Pensions

Lord Boateng Excerpts

Wednesday 19th July 2017 Lords Chamber

[Baroness Buscombe]

I thank the noble Baroness for her question. We are trying to look at what a suitable state pension is that rises in line with life expectancy and is fair across the board. I know the noble Baroness is very keen on the whole issue of fairness across all the socioeconomic areas, as it were. We are quite clear in our minds, having studied Cridland, that the reality is that our strategy is built on a solid evidence base that has been aided substantially by the two contributions from John Cridland and the Government Actuary. In fact, Cridland’s review took into account evidence provided by over 150 stakeholders. The question of life expectancy has gone up for all socioeconomic groups over the last 30 years, and for all constituent countries of the UK over the past decades. As I say, John Cridland did extensive work on this and concluded that a universal state pension age remains the best system as it provides simplicity and clarity, which enables people to plan for their retirement. As I have said, Cridland concluded that there are no practical or workable ways to factor in variations in life expectancy, and there is no evidence of regional options being any fairer or more targeted at disadvantaged groups. Allowing early access to the state pension on a reduced basis would risk leaving people with an inadequate pension. We believe that disadvantaged groups should be assisted through the working-age benefits system rather than through changes to the state pension age.

It is important to add that we should not see the issue of increasing the state pension age as one whereby we are bringing in a situation that is necessarily making it more difficult for people as they grow older, given that older workers can bring decades of valuable knowledge and experience to the workplace. This is all seeming rather doomy, but actually we should celebrate the fact that life expectancy is increasing. There are now 8.7 million people aged 50 to 64 in work, which is a record high, and more than 1.2 million people aged 65-plus who choose to remain in work. In 2017, we launched the Fuller Working Lives strategy in order to encourage more employers to take advantage of the benefits that older people bring. We are calling on employers to boost the number of older workers, not write people off once they reach a certain age.

[Lord Boateng (Lab)]

My Lords, it may be that I am just getting older and more irascible and that I am just another angry old man, but I really do not see what there is to celebrate if you are old and poor and doing a manual job. It is perfectly true that life expectancy is increasing, but it is not getting any easier to get older. Surely we all understand that. What is lacking from the Statement and the Government’s response is any sense of justice around the process of being old, poor, disabled or a carer.

[Baroness Buscombe]

My Lords, I have to say I entirely disagree with the noble Lord. I listened to some of the comments made by his party in another place and I found them shocking in relation to the way that old people are referred to, as if old people are somehow rather useless and “worn out”—I think that was one of the expressions used at the other end. My young, who will be hitting retirement when this comes into fruition, would take that very poorly. We are looking for every opportunity to find ways to improve healthy working lives for everyone. If one was a little more positive about this, one would accept that it is totally unfair to ask young people today and tomorrow to be saddled with such an enormous burden as the party opposite want to impose on the young people of today and those who are very much in their youth. The idea of the party opposite is that we should add £250 billion to the debt because—even though it legislated to increase the retirement age to 68—it now says that, somehow, we are not being kind to people in poor health who are unable to work up to the state pension.

The welfare system provides a safety net for those experiencing hardship, with a range of benefits tailored to individual circumstances. Indeed, the Government are committed to supporting the vulnerable, spending around £50 billion a year on benefits to support disabled people and people with health conditions, which equates to more than 6% of all government spending. I recognise that this change will have a bigger impact on people with lower life expectancy, but we agree with Cridland that a universal state pension is important for simplicity and clarity for planning purposes. There have been substantial improvements in life expectancy at 65 across all socioeconomic groups over the last 30 years. This means that change is needed for fairness between the generations.