean feat. A problem with any change to the state pension is that the costs are in the billions, not the millions.
Jenny Willott
I will make some progress first.
That problem makes it extremely difficult for small changes to be made. Given the financial circumstances, with the issues of debt and deficit that we have discussed, and the fact that other Departments are asking for money in the millions rather than the billions, convincing Treasury officials to be more generous cannot be easy. I hope that all hon. Members appreciate that the £1 billion going to these 500,000 people is a significant amount of money that has been found by the Government.
Hywel Williams
From the tenor of the hon. Lady’s remarks, it sounds as though she is satisfied with the concession that the Minister has achieved. I congratulate him on the distance that he has gone and I do not underestimate the difficulties. However, is the hon. Lady confident that the women in her constituency who will still be affected will be as easily persuaded as her?
Jenny Willott
I was just going to move on to the fact that, although I am delighted by the changes, in an ideal world I would have liked us to go further. I would have liked to see the cap closer to 12 months than 18 months, but we are not in an ideal world and the cost associated with that would have been significant. I understand that the cost of capping at 12 months would have been close to £3 billion, which would have been a significant amount of money to find. That would have been an uphill struggle. We have to appreciate the scale of the money that has been found to make things better for the women who are worst affected.
There has been a broad coalition campaigning on this subject, including Age UK, Saga and Members of all parties. Some have been extremely constructive in their campaigning and in the pressure that they have put on the Government, whereas others have been slightly less constructive at times. Some of what the Labour party has proposed today is, I think, unrealistic. It is unhelpful to the attempt to make as much progress as we would like towards helping the women who are most affected.
The Labour amendments tabled in Committee and today on Report that would delay the entire increase by two years are not sensible or realistic. Regardless of what the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East says, £10 billion would be a huge black hole in the public finances, and it would be a significant amount that the Government would have to find. [Interruption.] I am told that it would be closer to £11 billion. I am not going to start the debt versus deficit debate again, but there would be a huge black hole if we accepted a Labour party proposal that would require an unfunded promise of £11 billion.
Gregg McClymont
I have a very simple question for the hon. Lady. Why take that money from these women?
Jenny Willott
I would be grateful if the hon. Gentleman could clarify to us where the money that he proposes spending would come from. Unless we tackle the financial crisis in this country and the financial circumstances that we face, my child and all our children and grandchildren will be paying off the debt. We have to tackle the debt—it is real money that needs to be found, and a £10 billion black hole would be a significant one to fill.
Dame Anne Begg
Can the hon. Lady explain where the Government are finding the £1 billion that is needed to make the change that is being announced today?
Jenny Willott
I am really sorry, but I cannot tell the hon. Lady where the Minister has found the money. I am sure that if she asks him the same question later, he will respond.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I am sure we all have great sympathy with the women who have been most adversely affected by the changes, but do you not agree that the Labour party’s argument would be far more credible if it were able to tell us where it would make up the difference? Then we would be able to decide on the matter, as opposed to being told, “It is only £11 billion, we should find it from somewhere else.”
Jenny Willott
I completely agree. There is strong feeling throughout the House that in an ideal world, none of us would want to see the problem exist. We all accept that the state pension age will have to increase, because we are living longer and there is a black hole in the finances. I have said that in an ideal world, I would like to see the increase capped at 12 months, but we are not in an ideal world and we have to find a compromise that is workable and affordable. I appreciate that there are women who will be negatively affected by today’s proposals, and I am sure that we all have huge sympathy for them. However, I am glad that the Government have found the resources needed to mitigate the difficulties faced by those who are most severely affected.
Sheila Gilmore (Edinburgh East) (Lab)
Does the hon. Lady not agree that in politics, choices are constantly made, and that there are a number of choices that could be made in this case? There are those, for example, who argue that the 50% tax rate should be reduced at an early date, and there are those who argue that the generous tax reliefs given to people on higher rate tax who contribute to pension schemes could be ended, giving substantial savings. Does she agree that there are always choices, and it is not just a question of asking where a particular sum of money will be found?
Jenny Willott
I completely accept that political decisions are a matter of priorities and choices—all hon. Members understand that, because we are all involved in political debates and decisions. As I have said, in an ideal world, I would like the cap to be reduced. However, given the financial circumstances, the Government’s proposal is a compromise that I can accept. I understand that some will be negatively affected, but we have made significant progress. Half a million women and half a million men will benefit from the proposals, which I accept as a positive compromise.
Alok Sharma
My hon. Friend makes the point that we are not in an ideal world. A large part of the reason why we are not in the world that we would like to be in is that the previous Labour Government left us with a record deficit. Labour Members are now talking about another £10 billion. Does she agree that it is ludicrous for them to talk about unfunded commitments, and that they should instead apologise for the mess that they left the country in?
Jenny Willott
We need to focus on what is realistic and affordable. The Bill will affect people’s lives, and we need to ensure that the state pension is affordable and sustainable long into the future. I want to receive the state pension that I have paid into when I come to retire, and I am sure all hon. Members and people out there in the country would want the same thing.
I welcome the fact that Labour Front Benchers are now more positive toward to today’s proposals, and that they are prepared to accept that the Government have moved to the significant benefit of a large number of women, even if a realistic approach is somewhat lacking in their proposed amendments.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Does not the hand-wringing between 12 months and 18 months, and billions here and there, show the utter vanity of the UK spending billions on Trident nuclear weapons, when we are finding difficulty in paying money to old age pensioners?
Jenny Willott
The hon. Gentleman tempts me into an area into which I will not follow him. That is an issue for another day, although my position is probably not too dissimilar from his.
Given the financial circumstances and the constraints that the Government face, the deal proposed today is a good one. The Government’s amendments substantially mitigate the worst problems, and we should bear it in mind that £1 billion is a huge amount of money.
I hope the Minister can now concentrate on introducing a flat-rate pension for those whose retirement age is increased. That would make a massive difference to the amount that people get from their basic state pension when they retire, and it will benefit women in particular. Will he confirm that he still plans to introduce a flat-rate pension for 2016, so that women who are affected by the state pension age increase that we are discussing will be the first, or among the first, beneficiaries? In that way, although they retire later, they will do so on a significantly enhanced state pension, which would mitigate some of the financial implications of the Bill.
I commend the Minister and his colleagues in the Department for Work and Pensions for their efforts, and for their achievement of parting £1 billion from the Treasury to make the changes better, so that the effects are mitigated for those who are hardest hit. I hope that he continues to work to improve retirement income for both men and women.
Malcolm Wicks (Croydon North) (Lab)
It is a pleasure to follow the hon. Member for Cardiff Central (Jenny Willott). I may touch on some of her themes as I make progress.
The Minister will forgive me for repeating some of the issues that I have raised before, not least in Committee. My main point is this: pension policy in Britain has always been at its best when it goes with the grain of how our society works and of how our people work and live. It is also at its best when we have the courage for long-term planning, with time scales and periods of notice that enable men and women to plan their lives and their retirement properly.
This Parliament first legislated for old age pensions more than 100 years ago, because it started to understand the extraordinary fact that, for the first time in broad numbers, working people were outliving their working lives: hence the need for an income in old age. We then had the great national insurance reforms, which the Liberal party should have much credit for introducing, including particularly those in the great report by the Liberal reformer, William Beveridge.
Malcolm Wicks
Not at the moment, because I want to set out the three assumptions before I deal with the hon. Gentleman’s false—or possibly accurate—assumptions.
The second assumption is that British people live and work in similar ways. It is assumed that we start work and retire at more or less the same. The third assumption is that if we increase—as it appears we will—the pension age and the age of retirement, work will somehow be available. If people do not retire until 66 or 67, it is suggested that this Government’s extraordinarily brilliant economic and employment policies will deliver labour for the people. It is those three assumptions that I wish to question.
Stephen Metcalfe
Longevity and extended life expectancy are key to this argument. You point out that longevity is not necessarily equally spread across society. Are you saying that certain sectors of society have benefited from improved longevity more than others, and that for some, life expectancy has not risen at all?
Malcolm Wicks
Certainly for some people it has not, but broadly speaking it is my understanding that it has risen for all socio-economic groups. My assumption is that it will continue to increase, but it is the differences by social class that the hon. Gentleman’s question enables me to tease out—
Malcolm Wicks
With respect, I think that what I have to say will be helpful to the hon. Gentleman, and I am sure that he will tell me where I get it wrong, if I do.
I want to analyse mortality by social class. I shall talk about men in particular, although there is a class difference among women too. People in social class 7 tend to be in routine occupations. For example, they might be labourers, van drivers, packers or cleaners; many women would be cleaners. We hear a lot about longevity and how we will all live to 100: the Minister keeps telling us—he issues a press notice every few months—that one fifth or one sixth of us will live to 100. It might surprise the House, therefore, that 19%—almost one fifth—of men from social class 7 die before the age of 65. Almost one fifth of these hard-working working-class people in tough jobs—no doubt they have had tough lives too—die before 65.
I put that point to the Minister and the House because, before glibly raising the pension age to 66 or 67, we need to recognise that many of our fellow citizens do not live to 65. Furthermore, 10% of women in social class 7 die before the age of 60, while among the professional classes, that figure is only 4%. I should have said earlier that, in contrast to the 19% figure, the proportion of men in the professional classes who die before the age of 65 is 7%. So there is a huge social class differential, and if we are not careful—we need to do the arithmetic very carefully—and if we glibly increase the pension age, we might rule out more and more people from ever getting their old age pension.
Steve Webb
The right hon. Gentleman raises some important issues. I do not think that he was Pensions Minister at the time, but he will be aware that it was the Pensions Act 2007 that ultimately raised the state pension age to 68. Why did he support that, given the points that he is making now?
Malcolm Wicks
I recognised the logic of demography and longevity and the need to raise pension ages, but since ceasing to be a Minister of any kind, I have had more opportunity to think about this and to study it—[Laughter.] The Minister might try thinking independently. It is not a bad idea. I would not giggle at the idea that we rethink our positions from time to time. I have rethought my position on this, not least because the Government are going helter-skelter towards raising the pension age in ways that the Labour Government never foresaw.
Stephen Metcalfe
I am grateful to you for giving way for a second time. You said that 19% of men in social class 7 die before they reach 65. Of those, how many were in work at the time? Is this a social problem relating to health, or is it caused by the nature of the work that they have done? I ask because I am concerned that we are saying that we cannot raise the pension age because of this particular group, when in fact everyone’s life expectancy, regardless of how tough a life you have, has increased over the past 20 or 50 years.
Madam Deputy Speaker (Dawn Primarolo)
Order. May I help the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe)? I follow closely the question of women’s pension age and longevity, but he should not be addressing me—which is what he is doing when he says “you”—he should be addressing the rest of the Members in the Chamber. He has used that term several times now, and I gently ask him to observe the convention.
Malcolm Wicks
I cannot tell the hon. Gentleman how many of those people were still working when they died—although I want to say something later about the circumstances of that group of people.
Richard Graham
The right hon. Gentleman has much experience in these matters. However, may I put it to him that the reason why he voted in 2007 for the increase in the pension age was simply that the statistics to which he referred had changed so much? In 1911, when the first pensions were introduced—to be paid at 65—the average life expectancy of a male in the United Kingdom was 66. He made the point that some people today still die before the age of 65. Back in 1911, the vast majority of males died before that age. Life expectancy today is now 87 for the average male. Does he not agree that the changes in the state pension age reflect a huge change in longevity, and that the pension age has actually risen very slowly?
Malcolm Wicks
I am bound to say that life expectancy is not 87. On average, a girl born in the UK will live to 82 and a boy to 77. Obviously, however, once they have survived to the age of 65 many people are likely to live into their 80s, so I understand the broad point being made.
I shall conclude later by talking about a sensitivity that we could introduce into the system that might meet some of those problems, although the Minister has so far resisted it. However, now I want to refer to the association between social class and location, which various colleagues are interested in and knowledgeable about. This is not just about the broad difference between living in Kensington and living in parts of Glasgow; even within many of our big cities there are huge class differences in mortality. Across Sheffield, for example, there is a difference in life expectancy of more than 14 years between different parts of the city, and even in Kensington and Chelsea—the borough with the highest life expectancy—there is a difference of eight years between the most and the least deprived wards—which, for those of us who know Kensington, is not so surprising. Those differences and unfairnesses are reflected in terms of where people live in our cities.
Before I mention the idea that I have been trying to persuade the Minister to accept, I want to apply some pressure elsewhere: where will the jobs come from? We are living through a period of rising unemployment, and many people, including graduates with good degrees, in their 20s, 30s and 40s, cannot get jobs. Are we confident that if we make these accelerated changes—as the Minister knows, the acceleration is the difference between what the Labour Government did and what the coalition Government are doing—the work will be available?
Now 39% of 62-year-old men and 52% of 64-year-old men are not working, which means that huge proportions of men approaching what is meant to be their retirement are effectively retired from the labour market already. Furthermore, 36% of 58-year-old women are not working. I fear that we will be extending a kind of benefit twilight zone, in which people who are ineligible for their state pension—because we are raising the pension age—will jog along on incapacity or other benefits, with no one in the jobcentre pretending that those folks will get work—even the Minister will not be able to pretend that they will—and a huge army of people living in a state of desperation in that twilight zone.
Jim Shannon (Strangford) (DUP)
I am sure that the right hon. Gentleman will share our concerns about last week’s unemployment figures, which showed an increase among young people and women. Is there not a concern that unemployment levels for women are rising, and does that concern not need to be expressed tonight in the House?
Malcolm Wicks
That is the concern. Ironically, we are having this debate while the spectre of mass unemployment—as Liberals will remember, William Beveridge called it the giant evil of idleness—rears its ugly head, yet we are accelerating the increase in the age at which people will get their retirement pension.
Hywel Williams
The geographical variation is extremely gross if one adds in people who are economically inactive. The proportion of people who are economically inactive varies from place to place. Merthyr Tydfil is an obvious example in Wales. Last time I looked, the constituency of Witney had three economically inactive people searching for each job, while in the Rhondda that number was 154. That is a gross variation, and is not something to be disregarded.
Malcolm Wicks
That is an extraordinary variation, and one of the implications is that in order to make good policy and ensure good practice in pensions and other areas, we in this Parliament—including those on the Government Benches—need to have some understanding of how people work, and not just think of our own circumstances.
Sammy Wilson (East Antrim) (DUP)
The right hon. Gentleman is making a powerful point given the current economic circumstances, but we do not know what the employment circumstances will be in 2016 or 2020. Does he agree that the more essential point is that because people see investing in their pensions as a long-term decision, it is the short-term way in which these changes are being introduced that is creating all the unfairness? People had certain expectations and had made contributions, but the benefit from those contributions is now being denied them.
Malcolm Wicks
Yes, hence my introduction, when I argued that pensions policy in this country has always been at its best when it goes with the grain of how people live and makes long-term decisions that individuals can plan around. It is the acceleration of the process that we are now discussing. It is extraordinary that, having taken so much money out of the pensions system, the Conservatives—and, I suppose I have to say, the Liberals—now want credit for putting some of it back. That is a bit of Tory arithmetic that I am not terribly impressed by.
Harriett Baldwin
Does the right hon. Gentleman not welcome, as I do, the additional £25 billion going into the triple lock of the state pension, which, as of today, will protect pensioners from the rise in inflation?
Malcolm Wicks
That issue—how the shift from the retail prices index to the consumer prices index will affect the real value of pensions in future—is a subject for another day, although colleagues might want to touch on it today. My guess is that that shift, which seems quite dry and technical, will become the big pensions swindle of the 21st century. I am therefore not quite as impressed by the triple lock as the loyalist hon. Lady is.
Harriett Baldwin
Does the right hon. Gentleman not acknowledge that whereas his proposal was to uprate the state pension in line with average earnings, which would mean an increase of 1.8%, the triple lock chooses the best of the three? That is an incredibly important reinforcement of our state pension.
Malcolm Wicks
Yes, but I hope that the hon. Lady will consider my point about CPI and RPI, because we are talking about billions of pounds that could be lost to British pensioners when that change is implemented over coming decades.
Let me reach my conclusion. We suffer from over-generalisations in this field. I am fed up with macho commentators, often from the political, professional and business class, who somehow assume that everyone will live to a ripe old age and that those in their 60s will have portfolios full of all sorts of opportunities—a directorship here, writing a book or doing a television programme there. Many people, not least those on the Government Benches, talk about a world of that kind—I do not want to get the hon. Lady over-excited: she has had many chances to respond, but she knows who I am talking about. Given the typical life cycles for the late 20th and early 21st centuries, more and more of our children and grandchildren will effectively not get started in their careers until their early 20s or even their mid-20s. With the rise of university education, the pattern of many people’s working lives will be like that.
However, that pattern is not at all typical of everyone in our society. When we recall the question that the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) asked about the mortality of those people, let us remember that there are still many working people coming up to retirement who started their working lives as 15 or 16-year-olds. They are the packers, the cleaners, the van drivers, the heavy manual workers and the care workers. By the time they reach retirement they are worn out. They are physically knackered, if I am allowed to use those words. They are tired, they are exhausted and what they need, in an old-fashioned sense, is a rest. They need to retire. They are not people like the hon. Gentleman, who I suspect will still be sprightly in his late 60s and 70s, with his portfolios and all the rest of it; they are physically worn out. They have been working since they were children, and they need a rest.
Stephen Metcalfe
I am grateful to the right hon. Gentleman for giving way. He is making a powerful argument and some interesting points, but they relate to increasing the state pension age, full stop. This is not an argument about the escalation of that process; it is an argument about whether we should change the age at which people can claim their state pensions, which is separate from the debate that we are currently having.
Malcolm Wicks
My argument is that it is wrong to treat someone who starts work at 15 or 16 equally to someone who starts their first proper job at 21 or, with post-graduate qualifications, 23, 24 or 25. People who start earlier have often been in the labour market doing tough manual work—tougher work than any of us have ever done—for 10 more years than the likes of us. My argument is that we should reconstitute our national insurance system to recognise the contributions that they have made, so that anyone in work for, say, 49 years and paying contributions throughout that time should at the very least be able to take not an early pension, but a pension at a more reasonable age. If that brings about a difference between when they take their pension and when their grandchildren who went to university take theirs, that would be fair.
If we do not start to understand some of these social, employment and class sensitivities as we helter-skelter towards higher state pension ages, we will make mistakes and, with great unfairness and injustice, and leave people behind. Many of those people will never get their pensions, because they will be dead before they qualify for them. That is not a sign of a decent British pensions system that understands how our society is evolving.
Pat Glass (North West Durham) (Lab)
I rise to speak on behalf of the hundreds and possibly thousands of women who have contacted me on this matter. I also speak as a woman who is directly and personally affected by the Government’s changes, so I am in a position to tell the Government what is happening to women of a certain age when it comes to pensions.
The women who have contacted me have told me that they expected changes in the pension age. They know that we are all living longer—or rather, that some of us are—that we need to plan for our retirement better and over a longer period, that we need to pay more for our pensions and that there needs to be some equalisation between when men and women access their pensions. They understand and recognise all that. However, it is the speed at which the changes are being implemented that is causing anxiety and fear among women who no longer have time to plan and save for their future.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I absolutely agree with my hon. Friend. I, too, have been contacted by hundreds of concerned women in my constituency. Although we acknowledge the Government’s concessions, which they probably made because of the pressure that those women have put on them, they will not meet everybody’s needs. Hundreds of my constituents will still be up to £11,000 worse off, with not enough time to plan for a reasonable pension in their old age.
Pat Glass
I absolutely agree. This is just one more Government policy, on top of others that directly affect women and young people more than any other group, that will impoverish women. Whatever last-minute fixes the Government come up with, it remains wrong to penalise disproportionately women who happen to be between the ages of 56 and 58, many of whom have worked all their working lives. Many of them will have held several jobs in order to keep their families. They have paid their taxes and their bills, and, quite frankly, they deserve better than this.
Ian Paisley (North Antrim) (DUP)
Does the hon. Lady accept that the pension is one of the few certainties in life and that it is now being ditched for women of a certain age, as she aptly puts it? Those women have planned meticulously for when their retirement will begin and what they will use their pension for. They have planned how it will be broken down into housekeeping and into meeting the needs of their grandchildren, for example, but that is all being thrown askew by these proposals.
Pat Glass
Absolutely. This is causing not just anxiety but fear among those women, many of whom have been barred, until recently, from private company pension schemes because they were having to work in several part-time jobs with very low incomes in order to keep their families. They are now being let down by a Government who are simply not giving them sufficient time, which is all that they are asking for, to plan for the change.
Dr Whiteford
Given what we have heard from the right hon. Member for Croydon North (Malcolm Wicks) about the failure of people’s health to keep up with the increase in longevity, does the hon. Lady agree that many of those women will not be in the best of health and will be having to look for jobs at a time when their health might be compromised and they are not nearly as fit as they used to be?
Pat Glass
I absolutely agree.
The Chancellor has told us that he will not balance the books on the backs of the poor abroad, so why is he prepared to balance the books to a disproportionate degree on the backs of 500,000 women who just happen to have been born between 6 October 1953 and 5 March 1955? Why is it okay to do that to those women? The Government need to listen to the women of this country and accept Labour’s amendment so that no woman will have to wait more than an extra 12 months to reach their state pension age.
Richard Graham
I am delighted to be called to speak in the debate. I welcome amendments 13 and 14, which show that the Government have listened to their people, and I congratulate the Secretary of State and the Pensions Minister on successfully providing some relief to women in their 50s in my constituency. I pay tribute to all those from Gloucester who came to see me about this issue, led by Patsy Toleman, and to those who were encouraged by the campaign led by Age UK to write to me about it.
Like others on both sides of the coalition Government, I have been very active in writing to and making the case personally to the Secretary of State and the Chancellor, and I am sorry that the Opposition have been less than generous in their recognition of the value of capping at 18 months the increase in the wait for their pension for 250,000 women. They should perhaps be reminded that Age UK has said that
“we can’t emphasise enough the great achievement that this change represents as it will cost the Government £1 billion in lost cuts to expenditure.”
Richard Graham
I will be more generous than the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) was earlier; I will give way.
Fiona O’Donnell
I thank the hon. Gentleman for his generosity. He might find us ungenerous, but I wonder how many of those women who came to see him have been in touch over the past few days to tell him that the Government have gone far enough.
Richard Graham
I have not heard specifically from any of those who originally lobbied me on this issue. No doubt they will be hearing this debate, and I think that they will recognise, as all Members should do, that the Government cannot simply brush aside the issue of expenditure as those on the Opposition Front Bench did when they were in government. The interest that all our families are having to pay on the mountain of national debt built up by the hon. Lady’s party over the past 13 years means that an amount greater than the entire education budget is being spent on debt interest alone. That affects every woman in her constituency and in mine.
Sammy Wilson
The hon. Gentleman has rightly said that the Government have listened to the case that has been made, that they have made additional money available and that they will give people some notice of the changes in the pension age. Does he accept, however, that for many people who are carers, for example, or who are in part-time work or in and out of work for other reasons, the time horizon that is now being made available to them will not give them much chance to plan for their retirement?
Richard Graham
In a perfect world, everyone would have liked the changes to have gone further, but I believe that capping the additional waiting period at 18 months represents a significant step forward in providing time for preparation. We are not, alas, living in a perfect world—
Richard Graham
I should like to finish answering the previous intervention before I take the next one.
I am sure that the hon. Member for East Antrim (Sammy Wilson) would agree that tonight is all about a welcome change for all of us.
Pat Glass
I am grateful to the hon. Gentleman for giving way. We have heard several Members on the Government Benches talk about a perfect world, but does he accept that we did not have a perfect world in 1909, when the first pensions legislation was discussed, and that we certainly did not have one in 1945? Other Governments nevertheless saw that it was right not to take this kind of action, despite the very difficult financial circumstances in which they found themselves.
Richard Graham
I do not believe that that analogy is relevant. As I pointed out earlier to the right hon. Member for Croydon North, any analogy that stretches to compare today’s announcements with those in the original pensions legislation in 1911 is inaccurate, because it leaves aside the critical factor that life expectancy back then was hugely different from what it is now. In fact, the vast majority of people then did not live long enough to collect their pension, whereas today people will be living for 40, or possibly 50, years beyond their pension age—[Interruption.] The hon. Member for West Ham (Lyn Brown) is chuntering away, but the reality is that there are people in the public service who are drawing their pension in their 40s or early 50s, and it is not inconceivable that they will live for another 40 years.
Richard Graham
I will not give way on that point.
The arguments of the Opposition, who tabled amendments 1 to 7, have been extremely disappointing. My constituents will have heard three main points from the Opposition Front Bench. First, the Opposition have opposed the changes made by the Government on the basis that they do not go far enough. Secondly, the Opposition have strongly intimated that if elected in 2015, they would not implement the changes that they recommend tonight, which reeks strongly of hypocrisy. Thirdly, they have made it clear that they are not concerned about the additional £11 billion costs of their proposals, as they could be dealt with in the future and, therefore, should not affect our debate today. That is an entirely irresponsible attitude, which is entirely in keeping with the words of the former Chief Secretary to the Treasury when he announced that he was sorry there was no money left. It is very disappointing that the same philosophy is still strongly in evidence from the Opposition Front-Bench team.
Brandon Lewis
I was in the Chamber when the shadow Minister commented on £1 billion a year being only one thousandth of the debt, thus implying that it was a small amount of money. If we are talking about people being in touch with reality, surely my hon. Friend would agree that people outside this place will wonder about the economic credibility of an Opposition party that says £1 billion is not a lot of money.
Richard Graham
My hon. Friend is absolutely correct. As an American economist once said, “A billion here, a billion there, and sooner or later you have a large sum of money”. It is disappointing to hear such an irresponsible approach to spending and to the interest being paid by everybody in this country on our vast mountain of national debt.
Let me conclude. Tonight, I shall vote in favour of amendments 13 and 14. I recognise the significant achievement, to which Age UK has paid tribute, represented by the welcome changes that will benefit large numbers of women across the country. I pay tribute again to those women in my constituency who lobbied me on the issue, for whom I fought a long and quiet campaign with Ministers. I shall not vote for amendments 1 to 7, and I greatly regret the fact that the Opposition continue to table motions that they would not implement were they in power.
Dame Anne Begg
The Government’s amendments are an admission that they realise, at long last, that they got it very wrong about the acceleration of the new state pension age for women. On Second Reading and in Committee, there was always a promise that the Government would come up with some sort of transitional arrangements for the group of 500,000 women who will have to wait more than a year, and particularly for the group of 33,000 women who will have to wait for two years before qualifying for the state pension. However,all they have done is to shift the timetable six months later. Why cannot they go the whole hog and take the anomaly out of the system altogether? If they were to do as the Opposition ask and delay all the increases to the age of 66 until after 2020, once the initial transition is over for women between 60 and 65, there would be no anomaly that would require transitional or any special arrangements at all. There would then be no unfairness specifically to women—it is, of course, only women who have been affected by the changes—and that would also answer the question posed by my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) about the lack of time available for the group of women affected to prepare for the new pension age.
If the Government have recognised that issue, it is a shame that they could not go further. I suspect it is probably because the Minister, to whom I pay tribute, has found that getting anything out of the Treasury is like getting blood out of a stone. I recognise that getting just over £1 billion is a huge achievement, but in the overall scheme of things, and given the effects of the change, it would have been better—it would have been better if acceleration had not been proposed in the first place—if the problems had been properly recognised.
Before Government Members applaud themselves and welcome the change too much, perhaps we should think about the enormous campaign that was waged against the proposals. Would that campaign have existed if the Government had proposed at the outset what they propose now? In other words, when all this started, if it had been proposed that there would be an acceleration of the women’s state pension age up to 66 before 2020 so that 300,000 women would have to wait 18 months longer—on top of the delay they were already facing because of the timetable already set—would there have been the same outcry and the same campaign? I think that the answer to that question is unequivocally yes.
Just because the Government have made something bad slightly less worse, it does not mean that what is being proposed is not particularly bad. Someone who, after an accident, is told by a surgeon that they will lose both their legs, and who finds out after they come out of the anaesthetic that they have lost only one might feel a degree of elation that this was better than they had expected. However, someone going into an operation expecting to lose a leg who does lose one would still feel disappointed. In other words, the amendments that we are being asked to vote on still do not amount to a good deal for the group of women concerned.
Richard Graham
I simply want to observe that if any of us went into an operation expecting to lose both legs and a doctor managed to save one of them, surely we would feel that the doctor had done rather a good job. The analogy with the Minister’s announcement this evening is not irrelevant.
Dame Anne Begg
The hon. Gentleman has just made my point for me. Yes, we would feel a lot better, but if we had gone into the operation not expecting to lose either leg, but discovered afterwards that we had lost one, we would be absolutely devastated. The result would appear to be the same, but the emotional trauma caused in the meantime is quite different. That is exactly the position faced by these women.
The women we are talking about are not rich; they are not people for whom a billion pounds here or there amounts to pennies or not much money. These are women who have made the financial calculation that they will be able to get their state pension at a particular age. Some of them are still making the calculation that they will get the state pension at 60. I received an e-mail today from someone who could not understand why her pension age had gone up by 30 months. It is because she had not taken into account the original equalisation. That is no fault of the Government, but it illustrates the fact that people need a lot of time to prepare for the change, and even if they have had the time, they are not always prepared for it.
For the group of women who had not realised that the state pension age was going up to 65, it is a double whammy to discover that it is now going up to 66 and that they must face waiting that extra time, perhaps with no income at all. Many of these women will be in that position, even if they have taken early retirement for one reason or another. We know that by the age of 65, only about 40% of women are still in work; they might have fallen out of work for various reasons. Those women will have been depending on getting not just the basic state pension, but probably pension credit and all the other passported benefits that were mentioned earlier. For these women, there is a big hole in their financial planning. We have heard much about the Government’s debt meaning that they cannot possibly afford to do right by the group of women concerned, but the effect will be on those women’s personal debt. They will have to borrow money or in many cases live in pretty dire circumstances if they do not get the pension when they were expecting to get it.
Dame Anne Begg
Indeed, and there will be many such examples.
Women who hoped that their campaign would move the Government feel very disappointed. It is true that those in one group may have to wait for 18 months rather than two years, but they are still extremely disappointed at the Government’s failure to recognise that what they propose will have a disproportionate effect on a number of women who no longer have time to plan adequately for the future.
Sarah Newton (Truro and Falmouth) (Con)
The hon. Lady is being very generous in giving way.
Age UK led the campaign that generated so much awareness of the issue among women and prompted them to raise their concerns, rightly, with their Members of Parliament. Age UK has welcomed what the Government have done, and has acknowledged that 90% of women will now work for only one extra year. I know that the fact that 10% may have to work for an extra 18 months is a challenge for them, but this is a solution for that 90%, and campaigners have welcomed it.
Dame Anne Begg
It is not a solution for the 90%, because they will still have to work for an extra year, on top of the extra years for which they were already having to wait for their state pensions. I believe that Age UK made that comment at the time of the Government’s announcement. Of course all Members agree that the position is better than it was before, but it is still not good enough. If my inbox is anything to go by, women who thought that their problems would be solved when they first heard the announcement have now made their calculations and discovered that for a large number the goalposts have not been moved at all, and that they have been moved by only a small amount for others.
In my view, it is a pity that the Government ever went down this route. They could have begun the accelerated rise in the pension age to 66 after the completion of the equalisation, between 2020 and 2022, rather than in the period before 2020. Obviously some wonk at the Treasury thought “What a good idea this is—it will save billions of pounds”, without recognising the anomaly that it would create and the difficulty that it would cause for this group of women. If Conservative Members want to know why their stock among women is falling rapidly, I will tell them. The fact that the Tories do not understand that decisions such as this suggest that they imagine women can somehow cope with reductions in their income has made women realise that many of them simply do not understand their lives or appreciate their problems.
The Government’s proposal may be better than what was in the original Bill, but if we vote for it tonight our decision will be final, because that will then be the timetable for the acceleration of women’s pension age to 66. Labour Members believe that certainty is necessary when it comes to pensions and that we must allow people to plan in advance, but whoever wins the next election, the last thing that any Government will be in a position to do is start fiddling with the system. What is fundamental to our argument is that a group of women have had no chance to plan, and I see no way in which any Government will be able to deal with that.
Harriett Baldwin
Is the Chair of the Select Committee confirming that a pledge to reverse the position, in line with the amendment, will not feature in the next Labour manifesto?
Dame Anne Begg
I may be Chair of the Select Committee, but I am afraid that I have no direct say in what should be in a Labour or any other manifesto. However, common sense tells us that whoever is in power after the next election—the Liberal Democrats might have a majority then, and might want to reverse the arrangement—voting against the amendment tonight will remove any chance of our ever finding a solution for this group of women. Events will have moved on, the timetable will have been set, and the pension age will have already changed by the time of the next election. That is what I mean about the lack of time in which to plan.
I hope that Members will accept that it is wrong that this anomaly has been created. I hope that those who have listened to the women in their constituencies will do the right thing tonight, and will vote for the Opposition amendment. That is what I shall be doing.
Fiona O’Donnell
I am genuinely grateful for the opportunity to support the amendment to which my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) spoke so eloquently. I welcome him to the Dispatch Box.
Many women in my constituency have contacted me about this issue, and none of those who have contacted me over the weekend, yesterday or today have expressed the view that the Government have gone far enough; they all support the amendment. I found it almost stomach-turning to hear the hon. Member for Cardiff Central (Jenny Willott) congratulate herself on winning this concession from the Government. I do not think that even Labour Members should take credit for the achievement—lacking though it is in ambition—and I certainly do not think that the Liberal Democrats should do so. I wish that some of the honourable and good Liberal Democrat members of the Bill Committee mentioned by my right hon. Friend the Member for Croydon North (Malcolm Wicks) had had the guts and the principle to propose similar amendments when they had the opportunity. This feels a bit like Groundhog Day: it is the Health and Social Care Bill all over again.
Credit for the victory, such as it is, lies with all the women who have written to us, e-mailed us, telephoned us, and come to the House to make their case. They have said, “We will not sit back and let the Government do this to us.” Every evening as I leave this place, I see a touching reminder in the poster in the tube station showing those women, although I must confess that at first I considered it rather strange that there was also a man in the photograph, and wondered what that could be about. The fact is that this change will have an impact not just on the women concerned, but on the families for whom they have made plans. In the light of the rising cost of child care, they have asked themselves, “When can I help my sons and daughters to make better lives for themselves and their families?” I have to say that I think my sons and my daughter have similar plans for me, which I intend to resist for as long as possible.
The Government, particularly the Liberal Democrats, have not just broken their promise to women; they have broken their promise to their families as well. What an appalling lack of ambition from a Government! They have repeatedly called on Labour Members to say how we would pay for our proposals, so let me give them a couple of examples. Through the future jobs fund, they could take a million young people off the dole queue so that they were back at work and contributing to the system. They could scrap their top-down reorganisation of the NHS. They could ask the Secretary of State for Communities and Local Government whether he has any money left in the pocket where he found the bin money. This is not about arithmetic; it is about political will. It is about the Government saying, “We believe that this is something worth doing, and it is something to which we will commit ourselves.”
Steve Webb
I am very grateful. We let a lot of things past, but will the hon. Lady clarify one point? She mentioned—I think I quote her accurately—getting a million young people back to work through the future jobs fund. Can she tell the House how many permanent jobs young people actually got when Labour ran the future jobs fund?
Madam Deputy Speaker (Dawn Primarolo)
Order. I think the hon. Lady knows—and the Minister certainly does—that the debate has nothing to do with the future jobs fund.
Fiona O’Donnell
Perhaps we can have that conversation another time. The point is that the Government do not have the political will to do something about this. In opening for the Opposition, my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East mentioned that it is not just the Prime Minister of this Government who does not “get” women; the whole team do not “get” women.
At Prime Minister’s questions two weeks ago, I watched the Prime Minister’s Parliamentary Private Secretary gathering—almost dragging—women from their seats in order to create a female halo around the Prime Minister. He and his Government need to understand that the reason he is turning women off has nothing to do with stage management or presentation. The reason is the policies—such as the one we are discussing—which are adversely and unfairly impacting on women. I urge Liberal Democrat Members in particular, who have at times pushed the Government on this issue, to go the whole hog tonight and back the amendment.
When a Government consider an inequality impact assessment, that is not political correctness gone mad—it is not just something the previous Labour Government left for the current Government. Rather, it is about good government and good decision making, so that when a Government make a decision, they are in full possession of the facts about how that decision will impact on people.
Gordon Birtwistle (Burnley) (LD)
I would have some sympathy for the hon. Lady’s cause if she could explain where we might find the money to fund what she wants. [Interruption.] This is not about the future jobs fund. Will the hon. Lady tell us where the Labour party would find the cash?
Fiona O’Donnell
The hon. Gentleman should be extremely grateful to me for giving way, as he has not had the courtesy to be present for the entire debate. The fact is that when this Government want to find money, they can do so.
This decision betrays an appalling lack of ambition. I understand that the Government are not doing well in growing the economy, and they are probably a little disappointed in themselves—as, indeed, others are disappointed in them. Perhaps they have little faith in this country’s ability to recover and come out of the recession, with people back in work and contributing to the state. However, none of that serves to explain why this group of 500,000 women have to pay the price. Why do they have to pay for the Government’s plan to reduce debt?
For every one of those 500,000 women who will work for longer—300,000 of them for the full 18 months—there is a real story, such as that of a woman who works in the care service and who wrote to me. If she had known a few years ago that she was going to have to work extra time, she would have got out of the care sector while she could. She thinks she can struggle on until her retirement age as it stands now, but given the physical demands of her job, she does not think she can do another 18 months of lifting and handling.
Unfortunately, the hon. Member for Gloucester (Richard Graham) has left the Chamber. He talked about women retiring at 40 and 50 and living another 60 years of retirement. He is not talking about the women we are talking about. The women who need this money most are the women this Government are hurting most.
I urge Members to consider fairness, and to consider giving these women a fair chance. This is our one opportunity to stand up for those 500,000 women—the women who have been contacting us, appealing for justice. I hope we will all do the right thing tonight.
Madam Deputy Speaker (Dawn Primarolo)
Order. A number of Members still want to speak, and the Minister also has to respond to the debate. I intend to call him at about 7.20 pm, and I ask Members to be brief so that everybody can contribute.
Kate Green
As so much that I agree with and endorse has been said, I am sure I can be very brief.
That we have had any concessions at all from the Government today is a tribute to the many women who have contacted Members on both sides of the House. We are disappointed, however, as this is a half-baked measure. It is half-baked in two respects. It is half-baked as it deals with only part of the problem and only some of the women who are adversely affected, when, as my hon. Friend the Member for Aberdeen South (Dame Anne Begg) said, we had an opportunity to solve this problem and move forward. It is also half-baked because it does not offer a holistic response to the situation these women face. Rather, it addresses only the question of when we might grudgingly start to hand them their state pension, and it does not deal at all with the other elements of public policy that will be needed to support those women if they are not going to be eligible for a state pension until later.
Especially as we know that women’s private pension pots are significantly lower than men’s, it is regrettable that we are seeking to delay their access to the state pension before the new auto-enrolment in the National Employment Savings Trust has been in place for long enough for them to have had the opportunity to begin to build up a private pension pot. If these women are expected to remain in the workplace for longer, it is regrettable that there are no signs that the Government’s Work programme will be adapted to be better suited to helping older women find, or remain in, jobs. No thought has been given to how the Work programme will support those women.
I would be grateful if the Minister said what assessment has been made of the other financial benefits these women may have to rely on if they are not able to find paid work at the ages of 64, 65 or 66, and whether the cost the Government are talking about includes the additional level of those benefits. That is a particular concern because if women are using up their savings, they may have to draw further on the state when they reach retirement.
Other colleagues have pointed out that many older women provide child care for their children’s children. Will those children in future have to access paid-for child care that the Government will in due course be subsidising through the tax credit or universal credit?
Also, what is the health strategy in relation to the health needs of these women? We know that women in their 60s are more likely than men to suffer from functional disabilities. Some 40% of women at age 60 have limitations in activities of daily living, and 20% have severe limitations. I have not heard that the Minister has given any thought to that, or had any discussions with colleagues in the Department of Health to ensure that we are also securing better health for those women if we expect them to remain in paid work for longer.
The key additional points I wanted to make were about the absence of a holistic response from the Government. They have hastily introduced a half-baked measure—and a fairly vicious measure for the many hundreds of thousands of women who are still being put in a situation in which their retirement is substantially delayed without their having the resources to carry themselves through to that point. I urge the Minister to think again.
Lilian Greenwood
The Minister may feel that he has heard my speech before, as we discussed his Government’s plans to accelerate the rise in state pension age at some length in Committee. However, as he did not fully address the points I made then, I make no apology for making them again.
My constituent, Lorraine Smedley, e-mailed me on Friday asking if anything can be done even at this late stage. The answer must be yes. The Minister can still change his mind; he can accept our amendment that would ensure that no one would wait more than an extra 12 months to receive their pension. Also, if he chooses not to listen, Members on the Government Benches can still decide to join the Opposition in the Lobby tonight. I hope they will do so, although the contributions we have heard so far suggest that they will not.
Members who were not fortunate enough to serve on the Bill Committee will not know about my constituent Lorraine, so let me explain why she is so angry about the Government’s plans. Lorraine worked for the national health service for many years, but, having put aside some savings, she decided to take a part-time job as she moved towards her expected retirement date. She had worked out that she could supplement her part-time wage until her retirement. She told me:
“I thought I was close enough to my retirement age to know where I stood.”
Even with the Government’s welcome concession, Lorraine is still being asked to work for an extra 15 months, and she says she does not know what to do. Working those extra 15 months before she receives her state pension is not a prospect she relishes. Her job as a community care assistant is demanding, both physically and emotionally, and she is not sure that she will be able to continue; and with the cuts in public service spending and public sector jobs, she may not have a job anyway. The prospect of claiming benefits is anathema to Lorraine. She was determined to pay her own way her whole life, and having left school at 16 and paid into the state pension pot all those years she feels that she should not have to rely on benefits now.
Lorraine’s case highlights the two reasons why the Government’s proposals are unfair. First, they do not give women adequate notice of the change. The Minister has sprung these changes on women in their late 50s without giving them a realistic time scale in which to make preparations for the loss of pension payments that they have earned and expected over many years. In 1995, the then Government legislated for the equalisation of state pension ages. Women who were expecting to retire at 60 learned that they would have to wait until they were 65 to do so. They may not have liked it but they had many, many years to adjust. Yet that same group—those same women—who knew that they would have to work or wait for an extra five years for their pension, are now being asked to accept a further rise of more than a year with just five or seven years’ notice of the change.
The second reason why the Government have got it wrong is that the changes lead to one group being asked to bear an unfair share of the burden. According to the Department’s impact assessment, the proposals in the Bill affect about 5 million people—2.3 million men and 2.6 million women. About 4.5 million people will have their state pension age increased by a year or less, and their position is unaffected by the Minister’s last-minute amendment. An estimated 500,000 people, all of them women born between 6 October 1953 and 5 October 1954, will still have their pension age increased by more than a year. Some 300,000 women will experience an increase of exactly 18 months. No man will have to wait more than 12 months extra to receive his pension. How is that fair?
I accept that there has been a significant upward revision in the life expectancy of those reaching 65 over the next decade and that those benefiting from increased longevity should share in the costs. As we live longer, we need to pay more towards our income in retirement and/or work longer. The women like Lorraine who have written to me do not disagree—they understand that they may need to work longer—but they think that they should pay a fair share. The Minister did not explain in Committee so I hope he will explain now how it is fair that those 500,000 women have to pay a bigger share than anyone else, particularly given that we also know that they, as a group, are not well-equipped to bear a greater share of that burden.
As my hon. Friends have set out, these women are less financially secure than men and are much more likely to be reliant on the state pension. If they do have savings for their pension, those are likely to be much less than those of men. These women are likely to have taken time out of the labour market to care for children, thus affecting their contributions record and their salary level. They are likely to have worked part-time and to have been excluded from an occupational pension scheme until the 1990s. The Department’s own figures confirm this: the median pension savings of a 56-year-old woman are, as has been said, just £9,100, whereas the equivalent figure for men is £52,800, which is almost 600% higher.
Although, like Lorraine, I welcome the Minister’s amendment, it just does not go far enough. Women should not bear an unfair burden, which is why I support the Labour amendments. They would mean that 1.2 million fewer people would have to work longer and would ensure that nobody would be asked to work more than 12 months extra to receive their pension.
Nia Griffith (Llanelli) (Lab)
To be perfectly honest, it is disgraceful that the Government are not giving these women enough time to plan their retirement properly and it is clear that the changes that the Government are now proposing do not remedy the situation that they got themselves into with their initial proposals. It is wrong that women who have worked hard—doing all sorts of things, not necessarily paid work—for many years are now being denied their well-deserved pension for an extra 18 months with so little notice.
Nobody is denying the demands of longevity and the fact that we have to think ahead. However, we have to plan ahead properly and in a structured way. That is why in 2008 Labour legislated that the state pension age would become 66 by 2024 to 2026. That time scale was set out to give people 16 to 18 years in which to plan. As hon. Members will recall, the Turner report recommended a minimum of 15 years’ notice for any changes in the pension age and that is a very important point to note. Obviously the Government have brought that forward significantly, leaving many women with very little time in which to plan for a delayed retirement. Some 500,000 women will have a delay of up to 18 months before they get their pensions and about 330,000 women will have a delay of a full 18 months. The Government are determined to introduce this change, despite the fact that before the election we were given promises by both the Conservatives and the Liberal Democrats that there would be no change before 2020.
The particular women that we are talking about are the most vulnerable. Those who depend most on the state pension are those who have the lowest incomes, those who have perhaps had the least opportunity to make contributions and those who have worked in the least well-paid jobs. As has been clearly expressed by my hon. Friends, women are far more reliant than men on the state pension because their pension pot is usually very small. Very often they have been limited in the opportunities they have had in this regard. They may have taken years out for child care, limited themselves in order to be able to pick up their children after school or limited themselves by geographical location. Often this group of people are enabling their own sons and daughters to work and have a decent income for their families by providing very valuable child care for the grandchildren. We often refer to these women as the “sandwich generation” because at the same time as they are looking after those grandchildren they are often coping with their own elderly parents.
Of course, these women are often more vulnerable to the cuts. An enormous number of cuts are being made in all sorts of jobs, in not only the public sector, but the private sector. The Government’s growth strategy is clearly failing, and often it is not just the lack of public procurements, but the lowering of income levels in the whole of a region or town which is making it harder and harder even for private businesses to flourish. Women are often doing more casual work or are working part-time, and as they are the ones who have often come latest to the jobs they are often the ones facing redundancy. It is often extremely difficult for older women to find new posts, particularly in areas with geographical limitations or not very good bus services, and if they need to be back to collect the grandchildren from school.
A number of these women are widows. My right hon. Friend the Member for Croydon North (Malcolm Wicks) has clearly explained the demographics and set out the number of men in certain groups who die young. Some 19% of men in certain social categories die before the age of 65, many of whom leave widows and they, like other groups, are not best placed to face the difficulties of trying to keep house and home together in difficult financial circumstances. If they do not receive their pension until a certain age, they will be losing not only the state pension, but pension credit and the various concessions and entitlements that are limited to people of state pension age.
If there were a genuine growth strategy, the argument about freeing up jobs would not be valid, because as more jobs are generated people who stay in work longer have more money to spend and so it is easier to create more jobs that younger people can take up. When there is no economic growth and the spiral is downwards, there is more bed-blocking—or job-blocking—whereby older people staying in work makes it more difficult for youngsters to get started.
So although Labour Members welcome the fact that the Government have made something of a concession, we are very disappointed that it is only a half-measure. In fact, it is nothing but window dressing. It is the sort of Christmas present that is wrapping with absolutely nothing inside—an empty cardboard box with some paper round it. The correspondence that I have received indicates to me that my constituents are not fooled by it and are worried that they will still be facing much of the same difficulty as they were with the original proposals.
I shall support the amendments tabled by those on my Front Bench to ensure that we try to give the maximum number of women the maximum amount of benefit that we can, rather than the Government amendments, which are, quite frankly, laughable. They are a disgrace because they do not address the main thrust of the problem and they leave a lot of women with a large gap and very little time in which to work out how to deal with it.
Sheila Gilmore
The concession made by the Government is, of course, a welcome one. The fact that we are saying that it is not enough does not mean that it is not welcome, but I do ask why they have taken so long to arrive at this point. On Second Reading, back in June, not a single Government Back Bencher spoke in favour of the Government’s proposals on the acceleration in women’s pension age. They were clearly unhappy but were prevailed on at the time, it would appear, to vote for Second Reading by being told that some form of transitional arrangement would be forthcoming.
Those of us who were privileged to serve in Committee asked for the transitional arrangements so that we could debate and scrutinise them, which is what a Committee ought to be about, but we were told that they were not ready because they would be very complicated. “By the way,” said the Minister, “Where are your transitional proposals? Why have you not come up with any?” As a new Member, I thought that perhaps it was commonplace for the Opposition to be expected to come up with proposals for the Government because they have not thought them up yet—
Sheila Gilmore
We had amendments. We tabled amendments that were not a million miles away from those that we are proposing today, because we felt that, in the circumstances, a proposal to cap the period of time for which women would have to endure this change was the best thing to do. Our amendments were not supported by either Government party in Committee, but we had clearly made proposals that ranked as transitional, because—lo and behold—four days before this final chance to debate the subject in the House, a proposal was made. It is not some complex transitional arrangement that would take civil servants hours, weeks or months to work out but fairly straightforward and involves capping the period of time. In my view, that proposal could have been made in Committee without any difficulty and it could also have been made at any time over the months that have passed since the Committee stage ended in July.
I suspect that one of the main reasons this rabbit has apparently been pulled out of the hat at the last minute is to prevent any great campaign being restarted for further change and to prevent people asking for more. Like Oliver—most of us nowadays, unlike the cruel people in Victorian workhouses, think that Oliver was right to ask for more—the women who have contacted my colleagues and me over the past few days are still asking for more because they feel that the Government’s proposals remain unfair. They have alleviated the proposals for one group of women but not for all those who are affected and, in my view, those women are right to ask for more.
The Government have been extremely calculating. By not making their announcement until almost as late as possible while still making it in any way credible, they calculated that they would foreshorten the possibility that their Back Benchers might again be contacted by many of their constituents who would argue that the proposals are still not enough. The fact that they have given the shortest amount of time to this very successful campaign is clearly tactical.
In this debate, we always come back to the money question—it happened repeatedly in Committee and in many interventions on Opposition Members today. We are asked where we will get the money and told to come up with a specific statement about where we will find it. That happens not just as regards this proposal but day in, day out—[Interruption.] It is not unreasonable for us to say that we would not start from here. That is not unreasonable because we have a very different view about the choices and the fairness arguments that it is right to make and about how to progress our public finances over the next period.
Another argument that often comes up states that one cannot borrow one’s way out of a crisis or out of debt. It seems we cannot cut our way out of a deficit either, or out of more debt, because public borrowing, far from having come down in the past year and a half, is rising. We would not start from here because our entire economic strategy would be different. Our view—as we said a year and a half ago and as it remains—is that to attempt to reduce the deficit within this Parliament was reckless, that it would not be successful and that it would risk higher unemployment and the stagnation of the economy. That is what is happening. If the economy continues to stagnate, tax revenues will fall with fewer people in work and fewer businesses thriving. Falling tax revenues are a big reason why we have a deficit in the first place. This is not simply about Government spending, as is sometimes suggested.
Tax revenues will fall and benefits payments and other outgoings will rise, and those are very important considerations. In saying that we would not start from here, it is perfectly reasonable for us to make it clear that we would not want to be in the position that the Government seem determined to drive us into.
Jim Shannon
Under the Labour proposals for auto-enrolment for pensions, protection was given, but under the coalition Government’s proposals the same protection is not given as there are conditions and people fall outside them. Does the hon. Lady think that that is another example of the difference between the two sides? Labour gives the option of protection and the coalition does not.
Sheila Gilmore
That certainly is such an example. If we are to give people the opportunity of saving for their pensions into the future, it is important that we take seriously the proposals for auto-enrolment and NEST and build them up in a way to which everybody should give their full support. Although I am sure that the Government have not officially said that they are not giving them their full support, I was struck as I read an article in The Sunday Times a week last Sunday by a suggestion that the Government might be backing off on the speed of the introduction of auto-enrolment. That might have been a piece of kite-flying, as I gather it relates to a piece of work that is being done internally for the Government, which will not be published and which we cannot see, about how to make yet more savings and attempt to grow the economy, but nevertheless that story reached the newspapers. I am sure the Minister will tell us that we have nothing to fear when we reach the relevant part of the debate.
We are constantly asked where we would find the money and, interestingly, despite the comments that Government Members made from a sedentary position a few moments ago, when my hon. Friends the Members for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and for East Lothian (Fiona O'Donnell) made suggestions, they were pooh-poohed.
Brandon Lewis
Does the hon. Lady accept that one reason why people were incredulous about some of the suggestions made earlier is that the £11 billion required by Labour is equivalent to the whole budget for the Department for Environment, Food and Rural Affairs and roughly double that of the Department for Culture, Media and Sport?
Sheila Gilmore
We are talking about a spending period over 10 years, so it is not equivalent to the budget in a given year. Even in those terms, we are always making choices, and I will not accept lessons from a party with many members who are publicly saying that, as quickly as possible, they want to reduce or take away the 50% tax rate. That is something they are keen to do and that is their choice. They can make the case for it, but if they bring that proposal forward, I for one will certainly oppose it. That is another way of deciding how money is going to be spent and how money is going to be collected—and that is only one example.
In an earlier intervention, I mentioned the pension tax relief system, which gives a huge amount of money to people who already have a lot of money. If someone wants to save £100 into their pension pot and they are on 20% tax, in order to get £200 tax relief they have to find £800 from their pocket, but if someone is on 50% tax, they have to find only half the amount they want to save. That is unfair; it is a subsidy to those who already have a lot of income and assets. If at the end of this decade we are finding it difficult to make ends meet and we cannot help the group of women we are talking about, perhaps we should be thinking about that system.
The women who are affected by the measure will be making exactly those comparisons. They know that choices are made in politics and that choices are made by Governments, and they know that it is not impossible for the Government to change their mind on this proposal. They did not campaign for it during the election; indeed one of my hon. Friends has suggested that it was probably drawn up in a great hurry and seemed like a good wheeze at the time, but it puts a particular burden on a group of women many of whom cannot easily afford the changes. I want to emphasise, as several of my colleagues have done, that it should not be assumed that these women have a job and can just go on doing that job, or that they will still be in that job in three, four or five years’ time.
Fiona O’Donnell
Does my hon. Friend agree that those 500,000 women will also be asking, “Why us? Why not the banks or the bankers?” Why are they being made to pay? This is not just a question of economics but a question of right and wrong—and this is clearly wrong.
Sheila Gilmore
I could not have put it better myself.
Another question that the Minister has to answer is whether the Government, in looking for the savings they plan to make by going down this road, have put into the mix the additional costs that might arise in relation to some of these women, some of whom will not be able to work and might claim benefits. Some might claim jobseeker’s allowance for a period and others might claim employment and support allowance if they are in ill health, although some of them will find that those benefits are cut off very quickly in certain circumstances because of other Government proposals. They will then be thrown back to spending any savings they may have made towards retirement.
A woman in her 50s or early 60s who finds herself in that position may not be able to claim benefit for very long. If she has a partner or has savings of any sort she will not be eligible for the means-tested benefits that come in after six months in the case of JSA and that, under Government proposals, will be lost after a year even for people who are unfit to work and are in a work-related activity group. They will find themselves eating up—literally in some cases—their savings to make it through to their postponed retirement date. Of course, at that stage, those women will no doubt have to claim additional top-ups to help their financial situation. I would like to be satisfied that the Government have taken those costs into account. The women themselves will have to meet extra costs, and so will the Government. The proposal is ill-thought-out and there has been a lot of time to rethink it. Like all the women who have been campaigning on this, I am extremely disappointed that the Government are not prepared to support our amendment tonight.
Yasmin Qureshi (Bolton South East) (Lab)
This is an incredibly important stage of the Bill, about which I have received hundreds of e-mails. I am sure that Members of the House from across the political divide have received e-mails specifically concerning women aged 58 and 56. We have had a number of discussions about this matter, including a Westminster Hall debate at which the Minister was present.
I know that I may sound very boring if I repeat again the concerns of those women and of Opposition Members about why this particular provision should not go through. Everyone accepts that the state pension age needs to rise in order to pay for a more generous basic state pension. This principle underpinned Labour’s Pensions Act 2007, which continued the 1995 timetable for equalising women’s state pension age with men’s by increasing it to 65 by 2020, and then legislated to increase both SPAs to 66 by 2027, to 67 by 2036 and to 68 by 2046. That was agreed and there was cross-party consensus on that.
The coalition agreement stated:
“The parties agree to....hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for man and 2020 for women.”
However, the Bill proposes an acceleration in the equalisation for women by 2018 and increases both men’s and women’s state pension age to 66 by 2020. This will hit women aged between 56 and 58 particularly hard, as they will have very little time to prepare or amend their existing plans. As has been pointed out by my colleagues countless times, those women have worked very hard in their lives but often for not very high pay, so they will not be getting very generous pensions in any event, yet they are going to be hit even harder.
The proposal will affect 4.9 million people—2.6 million women and 2.3 million men. Some 500,000 women born between 6 October 1953 and 5 March 1955 will have their state pension age delayed by more than a year, and 300,000 women born between 6 December 1953 and 5 April 1954 will have theirs delayed by 18 months exactly. For the 300,000 women facing an 18-month delay, the loss of income will be around £7,500; for those in receipt of pension credit, the figure will be closer to £11,000. That sudden and dramatic change in women’s expectations regarding their state pension age and retirement income comes with just five to seven years’ notice, which simply is not long enough for them to make adequate alternative arrangements in their retirement planning.
Women are already at a disadvantage in terms of pension provision. The median pension saving of a 56-year-old woman is just £9,100, whereas the equivalent figure for men is £52,800—almost 600% higher. It is not fair to speed up the equalisation timetable because it will hurt women disproportionately, especially those aged between 56 and 58. I know that we hear about the financial constraints, but if the Government can find £3 billion for the completely unnecessary reorganisation of the national health service, which nobody wants—we have not heard any practitioners in the medical field say that those provisions are right—are they really saying that they cannot find a bit of money for women who have worked hard for so long in their lives? The proposal is measly penny-pinching. The Government are hurting the people who are already the poorest in our society and hitting them even harder. If money can be found for the wasteful reorganisation of the NHS, I am sure money can be found for the provision to be deleted.
I urge the Minister to reconsider this aspect of the Bill and think about those women, who have worked hard all their lives. He should think for once about ordinary working people who are looking forward to some kind of pension, although they will retire later than they thought they would, and he should give them time to prepare for their pensions.
Steve Webb
It is a pleasure to support Government amendments 13 and 14 and to ask the House to reject amendment 1.
I welcome the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) to his new role. With due deference to the good people of Kilsyth and Kirkintilloch East, I hope he will forgive me if henceforth I refer to him as the hon. Member for Cumbernauld—I hope they will not take offence at that. As he knows, his predecessor, the hon. Member for Leeds West (Rachel Reeves), to whom he referred in his speech, enjoyed a meteoric rise by shadowing me for 18 months. I hope to do the same for his career.
Before I move on to the amendments, I want to place on record my appreciation of one of the Department’s officials, Evelyn Arnold, who has worked for the Department for 36 years. I know that the right hon. Member for East Ham (Stephen Timms) will have enjoyed working alongside her as well. She is stepping down from a legendary career. It is not often that we pay tribute on the record to the officials who make us sound far better informed than we otherwise would, so I would like to do that formally today.
We have heard £1 billion described today as “window dressing”, “a bit of money” and “penny pinching”. That summarises the difference between opposition and government. It reminds us how we came to find ourselves borrowing £150 billion a year when £11 billion, which is the cost of amendment 1, is regarded as small change and not worth worrying too much about. When pressed about where the £11 billion would come from, the Opposition said, in effect, “We’ll find it at some point,” but there was no specific answer.
It was revealing that the hon. Member for Edinburgh East (Sheila Gilmore) said, “We keep being asked this question.” They keep being asked the question because they keep making unfunded promises. My right hon. Friend the Chancellor pointed out that last week’s Opposition amendment cost £20 billion. Today’s would cost another £11 billion and, as the man once said, “Soon you’re talking about serious money.”
The Government amendments are, as the Chair of the Select Committee graciously said, a huge achievement, which is to say that at a time when the public finances are, if anything—because of the global economic situation—under even more pressure than they were at the time of Second Reading back in June, to identify £1 billion is an important sign of the Government’s commitment to fairness in pension reform.
Sheila Gilmore
The Minister wants to make a great deal, and some of his supporters made a great deal, of having extracted that sum from the Treasury, but is he not again mistaking the position? He starts talking about the fact that we are apparently in a very difficult situation, worse than a year ago, and then says, “And we’ve managed to find a billion,” but this is a long-term planning issue—it is not about what has happened in the past year.
Steve Webb
I notice that the hon. Lady dismisses the odd billion here or there again as of no great consequence. We have to make these decisions in the context of the real world. That is the difference between government and opposition. The hon. Member for East Lothian (Fiona O’Donnell), who spoke in the debate, said that it would take guts—that was the expression she used—to support an unfunded £11 billion promise, which the Opposition know they will never have to fund and would not implement if in government. That is a very odd definition of “guts”.
Susan Elan Jones (Clwyd South) (Lab)
Is the Minister suggesting that the coalition agreement, which is fundamentally different from what is proposed in the Bill, was not made in the real world? That is what some of us suspect, but is he confirming it?
Steve Webb
As the hon. Lady knows, the coalition agreement referred to the possibility of raising the state pension age for men from 2016 and for women from 2020. Obviously, what we have done since that coalition agreement was produced is sought expert legal advice. We were advised that delaying the equalisation between men and women would have been illegal under European law. That comes to the heart of one of the questions that has rightly been asked, which is, why do the changes affect women more than men? The reason is that they are two separate changes brought together.
The first is the more rapid equalisation, and the second is the equal treatment of men and women from 65 to 66. The equal treatment of men and women from 65 to 66, not surprisingly, affects men and women equally, so the thing that affects women more is equalisation. That is what the Pensions Act 1995 does. It leaves men’s pension age at 65 and equalises women’s pension age, raising it from 60 to 65. Lo and behold, that Bill affected only women, because equalising the pension age so that women get the pension at the same age as men rather than earlier affects women. Not surprisingly, a change that was happening in any case, which we have speeded up and which affects only women, added to a change that affects men and women equally, produces the expected result.
Hywel Williams
The Minister is making a reasonable case, as ever. I am rather more interested in his justification for the acceleration of the change. I hope that he will come to that shortly.
Steve Webb
Let me address that directly. What is striking as soon as one looks at the evidence on longevity is just how far behind the curve we are. When the male state pension age was set at 65, it was not so much a case of Lord Hutton writing reports on pensions as a case of Len Hutton striding out at the Oval. That was the era that we were talking about. In that almost 100 years, there have been incredible increases in life expectancy, yet the male state pension age will still be 65 for another seven years. That shows how far behind the curve we are.
The views of Lord Turner were cited by the hon. Member for Cumbernauld and by others, with some suggestion that we are breaching the Turner consensus. However, Lord Turner has breached the Turner consensus, if I may say so. He said in a news interview a couple of years ago, and the world has moved on even since then:
“If I was redoing my report I would be more radical, arguing for an even faster increase in the state pension age.”
That is exactly what we are doing, in line with the Turner consensus.
Dr Whiteford
Does the Minister accept that although longevity has increased, healthy working life has not kept pace with longevity, and that there is a serious issue, especially for the particular group of women under discussion, many of whom will not be in the best of health in their late 50s and early 60s? That is one of the reasons why shifting the goalposts twice for this group of women is having such a disproportionate impact.
Steve Webb
The issue of health is certainly important. Almost all the figures that have been quoted through the debate assume that the women whose pension age is being delayed will have no money. If, as the hon. Lady rightly says, they are unable to work because of ill health and the household has no other resources, they will get a significant amount of that money through employment and support allowance and other benefits.
Clearly, there are differences between individual groups and, as the hon. Lady and the hon. Member for Arfon (Hywel Williams) pointed out, between different parts of the country, but if we look at England, Wales and Scotland, for example, in terms of life expectancy at 65, in England for men since 1981 life expectancy has increased by seven years. In Wales for men it has increased by seven years, and in Scotland for men it has increased by seven years. For women, each of those figures is six years, respectively. So although there are differences, there have been substantial increases across the board.
Yes, there is big variation. I accept that point, but there have been increases across the board and we cannot say that because they have not happened for every individual in every part of the country and in every social group, we will do nothing. That is what got us into the present mess in the first place.
Kate Green
I note that the Minister acknowledges that for some women with no other source of income, instead of receiving their state pension they may for a time continue to receive out-of-work benefits. Can he address two points in relation to that? First, what do the Government estimate will be the cost of those women receiving such benefits for an extended period? Secondly, does he not understand that for women who are at that age and stage in their life, being expected to claim something called jobseeker’s allowance is a tremendous insult or a tremendous concern because they know that they are not genuinely jobseekers? The labour market does not want or need them.
Steve Webb
On the hon. Lady’s first point, we have of course taken account of the fact that there will be some women, and indeed some men, for whom the changes mean that instead of receiving a retirement pension, they receive jobseeker’s allowance, employment and support allowance or another benefit. To give her an order of magnitude on that, without making allowance for that, the Bill would have saved around £33 billion. Taking account of that, we estimate a saving of around £30 billion, so getting on for 10% of the savings is lost through paying other benefits. That is entirely right and proper. In a way, her observation is backward-looking rather than forward-looking. We are moving to a world in which the idea of early retirement and drawing a pension at 60 years old or below, as in some public service schemes, is simply from another era, and the idea that someone should seek work, particularly if they are able-bodied, into their 60s is going to become entirely normal. The idea that it is somehow offensive to say that someone should look for work in their 60s is an idea from a bygone era; it is not the world that we are moving to.
Malcolm Wicks
I am interested in the arithmetic that the Minister has just presented on how his savings have been adjusted, because some people will not be in work. Given that many people in the year or two before retirement are not in work, will he publish the detailed figures so that the House can scrutinise them?
Steve Webb
As a former Minister, the right hon. Gentleman will know that the figures were published with the Bill in May: they are from the impact assessment.
We have had a number of contributions, and in the short time available to me I shall refer to some of the points that have been made. As I have said, the hon. Member for Cumbernauld stated that his £11 billion should be spent and regarded it as a small sum, because he took the annual equivalent, divided that by the national debt and came up with a small fraction, as though somehow one can make £11 billion disappear. Well, the Labour party did make £11 billion disappear regularly, so he is keeping up that tradition, I suppose.
My hon. Friend the Member for Cardiff Central (Jenny Willott) asked where state pension reform fits into the measures before us, and I am pleased to tell her that we remain entirely committed to such reform, but one irony of all this is that the very group of women whom we are most concerned about, and whom we have heard most about in this debate, are probably the single group who will most benefit from our ideas on state pension reform.
In particular, many women who spent time bringing up children, before either home responsibilities protection came in or the state second pension introduced crediting, would benefit substantially from such reform. So, yes, their pension age will rise, but as our reforms take hold such women will benefit substantially, and my long-term commitment to pensions justice for women will be delivered. That is certainly my goal.
The right hon. Member for Croydon North (Malcolm Wicks) made the point that he has made before about differences in life expectancy and about people who leave school earlier, but his proposal for starting the national insurance clock running at different ages would create different anomalies. He says that somebody who leaves school and goes into a manual job could get their pension earlier, but someone who leaves school and goes to a desk job would also get their pension earlier, and people would then say, “Is that fair?” There are anomalies whichever way we do it.
The right hon. Gentleman did, however, raise the issue of people in the lowest socio-economic groups, but I remind him that over a 20-year period to 2002 men in the routine class, the lowest—as it were—socio-economic group, saw life expectancy at 65 years old increase by 2.5 years, and, given that the Bill increases the state pension age for men by only one year, the improvement in life expectancy for men, even in the group whom he is most concerned about, is running ahead of our proposed increase in the state pension age.
I repeat to the right hon. Gentleman that his points about the differences between groups are an argument for doing nothing. He supported the Pensions Act 2007, which will raise the state pension age to 68 years old, and we need to address health and occupational inequalities, rather than do nothing while we wait. That is the Opposition’s counsel—let us wait another decade—but the trouble is that we have already waited a century to move the state pensions ages, so how long is long enough?
My hon. Friend the Member for Gloucester (Richard Graham) quite properly raised the important issue of notifying people of any changes, so I shall share with the House our plans. I very much welcome the fact that, subject to the House approving the Bill tonight and their lordships approving it in due course, we will be able to write directly to those affected to tell them exactly how they stand, thereby ending a period of uncertainty.
We will write to those women born between April and December 1953, just over 250,000 of them, early in the new year; to those born between December 1953 and April 1954, another 250,000 people, in February; and to another 250,000, born between April 1954 and April 1955, in March. The last group covers all women who would have been affected by the original equalisation timetable.
Fiona O’Donnell
Will the Minister also advise those women of their right to employment and support allowance? Will he confirm that, if they claim ESA, are turned down, wait seven months—as some have in my constituency—for an appeal, and that period crosses over their entitlement date to the state pension, their appeal will still be heard and any benefits backdated?
Steve Webb
Perhaps the hon. Lady does not understand what I am saying. I am talking about people who will reach state pension age in seven or eight years’ time, so I am not sure that writing a letter, stating, “In the event you are on a certain benefit in seven or eight years’ time, and the delay in tribunals in such and such,” is germane to my point.
The Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), in a characteristically balanced contribution—[Interruption]—I spotted the balance even if nobody else did. She described the changes we are making today as a huge achievement, then said, “Well why don’t we go the whole hog,” but there are 11.1 billion reasons why we are not going to go the whole hog, and I am sure she understands that point.
The hon. Member for Edinburgh East said, “Well, I wouldn’t start from here”—and so say all of us. I do not think that any one of us would have chosen to inherit an annual deficit of £150 billion that had to be cleared up—[Interruption.] Members say from a sedentary position, “This isn’t about the deficit,” but a sequence of deficits creates a debt, which will be £1.4 trillion at the end of this Parliament, and that is both a capital sum and the interest that our children and grandchildren will have to pay, so we should take responsibility for it and tackle it.
The hon. Member for Stretford and Urmston (Kate Green) said that the Work programme does not do anything for older women, but its beauty is that providers do not get paid unless they tailor what they do to the individual in front of them. For example, we find that the biggest barrier for many potential older workers is IT skills; they are entirely job-ready but not necessarily up to speed with technology. So, if that is the barrier, the Work programme provider does not need to come to my right hon. Friend the Secretary of State for approval, as in the old days, asking whether it is on a departmental checklist; they just get on with it, help the person obtain the skills and are rewarded only if they get that individual a job.
Kate Green
I understand how the Work programme proposes to reward providers, but does the Minister not accept that older women are particularly disadvantaged when seeking to access the labour market? Can he tell us, therefore, whether there will be an incentive payment to such providers in dealing with those older women?
Steve Webb
The incentive is clear: the providers do not get any money at all unless they help someone into work.
The hon. Member for Llanelli (Nia Griffith) mentioned grandparents: women in the age group under discussion who by taking care of grandchildren enable their sons and daughters to work. That is an important point, and that is why I was pleased to carry through in office proposals that had previously been brought forward on national insurance credits for grandparents—when their daughters are not using them—to ensure that their state pension rights do not suffer.
The hon. Member for Edinburgh East asked why we did not do all that earlier and referred to Second Reading, but I remind her that in that debate my right hon. Friend the Secretary of State said that the basic principle of the Bill is right—that we move to equality sooner and to aged 66 in 2020. We have been entirely consistent with what he said, but he also said that we need to make sure that the transition is fair and that those most adversely affected are helped. That is exactly what we deliver on today with the amendments.
We have identified, notwithstanding the difficult fiscal position, £1.1 billion to ensure that half a million people face a shorter increase in their pension age, and that a quarter of a million women who could have faced up to 24 months will now face a maximum of 18 months. It is worth keeping in context the fact that nine out of 10 people affected by the Bill will see an increase of one year or less in their state pension age.
The hon. Member for Bolton South East (Yasmin Qureshi), who spoke last, said, “Well, it’s only a bit of money,” and, “It’s penny pinching,” and all I can say is that many people think that £1.1 billion is a lot of money. I know that it is a naïve observation, but I am in that category as well.
It was important to allocate to this issue a large amount of time for debate today, but we have simply had a repeat of what we heard in Committee: “Find £10 billion or £11 billion—it’ll come from somewhere, it’s not really a lot of money.” From the Government, however, we have seen a serious balance struck between introducing the fiscal responsibility that was all too often lacking under the previous Government and listening and responding to the needs of those most affected by the Bill—and I commend our amendments to the House.
Gregg McClymont
This been a very important debate. I thank the Minister for his reply, but he has not satisfactorily answered the question repeatedly asked by Labour Members, which is fairly straightforward. Why are these 500,000 women paying a disproportionate price? Why are they having disproportionately to carry the burden?
Our amendments, if accepted, would mean that not one of the half a million women affected by this Bill would have to wait more than an extra year for their state pension, and, importantly, that they would have at least nine years’ notice of the rise in their state pension age. At the same time, the state pension age of 66 for men and women would be brought forward to 2022. That would be a fair package, and it would keep the Government to the promise made in the coalition agreement. I should like to withdraw amendment 1 and test the will of the House on amendment 3.
Amendment, by leave withdrawn.
Amendment proposed: 3, page 1, line 8, leave out subsection (4).—(Gregg McClymont.)
Question put, That the amendment be made.
‘6th January 1954 to 5th February 1954 | 6th May 2019 |
6th February 1954 to 5th March 1954 | 6th July 2019 |
6th March 1954 to 5th April 1954 | 6th September 2019 |
6th April 1954 to 5th May 1954 | 6th November 2019 |
6th May 1954 to 5th June 1954 | 6th January 2020 |
6th June 1954 to 5th July 1954 | 6th March 2020 |
6th July 1954 to 5th August 1954 | 6th May 2020 |
6th August 1954 to 5th September 1954 | 6th July 2020 |
6th September 1954 to 5th October 1954 | 6th September 2020”’. |
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
New clause 1—Obligation to inform scheme members about provider and product options—
‘Providers of Qualifying Schemes under section 16 of the Pensions Act 2008 (c.30) must, when informing members of their own range of annuity and similar products, explain clearly that alternative and more suitable options from other providers may be available.’.
New clause 9—Duty to establish a review into transfers into the National Employment Savings Trust (NEST)—
‘Within two years of the passing of this Act the Secretary of State shall establish a review into allowing transfers into the National Employment Savings Trust (NEST).’.
New clause 10—Duty to review any order on contribution limits in the National Employment Savings Trust—
‘In section 70 of the 2008 Act (Contribution Limits) at the end of subsection (1) insert—
‘(1A) Any order under this section shall be reviewed by the Secretary of State within two years of the Pension Scheme being opened to members.’.
Amendment 18, in clause 6, page 6, line 37, leave out ‘three’ and insert ‘one’.
Amendment 19, in clause 8, page 8, line 1, at beginning insert ‘Subject to subsection (2A),’.
Amendment 20, page 8, line 4, at end insert—
‘(2A) An order made under subsection (2) must not increase the amount in section 3(1)(c) by more than—
(a) the general level of earning; or
(b) in percentage terms by more than the percentage increase in the Lower Earnings Limit for national insurance purposes.’.
Government amendments 15 and 16.
Steve Webb
This is a broad group of proposals relating to private pensions. I shall speak in support of Government new clause 2 and Government amendments 15 and 16. As we have a relatively short time to discuss these issues I will also deal with the other amendments in the group, and do not anticipate making a further contribution to the debate.
Government new clause 2 deals with charges. Obviously, charges are important, as I am sure the whole House will agree, because money that goes on charges does not turn into pensions. The Government are therefore keen to ensure that charges are at a reasonable level and are transparent. For example, following on from the policies of the previous Government, we have gone ahead with the introduction of the National Employment Savings Trust, which will be a low-cost provider designed to ensure that charges across the market are brought down. There is evidence that new entrants to the market and existing providers are already looking at charges significantly lower than many people have experienced on their pensions in the past.
In Committee, concerns were raised about whether the Government should be capping charges. As the right hon. Member for East Ham (Stephen Timms), who is responding for the Opposition, is well aware, the Government do have powers to cap certain pension scheme charges. In considering this issue, we became aware of the anomaly that we do not have that power in relation to people who are no longer active members of pension schemes but who are deferred members, and in particular deferred members of qualifying schemes for auto-enrolment. If we want to cap charges—I will come back to that issue in a second—we do not currently have the power in primary legislation to cap them for deferred members of qualifying schemes for auto-enrolment. The purpose of Government new clause 2 is to give us that power, so that if we want to impose charge caps, we can do so systematically and without unintended omissions.
Our thinking on charge caps is that in general, we do not believe there will be a problem with charges. Particularly in the early years of auto-enrolment, it will be the very largest firms that come into the system. They will have the resources and time to shop around, they will be able to strike good deals, and they will have the National Employment Savings Trust available to them. We expect that for big and medium-sized firms, relatively low charges will be the norm.
Kevin Brennan (Cardiff West) (Lab)
Why have the Government decided to raise the level at which auto-enrolment will come in? By their own figures, that will affect about 600,000 people, mainly women.
Steve Webb
I will come on to that, because Opposition amendments 19 and 20 relate to it. As I said in my introduction, I shall deal with all the amendments in this group, so if the hon. Gentleman will forgive me I will explain our thinking on that matter later.
Glenda Jackson (Hampstead and Kilburn) (Lab)
The Minister has referred to the transparency of the current charges in the pensions industry, yet in his evidence to the Work and Pensions Committee, the gentleman who advised the Government on the matter—I regret that I have forgotten his name—made the point, which I am sure everybody in the House would endorse, that existing pensions provision is extremely cloudy. It is extremely difficult to know what the charges are, because the wording is imponderable in many instances. Why is the Minister so sanguine about what will happen in future? It certainly has not happened in the past, and it certainly is not happening now.
Steve Webb
There are two significant differences between past and future provision. First, we have established NEST, which did not exist before. It has been set up as a low-cost provider, so we have guaranteed that there is such a provider out there, particularly for small firms, which are the least likely to shop around. Secondly, there is a saying that pensions are not bought, they are sold. In other words, individuals tend not to go out and look for a pension but instead have one sold to them. In a world of auto-enrolment, the opposite is the case. Employers have a legal duty to select a provider, and that makes providers’ costs much lower. Rather than having to bear the huge costs of individual salespeople going out and selling to individual policyholders, employers will instead seek out providers. The costs of the whole process will be much lower, so that will be a significant step in the right direction.
Steve Webb
I will not, if the hon. Lady will forgive me, because I am going to try to cover about six topics in not very much time, so as to give everyone else a chance to respond.
Government new clause 2 has been tabled in response to our discussions in Committee, and will give the Government a power that I think previous Governments either thought they had or would have wanted to have. It is the power to cap charges for deferred members of qualifying auto-enrolment schemes. I think that is probably a relatively uncontentious power. Were we to bring it into force, that would clearly be the subject of separate debates and discussion in the House, but I hope the House will be happy that the Government should have that power.
Government amendments 15 and 16 are technical amendments to clause 14, dealing with what would otherwise have been a problem in section 30 of the Pensions Act 2008. Although that section currently allows employers to use a defined benefit, hybrid or money purchase scheme as an alternative scheme, it does not allow them to use a workplace personal pension scheme. Clause 14 corrects that omission, but there is a risk that an individual might be automatically enrolled into a personal pension scheme, and then required to pay contributions immediately for up to four previous years. The amendments protect individuals from that scenario. They correct what we believe to be an error in previous legislation. I hope that the House will find my explanation helpful, although I can go into far greater detail if threatened.
I welcome new clause 1, tabled by my hon. Friend the Member for West Worcestershire (Harriett Baldwin), who serves on the Work and Pensions Committee. I believe that, in a rather intimidating fashion, it has been signed by pretty much all the Committee’s members, so I think I have to give it a fair wind. It is about what is known in jargon as the “open market option”—in other words, the fact that people often forget that when they save for a pension, they are doing two things. First, they are building up a pot of money—the accumulation stage—and then they are turning it into a pension, which is the “decumulation” stage. Those are two entirely separate processes.
All too often, someone can save with provider A—I will not use the name of a company—and think that they have to take their pension from provider A, which they do not. Broadly speaking, as a rule of thumb, it is estimated that the market can be divided into thirds. Roughly a third of people shop around and go somewhere else, a third of people shop around and stay with their original provider, and a third of people do not shop around at all. There is clearly a danger that at the crucial point when somebody sets their income for the rest of their life, they may not be getting the best value. The open market option reminds people that they can shop around, and indeed prompts them to do so. However, as I have just indicated, take-up of that option is not as high as we would wish, or as I believe the insurance industry would increasingly wish, so we need to do more.
I take new clause 1 as a probing amendment, and it is important in getting the issue on the table. As drafted, it would have one or two problems. It would bring some schemes within its scope that should not be, such as final salary schemes. Those are qualifying schemes for auto-enrolment, but we do not want to give final salary scheme providers a duty to tell people about their right to buy an annuity. That would not be appropriate. The new clause also duplicates some existing duties. For example, the Occupational Pension Schemes (Disclosure of Information) Regulations 1996, as I am sure my hon. Friend is well aware, state that when members have the opportunity to select an annuity, they must be informed of their right to buy one on the open market. They must also be advised that there are different types of annuities available, which may have different features and different payment rates. There are also 1987 regulations that relate to contract-based business. So there are rules about the open market option, but I think we would all agree that they are not working as well as they should. I am sure that is the point of my hon. Friend’s new clause.
The Government welcome the opportunity to discuss the open market option. We believe that it is critical for consumers to think about the shape of annuity that is most appropriate to their circumstances and compare rates across providers. There are comparison websites available, which is a helpful development, but people have to know about them to look at them. They have to consider the option in order to know what questions to ask.
I am pleased to say that, in an example of joined-up government, we are working closely with our colleagues at the Treasury on the matter. I regularly meet my hon. Friend the Financial Secretary, who leads on it, to discuss the open market option, and we have a joint working group examining that very issue. My hon. Friend the Member for West Worcestershire will be pleased to know that earlier this year, we asked that working group to consider what is called a default open market option arrangement—in other words, whether we could make shopping around the default, so that people would have to make an active choice to stay with their current provider. There are practical issues to consider, such as what would happen to someone who failed to shop around, whether there should be a point at which their own provider paid them a pension, and what information people should have. However, the principle is attractive, and certainly my hon. Friend the Financial Secretary is keen to go as far as we can.
Progress has already been made. One might say that a working group is often the last refuge of a scoundrel—not the Financial Secretary, I should add; I meant myself. However, this is a working group with teeth. To give one example, the Association of British Insurers, which has engaged actively with us on the matter, has already said that its members will cease sending out to people, with the letter saying that they can get an annuity, the application form from their own provider. They will stop saying, “You can shop around, but here in the same envelope is a form to get an annuity from us.” Instead, a person will actively have to say, “I want my annuity from you; give me a form.” That is a small step in the right direction, but I believe we need to go further.
I will be pleased to hear the arguments and concerns of my hon. Friend the Member for West Worcestershire, but we are certainly seized of the importance of this issue. We do not believe the new clause is quite the way to deliver what is needed, but the Government very much welcome it, and the spirit of what she is trying to achieve.
Glenda Jackson
I am extremely grateful that the Minister welcomes new clause 1, but with all due respect, he spoke earlier of pensions being not bought, but sold. He is now talking about the buyer being in the driving seat, but as we know full well, and as we see in the papers every day in relation to energy prices, people do not seem to have the capacity to shop around in their best interests. I do not think that the Government have had a great deal of success in encouraging companies to make the situation better. Will he learn from those mistakes, and will there be a better method?
Steve Webb
As I think I said a moment ago, we have asked the working group to look at making shopping around—[Interruption.] Before the hon. Lady heckles me, she might like to listen.
Steve Webb
The working group will look at making shopping around the default situation. Somebody who does not actively choose to stay with their current provider will shop around by default. That is the difference between pensions and energy suppliers. Whereas people are stuck with their energy suppliers unless they choose to shop around, people will not get a pension unless they shop around. That is a pretty good incentive to shop around.
Steve Webb
I hope that the hon. Lady will forgive me if I do not; I have given way to her twice already.
New clauses 9 and 10 relate to the role of NEST, which I mentioned a moment ago. New clause 9 suggests that in a couple of years’ time we should review transfers into NEST, and new clause 10 suggests that we review contribution limits at the same time. It is worth reminding the House why NEST was constrained when it was established. There was a recognition that there is a market for big firms and higher earners—pension providers are willing to provide at a reasonable cost and to go to such firms. However, for small firms and lower-paid workers, there was a market failure. NEST was designed to fill that gap in the market.
First, the Government created a legal duty for firms to enrol people, so we ensured that there was something to enrol people in. That is what NEST is for. Secondly, we could have created NEST and imposed no constraints, and it could have been just another provider, but because we constrained NEST to consider lower-paid workers and smaller firms, it has innovated in an impressive manner. The previous Government envisaged such constraints. The Work and Pensions Committee has visited NEST and was positive about what it found. Forcing NEST to focus on lower-paid workers, smaller firms, and people who do not speak “pensions” or who are uninterested in them, has created impressive product, investment strategy and technological innovation, which is entirely welcome. Creating NEST with constraints was the right thing to do, and it has been beneficial.
Dame Anne Begg
If NEST is to work, people must have confidence in the products that are going to be delivered. However, there is a danger that other providers muddy the waters of what is on offer. For instance, a Federation of Small Businesses booklet says that it will offer a comparable pension provider with which firms can auto-enrol their workers. The charge is 0.75% to FSB members and 1% to non-members, but they are not comparable prices. What can the Minister do to ensure that such misinformation does not divert people away from NEST?
Steve Webb
I am grateful to the Chair of the Work and Pensions Committee for drawing my attention to that document, and I am keen to see a copy. Pensions selling is, broadly speaking, regulated by the Financial Services Authority. Claims about pensions need to be accurate. NEST charges are the equivalent—on an average pension—of around 0.5%, as the hon. Lady knows. The suggestion is that a charge of 0.75% or 1% is “comparable”. We can compare anything with anything, but the comparison is not always favourable. She raises an important point, and the pensions regulator and the FSA will seek to ensure that people are given accurate information about pensions.
The right hon. Member for East Ham (Stephen Timms), who speaks for the Opposition, will be well aware that the Government already have a duty to review NEST after the five-year roll-out of auto-enrolment. New clauses 9 and 10 would not repeal the other duty, so they would mean a review in two years and another one three years after that. The earlier review would be premature and unhelpful in the middle of the roll-out. One might want to tweak 1,001 things, but a review in the middle of roll-out would create uncertainty when the next tranche of firms is choosing which provider to go for. Will NEST have its limit lifted? Will the transfer ban go? Those questions would mean yet more turmoil. An element of certainty in the auto-enrolment process, which has been iterated quite a lot, would be welcome.
The right hon. Gentleman will know that the Government had our own review—“Making automatic enrolment work”—last summer. It said that in the end, in 2017, the restrictions should go. I am entirely sympathetic to that proposition, but deciding that today, or reviewing the situation in the middle of the roll-out, is not the best way forward.
Stephen Timms (East Ham) (Lab)
May I ask the Minister a wider question on auto-enrolment? As he will know because it has been widely reported in the past few days, a report from Mr Adrian Beecroft recommends that the Government postpone the implementation of auto-enrolment altogether. Has the Minister seen that report? If so, what is his response to it?
Steve Webb
The right hon. Gentleman is right that a draft report has been produced and reported in the press, but I can assure him that—as we once famously pointed out—2012 will definitely happen next year. In other words, we do not believe that this important programme should be delayed. Interestingly, the CBI does not believe in a delay, either. It recognises that the biggest firms, which will come in next year, are already planning. In many cases they have already chosen their providers. They are getting on with it, and the last thing we need is new uncertainty about the start of auto-enrolment. We will, therefore, be pressing ahead.
Waiting periods are clearly a trade-off, but today more than ever, we need to realise the impact of what we are doing on smaller firms and businesses more generally.
Mrs Jenny Chapman (Darlington) (Lab)
I understand the Minister’s point and the benefits to a payroll department in a small firm, but does he accept that people who change jobs frequently throughout their careers could be disadvantaged? If people change jobs 11 times, they could end up losing about three years’ worth of benefits.
Steve Webb
The hon. Lady raises an important issue. That is one of the arguments against a six-month waiting period, but those things are a matter of judgment. She used an interesting phrase when she mentioned the payroll departments of small firms, but of course a typical small firm does not have a payroll department, and will struggle with those provisions. We are trying to ensure that the scheme has flexibility, so that we take small firms with us rather than have them resenting the scheme. The waiting period is important in that respect.
Finally, on amendments 19 and 20 and the earnings trigger, which the hon. Member for Cardiff West (Kevin Brennan) mentioned, the Bill originally proposed that we auto-enrol at around about the national insurance floor, which is a bit more than £5,000, uprated in today’s prices. There were two problems with that. First, there was no de minimis provision, so employers would have auto-enrolled people for pennies a week. If the floor were £5,000 and a person earned £100 a week—£5,200 a year—they would be enrolled on the £200 above the £5,000. Under the legislation that we inherited, the contribution at the start would be 1%—£2 a year, or 4p a week. There might have been the odd adverse newspaper story had we required small firms to enrol people for 4p a week, so we took the view that we had to put the threshold up.
The obvious threshold to use—common thresholds are attractive to employers—is the PAYE threshold. Although we will look at the prevailing situation and make a judgment each year, the broad idea behind aligning with the PAYE threshold is that if businesses have to run PAYE for somebody, auto-enrolment will be a reasonable duty. Below that level, it is inappropriate.
Kevin Brennan
Further to that point, if the Government raise the PAYE threshold, as they have previously announced, will auto-enrolment be triggered at that higher threshold? Would not that deny millions of people—those who would benefit the most—the benefits of auto-enrolment?
Steve Webb
As we have made clear, people still have the right to opt in to auto-enrolment, but obviously the bulk duty will be at the tax threshold. There is a trade-off: we can have a low threshold, but that results in people being brought in for what are technically known as piddling amounts of money, for which the costs are disproportionate. The tax threshold appears to us to be broadly the right level, but as the hon. Gentleman will be aware, we have discretion in the Bill to look each year at the labour market and at what has happened to earnings and prices, and to make a judgment. That is the broad direction of travel, as recommended to us—
Dame Anne Begg
The concern that some of us have is not that the tax threshold will go up to £10,000—although that is the avowed intention of the Government—but that the gap between £7,400 and £10,000 is about £2,500. That group of workers earning under £10,000 might be ruled out of auto-enrolment, when they are the very people who should be auto-enrolled. The situation would be different if the threshold were going up by the rate of inflation, but can the Minister give some assurance that if there is such a leap, he will reconsider the threshold?
Steve Webb
It will clearly vary from individual to individual, but for many people, earning £8,000 or £9,000 is a transitory phase in their labour market experience, and they will move on to earn more than the tax threshold and so come within the scope of the provision. So even if the threshold is not raised, it will not make a lot of difference if someone is not in the scheme for that year. For some people, they or their household will already have pension rights accrued and it might even be right for them to opt out. People will have the chance to opt in to pension provision if it is particularly important for them, and it is right that they should. I accept that there are issues for that group, but for any line drawn one can ask, “What about the people just below?” If we enrol people for trivial amounts of money, we will undermine the whole credibility of the scheme.
We have now had a whistle-stop tour through half a dozen private pensions issues, and I look forward to hearing hon. Members’ comments. I commend new clause 2 to the House.
Stephen Timms
I welcome new clause 2, but I speak in favour of new clauses 9 and 10, and amendments 18, 19 and 20. I shall also respond to some of the points that the Minister has just made. I shall begin by endorsing the tribute the Minister paid to Evelyn Arnold, who is retiring from his Department this week. I very much valued her advice and the way in which it was delivered.
I welcome the fact that the Government have maintained the all-party consensus on the principle of auto-enrolment, based on the work of Lord Turner’s commission on behalf of the previous Government. I worked closely with Adair Turner in that period, and I pay tribute to him, and to his fellow commissioners—Jeannie Drake, now Baroness Drake of Shene in the other place, and John Hills—for their very important achievement in the commission’s report.
I say “all-party consensus” about auto-enrolment, but—as I suggested in my recent intervention—there has been some discussion in the last few days about the extent of that consensus. I notice that David Prosser, who knows something about all this, wrote in The Independent on Saturday:
“There is a growing fear that the Government is about to announce a postponement of auto-enrolment…every delay in pension reform will mean a more miserable old age for millions.”
I am glad, therefore, that the Minister has reaffirmed that the Government intend to go ahead with auto-enrolment on the timetable that has been announced.
It has been reported that Adrian Beecroft, who has given more than £500,000 to the Conservative party in the past five years and has, coincidentally, been asked to advise the Government on cutting burdens on business, has recommended in an interim report that auto-enrolment should be put on hold and scrapped entirely for small businesses.
No doubt there has been some lively discussion within the coalition about this issue, and it is encouraging to see the Secretary of State in his place on the Front Bench and agreeing with the Minister. The Financial Times quotes a Liberal Democrat official this morning as saying of Mr Beecroft:
“He is an ideological Tory donor recruited to give voice to deeply held prejudices in the Tory party. His report has no evidence base.”
I also noticed that the Liberal Democrat Equalities Minister told The Observer on Sunday that Mr Beecroft’s ideas would be “swept away”. We perhaps heard some sweeping away from the Minister this evening. I am pleased to hear his confirmation—endorsed by the Secretary of State—that there will be no delay in auto-enrolment and that small businesses will not be missed out.
I welcome, therefore, the maintaining of the previous consensus on auto-enrolment, and I hope that the position that Ministers have put to the House this evening will stand. However, I regret the dilution of the previous proposals in the Bill. Our amendments seek to address the watering down of the principle of auto-enrolment that the Government have proposed. The amendments would reduce the proposed three-month waiting period to one month. They would also limit increases to the earnings trigger for auto-enrolment to no more than the increase in either the general level of earnings or the national insurance lower earnings limit. That is to address the concern explained by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Select Committee in her intervention a few moments ago. The new clauses would put a duty on the Secretary of State to establish within two years a review into allowing transfers into NEST, and to review any order he makes on contribution limits in the scheme.
The Labour Government were determined to build cross-party consensus on pensions reform, and, thanks to Lord Turner’s commission, we succeeded. That was very important. We know that people have been under-saving for their retirement. It is estimated that 7 million people in the UK were not saving enough to provide an adequate retirement income. According to Scottish Widows, 20% of people were not saving at all for retirement. Overcoming that problem requires the establishment of a system that people can be confident will endure beyond a future change of Government. I welcome the fact that the principles have indeed survived a change of Government.
The levels of saving among people on low incomes are a particular cause for concern. While 77% of people earning £31,000 a year have savings, that applies to only 56% of people on average earnings and 44% of people on £18,000. The Office for National Statistics has reported that, thanks to the global financial crisis, pension savings fell by £2 billion in 2009-2010. The importance of tackling under-saving has risen even since auto-enrolment was first proposed.
The final report of the pensions commission in 2006 recommended three steps to tackle under-saving: a higher state pension age, restoration of the earnings link for the state pension and the introduction of automatic enrolment—the subject of these amendments. For a long time, inertia had acted against people building up sufficient savings for retirement. My hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) has commented on the effect of complex products on people’s understanding of the cost of products. Other demands on people’s income mean that people do not get around to saving. Auto-enrolment will harness inertia to the opposite effect by making saving, rather than not saving, the default option. We continue to support auto-enrolment into workplace pensions, and we are keen to maintain the consensus established for it. Partly for that reason, however, we cannot support the watering down proposed in the Bill.
Steve Webb
This is obviously a balancing act, but one reason for going beyond one month is seasonal workers. Given that the summer lasts longer than four weeks—perhaps not in Britain, but in general—the right hon. Gentleman’s proposals would bring fruit pickers into auto-enrolment. Does that not bother him?
Stephen Timms
No, it does not bother me. The people in that kind of employment might well fall into the category that the Minister mentioned earlier—people who progress later in their working lives, and the earlier that they start their pension saving the better. If they are in a job for more than one month, I would welcome giving them the ability to start saving for their retirement.
Dame Anne Begg
As someone who, in their young days, was a fruit picker in Angus, picking strawberries and raspberries, I think that the only way a fruit picker might end up in auto-enrolment would be if they had other jobs throughout the year that put them above the threshold. However, I can assure the Minister that the three months of the summer for which one would be fruit picking would be unlikely to generate the income that one would need to get over the threshold.
Stephen Timms
I could not have wished for a more effective endorsement of the case that I have put to the House. I am grateful to my hon. Friend.
The Government’s waiting period would incur significant costs through lost contributions for 500,000 employees at any one time and amounting to 7% of an average worker’s fund over a lifetime. Those losses undermine the principle of auto-enrolment and substantially outweigh the benefit from the small reduction in the annual costs to employers.
Amendments 19 and 20 would link the earnings trigger for auto-enrolment to the increase in either earnings or the lower earnings limit for national insurance. As the Minister set out earlier in his exchange with my hon. Friend the Member for Aberdeen South, the Bill will link the level of earnings at which people are auto-enrolled to the higher income tax threshold, with the level reviewed in future according to a number of factors. However, like the three-month waiting period, this measure will exclude a significant number of people from auto-enrolment. Those people will by definition be lower-paid workers, who we know already save proportionately less than others. We also know that they are disproportionately likely to be women.
Earlier the Minister touched on the aspiration that the income tax threshold will in due course rise to £10,000. As my hon. Friend said, there would be a worry if all those earning less than £10,000 were in due course excluded from auto-enrolment as a result. The National Association of Pension Funds has pointed out that that would exclude 17% of all employees and 27%—more than a quarter—of women employees. Adrian Beecroft might be pleased about that, but the Minister should not be. Pension contributions would remain payable on earnings above the national insurance threshold under the plans in the Bill. The TUC has pointed out that moving to that scenario would create a big cliff-edge, so that people would get to, say, £10,000 and suddenly find a large chunk of their earnings deducted, having previously not had anything deducted automatically. That would create a significant disincentive, which the Bill ought to avoid, to enrolment.
We have heard about the basis on which the Government intend to raise the earnings trigger. Their worry is that saving will not deliver sufficient benefits in retirement to be worth while for many people earning below the income tax threshold. However, the Government’s own report shows that most people earning around £8,000 to £9,000 a year will not be earning consistently or permanently in that range, as the Minister underlined, but will move up the income scale.
Stephen Lloyd (Eastbourne) (LD)
Does the right hon. Gentleman not agree that the danger of starting when incomes are too low is that the amount in the pot might be so risibly low that it would undermine the obvious advantages that auto-enrolment will deliver over the next 20 years or so?
Stephen Timms
The hon. Gentleman has a point—the Minister also made that point—which is that if the threshold was down at the national insurance threshold, the amounts involved could be tiny. What I am suggesting in our amendments is that the way in which the higher threshold that has now been agreed is subsequently uprated should be constrained. If it is not, a large number of people could be undesirably excluded from auto-enrolment at a time when it might be very much to their advantage to be included, particularly if the threshold goes up to £10,000.
The Minister will tell us—indeed, he already has —that people whose earnings are between the contribution threshold and the earnings trigger can opt into the scheme if they feel they are missing out. However, people have always been able to opt in; the problem is that they have chosen not to. That is why we have auto-enrolment. The point is that opt-ins have not worked. We need a step change. It is unfair to exclude people on lower wages, because they need to be part of the scheme too.
Our two new clauses would place a duty on the Secretary of State to review allowing transfers into NEST and the contribution limits on the scheme. The limits on transfers in and annual contributions were a factor in creating consensus on auto-enrolment—the Minister was right about that. They were correct at the time, and helped us to focus the scheme on where it was needed.
The Johnson review that the Government commissioned was clear about what ought to happen next. It made the point that the Government needed to review those two areas before the planned 2017 review. Paul Johnson said:
“Government and regulators should review as a matter of some urgency how to ensure that it is more straightforward for people to move their pension pot with them as they move employer, so that by the time of the 2017 review the more general issue of pension transfers has been addressed and NEST is able to receive transfers in and pay transfers out.”
The Minister suggested that to do two reviews would muddle things, but that is precisely what the Johnson review calls for, and I think that it does so with good reason. The report argues that that will be
“critical to the success of the reform”.
If this review does not occur before 2017, savers will spend years with fragmented savings in numerous pots that they are unable to combine. They will lose out on the benefits of being able to purchase an annuity on better terms as a result of having one, larger pot of money rather than several small ones. In some circumstances, they might also lose out due to higher management charges or as a result of deferred member penalties.
The Minister has offered some encouragement on this. I notice that he told a pensions conference last month of his vision that people will end up with what he described as “one big fat pot” instead of lots of little ones. However, no provision to review transfers in before 2017 appears on the face of the Bill, which means that people will continue to have lots of little pots, and his vision will remain unfulfilled.
It is right that contribution limits are in place while NEST is being established, but we should look again at whether those limits are necessary sooner rather than later. The Johnson review recommended that the Government legislate to remove the cap in 2017, which would be difficult if the review were commencing only in that year. The amendment therefore provides for a review in 2014. We remain wholeheartedly on the side of the consensus over auto-enrolment, but we believe that some changes are needed.
I shall also be listening with great interest to the speech of the hon. Member for West Worcestershire (Harriett Baldwin) in favour of her new clause 1. I was pleased that the Minister sounded well disposed towards it, although we shall need to know precisely what is going to happen to make its aims a reality. I hope that we can make progress in that area, as well as in the others that I have mentioned in my speech.
Harriett Baldwin
I should like to discuss auto-enrolment in general, and new clause 1 in particular. The new clause has been tabled in my name and those of my colleagues on the Work and Pensions Select Committee and several other hon. Friends. This part of the Bill enjoys much greater cross-party consensus than the matters that we were discussing earlier.
Auto-enrolment will improve the pensions landscape in this country for ever. For the first time, millions of ordinary workers will be brought into personal pensions. Between 3 million and 4 million women will begin pension savings, and a total of 10 million pension savers could be created by the massive nudge that they will get from this part of the Bill.
For a typical worker on an average income, the expectation is that, from the age of 22 until their retirement at, say, 67, there is much more likely to be a persistency of saving. For example, a woman earning £25,000 who is saving 5% of her income would save £100 a month. Her employer would make up a similar amount and, with tax breaks over her working lifetime and reasonable investment growth, that regular savings habit could create a pot worth some £200,000 in today’s money. Pessimists have said that that would provide an income of only about 45% of that person’s earnings in retirement, but I say that that is 45% more than they would have had without this enormous nudge. I welcome this step, which I believe will, in the fullness of time, reduce the number of my constituents who as pensioners really worry about making ends meet.
Dame Anne Begg
Does the hon. Lady accept that there might also be a nudge to the pension providers? If they know that they will not automatically get the business from those who have saved with them throughout the lifetime of their pension savings scheme and that that group of people is likely to shop around, those pension providers might improve the annuity on offer to individuals.
Harriett Baldwin
That is an excellent point, and I hope we all fervently agree that competition in this area would be an excellent improvement. Locking in your retirement income is the second most important financial decision that you will ever make. I apologise; I do not mean you, Madam Deputy Speaker, but an individual. Unlike buying a house, however, it is a completely irreversible decision—one that will last for the rest of the individual’s life.
The different rates offered by different providers could mean one’s retirement income being as much as 20% lower if one does not shop around. If we are unlucky enough to suffer from high blood pressure, diabetes, a heart condition, kidney failure, certain types of cancer, multiple sclerosis or chronic asthma or if we smoke, the one bright side is that a 40% higher retirement income could be achieved by shopping around. People who have enjoyed good health in their career but been in a hazardous occupation such as mining might find someone who will offer them a better retirement income. The right hon. Member for Croydon North (Malcolm Wicks), who is no longer in his place, knows that this does not apply to the state pension, but for the pensions we are talking about that involve the insurance market, those factors do apply. My fellow Select Committee members and I thus feel strongly about the value of this particular approach.
Kate Green
I am pleased to welcome the hon. Lady’s new clause. Does she agree that many people are reluctant or even in denial when it comes to facing decisions about their pensions and that there is a real opportunity here to spread a good news message about both the value of saving and making positive decisions about how to invest the product of that saving, thus providing an opportunity for the pensions industry to get on the front foot in engaging people in their long-term financial security?
Harriett Baldwin
I welcome that sensible intervention. I think this will completely transform the landscape. I spoke about an individual with a £200,000 lump sum at retirement. If we multiply that by the up to 10 million additional savers that we could be looking at, it shows how this country’s savings culture is going to be transformed. The scale of the issue to which new clause 1 refers will get much bigger over time.
The Minister reassured us in his earlier comments that there is a cross-departmental working group. I certainly hope that that group will move quickly to come up with some firm recommendations. I know that all who are signatories to this particular new clause look forward to that. We look forward, too, to seeing the action that will come about as a result.
Teresa Pearce (Erith and Thamesmead) (Lab)
I strongly support the principle of auto-enrolment. As was pointed out by the hon. Member for West Worcestershire (Harriett Baldwin), it means that from 2012 onwards, millions of people will save for a pension for the first time. We need a low-cost, trustworthy system in the United Kingdom if we are to begin to lift future generations out of pensioner poverty.
I fully support the establishment of NEST, as currently only 50% of employees contribute to a private pension, and for many of those on lower incomes the current system is poor. Research has shown that if a typical British and a typical Dutch person save exactly the same amount for their retirement, the Dutch person will end up with a 50% larger pension under the current scheme. I believe that that is because in the UK it is often not clear how high pension charges can be. For instance, a person who is sold a pension and charged at 1.5% per annum may not realise that over the lifetime of the pension, 38% of their possible income could be lost to fees.
In the past, pension companies were unwilling to provide the low-cost pensions of the type needed under auto-enrolment, as they felt that the ordinary low-paid workers had what the industry deemed “unattractive lives”—a somewhat derogatory term which simply meant that it was not easy to make money out of those policies. Indeed, it was because of the failure of the current structure to provide such pensions that it was necessary to establish NEST.
I welcome auto-enrolment, I welcome NEST and I welcome new clause 2, but three points cause me concern. My concern about auto-enrolment was prompted by some of the evidence given to the Work and Pensions Committee relating to a lack of regulation. I was troubled to hear that there would be no restrictions on how workplace pension savings are invested, and no record-keeping requirements for providers. The meeting between the Select Committee and the Pensions Regulator gave me very little reassurance. It appears that during the drafting of the Bill, many interested parties gained concessions. Employers, whether large, small or micro—along with the pensions industry—have been pleased to note that restrictions will be placed on NEST, but not necessarily on other alternative providers.
I believe that the restrictions placed on contributions to NEST, a vehicle for workers whose employers have no pension provision, may push some employers who are new to the pensions arena towards less scrupulous pension providers, I realise that NEST is aimed at lower earners, but some of the restrictions placed on it may nudge employers who are baffled by the choices facing them towards a pension provider that does not have such restrictions, but may well provide an unattractive pension scheme for the employee. It appears that the industry and employers have been around the negotiating table, but that the employees’ voice has not yet been heard.
If employers reject NEST because of the contribution limit, or other limits, they may place employees in schemes with unfairly high charges. I am deeply concerned about the apparent lack of a quality test for schemes that would be deemed to be a qualifying alternative to NEST. We know from past mis-selling scandals that too few people understand how charges, and pensions, work, and that—as in the case of the mis-selling of endowment policies—it can take many years for such practices to come to light. I ask the Minister to consider, with the benefit of hindsight in regard to previous mis-selling problems, what measures he intends to take to ensure that we do not store up similar troubles with auto-enrolment outside NEST.
My second point, which the Minister has touched on, relates to the ban on transfers to NEST, which resulted from lobbying from the pensions industry and which will benefit that industry at the expense of employees in the scheme. Under the current rules, people who are auto-enrolled in a scheme and go into NEST will not be able to move existing pots into the scheme. Such a ban cannot benefit the very employees and future pensioners whom we are trying to assist; it can only support the industry. I believe that a modern pension in a modern age should be portable, and that provisions for transfers in and out of NEST should be included in the Bill even if they cannot be implemented immediately. I welcomed some of the reassurances given by the Minister in his opening remarks.
My third reason for concern is the three-month waiting period. Although I understand the need to balance the administrative burden for businesses, it means that half a million fewer people will be automatically enrolled. As has been pointed out twice already today, nowadays many people have 11 different employers over their lifetimes. I would support a reduction to one month. Nevertheless, employees are currently able to opt in to the system from the first day of their employment, but they need to know that they have that right. I urge the Minister to amend the measures to require employers to ensure that employees are aware from when they start their employment that they can opt in from day one and receive employer pensions contributions.
The pensions cap combined with the three-month opt-out and the inability to transfer into NEST will prevent casual workers and part-time workers—mainly women—from building a decent pot, even though that is our aim. I ask the Minister to consider these concerns and in his closing remarks to give the House further assurances as to how they can be addressed.
Glenda Jackson
I rise to speak in support of the new clause of the hon. Member for West Worcestershire (Harriett Baldwin). I also strongly endorse everything my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) has just said. I, too, strongly support auto-enrolment. It offers a genuine breakthrough in attracting those people who presume that saving has nothing to offer them, which is not infrequently because their wages have been extremely low.
This scheme requires greater Government support, however. I was concerned by the Minister’s somewhat sanguine attitude towards what the established pensions industry is going to do. As the hon. Member for West Worcestershire said, millions of people will for the first time feel encouraged to begin to save for their future.
Those people have always been out there, but the existing pensions industry has done absolutely nothing to attract them into savings. If it is suddenly interested in this new market, I wonder what it finds so attractive. The Minister referred to the CBI, which is a confederation of major employers. However, from my point of view the real silver lining of the scheme is that it will attract employers who employ only a few staff and their employees.
I am not making a party political point here, but we are currently in a period when people’s standards of living are falling. The most recent report from the Institute for Fiscal Studies found that most people’s standard of living has fallen by 7%. That will serve only to reinforce the existing reluctance of small business men and their employees on low incomes to see any benefits in saving for the future, and the pensions industry does not seem in any way geared up to make it attractive.
My hon. Friend spoke about the mis-selling scandals of the past. I need only refer to payment protection insurance. The mis-selling of that was conducted by bankers, and at that time they were considered to be rock-solid people, although that assessment has now changed dramatically in this country and the entire world. There have been far too many examples of excessive charges. I have also referred to the impenetrable documents issued to us by our pension providers. The problem is not simply their length or the smallness of the print; they are completely incomprehensible.
I understand that the Government cannot simply say to everybody, “Listen, the only scheme you should go into is this new scheme, NEST.” However, as that option is not available to them, they must work with the existing pensions industry to ensure that safeguards are in place.
The Government have attempted to make some changes in another supposedly competitive industry: the energy industry. They have markedly failed, however. There is no genuine competition in that industry. We, the people who have to pay the bills, know that, and Which? has said it, as have Ofgem and the Government.
This measure is a major step forward and, as I have said, I absolutely endorse it, because it genuinely seems to be a way of ensuring that people can have a more secure future for themselves. Not only that, but we also hope it will relieve the tax burden for generations to come and it should give people a greater sense of being in charge of their own destinies. However, that is not possible if they are not absolutely satisfied and guaranteed that the pensions being sold are actually transparent and honest, and that the detail is specific and clear to them—
Mr Duncan Smith
I beg to move, That the Bill be now read the Third time.
I welcome the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) to his place. Notwithstanding our earlier little exchanges, I unreservedly welcome him. I am sure that he will be a great asset to his party, and I look forward to other clashes and debates that we may have as time goes on. I thank the Members on both sides of the House who served with distinction on the Public Bill Committee for their help in scrutinising the Bill. They have had to hang around for quite a long time, but we are where we are now. I also thank the Opposition for their approach to many of the positive debates on the Bill’s clauses. May I also extend my appreciation to my hon. Friend the Member for Altrincham and Sale West (Mr Brady) and the hon. Member for North Ayrshire and Arran (Katy Clark) for chairing the Committee sittings through those longer moments?
It is also right that I pay tribute to my hon. Friend the Pensions Minister for his commitment to taking this important legislation through this House. If there is anybody in government who has championed the cause of the low-paid in pensions, it is him. It is a privilege and pleasure to work with him in this coalition—a very firm coalition in our case. On a departmental point, may I back him up on what he said about one of our civil servants, Evelyn Arnold, whom the right hon. Member for East Ham (Stephen Timms) knows? She is retiring after a long time and has seen so many of these things go through, and it is right for us to thank those who serve us without normal comment. So, without question, I thank her for the time she has spent, on behalf of all parties in government, getting this sort of legislation through.
Over the past few months, a number of amendments were made that I believe have improved the Bill, and I shall run through them. With the blessing of the House, I do not intend to spend much time on them because we have been through them a lot. Amendment 1 related to the consumer prices index underpin, where we have listened to concerns and responded by ensuring that schemes that use the retail prices index will not have to uprate by CPI in the years when it is higher. We have heard the issues raised on deferred member charges and, having listened, we have extended an existing reserve power to cap charges to also cover deferred members. That enables the Government to protect all scheme members from high charges regardless of what might come in the future, which is an important feature. Thirdly, we have also made an amendment to clarify the definition of money purchase benefits in light of the Supreme Court’s recent judgment in Houldsworth v. Bridge, ensuring that schemes and members continue to have adequate protection.
The House will be aware that we have listened and responded to concerns about the women most affected by the accelerated rise in the state pension age. Last week we announced that no women will see their state pension age increase by more than 18 months. We have always been clear that our policy will not change and we will still equalise the state pension age by 2018 and increase it to 66 by 2020. We have, however, honoured the commitment I gave on Second Reading to ease the transition process for those who are most affected. I listened with interest to the debate, but the point that is sometimes missed is that the adjustment means that nearly 250,000 women will have a lower state pension age as a result of the change, as will a similar number of men: 500,000 people at a cost of just over £1 billion in the next spending period. We should not sniff at that.
Mr Duncan Smith
Before I give way to the right hon. Gentleman, let me make a small point. I understand why the Opposition want to trumpet a great deal about this. Having sat in opposition, I understand that getting self-righteous about such things in defence of others who raise them is exactly what Opposition Members do. As some of my hon. Friends said earlier, however, unless the Opposition can guarantee that they will reverse the measure if and when they come into government, in essence they are doing something quite cynical by raising the hopes of women outside, knowing only too well secretly that they will never make the change. If I give way, I would like to hear that the Opposition absolutely plan to reverse this measure and change it in government.
Stephen Timms
One thing the Opposition are entitled to do is ask the Government to explain why they are doing what they are doing. At a time when the Government are increasing the state pension age by one year for many people, what is the justification for picking out 500,000 women and treating them more harshly than everybody else?
Mr Duncan Smith
I think the right hon. Gentleman knows the answer to that question. It is wholly part of the process of equalisation and of moving everybody on at the same time for the extra year’s increase. That answers his point, but, as he knows in his heart of hearts—I consider him a reasonable man in his dealings most of all—the real point is that had Labour been in government, I suspect that they would have done almost exactly the same things.
The generation below my generation is likely to retire on a lower income in retirement, the first generation to do so, as a result of all the problems we have had with the economy—which the previous Government left for us and for which we never get an apology—and the reality that not enough people have been saving. We are about to condemn a generation of people who will struggle to save for their pensions and who will have to pay off elements of the debt that we—this generation going through Parliament—have overseen while at the same time paying for those who are already in retirement, and we must do something to help them rid us of that debt so that they do not pick up such a large proportion of it and are not saddled with it as they attempt to bring up their children and earn a living at the same time.
Stephen Timms
The Secretary of State is explaining why the state pension age needs to be raised and our amendments did not oppose the increase of one year. We are still waiting, however, for some justification why this particular group of 500,000 women must wait more than a year—longer than everyone else—to reach their state pension age.
Mr Duncan Smith
I think I have explained that. As I said earlier and as the right hon. Gentleman knows well, the acceleration is about reaching equalisation in time to move the age to 66. We can bandy this subject about, but the point remains that the Opposition must come to terms with something quite important. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, who opened the debate on Report, suggested that £11 billion—he insisted on saying £10 billion, but I must tell him that the figure is £11 billion—was no great problem and not an issue in the great scheme of things. That is, in a sense, the problem. I remind him that to save £5 billion in real terms today straight off, we would have to cut the education budget by 10%. That is the nature of how we would have to find the money.
I simply say to the Opposition that I understand the rules of opposition—goodness gracious, we spent enough time in opposition ourselves—and the temptations that come with opposition, but realistically they should be saying to all those women that we have made a major move. We are prepared to spend an extra £1 billion to make sure that those who were excessively caught in that trap are not any more. I think that is fair and reasonable and that the Opposition need to explain to women up and down the land why they are making a big fuss about this when they know, cynically, that they would not overturn this if they came to government. That is a very cynical position to be in—to whip up this emotion outside and then calmly and quietly say, “Of course, we can’t change it.” I am afraid that is bad politics and bad decision making.
Glenda Jackson
Perhaps the Secretary of State would like to hear what some of the women in my constituency think about the Government’s changes regarding their pension age. Their view is that the Government have made this very small change—it is a very small movement—which has nothing whatever to do with a concern for those women in their old age, because they are losing the women’s vote––and my constituents are not by nature cynical.
Mr Duncan Smith
After listening to the Opposition tonight, they ought to be. One thing I will be certain to tell them whenever I encounter them is that at least I am being honest about what we are trying to do. We inherited a major economic problem, with a deficit that was out of control and burgeoning debt—the two are linked just in case the Opposition do not remember that. The reality is that, on both counts, we are charged with reducing the amounts. That is not something that is given to just a few Ministers—it is ultimately about taxpayers and about those who get pensions.
We have listened and we have done something quite significant—not small—to give way. To cap this at 18 months and spend £1 billion is, as my hon. Friends have recognised, a big step. Of course, in a perfect world, as the hon. Member for Cardiff Central (Jenny Willott) said, if all things were equal we would have loved to be able to do more, but the reality that we face is that this country has to get its debt under control. As I said earlier, the real burden is not going to fall on the shoulders of the hon. Member for Hampstead and Kilburn (Glenda Jackson) or on mine but on those of our children and grandchildren if we do not do something about that debt. I am not prepared to think to myself, “I must charge around and say that I am worried about this group or that group.” I have to say to them honestly, “All of us, together, recognise that we must do the best for the next generation coming through,” as well as doing our best, as the Pensions Minister said, for those who are due to retire.
With the amendments in place, I believe that the Bill has reached Third Reading with its fundamental principles firmly intact. I have repeatedly said that the Bill is, in large part, about the next generation—a generation who will have to pay for their parents’ retirement while footing the bill for their own savings and also for the debt.
I want to discuss auto-enrolment which, as the right hon. Member for East Ham rightly said, was started by his Government. We committed to continue it and I like to think that we have done that in the best spirit possible, taking into account the difficult financial considerations. The key will be getting many more people into saving. As he knows, some 9 million to 10 million people will be eligible under the new system. That is why we are taking forward plans for automatic enrolment into pension schemes—plans that were debated and widely supported across the House.
The Bill refines some of the parameters of automatic enrolment legislation and ensures that we take forward a model that will work for the individual, I hope, as well as for the employers who will be our key partners in delivering these reforms. There was a question about the three-month point and I wanted to make a point about those who are in work for three months in these firms and then move on—90% will move on, so the issue we are dealing with concerns a much smaller group than people have been leading us to believe. I do not agree with those who say categorically that this is a problem for growth. Auto-enrolment is good for the country, good for people who save and, ultimately, good for growth because it puts the economy on a firm footing, based on savings. I stand here today categorically prepared to take on anybody on that basis, and I will continue to do so, as will the Pensions Minister and, indeed, all of us. Others who support us on this include the TUC, the CBI and the National Association of Pension Funds. I hope that, as a consideration, we will move forward on this together.
Finally, I want to touch briefly on the consumer prices index uprating and judicial pensions. I know that everybody in the House is worried about the judicial pension scheme that is going through in the Bill, but none the less we will press on. As I made clear on Second Reading, the Bill makes a few relatively minor changes to the legislation governing the uprating of occupational pensions. It amends references to the retail prices index to read instead the “general level of prices” to ensure consistency with the rest of the legislation. It does not specify the measure for the general level of prices. I am pleased to see that the Opposition support us in all of this, although after talking to some Opposition Back Benchers, I do not think they were aware that the Government and the Opposition are apparently as one on CPI.
On judicial pensions, I will simply say that this is a key part of building a more responsible pension system, and I am pleased that the provisions have received the widespread support of the House.
I shall conclude, as others may want to speak. When we introduced the Bill, we were clear about the principle behind it: a desire to secure a better deal for our children through incentivising saving and sharing the costs of retirement more evenly between the generations. I hope there are more changes to come, with the other pension reforms that my hon. Friend the Minister spoke about, which will incentivise saving and give people a base income in retirement that they can understand and calculate. These changes should be seen in the light of all those wider reforms. We are currently working on that state pension design and consulting on the option of a single tier. All this will, I hope, provide a better deal for many women and self-employed people who have historically tended to suffer poorer pension outcomes. The changes that we are making to our retirement system are designed to put it back on firm foundations, establishing a new and fairer settlement between young and old.
I return to one point. It is a challenge to any Opposition, I guess, to have been in government and created something of which they are justifiably proud—auto-enrolment. We wanted to continue with it and we have done our level best to do that. That is the most important and powerful part of this Bill of reform. Given the importance of auto-enrolment, and notwithstanding all the heat and light generated by the Opposition’s arguments today about the level and the speed at which the state pension retirement age has moved, when they sit down and consider what is in the Bill that we are about to pass—automatic enrolment to improve the savings and outcomes for people in future years—I hope the Opposition will do the right thing and support the Bill. On that basis I commend the Bill to the House.
Stephen Timms
The Bill certainly has some welcome features, as well as some very regrettable, unwelcome features. I shall touch on both aspects in my contribution.
The recommendations of the Pensions Commission chaired by Lord Turner were broadly accepted across the House. As Pensions Minister at the time, I was extremely impressed by the energy and commitment brought to their task by Lord Turner and his fellow commissioners, John Hills and the now Baroness Jeannie Drake. They were successful in putting together an all-party consensus, which has endured. We will continue to work consensually with the Government as far as we can for the strategy that was developed in the review.
The first element of that was auto-enrolment into a low-cost national scheme. I agree with the Secretary of State about the significance of that change and I welcome his confirmation that the Government will not move away from their commitment to auto-enrolment. The second element was an increase in the state pension age, and re-linking the level of the state pension with earnings was the third.
But it is not fair for the costs of this trinity of measures to be borne disproportionately by any one group in society, whether that group is defined by age, occupation or gender. The Bill would unfortunately affect some groups far more than others. We have just had a debate touching on the fact that young people and agency workers, who move jobs more frequently than average, are likely to lose many months of employers’ contributions because of the changes, as well as the chance of building up a savings habit, because of the introduction of a waiting period in auto-enrolment. Up to a million people on low wages would be left out of auto-enrolment owing to the increase in the level of the earnings threshold. But most significantly of all, and this is what gives us a real problem with the Bill, half a million women aged 56 and 57 will find themselves waiting up to 18 months longer for their state pension, and a third of a million will be waiting a full 18 months extra, with too little time to plan for the change. That is a serious problem.
We welcome the Government’s recognition that the original Bill was wrong, and what we have now is certainly a welcome change. I make no bones about welcoming the change that has been made, the concession in response to the big and entirely proper campaign that took place, but the Bill still leaves half a million women in the lurch. My hon. Friend the Member for Leeds West (Rachel Reeves) led the argument against the original ill thought-out plans, and I welcome the change that has occurred, but, with so many women still affected, Ministers cannot claim that they have solved the problem.
We understand why the state pension age is being increased by one year for many people, because the Secretary of State set out why and our amendments did not oppose the increase, but what has struck me about tonight’s debate is that no Government Member supporting the Bill has provided any justification why it is being increased by more than one year for half a million women—and not for a single man. What is the justification for picking out that group of half a million women and treating them more harshly than everybody else?
Why are those women being picked out for worse treatment? We have been given no justification at all, except that it will save a lot of money. No doubt it will, but the Secretary of State has a responsibility to develop a policy that can be defended, that has some rationale to it, not simply telling us, “Well, this is going to save us a lot of money.” There needs to be some justification for the change that is being made, and no justification—at least none that I can understand—has been made at all for picking out that group of half a million women.
The Pensions Policy Institute recommends that 10 years’ notice be given for people to plan for a change in their pension age, and the Turner report recommended a longer period, but the plans in the Bill still give some women as little as five years, and that is simply not enough. It is just not fair to those affected to impose on them such a big change with so little notice.
Those women have relied on an implicit contract of reasonableness and fairness between government and citizens when planning their retirement, and, if the truth is that government cannot be trusted to keep its side of the bargain, how are people expected to plan for pensions saving at all? Pension saving is inherently long-term in character, but it simply will not happen if the Government make a habit of sudden policy lurches that undermine the assumptions on which people have been encouraged to build in the past, so it is no wonder so many women feel so badly let down by what the Government have done.
We are talking about a 10-year period beginning in 2016. Under the coalition’s plans, unless they are to continue the current effectively zero-growth policy indefinitely, those savings are about the long-term sustainability of the pensions system, and we support, as our amendments tonight supported, the proposal to find further savings, if necessary, by bringing forward the date at which the rise to 67 years old occurs, as long as people have time to organise their affairs and to plan accordingly. The sudden unpredictable lurch, not mentioned by either coalition party in the general election campaign or in the coalition agreement, has caused the problem.
As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) stated on Report, our objection to this part of the Bill is that it achieves these very large savings solely at the expense of one age cohort of women, apparently on a wholly arbitrary basis. The data are very clear. Women have substantially lower savings than men, yet a group of women—older women who have the least time to plan for the change—are being asked to bear the cost. The Bill simply fails the fairness test, and for that reason, in particular, we cannot support its Third Reading. We understand that Ministers are worried about rapidly plunging popularity among women voters and we are told that they are puzzled about why that is happening. They should just take a careful look at the unfairness in this Bill, and they will find a ready explanation there. We will not support that unfairness in the Lobby tonight, and no one else who values fairness should do so either.
The third of a million women with a wait of an extra 18 months will lose, just in state pension, pension payments averaging £7,800, and if one allows for pension credit and other passported benefits, we are talking about significantly greater sums still. Those women, if they are not working at the moment, will find it hard to find new jobs in the current labour market. Given that 37% of them are currently not in work, how are they supposed to make up that shortfall? We have been given no answers to that question.
As I think we would all agree, the design of the future pensions system should maintain inter-generational fairness. Imposing such large costs on one group of women means that the Bill fails to meet that fairness test. What became of the Burkean compact between generations to which Conservatives once subscribed?
Jenny Willott
Is the right hon. Gentleman able to answer the question that was posed by several hon. Members earlier in the debate, and then again by the Secretary of State, about whether he and his party would plan to repeal the proposals on women’s pensions and pension age if they were to come into government after the next election, given that the changes would not have taken place by that time and they would have the opportunity to do that were they so minded?
Stephen Timms
My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East answered that question earlier in the debate. Our view is that there have been too many changes and we would not propose yet another. The hon. Lady needs to explain the justification for picking out this particular group of half a million women and treating them more harshly than everyone else whose state pension age is being raised only by one year. For a third of a million women, it is being raised by a year and a half, and for half a million, it is being raised by more than a year. We have had no explanation and no attempt at a justification. Is it an accident or some kind of mishap? It certainly should be put right, and sadly it has not been put right in the changes that the Government have made.
There are other problems in the Bill. It dilutes the plan for auto-enrolment that was supported across the House. The proposals will leave many low-paid and agency workers outside auto-enrolment, and we think that they should not be left behind. Moreover, the gains from these exclusions, in lower costs for employers, will be small. It would be quite wrong to exclude people just because they work for small companies, as the Conservative party donor Adrian Beecroft is apparently arguing. I greatly appreciate the assurances that we have had about that during the debate, and I hope that Ministers will continue stoutly to resist any such moves if they are promoted from elsewhere in the coalition. The Pensions Commission made it clear that extending the benefits of pensions saving to more people who work for small firms is one of the prizes from this reform, and we must not throw it away.
The Secretary of State is absolutely right to argue that this is a pro-growth, not an anti-growth, change in making it possible for more people to save for a decent retirement. Of course it is right to be concerned about the plight of small firms in the zero-growth economy that we seem to have. I commend to the Government the national insurance holiday for small firms that take on additional workers that is proposed by my right hon. Friend the shadow Chancellor. We remain strongly supportive of the policy of auto-enrolment. We are disappointed, however, that the Government are seeking to water down the proposals around which the all-party consensus was hard won.
We welcome the consensus on the basic building blocks for a more sustainable pensions system, but the Government are quite wrong to load the cost of change so disproportionately on one group of half a million women. For a long time, they did not listen to those women at all. When they did, they came forward with a half measure. The sense of grievance that they have instilled in the women affected will not be readily dispelled. We are pleased to have won a concession, but many people will still be deeply disappointed. For that reason in particular, I urge Members to decline to give the Bill a Third Reading.
Sheila Gilmore
I am glad that the politicians who sat in this House when I was born and was growing up in this country did not decide that the burden of debt was so great that they could not introduce the reforms that brought us the welfare state. It was not their view that they should stop planning, being optimistic and working towards a better future for their children and grandchildren. Despite the national debt being eye-wateringly high, our predecessors in this place were prepared to go ahead with reform and change.
Today, we have heard several speakers, including the Pensions Minister and the Secretary of State, argue that the Opposition are somehow being unfair to future generations, whereas the Government are being fair, because we would burden people with more debt. I think that our predecessors did the right thing for us. In fact, it was so much the right thing that I suspect it created the problem that we now have with longevity. The incredible improvements in life expectancy over the past 50 or 60 years have their roots in the creation of the welfare state.
Mr David Ward (Bradford East) (LD)
My parents, and I suspect the hon. Lady’s parents, had rationing after the war because the situation was so serious, and it was not good for many years after that.
Sheila Gilmore
Rationing, oddly enough, did a lot for people’s health and well-being. For some people in Britain at that time, it did not represent a worse standard of living, although it may have done for others, because during the 1930s many families struggled to put food on their tables because of unemployment.
The point that I was making is that the vision was not constrained by the debt. Things were difficult in many ways in the post-war period, but the Government of the day were nevertheless of the view that one had to plan for the future. I am not a great pessimist about debt. I feel that the whole thing has been grossly misrepresented by Government Members. In the early years of the last decade, the Government reduced the debt. Debt was very high in the period of the last Conservative Government, which people appear to have forgotten. It is not the case that the last Labour Government simply set about building up that debt in some sort of systematic way, to the detriment of future generations, as is suggested.
Of course we have to address how to cease having annual financial deficits, and then in the medium to long term we have to reduce debt. However, at the moment the signs are at the medicine that the coalition parties are applying is not working. The chances are that, the way things are going, we will get to the end of this Parliament with a greater debt. We are already borrowing more than was projected last year, which is indeed quite frightening, but it means that we need to consider what we want to do.
I am not going to make too much of this point, because various people have made it earlier, but all Governments make choices about what they spend money on. We do not believe that the choice to accelerate the pension age rise for women is the right one. There are others that could be made, and we would be making them if we were in government. It has been said in this debate and others that if we cannot immediately identify some cut equivalent to any spending that we suggest is justified and fair, we are somehow being irresponsible. I do not accept that.
I suggested earlier a couple of things that I thought we could do, for example not ending the 50% tax rate, as some Government Members seem keen to do. The idea keeps being floated. We could also consider how we provide tax relief on the pension contributions of people on higher-rate tax earnings, because that is a huge giveaway to those who are already better off. There are a number of choices that we could make. I know that this is not the view of everyone on the Labour Benches, but personally I am not in favour of going ahead with Trident. Some of my colleagues agree with me and some do not, but the important point is that there are always choices.
I was going to say that we had driven people out of the Gallery in this debate, because when I started to speak it was completely empty. However, people have now obviously come in to hear me. People often see the subject of pensions as a bit of a bore and not very exciting, but it is hugely important. I regret greatly that the very good pensions legislation that Barbara Castle introduced, which brought in the state earnings-related pension scheme, was completely destroyed by the last Conservative Government. Had that not happened, many people would be very much better off now.
Although I very much agree with auto-enrolment, I am afraid I do not see it a complete substitute for that legislation. However, we must not move away from auto-enrolment, and I very much welcome the guarantees from the Secretary of State and the Pensions Minister that they will not agree to any delay in its rolling out. Nevertheless, for the reasons that my right hon. Friend the Member for East Ham (Stephen Timms) gave, I am not in a position to support the Bill tonight.
Glenda Jackson
Regrettably, I was not here for the opening remarks of my hon. Friend the Member for Edinburgh East (Sheila Gilmore), but we are clearly of one mind. I share with her the total refusal to accept the Government’s interpretation of the situation in which we find ourselves. The Secretary of State made a passionate plea that the debt should not lay a burden on our children and grandchildren, but that plea would have played rather more resonantly with me were it not for the fact that his Government are punishing our children and grandchildren even as we speak.
My parents and grandparents had absolutely no qualms whatever about laying on my generation the burden of debt incurred by fighting and winning a second world war, and I have to say that I am extremely grateful to them for that. I also point out to the Secretary of State that in the intervening decades, the opportunities that were presented to me and millions like me in this country by, as my hon. Friend said, the introduction of the welfare state, had been not only unheard of but undreamt of by people from the social and economic background from which I came. Therefore I, like her, simply refuse to accept that the choices the Government are making in every single area of our national economic life will promote growth, provide a way forward or benefit this country.
I would be more prepared to believe that the changes to the pension system that the Government have introduced—which, as my right hon. Friend the Member for East Ham (Stephen Timms) said, are grossly unfair to women—were driven by the harsh economic climate, which the Government constantly pray in aid, were it not for the fact that that measly six months will save only £1.1 billion. The Government borrow something like 10 times that amount every week. I simply cannot make the figures match—but then neither can they.
Mrs Anne Main (St Albans) (Con)
I struggle to see the hon. Lady’s logic in comparing a debt carried over on behalf of the nation for the second world war with a pension debt that results from the demographic fact of an ageing population for whom we must pay. Is she saying that £1.2 billion is a measly amount? If so, where would she find the other £10 billion that the Labour party are committed to spending by not voting for the Bill?
Glenda Jackson
I trust that the hon. Lady would allow me to use my own adjectives—“measly” is not a word that would immediately spring to my mind to describe £1.1 billion. The fact is that the six-month “pause”, which might be a better word to use as far as the hon. Lady’s view of the economy is concerned, will apparently save the nation £1.1 billion. That saving will not come in until next year, and it is doing nothing to fill the current hole. That sum is a fraction of what the Government are borrowing week in, week out, because they have markedly failed to do anything to create growth in this country. They have done little or nothing to stimulate our economy. The hon. Lady may smile and shake her head, but I was taught that the only way to get something is by earning it. That is the only way to settle debt.
Glenda Jackson
The hon. Lady is plucking fantasies out of the air—fantasies that the Government have been running for months. The money is certainly not paying to ensure that every child in my constituency has a school place, or that every elderly person in my constituency has secure meals on wheels, or that day centres for the elderly remain open. The Government have done nothing to encourage young people to believe that they have a future. Whatever they are doing with the money, they are certainly not stimulating growth in the country.
I must return to the issues that we are supposedly debating. The Government have imposed a gross unfairness on one half of our people: women. That unfairness is absolutely unacceptable. As I had occasion to say to the Secretary of State in an intervention, for many women in my constituency, the changes to the Bill are nothing more than a cynical attempt by the Government to re-attract the female vote, which, as they read every day in the papers, they are losing.
On the one hand, the Government have introduced this Bill, but on the other, they protest that one of their central planks is ensuring greater equality for women. They say that they want more women in the boardroom, and greater wage equality and equality of opportunity, but then they decide that when a woman has worked all her life—as has been said, she will probably have been in low-paid work, doing two or three jobs at the same time, not least looking after her family, including both children and parents—and when her employment potential is nil, she must struggle on until the state pension comes in.
I strongly and heartily endorse many aspects of auto-enrolment. I do have concerns that the Government will not introduce sufficient teeth to ensure that, if the existing pensions industry does regard auto-enrolment as a business that they would wish to enter, the proper safeguards would be in place to ensure that it remains genuinely competitive, open and transparent, so that people who have never before considered having a pension will not find—as most of us do at the moment—the pension papers to be totally obfuscating so that we are no wiser about where our money is going or what the charges are after reading them.
It will not be possible for me to vote for this Bill, but I strongly endorse auto-enrolment. I urge the Government to think again, even at this late stage, about trying to eradicate this gross unfairness from the Bill.
Jenny Willott
It will not surprise hon. Members to learn that I welcome the Bill. The issue of women’s state pension age has been discussed in full already today, but there is much else in the Bill to be welcomed. Many of the measures have broad support across the House, as we have already heard this evening. Auto-enrolment is, as the hon. Member for Hampstead and Kilburn (Glenda Jackson) said, critical to many people who up to now have had no pension savings and have not been in a position to save for their retirement. It is fundamental, and I support it now as I supported it when it was proposed by the previous Government.
We have to get more people saving for their retirement. Far too many people have no savings at all, and when they retire they depend entirely on the basic state pension. It was not designed to provide an adequate living; it was designed as a safety net. But for an awful lot of people it is their sole retirement income, and that is something that we need to change. For years we have been grappling with how to get more people to save, especially those on the lowest incomes. Auto-enrolment is critical, because we need to make it as easy as possible for people to save. We need to make it as easy as possible for businesses to administer, so that it becomes a no-brainer: people will automatically save for retirement without thinking twice about it, and so put themselves in a better position for their retirement.
Pensions are such an important issue to get right. It is not glamorous, people do not understand it, and it is very complicated. Even when I have conversations with other hon. Members about it, their eyes often glaze over. It is not an issue that people want to discuss, but it is our duty to try to make it as simple as possible for people so that as many as possible have some savings put away for their retirement and can retire in more comfort. That ties in with what my hon. Friend the Minister said earlier about the need to get means-testing out of the system, so that people know that whatever they save while they are working will benefit them in their retirement. We need to ensure that a flat-rate pension is introduced as soon as possible so that people who work, on however low an income, know that whatever they put aside during their working lives will benefit them when they retire, that they will have adequate retirement pensions, and that they will not have to rely on just the basic state pension.
I am saddened that many hon. Members feel unable to support the Bill—
Ian Murray (Edinburgh South) (Lab)
I am grateful to the hon. Lady for giving way at this late hour on Third Reading. She is making a very impassioned speech about women who should save for their retirement, and that is right—but what would she say to the 500,000 women who have made savings and thought about what will happen when they retire, but who will now have to wait 18 months longer for the state pension?
Jenny Willott
I am sorry that the hon. Gentleman was not able to be in his place earlier when I explained all that. We had a long debate on exactly that point earlier. The whole point of Third Reading is to be able to expand on the issues, and I wish to put on record the fact that I am very supportive of auto-enrolment, as are many other hon. Members, and on the capping of fees, as well as other measures in the Bill that are crucial but have not had as much attention as women’s pensions have. I hope that hon. Members will reconsider and feel able to support the Bill this evening, so that we can ensure that more people save for their retirement and do not have to live in poverty.
Steve Baker (Wycombe) (Con)
The right hon. Member for East Ham (Stephen Timms) set out his misgivings about the Bill. I share some of his trepidation about the effects on the group of women that we have discussed, but I shall be supporting the Government because I disagree with the hon. Members for Edinburgh East (Sheila Gilmore) and for Hampstead and Kilburn (Glenda Jackson), who sought to set out our financial position and compare our debt to that after the second world war. I wish that our financial context was as simple as just the size of the national debt. I have the figures and charts on my iPad: shortly after the second world war the Government were running a surplus—the second largest run since the second world war. It was beaten only in 1970. I would make another point about how the welfare state was founded.
Sheila Gilmore
In terms of annual expenditure, I do not disagree with that, but the surplus was so high partly because personal taxation levels were considerably higher than they are today.
Steve Baker
I am grateful for the hon. Lady’s point, because she seems to have pre-empted me—as I rewind on my iPad back to the chart showing taxation. [Interruption.] Between 1940 and 1950 the total level of taxation taken out of the economy rose from about 12% to 40% and it has stayed at about 40% since 1970. The context therefore is very different. The Government can only fund themselves through taxation, borrowing and currency debasement. If I wind forward and have a look at the charts on currency debasement, I can tell her that we have been furiously debasing the currency since 1971, which is the reason for the current mess we are in.
I also point out to the hon. Lady that the Bank for International Settlements has provided a number of charts setting out the debt projections for most of the western world, all of which look catastrophic. For example, in the United Kingdom—[Interruption.] Aren’t iPads useful! The BIS tells us that on the trajectory we inherited from Labour, our national debt would have reached 500% of gross domestic product by 2040. By then our debt interest payments would have been one quarter—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sure that the hon. Gentleman is using his iPad very well, but I hope that he will come to Third Reading, which he should be mentioning.
Steve Baker
The financial context now is quite different from that in previous years. If the Government were not to address the pensions crisis within a realistic financial context, we would have a financial catastrophe. We would find ourselves, by 2040, attempting to spend one quarter of GDP on debt interest. It would be catastrophic—and much as my heart goes out to those ladies who I wish were not being affected by the Bill, because of the financial position in which we find ourselves I shall, of course, support the Government.
Nic Dakin (Scunthorpe) (Lab)
Pensions are one of the great challenges of our age, so it is pleasing that we have been able to adopt a cross-party approach. It was begun by the previous Government, who set up the Turner review, and has been taken forward by this Government in, by and large, a sensible way—although there are areas of great concern.
Auto-enrolment is a positive development that, judging by speeches from across the House, is supported widely by Members on both sides. It will provide protection for people in their old age, and is a good thing. However, it is unfortunate that the Bill, as currently constructed, will hit young people and agency workers by putting in place a waiting period that means that they will not get all the entitlements that they should do early in their pension-building life. It is even more unfortunate that women aged 56 to 58 will be significantly penalised in a way that fails any test of fairness that the House, or anybody outside it, might apply.
Mark Durkan (Foyle) (SDLP)
Does my hon. Friend agree that Government Members, in trying to defend the Bill as it now stands—with the Government’s changes—are trying to pass off an improvement as a solution? They are trying to present a mitigation of the scale of an injustice as justice itself. Those of us who will be voting against the Bill on Third Reading do not believe that we have an acceptable casualty level among the women he is talking about, or that they were selected fairly or necessarily.
Nic Dakin
My hon. Friend makes the point clearly and soundly. My right hon. Friend the Member for East Ham (Stephen Timms) made it absolutely clear this evening how unfair this Bill still is, and why anyone with any sense of justice and fairness should vote against it. It is outrageous for the Government to come here this evening with a mealy-mouthed effort to satisfy the women up and down this country. I urge all Members of this House to vote against the Bill.
Yasmin Qureshi
The Opposition and Government agree on many things in the pensions debate. It was the previous Labour Government who introduced the Turner commission that looked into the ageing population and the need to sort out pensions, but that is not to say that a certain group of women—about 500,000 of them—should be penalised. [Interruption.] Government Members are smiling and talking, but we are talking about 500,000 women who will be drastically affected by the pension cuts. Everybody talks about how we do not have enough money, but the Government have found tens of billions of pounds for quantitative easing, and they can waste £3 billion on the unnecessary transformation or reorganisation of the NHS, and yet they find it difficult to find money for those ladies.
The Labour Government also wanted to introduce auto-enrolment, but under our proposals many more people would have benefited through enrolling automatically at £5,000; now the figure is £7,475, which means that 600,000 people will not be able to enrol automatically in a pension scheme, which again will hit women disproportionately. The Government have indicated that the rise is in line with income tax, but we know that in the next few years or so the increase will continue, which will exclude 1.5 million to 2 million people, as compared with the Labour party’s original plan. The Government have also introduced a three-month waiting period before auto-enrolment, which they predict will result in 500,000 fewer people being automatically enrolled in a pension scheme. We estimate that each person will have about 11 different employers overall. I know that it is very late—there are only three minutes to go—but in light of what has happened and the fact that 500,000 women will be affected, along with 600,000 people who will be affected by the changes in auto-enrolment, I would urge the Government to reconsider.
Hon. Members have claimed that the Labour party did nothing about pensions when it was in power, but we should remember that in 1997, after years of Conservative government, the biggest challenge that we faced was tackling pensioner poverty and improving older people’s quality of life. Between 1979 and 1997, the state pension declined from 20% of average male earnings to 14%. In 1997, 29% of our pensioners were living in poverty, which was absolutely disgraceful. Between 1997 and 2010, Labour made huge achievements, of which we are proud. Average gross pensioner income increased by more than 40% in real terms, ahead of the growth in average earnings. More than 1 million people were lifted out of poverty, with no pensioner living on less than £130 a week, compared with £69 a week in 1997.
The winter fuel allowance, free off-peak travel on local buses for 11 million people over 60, free TV licences for the over-75s and an increased threshold to ensure that 60% of pensioners pay no tax at all have made a difference. Those policies cost money, and of course money was spent, but this Government might remember that, when they were in opposition, they agreed to all Labour’s expenditure plans. For them now to turn round and say that they did not know what was going to happen, or that they did not know how much money there was in the Treasury, is completely wrong. The coalition agreement stated that there would be cross-party consensus on this matter, and at that point, the Government knew exactly what the state of the finances was. At the last minute, however, those promises have been reneged on, and they are not the only ones—
Business without Debate
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Petitions
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hugh Bayley (York Central) (Lab)
I wish to present to the House the following petition, which was signed by Terry Gallogly of Lowther court in York and supported by a further 79 people who live in the city I represent.
The petition states:
The Petition of York Palestine Solidarity Campaign and the people of York,
Declares that the Petitioners note that since 1993 the Palestinian Authority has been involved in fruitless negotiations that have still not resulted in freedom; that the number of Israeli settlers living illegally on Palestinian territory has more than doubled, large areas of land have been stolen, over 600 checkpoints prevent freedom of movement to schools and hospitals, and a wall, declared illegal by an international court 7 years ago, continues to be built; and that this September, with no end to the Occupation in sight, and with the support of many countries, the Palestinian Authority will apply to the United Nations for recognition of Palestine as an independent state.
The Petitioners therefore request that the House of Commons urges the Government to formally recognise the right of the Palestinian people for self-determination and the right of Palestinian refugees to be able to return in freedom to their homes, and calls on the Government to work urgently for just solution in the region.
And the Petitioners remain, etc.
[P000964]
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I rise to present a petition from radio listeners throughout Merseyside. The petition was collected online and on the streets of Liverpool. I am sure that many more people would have liked to have signed it, but time is of the essence, which is why I am submitting it today. Nevertheless, there are in the region of 2,000 signatories to the petition, along with many testimonials.
The petition states:
The Petition of listeners to BBC Radio Merseyside,
Declares that the Petitioners oppose the 20% cut to BBC Radio Merseyside’s budget proposed by the BBC management; that the Petitioners note that BBC Radio Merseyside is the most listened to of the BBC’s 39 local radio stations outside of London with over 300,000 listeners who tune in for an average of 16.2 hours per week to popular programmes such as the Roger Phillips Show and the Billy Butler Show; further note that there are more staff at Radio 4 who work on the You and Yours programme than the whole of the current team of BBC Radio Merseyside; and that the Petitioners believe any efficiency savings should be fairly distributed, protecting local services and jobs where possible, in order to guarantee quality of programming which remains locally relevant and to preserve a service that is depended on by millions of listeners up and down the country, rather than maintaining the budgets of bigger channels and national radio stations.
The Petitioners therefore request that the House of Commons urges the Government to encourage the BBC to reconsider its cuts to BBC local radio.
And the Petitioners remain, etc.
[P000965]
Marine Management Organisation
(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sarah Newton (Truro and Falmouth) (Con)
I am grateful for the opportunity to raise an issue of great concern to my constituency and many maritime constituencies around our shores. The UK marine area covers an area three and a half times the UK land mass. It is rich in marine life and natural resources, which form the basis of human economic activities estimated to be worth £46 billion in 2005-06. Some of those pose a risk to the integrity of marine ecosystems, with impacts growing because of pressures such as large-scale marine renewable energy developments. Current activities have resulted in a crowded marine area, including licensed developments and areas of high fishing effort. Concerns over the degradation of the marine environment have led to a range of new policies, culminating in legislation and the Marine and Coastal Access Act 2009.
The most significant aspect of that Act is the introduction of marine planning: a framework for decisions on marine activities aimed at reducing user conflict and encouraging an “ecosystem-based approach”. Planning, as described in the Act, aims to promote economic activity, as well as to integrate environmental protection into decision making. I have read the Hansard record of the Committee stage of that Bill and know that the then Minister was keen to ensure that the Bill achieved the right balance between sustainable development and environmental protection.
The Marine Management Organisation was created as the main delivery agency for the new planning and licensing regime, but Natural England and the Joint Nature Conservation Committee have the main role in the pre-designation of marine protection areas. I have met its chairman and chief executive, who are trying to deliver the aims of their organisation. All the comments I am about to make relate not to their performance in managing the organisation, but rather to the structure of the processes they have inherited.
The key challenge facing the marine planning system that I am experiencing in the port of Falmouth and the Carrick Roads is resolving the inevitable conflicts between policy objectives to ensure the integration of the social, economic and environmental needs of the area. Given the limited amount of time available to me, I will summarise the area briefly. It is the third largest natural harbour in the world; home of the last commercial oyster fishing fleet under sail in Europe; host to a thriving ship repair business; host to the Royal Fleet Auxiliary Service fleet; home to world-class super-yacht builders Pendennis; and home to a range of marine renewable businesses. It is also a centre of world-class yachting and sailing, including the home base of British Olympic sailor Ben Ainslie. It has a special area of conservation and areas of sites of special scientific interest. Having grown up there, I can testify to the huge improvements that have been made to the quality of water and the natural environment, which all Falmouthians very much value.
All concerned with the new marine planning process acknowledge the challenges involved. Putting 25% of England’s marine environment under “protection” in a relatively short time, given the severely resource-constrained situation the Government find themselves in, is deeply concerning. The uncertainties in planning decisions as a result of knowledge gaps, and sometimes competing scientific evidence is of particular concern. Effective marine management requires sound evidence and monitoring. A Centre for Environment, Fisheries and Aquaculture Science report in 2010 entitled “Marine Survey Needs to Underpin Defra Policy” identifies a shortage of data necessary for marine planning. It also states that much of the evidence to be used in designation is subject to a medium or low level of confidence.
About 10% of the UK continental shelf is currently mapped in detail by survey or observation. To fill gaps, projects such as UKSeaMap produce broad-scale predictive habitat maps based on best available data, but confidence in some of the designations is as low as 20%. Direct mapping is expensive: the cost is estimated to be £210 million over seven years to map the rest of the UK’s regional seas to scales relevant to marine habitats, and there are limited funds to undertake such surveys.
Given the emphasis on evidence-based policy needing to be based on the best possible science, I want the Minister to consider the following recommendations about the guidance the Department for Environment, Food and Rural Affairs gives to the MMO, which has the job of licensing activity in the marine environment, such as dredging, as well as establishing a network of marine protected areas, include marine conservation zones and reference sites. To undertake that work, the MMO is using the DEFRA-produced “A description of the marine planning system for England”. That is quite a general document and it would be relatively straightforward for the Minister to issue additional guidance to bring in the changes I recommend, which would not need any primary legislation.
The additional guidance I want the Minister to consider stems from the need to access the broadest and best possible evidence base for appropriate decisions to be taken. As the Minister is aware, Natural England and the JNCC are the Government’s statutory nature conservation advisers in the English and UK offshore marine area, yet there is a wealth of knowledge in coastal communities, academic institutions around the UK and even internationally that I believe should be used in addition to the expertise of those organisations. Marine science is a fast-growing academic discipline and the MMO should be enabled to extend the range of organisations and people that can provide scientific evidence to enable its independent decision making. The quality of evidence should be paramount, whether or not it comes from Natural England or the JNCC. Of course, any organisation or person would have to demonstrate their ability to carry out the task and their work should be open to scrutiny and challenge. I believe their evidence should be considered on a level playing field and on equal terms with that of Natural England and the JNCC.
I also want the Minister to consider extending the limited appeals system. Generally speaking, the terrestrial planning system does not extend below the low tide mark, so the normal planning appeals process does not apply. The 2009 Act does not appear to set out an equivalent appeals process for planning decisions, although it does allow for one to be set out by regulations under section 37 for appeals against licensing decisions. I note the Department of Energy and Climate Change and DEFRA’s recent consultation on licensing under part 4, including appeals on decisions.
The marine planning system for England March 2011 document states in paragraph 5.61 that appeals against the refusal of terrestrial planning permission and inquiries are dealt with by the Planning Inspectorate and it goes on to say that the Planning Inspectorate could be involved in independent investigations within the marine planning system. If an independent investigation is required, an investigator will be appointed to provide advice and recommendations on how issues may be resolved and plans may be improved. The final format that the investigation will take is decided by the Secretary of State on the advice of the MMO. It is essential that these powers should be made available in the predetermination stage of marine protection designations as well as in relation to decisions the MMO will make post-designation in the management of marine protected areas.
The potential economic and social impact of designation of marine protected areas on coastal communities is so significant that it demands an appropriate appeals process. Decisions of such magnitude would not be made on the land without an appropriate appeals process. With the recent publication of the list of potential sites, there has been a huge outcry in my constituency at the potential designation of part of the Fal estuary as a marine protected area and a reference site.
Falmouth town council is united in strongly opposing the plans, stating that
“the proposal…threatens 350 years of history and shipping power in this port”.
The impact of the designation upon the recreational use of the Fal estuary has also aroused anger. Referring to the effect of the designation on a long and proud history of sailing boat racing on the Fal, Falmouth race officer Walter Amos has stated:
“The proposal would put an end to 150 years of tradition, cause enormous resentment, and have considerable economic consequences.”
Andrew George (St Ives) (LD)
My hon. Friend is making a strong case, particularly regarding reference sites. The Minister and I served our time on the Bill that became the Marine and Coastal Access Act 2009, and what my hon. Friend says is absolutely right: what we need in relation to reference sites is consultation and the opportunity for appeals, as with my constituency and the Cape Bank reference site. Low-impact fishing takes place there at the moment, but that would be stopped, with the unintended consequence of discouraging the very type of fishing that I should have thought the Act was intended to protect.
Sarah Newton
I thank my hon. Friend for that very helpful intervention.
Richard Gates, the Falmouth town centre manager, has added his voice to the chorus of local residents opposing the plans, commenting:
“We live in a beautiful part of the country and certainly are very environmentally aware but this cannot be at the detriment of people’s livelihoods and leisure when many people are working so hard to develop the area”.
I am sure that Falmouth and, as my hon. Friend the Member for St Ives (Andrew George) has pointed out, other parts of Cornwall are not the only coastal communities that feel that the current recommended sites for marine protected areas are inappropriate because they fail to meet the fundamental aim of creating areas that strike the right balance between sustainable economic, social and environmental protection.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
My hon. Friend’s description of her beautiful constituency could be substituted for mine, with Aldeburgh and the River Alde. Is it not the case that constituents feel that designations are being slapped on top of existing special protection areas simply because the data are available, rather than other parts of the coast being sought that could easily fulfil the criteria for marine conservation zones?
Sarah Newton
I am very grateful for those comments. My hon. Friend anticipates a point that I was going to make but now do not need to make. I think that issue is a real problem.
Perhaps it is not surprising that this has happened because the lead agencies tasked with drawing up the list of potential sites, the JNCC and Natural England, have as their primary purpose environmental protection and conservation. What is not part of their remit is what the Act clearly set out to achieve—balancing the social, economic and environmental needs of communities.
I appreciate that the Minister has inherited the current process and would not have designed one that led to the current situation, where there is so much genuine outrage and concern, but that is where we are today. It is a matter of great importance to coastal communities that measures are urgently taken to enable greater use of all the available evidence base by decision makers, rather than their relying almost entirely on Natural England and the JNCC. An open, transparent appeals process for both pre and post-designation decision making needs to be established urgently.
Given that the deadline for the establishment of the marine protected areas sites is 2012 and that the sites are being consulted on as we speak, I hope the Minister can reassure me that he will consider these recommendations so that the implementation of the very worthy aims of the Act command the respect of coastal communities. It is vital that people who might be adversely affected by the implementation of the Act are thoroughly involved, which they have not been so far. Making the new planning system work depends on building a consensus and support that can be achieved only if all concerned have confidence in the system that is used to reach conclusions. Sadly, that is very much missing at the moment. Politicians are elected to use their judgment and are democratically accountable. I hope that the Minister can reassure us tonight that he will exercise his judgment and democratic accountability to ensure that there is a common-sense approach to marine planning.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I thank you, Mr Deputy Speaker, for calling me to speak. I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate and thank her for allowing me to participate in it. I am well aware that the setting up of the MMO in the previous Parliament was a contentious issue that caused frustration in my constituency.
My predecessor fought valiantly to convince her own Labour Front-Bench team in DEFRA that the MMO should be located in the south-west. After all, the peninsula has 30% of the UK’s coastline and Plymouth is a global player with the Royal Navy, the Plymouth Marine Laboratory, Plymouth university, the Marine Biological Association, the Sir Alister Hardy Foundation for Ocean Science and the National Marine Aquarium all based in my Plymouth, Sutton and Devonport constituency. Plymouth is a fishing port as well. I suspect that the decision to locate the MMO in Newcastle was a political one, aimed at satisfying Labour Members of Parliament in the north. With only three Labour Members of Parliament in Devon and Cornwall by 2005, I am afraid my predecessor’s views were rather disregarded.
I suspect that things have gone too far and that it would be inappropriate to move the MMO to Plymouth or the south-west, especially in the present financial climate when we have to be very careful with taxpayers’ money. We need to ensure that money is spent wisely. However, will my hon. Friend the Minister consider whether a small satellite office might be set up in Plymouth, or if some funding could be given to the university to host a few officials who could liaise with the MMO and make sure that the south-west is well represented?
In the short time available to me, I want to welcome the MMO’s commitment to evidence-based and transparent decision making. I welcome the proposals to develop Falmouth port, as this will deliver a cluster approach to economic development in the south-west. Like Plymouth, it is of regional economic significance and could potentially be a key test of the MMO’s commitment to sustainable development, but I seek an assurance from the Minister that the MMO will work with its statutory conservation advisers to scrutinise the quality of evidence and ensure that robust processes are in place.
I was concerned to see a recent independent review of Natural England’s quality assurance processes that outlined a number of significant issues in relation to advice on the marine environment. The review contained a range of recommendations so that Natural England is brought into line with recognised good practice. Will the Minister assure the House that Natural England is committed to working with the MMO to provide high quality advice that is subject to independent peer review and scrutiny?
The way we manage our seas is becoming increasingly important as they become a barometer for global warming. If they want to carry all interested parties and users of the seas with them, Ministers will need to ensure that there is a significant amount of public consultation.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate on such an important issue for her constituents. I thank other hon. Members for their contributions.
The Marine Management Organisation was created just 18 months ago, with cross-party support. As a non-departmental public body, it carries out its function with technical expertise, impartiality and transparency, and at arm’s length from Ministers, but it is accountable to both Ministers and Parliament. At the outset, I pay tribute to the MMO and to its staff. Its remit is very diverse. It continues to mature and is tackling a range of challenging issues. It manages our fisheries; it is delivering marine planning; it is working with others to create and manage a network of marine protected areas and to carry out marine licensing. Within its broad remit, the MMO is required to manage its activities with the objective of making a contribution to sustainable development, in a consistent and co-ordinated manner and taking account of all relevant facts and matters.
The MMO’s decisions should be impartial and based on best available evidence, taking into account the potential benefits and anticipated adverse impacts. It also needs to ensure that its decisions comply with statutory requirements under UK and EU legislation and are consistent with our international obligations. All that sounds straightforward in theory, but the decisions that the MMO has to make, whether about opening and closing fisheries, licensing construction or applications to the European fisheries fund have real-world impacts and directly affect people’s livelihoods, something that I believe the MMO is acutely aware of. The MMO will never be able to please all the people all the time, and decisions will sometimes adversely affect some more than others, but for that reason the MMO stresses the importance of transparency and impartiality. The MMO has been exemplary in ensuring that the information it bases its decisions on is publicly available, and it is helpful for people to be able to see how it makes its decisions, particularly when they are relatively controversial.
One cornerstone of the 2009 Act was to introduce a streamlined licensing system and marine planning in order to contribute to the sustainable development of our seas. That streamlined licensing system was introduced in April, the first marine plans will be in place in 2013 and, to guide the MMO, DEFRA has produced statutory guidance on sustainable development. It refers to the UK marine policy statement, which was adopted in March as the framework for planning and decision making in the marine environment in order to ensure a consistent approach throughout the UK and to contribute to sustainable development.
At the same time, DEFRA produced the description for the marine planning process in England so that the MMO could take it forward and produce subsequent guidance on how marine planning will work, and it is an absolute priority of this Government to ensure that, when we view our seas, we do so holistically. For too long we have looked down the silos of fisheries, conservation or marine licensing, but now, at last, we are developing the means to look at the marine environment as a whole. That is long overdue, and it will assist the constituents of my hon. Friends and others, who at the moment have to follow an entirely application-led process. Marine planning, like terrestrial planning, will be a great advantage to them.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman refers to involvement with other parts of the United Kingdom, and there is an impact on the devolved Administrations of Scotland, Northern Ireland and Wales, because they have responsibility for fishing, so can he confirm that he will consult the devolved Administrations to ensure that there is a uniform approach to fishing?
Richard Benyon
I make it my business to confer with my devolved colleagues regularly, and I will do so on Thursday and Friday in Luxembourg and with the Northern Ireland Minister and other devolved Ministers in Newcastle in the very near future. I can assure the hon. Gentleman that I make it my business to ensure that we, as a UK group of Ministers, talk together and recognise that we cannot look at our seas just in terms of the countries that make up the United Kingdom; we have to look at them holistically.
My hon. Friend the Member for Truro and Falmouth mentioned the appeals process, and one important feature of the new licensing system is the introduction of just such a process. An applicant for a marine licence will be able to appeal against a decision made by the licensing authority on their application. That includes a decision not to grant a licence, conditions attached to a licence or the length of a licence, and the Planning Inspectorate—PINS—will manage and decide appeals against licensing decisions made by the licensing authority.
We have closely aligned our processes to those for terrestrial planning appeals, as we expect there to be benefits in developing a system that is consistent with current practice. For example, a familiar process should be easier for PINS to implement and for appellants to understand and follow.
Similarly, for marine planning, as my hon. Friend said, there will be the option for independent investigations of a marine plan, and PINS will carry out those, too. Should an independent investigation be needed, it will take place after the consultation on a proposed marine plan and before adoption by the Secretary of State.
Clarity, transparency and the involvement of as many stakeholders and communities as possible are important in marine planning and licensing. Similarly, although the MMO relies on advice from Natural England and the Joint Nature Conservation Committee as statutory consultees when making many of its decisions, it none the less draws on a wider evidence base in delivering its work. Naturally, this includes research commissioned by DEFRA and carried out by the Centre for Environment, Fisheries and Aquaculture Science and many other expert organisations, as well as studies commissioned directly by the MMO.
Indeed, the constituency of my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) is a well-known international hub of expertise in marine science, and precisely those resources are available to and used by the MMO for the evidence that it needs. It is essential that it should be able to have access to the best information available, including information submitted during public consultations. I can give my hon. Friends the absolute assurance that, in our reviews of the performance of the MMO, we will ensure that it is taking all the best evidence available and is not only listening to the statutory conservation bodies but registering a serious attempt to widen its reach in terms of the advice it receives.
My hon. Friend may also wish for some clarification of the marine conservation zone process. The identification of MCZs has been stakeholder-led operation from the outset, managed by the statutory nature conservation bodies, Natural England and the JNCC. The statutory nature conservation bodies established four regional MCZ projects—Balanced Seas, Finding Sanctuary, Net Gain and the Irish sea conservation zones—and these provided advice about which MCZs should be brought forward. I can tell hon. Members, if they have not witnessed it, that it has been a tortuous process with many hours of work, and it has brought forward some suggestions at this stage.
Each project established stakeholder groups made up of a variety of key interested parties in their regions to examine the evidence and put forward site recommendations and associated impact assessments. To that end, it is the stakeholders who have been responsible for developing the recommendations on location, conservation objectives and management measures options of any MCZs in their region, and they have had a real opportunity to shape and influence the decisions that the Government will make.
On 8 September, the regional MCZ projects submitted their final MCZ recommendations to the independent Science Advisory Panel and the statutory nature conservation bodies for review. In total, there are 127 recommended MCZ sites. Across all four projects, over 2,500 interviews were conducted with stakeholders, and detailed discussions took place during the course of 155 stakeholder meetings. Over 1 million individuals’ interests have been represented through the MCZ stakeholder groups. Once the advice from the panel and the statutory nature conservation bodies is received, Ministers—I stress, Ministers themselves—will examine all the evidence before deciding which sites to put forward for public consultation. The public consultation will be yet another opportunity for stakeholders to present their views on proposals and for any further new evidence to be submitted. Only after all this evidence has been collated and reviewed will Ministers designate MCZs.
I conclude by reiterating the scale of the challenge facing the MMO and Ministers as we seek to grapple with exceedingly complex issues that, as my hon. Friends have eloquently noted, stir a great deal of interest and passion around coastal Britain. I look forward to continuing that vigorous discussion as we move forward through the process of designating marine conservation zones and managing our vital marine resources.
Question put and agreed to.