Oral Answers to Questions

Baroness Morgan of Cotes Excerpts

Monday 9th October 2017 Commons Chamber

[Mr Gauke]

I visit jobcentres all the time and what I hear is that universal credit is providing a more personalised support that is helping to get more people into work and that it is an important reform. Those who stand in the way of it are failing to help the people who need support.

[Nicky Morgan (Loughborough) (Con)]

T4. I know Ministers take very seriously the responsibility of supporting those with mental ill health to stay in work. One of my constituents has contacted me about his concerns. He is suffering from mental health challenges and is finding that the constant threat of redundancy or reorganisation is taking a toll on his mental health. Can the Minister tell me now, or write to me, to explain what obligations employers have to take into account their employees’ mental health when they are making such decisions?

[Penny Mordaunt]

I am sorry to hear about the experience of my right hon. Friend’s constituent. As she will know, the Prime Minister commissioned a review of mental health in the workplace led by Paul Farmer and Dennis Stevenson. Their findings will be reported to this House shortly.

Oral Answers to Questions

Baroness Morgan of Cotes Excerpts

Monday 20th February 2017 Commons Chamber

[Penny Mordaunt]

This consultation affords us an opportunity to look at a person’s whole journey. Generalising, the earlier someone can have a conversation with somebody about their ambitions and the support they will need, the better that journey will be, so I totally agree with the hon. Gentleman.

[Nicky Morgan (Loughborough) (Con)]

I suspect that the Employment Minister may not be aware of the Employment of Women, Young Persons, and Children Act 1920, but it is a concern to the Heritage Railway Association and others, who have had advice from leading counsel that young people cannot volunteer in industrial undertakings. We have now written to the Health and Safety Executive, but I wonder whether the Minister will meet me to have a conversation about it.

[Penny Mordaunt]

I would be very happy to meet my right hon. Friend about that issue. There is a huge amount of work going on to ensure that young people, but others as well, can make use of all opportunities to expand their horizons, and I would be happy to meet her about the specific points she raises.

Digital Equipment Ltd: Pension Scheme

Baroness Morgan of Cotes Excerpts

Tuesday 17th January 2017 Westminster Hall

[Corri Wilson (Ayr, Carrick and Cumnock) (SNP)]

I beg to move,

That this House has considered Digital Equipment Ltd’s pension scheme.

It is a pleasure to serve under your chairmanship, Mr McCabe, and to move this motion on behalf of my constituents. I am grateful to those Members who are here to take part in the debate. I am sure that they share my belief that this is an important topic.

Digital Equipment Ltd started in Massachusetts in the 1950s, in the days when computers were so big that they filled whole rooms. Its story is one of a dramatic rise and fall. From humble beginnings, it became a leading vendor of computer systems, including computers and software. By 1977, when Digital came to Ayr, it had grown into an entrepreneurial computer company boasting $1.5 billion in annual sales. In the ’70s and ’80s, computer technology changed rapidly, and Digital was at the forefront of that change. It quickly became a major employer not just in my constituency but across Scotland and the UK. At its peak, it employed around 1,500 people in Ayr.

Unfortunately, the company failed to adapt successfully after the rise of the personal computer eroded its minicomputer market, and it was acquired in June 1998 by Compaq, which merged with Hewlett Packard in 2002. Some parts of Digital were sold to Intel, but the plant in Ayr met its end. From the accounts given to me by my constituents, Digital was considered a good place to work, and it is remembered locally with fondness. It seems that its approach to technology—it was at the forefront of networking computers as peers—was mirrored in its corporate approach, with management structures that treated its people as equals.

The pension scheme was open to all employees and started paying pension from the age of 60 for both men and women. Although pension indexation was not guaranteed and Digital was not legally bound to award increases, the company made it its practice to do so. Staff were reassured that that custom would continue when Compaq acquired Digital in 1998, and Compaq continued to pay discretionary increases to pensioners. That trend was broken only following Hewlett Packard’s acquisition in 2002. In October 2006, the assets and liabilities of the Digital plan were transferred to the Digital section of Hewlett Packard’s retirement benefits plan, which provides for increases of pre-1997 pension rights at the discretion of the principal employer.

Since 2002, Digital pensioners in the UK have seen only two increases to their pre-1997 pensions, each amounting to 1%. In the past 14 years, the value of those pensions has stagnated. Those pensioners’ buying power has diminished and continues to shrink year on year, in contrast with their former colleagues in Europe. Pensioners in Hewlett Packard’s European subsidiaries have received regular cost of living increases, because only the UK Government have set an exclusion for pre-1997 contributions. The former staff of Digital in the UK do not feel quite so equal now.

I appreciate that HP is a huge multinational company that operates in around 150 countries and pays its pensioners in full accordance with the law in each of those countries, and I did not secure this debate to beat it about the head with a stick for not fulfilling its obligations to my constituents. However, I have great sympathy with those Digital employees who trusted their employer and paid into what they saw at the time as a great pension scheme, but have found that it does not support them in their old age and rely on Government support to get by. Many of my constituents paid into their Digital pensions for more than 20 years, and the bulk of their contributions were paid before 1997. Those who have not reached pensionable age do not yet know how little their pensions will be worth to them.

When this issue was first brought to my attention, I wrote to the Pensions Minister on behalf of my constituents to find out how the Government intended to resolve some of the issues with defined-benefit pension schemes such as the Digital scheme. I am grateful to him for his prompt response, in which he stated that

“the Government has no plans to force schemes to pay any increases to the pre-1997 pensions—beyond those that are already required by scheme rules”

and outlined that Government interference would be wrong and liability increases for which an employer had not planned or could not provide could lead to widespread scheme closures and risks. But I have a host of constituents who had planned for their retirement but have found that their pension scheme does not support them.

The Government have made it clear that, if the demands of the Hewlett Packard Pension Association, which has campaigned about this issue, were met, the additional liability on employers would mean that they would need to find extra money, and the Government do not plan to make them do that. I understand their position on that point. However, according to the Office for National Statistics occupational pension schemes survey, in 2015, there were around 5.2 million defined-benefit schemes in payment in the UK with rights accrued before 1997, of which more than 90% paid an increase. Just 8% of schemes like Digital’s used their discretion to deny any cost of living increase to their pensioners. Despite the fact that indexation is not mandatory for rights accrued before 1997, it appears that many schemes voluntarily apply some form of inflation protection to pensions in payment, and many apply limited price indexation retrospectively to service before 1997.

[Nicky Morgan (Loughborough) (Con)]

The hon. Lady is making an excellent case on behalf of her constituents. Does she agree that not only Digital or Hewlett Packard employees but those of other companies are affected? She mentioned that only 10% of defined-benefit pension schemes do not pay indexation. Campaigners are asking not for indexation to be backdated but for this issue to be corrected going forward. Does she also welcome the fact that the Pensions Minister has agreed to meet some of my constituents? I welcome the way that he is engaging with this debate.

[Corri Wilson]

The right hon. Lady makes a valid point that campaigners are not asking for indexation to be backdated, which would cause considerable difficulties for the companies involved. I will come to that point later.

I empathise with Hewlett Packard and other businesses that inherited defined-benefit schemes through expanding their operations during the boom years. They are all experiencing a global turnaround and an extremely challenging marketplace. Difficult decisions have to be made, and looking after the former employees of businesses that have long since been subsumed has to be balanced with current business concerns and the welfare of current workforces. Hewlett Packard is breaking no laws, and I understand that it fully appreciates the impact of its decision on its pensioner population and that is taken into account during annual reviews. However, I have greater sympathy for the concerns of the pensioners who have pensions with HP that will be frozen due to not being covered by legislation, and I would like the UK Government to take action to address the problems with defined-benefit schemes.

The Hewlett Packard Pension Association claims that withheld cost of living increases have so far cost pensioners an average of £24,000 compared with their colleagues whose contributions were made post-1997. That has led to severe financial hardship for many of those pensioners and has resulted in them being unable to afford an ordinary living pattern, being on the verge of poverty and requiring Government subsidies in the form of income support benefits.

Oral Answers to Questions

Baroness Morgan of Cotes Excerpts

Monday 9th January 2017 Commons Chamber

[The Minister for Disabled People, Health and Work (Penny Mordaunt)]

PIP is slightly different. For example, someone’s needs might increase and they need a reassessment to receive more support under PIP. The Green Paper affords us the opportunity to look at all these things together. I think there are opportunities for PIP perhaps to have a lighter assessment, but we need to get the whole process right.

[Nicky Morgan (Loughborough) (Con)]

T7. I wrote to the Pensions Minister on 16 December about my constituent, Ruth Saunders, who drew to my attention the fact that there are certain defined-benefit pension schemes where increases are not being paid for amounts paid in before April 1997. He very kindly responded on 5 January. The point is that there is discrimination because only 10% to 15% of companies are not paying these increases. The issue is whether the amount can be corrected going forward. I would suggest that this is one of the burning injustices that the Prime Minister was talking about, and I would like a meeting with the Minister and my constituent to discuss the issue further.

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I would be delighted to have a meeting with my right hon. Friend and her constituent.

Child Support Agency

Baroness Morgan of Cotes Excerpts

Wednesday 11th July 2012 Westminster Hall

[Nicky Morgan (Loughborough) (Con)]

It is a pleasure, Mr Weir, to speak in the Chamber this afternoon with you in the Chair. I am not sure whether we are setting a record here, but women outnumber men by about five to one at the moment. That is an extremely good sign on an afternoon when Parliament is debating sitting hours.

This afternoon’s debate is about reform of the Child Support Agency. When I was elected, I expected to deal with a number of cases relating to welfare benefits, the United Kingdom Border Agency and organisations such as Her Majesty’s Revenue and Customs. What I did not expect was that one of my largest and most enduring case loads would relate to the Child Support Agency. In just over two years, my constituency office has dealt with 70 individual cases in which something has gone wrong, and I am just one Member of Parliament. In the borough of Charnwood alone, in December 2011 the CSA had a live case load of almost 2,600 cases.

Before I go into the details of some of those cases, it might be helpful if we consider why the CSA was set up in the first place. Back in 1993, when John Major’s Government introduced the agency, the aim was for it to pursue parents who failed to support their children financially. Savings were expected because parents claiming benefits from the state would instead find their income supplemented by a maintenance arrangement paid by the non-resident parent. I support that intention, but as I aim to show in this debate, it is clear to me and doubtless to other hon. Members that the system is not working and must be reformed, as children, through no fault of their own, are not receiving the financial support they need or deserve.

Despite an often heavy-handed approach, and costs of £440 million every year, half of children living in separated families in this country have no financial maintenance support in place. The CSA is expensive to run, with 40p being spent to collect each £1. Those costs often result from the Child Maintenance and Enforcement Commission running two separate, failing IT systems, and an additional 100,000 clerical cases—that is, paper cases—that the system cannot cope with.

Recent CMEC statistics show that 48% of complaints were from non-resident parents, and 50% were from parents with care, so it is clear that no one is happy with the current system. CSA data also show that more than 5,000 past and current CSA cases remain, with more than £50,000 in arrears. I congratulate CMEC on producing an excellent set of statistics. It should be congratulated on the transparency with which it produces its figures. It is a model for many other non-departmental public bodies and other arms of Government to follow.

Despite the statistics, there has been some progress, with deduction orders, under which money is removed directly from debtors’ accounts, having trebled since 2009. We need a simple and flexible system that supports families in making and sticking to their own arrangements, if that is possible, and that steers families through a tough time, keeping negotiations constructive and preventing a difficult family break-up from becoming worse or potentially destructive.

The problem with the current system from my perspective is, first, that it seems to invite conflict, and is often accused of being heavy-handed and far too arbitrary. The evidence shows that the most effective and enduring arrangements are ones that parents come to themselves. Secondly, the CSA does not offer value for money; and thirdly, enforcement may be ineffective, with huge arrears totalling nearly £4 billion in March 2012. A specific issue that I suspect other hon. Members will also speak about relates to self-employed partners paying child maintenance.

[Mr Mark Spencer (Sherwood) (Con)]

I congratulate my hon. Friend on securing this debate. Does she recognise that at the moment the system seems to penalise those dads and absent parents who want to do the right thing and want to contribute to their children’s welfare, but the CSA seems to have no power to grab hold of those who want to avoid the system, and to make them contribute to their children’s lives?

[Nicky Morgan]

I thank my hon. Friend for making that point. He is absolutely right, and I will refer to a couple of constituency cases in which the non-resident parent, usually the father, is trying to do the right thing, perhaps by looking after the children on one or two days a week, but that is not recognised, when other people seem to be able to play the system. That is certainly something we in my constituency office have found.

I want to bring a human element to this debate. Numbers and statistics are all very well, but what I and other hon. Members—including the Minister—see in our constituency casework is the negative effect that the CSA is having on people’s lives, particularly children. I do not expect the Minister to comment on the individual cases I am about to raise—she has been good enough to see me twice with her officials to discuss two very difficult cases—but I feel that I owe it to my constituents, who often come to see me and my caseworkers in a state of some distress, to talk about their cases.

I shall start with poor enforcement. Karon Hollis is the mother of four children. All have the same father, who is self-employed and was using the accounting system to tell the CSA that he does not earn enough to pay her anything but the bare minimum of £5 per week—£5 for four children. Ms Hollis gathered evidence to show that his lifestyle could not possibly match what he was saying about his finances, but the CSA did not take her evidence, or lost it on the several occasions when she sent it in. Ms Hollis asked for our help with putting her evidence to the CSA, which has resulted in an assessment of £50 per week—10 times the amount she was originally getting. Why must ex-partners so often have to become detectives to get a fairer assessment?

My second case relates to Tracey Warren. It is currently with the adjudicator, who is carrying out a formal investigation. Ms Warren told the CSA 18 months before her ex-husband left the country that he was planning to go, and kept doing so, but nothing was done to get him to pay before he went. He has now moved to the middle east, and because Britain does not have a reciprocal arrangement with the country in question, the CSA cannot chase him for payment. The same issue has arisen in another case, in which the mother has moved to China.

Moving on to cases where paternity is an issue, I have had two cases in which the father queried the paternity of the child and, as a result, the whole CSA claims process ground to a halt. I cannot say whether that is a delaying tactic, but in one case, after a father had asked for a DNA test, he heard nothing further from the CSA for three years, when they contacted him to say he was £16,000 in arrears. Surely an efficient and effective system should not allow such a long period of silence to occur. Paternity should be swiftly established to allow the CSA system to proceed, or the CSA to cease involvement if paternity is not proven.

On arrears being allowed to accrue without the CSA seeming to notice, Mr B in my constituency had a deduction of earnings order so that maintenance was deducted from his salary every month. Unfortunately, the employer failed to pass that amount on to the CSA, and the CSA failed to notice. When the employer went into administration, my constituent, Mr B, was told by the CSA that he would have to pay the outstanding amounts all over again. He did eventually recover a percentage of the debt as part of the administration process. What I cannot understand is why the CSA failed to spot that it was not receiving the money from the employer in the first place.

An element of flexibility is needed in the system. My constituent, Christine Barrell, is claiming maintenance from her husband, who is self-employed. He has been “nil assessed”, which Mrs Barrell is challenging. Her husband’s business accounts, which will support her appeal, are not due until the end of the year, but the CSA needs her appeal within the next 28 days. Can that period be extended to reflect the particulars of this case?

Finally, I want to highlight those cases that I have already mentioned, thanks to the intervention by my hon. Friend the Member for Sherwood (Mr Spencer), in which the non-resident parent is trying to do the right thing and to maintain contact with their children by seeing them regularly. They often feed and clothe their children, as well as incurring transport costs to see them and to return them to the parent with care. But those costs are not reflected in the maintenance calculation, and the parent with care may not agree to the calculation being adjusted to help to meet those costs. In one case, the CSA recommended that the parent with care should share the child benefit they are receiving, but that was met with a flat refusal.

I hope I have shown that we have a system that no one seems satisfied with; so where do we go from here? In a recent survey carried out for CMEC, two thirds of parents with a family-based arrangement said they were happy with their situation. Only one third of CSA clients said they felt the same. Almost 90% of non-resident parents complied with their own arrangements, compared with just under two thirds of those who had payments assessed and enforced by the CSA. Most parents with family-based arrangements considered them to be fair, whereas only 42% of those whose payments were calculated and enforced by the state system did so. More than 50% of parents who use the CSA say that they could make their own arrangements if only they had the right help and support.

I welcome the Government’s proposed collaborative approach. Hopefully, it will mean that separated parents are able to avoid the conflict that often comes with CSA involvement by making their own, family-based maintenance arrangements whenever possible, and the Government have already committed £20 million to developing better co-ordinated local support services to help that happen. The money will be used to work with voluntary and community groups to make it easier for parents to navigate existing support, and to consider what additional help is needed.

There has been criticism of the charges that will be introduced to allow people to access the statutory system. The previous Government introduced a wide-ranging power to charge all parents as part of the Child Maintenance and Other Payments Act 2008, and the coalition is building on that legislation and on Sir David Henshaw’s report to the previous Government on the CSA, and implementing those charging proposals. I understand that there will be heavy discounts for those on the lowest incomes, and total exemption when domestic violence has occurred.

In her response to the debate, will the Minister say more about those charging proposals? Who will be affected, how will they work, and when will they be introduced? Will she also address an issue that has been raised with me by Gingerbread: what will happen to new and existing cases when the new system comes into force? We hope that parents who separate after the new system is introduced will be signposted to a range of support services and encouraged to make a private arrangement, but what about parents who are already caught up in the system? If, for example, a deduction of earnings order is in place, what will happen to that when the new system comes into force?

In conclusion, I hope I have shown that the current statutory child support system needs speedy reform. I appreciate, however, that it is difficult for any Government system to cope with the complexities of family life. Parenting is hard enough for both mothers and fathers, without having to make allowances for the access arrangements, work pressures and new relationships that make every situation unique, and that is why any child support system will, perhaps by necessity, be a fairly blunt instrument.

[Jessica Morden (Newport East) (Lab)]

The hon. Lady is making a powerful case and we all agree that changes to the CSA are needed. Does she feel that it is important that the new system works smoothly immediately—something that has foxed all previous Governments? At a time of cuts and rising living costs, child maintenance really matters to families. We must not risk making things worse by getting things wrong and making the situation even more difficult for those families who are on the breadline.

[Nicky Morgan]

I think the hon. Lady might have read the last sentence of my speech, and she is absolutely right. It will be interesting to hear speeches from all parts of the House, but we probably all want to get to the same place and ensure that families who cannot make arrangements receive help to do so, that children get the money they need in order to have the essentials required in life, and that families get the support they need. The hon. Lady is right to say that any transition must be as smooth as possible, and I am sure the Minister will address that point. We are talking about IT systems and family arrangements, and although things will never be entirely smooth, we do not want to see families put in a worse position than they are already in, or the unhappiness that I have already mentioned.

It is right to encourage families to make their own maintenance arrangements. However, the Government should consider how we can become better at getting assessments right in the first place and at enforcing arrangements when things go wrong, and how we can best help families to resolve such issues themselves. I hope to hear from my hon. Friend the Minister on those points.

As I have already hinted, it would be a terrible legacy if, in addressing all the problems I have highlighted, we were to introduce new instabilities into the new system. I look forward to hearing from the Minister about how lessons have been learned and how the system will avoid the situation—this is where I started my speech—in which half the children in this country who live in families that have separated have no financial maintenance support in place.

[Several hon. Members]

rose—

Specialist Disability Employment

Baroness Morgan of Cotes Excerpts

Tuesday 10th July 2012 Commons Chamber

[Mr Speaker]

Order. There is extensive interest in this very important subject, but there is also enormous interest in the second day of the Second Reading debate on the House of Lords Reform Bill, which I am inclined to accommodate, so I shall try to get in as many as I can now, but I need short questions and short answers.

[Nicky Morgan (Loughborough) (Con)]

I welcome the Minister’s statement and, in particular, the emphasis on Access to Work, especially for those with mental health disabilities, in which I am specifically interested. Will she say a little more about how Access to Work is helping those with mental health problems to have fulfilling jobs?

[Maria Miller]

My hon. Friend takes a great interest in the area and will be pleased to know that we are doing more to market Access to Work to people who have learning disabilities or mental health problems. Access to Work is an excellent scheme, but even more people with mental health problems need to participate in it, and we have an active marketing programme behind achieving that.

Employment Support

Baroness Morgan of Cotes Excerpts

Wednesday 7th March 2012 Commons Chamber

[Maria Miller]

The hon. Gentleman might not have heard me say earlier that, in the last major round of redundancies, which took place under the Labour Government in 2008, no process was put in place to track the progress of individuals who were offered support. Indeed, we found that some 40% of the individuals involved took retirement or early retirement. I want to ensure that people have the right support, and that they can see that there is an opportunity to move forward. Now, more than ever, it is important that we get this right. The last Government ducked these decisions; they did not take the difficult decisions and they did nothing to ensure that disabled people could get the job opportunities that they needed.

[Nicky Morgan (Loughborough) (Con)]

The Minister rightly recognises the success of residential training colleges such as the Royal National Institute of Blind People college in my constituency. Will she reassure me and other Members who have such colleges in their constituencies that departmental officials will make themselves fully available to the colleges as they explore alternative ways of working and being funded?

[Maria Miller]

My hon. Friend and I have had many conversations about the importance of the college in her constituency. The simple fact is that residential training colleges up and down the country provide important specialist support for disabled people to get into employment. I have already given a clear undertaking that we are going to provide funding for those residential training colleges through to the end of the 2012-13 academic year. Indeed, my officials are already meeting the heads of those colleges to ensure that we have a clear plan for retaining that expertise in the new funding environment.

Welfare Reform Bill

Baroness Morgan of Cotes Excerpts

Wednesday 1st February 2012 Commons Chamber

[Maria Miller]

The hon. Lady and I know that it is very difficult for us to sit in judgment over parents. Family breakdown can be caused by many different things and we need to make sure that the support is there for parents to come together and work together. All our evidence suggests that 50% of people in the CSA system would rather not be there and would rather be working in the way I have described.

[Nicky Morgan (Loughborough) (Con)]

The Minister is absolutely right about the need for collaboration-based arrangements. To respond to the previous intervention, is not the inflexibility of the system one reason why non-resident parents often do not like paying? The constant barrage of letters, telephone calls and everything else means that they feel more and more reluctant but more and more pressured to pay. My constituency cases suggest that collaborative arrangements are sustainable and have worked.

[Maria Miller]

My hon. Friend is right that the inflexibility in the system does not reflect true family life. Every single family is different. It is difficult to reflect that in a statutory system, which is why encouraging more people to work on those arrangements together, whether the issue is finance or access, is the way for children to get the best results after family breakdown.

Oral Answers to Questions

Baroness Morgan of Cotes Excerpts

Monday 23rd January 2012 Commons Chamber

[Maria Miller]

That was an important and useful debate to ensure that the work that we are doing in government is made clear. I have asked officials to look at the situation that he raised regarding Wythenshawe to make sure that the appropriate sales teams are in place. He asked when we are going to talk about our long-term decisions, and I can assure him that we will respond on that as soon as is practicable. We are in year four of a five-year plan, and it is important that we have those new plans in place.

[Nicky Morgan (Loughborough) (Con)]

I was pleased that the Minister affirmed her commitment to residential training colleges, including the college of the Royal National Institute of Blind People in my constituency. She may be aware of recently published figures from the Select Committee on Work and Pensions showing that 1,000 people who have suffered sight loss are still looking for opportunities to be helped back into work. Does she agree that those colleges provide a valuable opportunity to help those people find employment?

[Maria Miller]

I pay tribute to the work that my hon. Friend does to support her local residential training college. I absolutely agree that colleges such as the one in her constituency have a valuable role to play, particularly to offer specialist advice and support. I hope that the commitment that I have given the colleges to ensure provision through to the summer of 2013 will help them to plan for a future in which we focus more on individuals than on institutions.

Pensions Bill [Lords]

Baroness Morgan of Cotes Excerpts

Monday 20th June 2011 Commons Chamber

[Nick Boles (Grantham and Stamford) (Con)]

First, I should tell Members that I am absolutely not a pensions expert; I have never spoken on the subject before in my life. I have therefore found this debate particularly enlightening, and I want to single out the speech of the right hon. Member for Croydon North (Malcolm Wicks) as it was extraordinarily illuminating and provoking. I hope Ministers will look at the issue he raised for the long term—after this Bill has been passed and changes have been made—and address the disparity between people who start work in their teens and those of us who are lucky enough to start work in our early to mid-20s.

I want to focus not so much on the detail of pensions, but rather on the context in which the Government are taking this Bill and its measures through Parliament. It is important to address that context because it explains so many of the difficult, controversial and even painful decisions the Government are making. It also informs and defines the approach taken by Her Majesty’s Opposition, which can be summarised by the refrain we have heard so eloquently and passionately from so many Opposition Members’ mouths tonight: it just is not fair.

Let us first consider the context from the Government’s point of view. Our strategy is simple. It is based on our reluctantly coming to the understanding that everyone in this country will suffer more—will suffer most, indeed—if the Government do not quickly deal with our unsustainable public finances. I use the term “unsustainable public finances” rather than “deficit” because it is important to understand that this is not just about dealing with the current deficit; it is also about putting in place a long-term platform of sustainable public finances. It is not about what we need to do between now and 2015; rather, it is about what we need to put in place for our country for the next two, three and four decades. The insight that everything must serve this overall objective of putting our public finances on a sustainable footing—

[Nicky Morgan (Loughborough) (Con)]

Will my hon. Friend give way?

[Nick Boles]

Yes, I am happy to give way to my hon. Friend—even in mid-sentence.

[Nicky Morgan]

I thank my hon. Friend for giving way. He might address my point later in his speech, but does he agree that this issue is about not just public sector finances but a pension system that all our constituents can understand? Pensions is a very complex subject, as the Secretary of State said in opening, and many people do not understand the current system. Constituents who are in great need approach us when they finally receive their pension calculations and realise they might not have enough for the retirement they had planned.

[Nick Boles]

I entirely agree. Indeed, clarity, simplicity and dependability are what we seek to achieve in all areas of public policy, and when we do not have that we end up with the public finances we inherited from the last Government.

We should not be shy about admitting that the state of the public finances is leading us to make a whole series of decisions that unquestionably have rough edges. Nobody on the Government Benches wants to withdraw child benefit from people paying the higher rate of income tax. Nobody on the Government Benches wants to withdraw education maintenance allowance from people hoping to stay on in education after the age of 16. Nobody on the Government Benches wants to charge students of the future the full cost—up to £9,000 per annum—of studying at university. Nobody on the Government Benches wants to put up VAT, which is paid by everybody in this country regardless of their income. We do not want to do any of those things, and not a single one of those decisions has no rough edges, not a single one of those decisions has no victims and not a single one of those decisions treats everybody in the country equally.

We have never claimed that these decisions have no rough edges—that they do not have victims, and that they treat everyone equally—but we have claimed, and do claim, that each of the decisions is an essential part of the overall objective of putting our public finances on a sustainable basis. If these decisions are not made and implemented in full, all the people affected by them—the very same young people who will not be getting EMA, the very same students who will be paying tuition fees, the very same pensioners who will be receiving their pensions a bit later—will suffer far more.

The Opposition’s stance is very revealing. They could have decided to restrict their opposition over the past year and during the rest of this Parliament to those matters on which they have a profound ideological dispute with the Government. They could have decided to oppose the benefits cap, whereby in future nobody will get more than average income from benefits and which will make it clear to people that the only way to earn more than the average is to work for a living. They could have decided to oppose the universal credit, which demonstrates our view that we have to remove excessive means-testing from the benefits system in order to make work pay. They could have decided to oppose immigration controls, which illustrate our view that we need to restrict the entry of people into this country, so that it is British people who can go out and get the jobs that our recovery creates.

The Opposition could have decided to focus on and restrict their opposition to those matters, about which they have genuine ideological differences of opinion with us that I entirely respect. However, instead, they are choosing to oppose all the measures we are introducing—even those that are driven not by an ideological programme or by an attempt to reshape the way this country operates, but by a wish to rescue this country from a road to ruin.

--- Later in debate ---

[Mr William Bain (Glasgow North East) (Lab)]

I would like to say that it is a pleasure to follow the hon. Member for Grantham and Stamford (Nick Boles), but that might be pushing it somewhat. He made a characteristically rumbustious and entertaining contribution and I would like to respond directly to some of the issues he raised. He spoke about rough edges, but the view that we have heard from Opposition Members and even from some Members on the Government Benches is not of rough edges but of rough justice for women aged 56 and 57. He spoke about the road to ruin, but we see other countries engaged on a different path, as President Obama said when he spoke to us in Westminster Hall. Those countries are engaged in growing their economies more. The hon. Gentleman spoke about fairness, but may I say to him that fairness and restoring trust in politics are not about making a commitment in a coalition agreement 13 months ago and cynically breaking it in the way that this Bill will if it receives a Second Reading tonight.

Reform of the pensions system is best conducted with the agreement of as many shades of political and other opinion as possible. It is far too important for short-termism, and the principles and as much of the detail as possible should be above partisan politics. That is why there are some aspects of the Bill that Opposition Members could support, but the glaring unfairness at the heart of the Bill in its treatment of half a million women in the acceleration and equalisation of the state pension age in 2018 means that I will be opposing it tonight.

Rising life expectancy and other demographic changes mean that there is agreement across the House that the state pension age should change to reflect the longer period of retirement that people in younger age groups are likely to enjoy. There are currently 10.5 million people aged 65 and over, compared with just 5.5 million in the same age group in 1951. It was the previous Government who established the Turner commission to examine in detail on a non-partisan basis the necessary changes in the state pension age in a way that was fair to future taxpayers, just for people approaching retirement, and long term in its scope, to allow people to save for their retirement in the full knowledge and with sufficient notice of changes in the state pension age.

The Bill, particularly in part 1, breaks those three basic principles by adjusting the settlement in a way that hurts 500,000 women across the country who were born between December 1953 and October 1954, including 900 in my constituency. It fails in the aim of delivering an improved basic state pension. It also breaches the terms of the coalition agreement, which ruled out any equalisation of the state pension for women before 2020.

[Nicky Morgan]

On that point—I speak as a former lawyer—my understanding of the explanation given earlier this afternoon was that there was a legal reason that the coalition agreement could not be fulfilled as it was drafted. Is the hon. Gentleman honestly saying that his Government would have proceeded with something that is deemed to be illegal, however desirable?

[Mr Bain]

I am grateful for that intervention. The way to get round all the problems, legal or otherwise, is to follow the excellent suggestion that my hon. Friend the Member for Leeds West (Rachel Reeves) has already made in the debate and will restate in her winding-up speech: prevent this unfair change from going ahead and instead look at some of the accelerations in pension age that can be made, particularly in respect of people retiring at 66 or 67, which can also save money for the Exchequer.

The Minister and the Secretary of State did not spell out to the House what the legal problems were. Some Members have speculated that they relate to matters of European law. I hope that when the Pensions Minister winds up the debate, he can outline the legal issues. They certainly were not outlined to the country when the coalition agreement was signed, or during the press conference—the love-in—in the rose garden thereafter.

The Bill also fails the test of fairness, because it places too great a burden for savings on one group of the population when the Government should be looking elsewhere, such as at equalising state pension eligibility at 67. As my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) pointed out, even before these deeply unjust proposals were announced by the Government, women had been disadvantaged in pension provision for some time. As she said, median pension saving of a 56-year-old woman is just £9,100, almost six times lower than that of a man which, on average, is £52,800. Research by Prudential establishes that the average woman retiring this year can expect an annual income in retirement of £12,900 per annum, compared with an expected income of £19,400 for the average retiring male. Further, the same study found that 28% of women planning to retire this year have no savings in private or company pension schemes, compared with just 10% of men.

The previous Government’s strategy of seeking to link the basic state pension to earnings and making private pensions opt out instead of opt in sought to redress the balance and would have been implemented if we were in government. More safeguards should have been established through the Bill, rather than entrenching inequity, as it appears to do. Following the Bill, women affected will have less than seven years to react to the changes, and may be less likely to be in a pension scheme at all, with less disposable income to supplement savings for retirement, and with greater care responsibilities. Women are also much more likely to wind down in later years of employment, be that to care for elderly relatives or for young grandchildren. Furthermore, it will be more difficult for women to move from part-time to full-time work, or indeed back into employment of any form, given current economic conditions. The Office for Budget Responsibility’s projection of 310,000 public sector job losses in the coming years will disproportionately impact women, who make up 65% of that work force.

The Prime Minister said on Radio 2 today that retirement should be

“a process rather than a cliff edge”

and that

“many people, when they get to retirement, would like to go on doing some work or part-time work”.

The reality is that the cliff edge imposed by the Bill is an unfair burden on 56 and 57-year-old women who have done the right thing and saved for retirement but are now being grievously abandoned by the Government.

Recent decades have seen a change in employment patterns among women. The dated notion that a woman’s role is to stay at home and look after the children has been well and truly dispelled, but for women in their late 50s who are due to be affected by the proposals, such changes in social attitudes may not have been reflected in the earlier parts of their working lives. The Government’s reckless haste in changing the state pension age for those women makes adapting to that change even more difficult.

As Carers UK indicated last month, these changes will have a disproportionate impact on other social groups. About 58% of carers—3.4 million people—are women, as are one in five carers aged between 54 and 60. Of the estimated 662,000 carers who combine part-time work with caring, 89% are female. For carers, there is little opportunity to make contributions to a private pension plan or savings, even if they are in part-time employment. For women who are carers, provisions in the Bill collude to put them at even greater disadvantage.

In responding to the comprehensive spending review last October, Joanne Segars, chief executive of the National Association of Pension Funds, noted that any changes must include an improved and secure basic state pension. Savings from the Bill’s proposals on the state pension age will not even exceed £l billion until 2018-19, which is well outwith the range of the Government’s fiscal consolidation plan. The Bill does not spell out how they plan to increase the basic state pension for all. Again, there is little in the way of incentive and assistance for people who will now have to work longer. As the Equality and Human Rights Commission notes:

“Rather than focusing on increasing men’s State Pension Age and perpetuating the gap between men and women, Government should focus on how to help women and men extend their working lives, if they wish to do so, and thus reduce the disadvantage that women face in the workplace by shortened working lives.”

Women will also be penalised by the design of the Bill’s provisions on auto-enrolment in pension schemes, which will reduce the number of people enrolled by almost 600,000.

This is a Bill of broken promises from a deeply dysfunctional Government. It changes the terms of the social contract between women, low-paid workers and the state, with insufficient notice and scant regard to the effects on rising inequality. They are unjust proposals that bear the imprint of the Chancellor, despite having nothing to contribute to his deficit reduction plan during this Parliament. They put the burden of further departmental savings on the shoulders of too few people, and those people have worked and saved for the pension contributions they have accrued. That is why the Bill deserves to be opposed in the Lobby tonight.