(6 years, 9 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
With permission, Mr Speaker, I will make a statement following the Opposition day debate on state pension age.
The decision to equalise the state pension age for men and women dates back to 1995 and addresses a long-standing inequality between men and women’s state pension age. This change was part of a wider social trend towards gender equality, but was also a decision, partly as a result of European and equality legal cases, relating to occupational pension provision.
During the Blair and Brown years, the then Government decided that a state pension age fixed at 65 was no longer affordable or sustainable. The Pensions Act 2007 introduced an increase in state pension age to ages 66, 67 and 68. The coalition Government brought in further changes under the Pensions Act 2011, which accelerated the equalisation of women’s state pension age and brought forward the increase in men and women’s state pension age to 66 by 2020. During the passage of this Act, Parliament considered a range of alternative options, resulting in a £1.1 billion concession that capped the maximum increase any woman would see in her state pension age at 18 months, relative to the Pensions Act 1995 timetable.
Many Members raised the issue of communications in the November debate. Since 1995, the Government have gone to significant lengths to communicate these changes. People were notified with leaflets, an advertising campaign was carried out and later individual letters were posted out. Those affected by the 1995 Act changes were sent letters informing them of the change to their state pension age between 2009 and 2011, with letters sent to 1.2 million women. Those affected by the Pensions Act 2011 changes were sent letters between January 2012 and November 2013, which involved sending over 5 million letters with an accompanying leaflet.[Official Report, 17 December 2018, Vol. 651, c. 3MC.]
Life expectancy and state spending are what have driven these changes. Society has changed in countless ways since the 1950s and life expectancy is no exception. A girl born in 1951 was expected to live to 81, and a boy to 77. By 2018, the latest Office for National Statistics cohort figures show an increase of over 10 years for newly born girls and over 12 years for boys, to 92 and 89 respectively. Life expectancy at older ages has also gone up during this period and is projected to continue to increase in future years.
These welcome increases in life expectancy of course have implications for the state pension. As people live longer, they invariably also spend longer in retirement. Had we not equalised the state pension, women would be expected to spend over 40% of their adult lives in retirement, a proportion which would only continue to increase. This situation is not sustainable for any Government and means increasing taxes for the working population. Going as far as some campaigners have urged and revoking the 1995 Act would represent a loss of over £70 billion to the public purse.
The state pension must be maintained on an affordable footing for future generations of pensioners and taxpayers. That necessitated the Government’s action to equalise and then increase the state pension age through the Pensions Acts of 1995, 2007, 2011 and 2014.
Any further transitional arrangement would come at great cost. The Government have considered many options and all of the proposals would be wrought with substantial legal problems, as well as financial ones. Any amendment to the current legislation which creates a new inequality between men and women would unquestionably be highly dubious as a matter of law. Causing younger people to bear a greater share of the cost of the pensions system in this way would be unfair and undermine the principle of intergenerational fairness that is integral to our state pension reforms.
Let me turn to some of the proposals from the debate. The Scottish National party seeks a full compensation package of at the very least the reverse of the 2011 Act. The SNP costed this at £8 billion, but that is a vast underestimate: it would actually cost the taxpayer over £30 billion and potentially even more. There is also no doubt that the Scotland Act 2016 gives the Scottish Government the powers they need to address this issue. The Labour Opposition have made multiple suggestions, with many seeking the full compensation package of £70 billion. In addition, they have proposed in their manifesto keeping the state pension age at 66. That would cost over £250 billion more than the Government’s preferred timetable by 2045-46. Payments on this scale are simply unaffordable and cannot be justified.
The key choice a Government face when seeking to control state pension spend is to increase state pension age or pay lower pensions, with an inevitable impact on pensioner poverty. The only alternative is to ask the working generation to pay an even larger share of its income to support pensioners. I believe that successive Governments have made appropriate but difficult decisions to equalise and increase the state pension age. A significant concession was made in 2011 so that no woman will see an increase to her state pension age of more than 18 months, relative to the 1995 Act timetable. To renege on our decisions and further increase costs to the public, especially the working population, would be unfair and unaffordable.
Jack Dromey (Birmingham, Erdington) (Lab)
I thank the Minister for his statement and for arranging to let me have sight of it earlier this morning.
The state pension for women born in the 1950s should be set in the wider context of the Government’s—uninspiring, I have to say—track record on pensions. Last July, the Government announced that they would be bringing forward the increase in the state pension age to 68 in 2037, justifying this on the increase in life expectancy. However, in the same week, the renowned expert on life expectancy, Professor Sir Michael Marmot, described how a century-long rise in life expectancy was
“pretty close to having ground to a halt,”
and had flatlined since 2010—in part, I have to say, the consequence of Government policy on austerity.
Since then, statisticians from the ONS have revealed that by 2041 life expectancy for men and women would be a year less than had been projected just two years previously. In addition the ONS has revealed that, although women continue to live longer in good health than men, their healthy life expectancy has decreased since 2009. Yet more evidence from Public Health England shows how deep inequalities in healthy life expectancy remain. On average, people in the UK are now projected to live shorter lives than previously estimated. Does the Minister agree?
It is in this context that the Government are failing women born in the 1950s. This statement does nothing to address the pensions injustice these women face. The Government have had multiple opportunities to act, so why is the Minister again refusing to use the opportunity of a motion passed by this House to do so and to take further steps? It is unacceptable that we are having to make this same argument and raise the same points again because this Government continue to refuse to help these women, who are suffering and losing out due to the acceleration of the state pension age and lack of proper notice. This issue is not going to go away. Why do the Government continue to act as though it will? This statement is, sadly but not unsurprisingly, yet another example of the Government’s failure to give women born in the 1950s the dignity and respect they deserve. It is a missed opportunity to take real action.
We have all heard often heart breaking stories from many thousands of women affected by the changes about how the situation they face is one of desperation and fear of poverty. Christine in my constituency is 62 and is now having to wait until she is 66 to retire, with both her husband and her father having just died. In her words, “Not that cleaning jobs are a bad thing, but I have never done a cleaning job in my life and I am now having to do three cleaning jobs to make ends meet until such time as I can retire.” That is wrong.
It is to this Government’s shame that they refuse to recognise the very real basis for the fears of women such as Christine. What immediate measures will the Government take to address this appalling situation? Does the Minister understand how difficult it is for many women in their 60s to retrain and access decent work? What support will his Department offer these women—or will he repeat the bizarre proposal made from the Conservative Benches that they might take up apprenticeships?
As we have repeatedly set out, there are several immediate actions the Government could and should take, but time and again they have refused. Can the Minister explain why he refuses to offer women affected by Government changes to the state pension age the cost-neutral option to draw their state pension at age 64, as we have proposed? That would allow women who choose it to retire up to two years earlier.
The pension age is due to rise to 66 by the end of 2020. We reject the Government’s proposal to increase the state pension age even further. We will act by putting in place a new review of the pension age, specifically tasked with developing a flexible retirement policy that reflects the contributions people make, the wide variations in life expectancy and the arduous conditions of some work.
It is also right to extend pension credit to those who were due to retire before the increase in the pension age, which would benefit hundreds of thousands of women. Will the Minister look again at that proposal?
In conclusion, sadly, this statement does nothing to help women born in the 1950s. Actions are needed, not words, if the Government are to restore some of the faith and dignity that many people feel they have lost as a result of the Government’s refusal to act and to introduce proper transitional procedures. These are the women of Britain—the women who built this country. They deserve nothing less.
Guy Opperman
I thank the hon. Gentleman for his comments. He seeks an independent review of the state pension age. Well, the Government did that last year. The Cridland review was independent of Government and it published its conclusion, just as the Labour party manifesto called for. The review’s findings supported the assertions that the Government have put forward.
The Labour party used to be financially credible, but sadly those days are long gone. The Labour party, under Tony Blair and Gordon Brown, passed the Pensions Act 2007, which raised the state pension age. We now have the bizarre situation in which the Labour party manifesto states that the state pension age should not go beyond 66. In other words, it is going back on its own decision in 2007. Its credibility is sadly lacking.
The situation is further complicated by Labour’s reliance on Michael Marmot. The shadow Secretary of State for Work and Pensions keeps relying upon him, and the hon. Gentleman repeated that today. Michael Marmot made it very clear that “improvements in life expectancy at birth, which had been around a one-year increase every five years for women, and every three and a half years for men, have slowed since 2010 to a one-year increase every 10 years for women and ever six years for men.” The point is that the increase is still going ahead; it might have slowed to a degree, but life expectancy continues to rise.
The Labour party agreed in 2004 that the ONS cohort figures should be accepted and then followed them thereafter. The ONS produced a report last December on life expectancy at birth, which found that in 50 years’ time, by 2066, cohort life expectancy at birth is projected to reach 98 years for females and 96 for males, a rise of over six years for both genders. In 2018 life expectancy at birth is projected to be 92 for women and 89 for men.
Let me touch briefly on the Fuller Working Lives strategy, which I am sad to say the Labour party seems no longer to support. There are 1.2 million people over the age of 65 in employment, which should be celebrated. It is entirely right that retraining might not be suitable for everyone, but it is also right that Governments of every hue should provide opportunities for those who wish to take those things up. For example, over the most recent nine-month period, the number of apprenticeship starts for people between the ages of 45 and 59 was 53,000, and for the over-60s it was 3,400. That means thousands of people taking opportunities for retraining. With respect, that should be supported.
Several hon. Members rose—
Mr Speaker
Order. I remind the House of the substantial business to follow, which is heavily subscribed. There is therefore a premium upon brevity, from Back and Front Benches alike—minimum preliminary comments; simply a focus on the question to the Minister.
Peter Aldous (Waveney) (Con)
I shall cut to the chase, Mr Speaker. What impact assessments have the Government carried out to assess the impact of their proposals on women born in the 1950s?
Guy Opperman
Multiple impact assessments were carried out, in 1995, 2007 and 2011, and obviously these matters were debated at great length in both Houses of Parliament, on an ongoing basis.
Patrick Grady (Glasgow North) (SNP)
I thank the Minister for advance sight of his statement, although, frankly, it does not say very much that is new. The Government seem unable to accept that, irrespective of their policy of abstaining in Opposition day debates, there is a clear majority in the House in support of the 1950s women. Five Conservative Back Benchers and six Democratic Unionist party Members voted for the Scottish National party’s motion on 29 November, which is the second biggest rebellion in this Parliament. Rather than engaging in more bluster and buck-passing, the Government should be bringing forward proposals to address what the motion called for:
“to improve transitional arrangements for women born on or after 6 April 1951 who have been adversely affected by the acceleration of the increase to the state pension age.”—[Official Report, 29 November 2017; Vol. 632, c. 366.]
That is the will of the House, clearly expressed time and again.
It is not good enough for the Minister to wave a red herring and pretend that the Scottish Parliament could somehow resolve the situation. This is about reform of the pensions system, and the state pension age is reserved—the Scotland Act 2016 is very clear that the Scottish Parliament cannot make benefits by way of old age. In any event, it is not the job of the Scottish Parliament to clean up a mess made by the UK Government, and it is certainly not the job of Scottish taxpayers effectively to pay twice to mitigate the impact of Tory cuts.
If the Government continue to ignore this House and the voices of the 1950s women, they should get ready for further debates, questions, petitions and amendments to legislation, because this is not going away. This week we have been celebrating the suffrage campaign, and it is not by coincidence that the WASPI—Women Against State Pension Inequality Campaign—women have chosen those colours for their campaign. The 1950s women have paid in, and it is time for the UK Government to do them justice and pay out.
Guy Opperman
The hon. Gentleman knows full well that the Scotland Act 2016 gave a variety of powers, under sections 26, 28 and 24. Crucially, if an individual is of working age, they can be addressed with assistance by the Scottish Government—those are not my words; that was set out in crystal-clear detail on 22 June by Jeane Freeman, my opposite number in Scotland. I remind the hon. Gentleman that the SNP’s manifesto included a commitment to assess the impact of these changes and the options open to the Scottish Government with a view to providing support to these women. I suggest that the support is there. I have written to my opposite number in the Scottish Government and the leader of the SNP at Westminster, saying, “Go ahead; the UK Government do not object to that in any way.” He should get on with it.
Douglas Ross (Moray) (Con)
The Minister will be aware of my support for local WASPI women in Moray, and indeed that I supported the Opposition motion that has brought forward this statement. Will he update us on the legal challenge being taken forward by Bindmans on behalf of women affected by these changes, because a number of Moray women are looking at that?
Guy Opperman
My hon. Friend will be aware that a legal challenge is being brought forward. I cannot comment on the outcome of it, but it will be resisted by the Government. We do not believe that it has merit. Clearly that is a matter for Bindmans and the WASPI women, but it will definitely be resisted.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
I am afraid that the Minister might have missed the point, never mind the anger of 1950s women. Today, in the constituency of my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), there is a city-wide pensions roadshow. So many women are affected by the pension changes that demand has outstripped supply and not everyone can be let in. When will these women have answers and transitional arrangements?
Guy Opperman
With respect, this matter was debated at great length in 1995 and in 2007, under the Labour Government, and they could have altered the decision if they wished to do so. At that stage they took the view that the changes were fiscally sensible, and in 2011 the matter was again debated by Parliament and there was a concession of £1.1 billion, after much consideration by this House.
Carolyn Harris (Swansea East) (Lab)
Having heard the statement, I can only assume that the Minister really does not get this, because the strength of feeling, not just among the 1950s women, but among colleagues, is extremely high—they are angry. Maybe I can offer some help. If he agreed to meet me and his hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), we could share with him the findings of a consultation we have recently undertaken on behalf of the all-party parliamentary group on state pension inequality for women. We could talk him through the problem and encourage him to do the right thing by acknowledging the problem and coming up with a respectful answer.
Guy Opperman
With respect, this matter has been debated since 1995—long before the hon. Lady and I arrived in this House—and successive Governments have taken a similar view on the appropriateness of the action, based on affordability, workability and the applicable equality legislation.
Stephen Lloyd (Eastbourne) (LD)
Even though there is a shortage of time, I crave your indulgence, Mr Speaker, so that I can give two tiny bits of context. First, I believe that all parties are at fault here: the Conservatives, Labour—the Labour Government did little for 13 years—and the coalition. No party has a clean hand. Secondly, I urge the Minister to address three possible options. One is Labour’s cost-neutral option for retirement at 64. The second is the indication of some kind of transition. The third is that the Minister could accept some change if the parliamentary ombudsman took some WASPI cases and concluded that the communication from Governments of all parties had been shocking.
Guy Opperman
The hon. Gentleman walked through the Lobby with me in 2011 to pass the Pensions Act when the Liberal Democrats was a party of financial discipline, and I believe that we took the right decision at that time. I assure the hon. Gentleman that the so-called cost-neutral option is far from it—it is neither workable nor cost-neutral. The Government are sticking to the position that has been in place since 1995. The Labour Government took the same position for 13 years as did the coalition Government in 2011.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Yet again, the Minister has tried to break things down to a binary choice between paying out lower pensions or increasing the state pension age. However, pensions are only one aspect of Government spending and tax-raising powers. His Government have chosen to reduce corporation tax, which will cost the taxpayer £50 billion by 2025, and other tax cuts will cost £15 billion. As my hon. Friend the Member for Glasgow North (Patrick Grady) said, the parliamentary arithmetic is in favour of some changes, so will the Minister take control and actually make some sensible choices?
Guy Opperman
The hon. Gentleman and I are going to disagree massively on economic theory and taxation. It is right to cut taxes for business, because businesses make the payments that pay for the public sector that we all support so much. The key choice is whether the Government increase the state pension age or pay lower pensions, but the hon. Gentleman seems unable to accept that, and I do not agree with his approach to taxation.
Chris Elmore (Ogmore) (Lab)
During the Minister’s rather disappointing and sadly predictable statement, he said, as the Prime Minister said to me last year, that no woman will wait more than 18 months for their delayed pension, but that simply is not true. Some women are waiting six years and seven months. Will the Minister explain in simple terms how it is that those women are wrong and the Government are right, because those women are waiting and waiting and are not receiving their pensions?
Guy Opperman
I refer the hon. Gentleman to the point I made in my statement. The simple fact is that the 1995 Act brought the state pension age to 65, the Labour Government then increased it, and the coalition Government accelerated the process. The reason why it was referred to as an 18-month acceleration in 2011 is that that was relative to the 1995 Act timetable.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I recently attended the launch of the WASPI campaign group in the Amman valley in my constituency, and they raised with me the seemingly arbitrary deadline of 31 March this year for those wanting to make a complaint to the DWP about the lack of notice of the proposed changes. Will the Minister confirm whether that is the deadline? If it is, what is the reason for it?
Guy Opperman
I cannot give the hon. Gentleman a precise answer, but I will write to him. However, it is the case that maladministration claims are being brought through the independent case examiner or the ombudsman, and I will write to him with the details.