State Pension: Women born in the 1950s

Alex Burghart Excerpts

Thursday 22nd November 2018 Westminster Hall

[Alex Burghart (Brentwood and Ongar) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bone. I do not wish to make lengthy remarks. This is a very important debate, and I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing it. Brentwood and Ongar is the most beautiful constituency in the world, but North Ayrshire and Arran has a chance of being called the second best.

This issue has affected a number of women in my constituency since I was elected last year. I very much understand what they have been through, but I would like to set out my thinking on the subject in the context of how we have arrived where we have.

In 1995, the then Government decided to equalise the state pension age for men and women to address long-standing inequality. That change was part of a wider social trend towards gender equality, but was also a decision that arose partly from European law and equality law cases relating to occupational pension provision. The last Labour Government, between 1997 and 2010, continued the policy and additionally determined that a state pension age of 65 could not be sustained for very much longer. That was the thinking that led to the Pensions Act 2007, which raised the state pension age to 66, 67 and then 68.

Under the stewardship of the former Member for Thornbury and Yate, an excellent Pensions Minister, the coalition Government introduced additional reforms in the Pensions Act 2011, which brought in a number of highly important reforms—not least auto-enrolment, which has benefited many people across all of our constituencies—and sought to address a growing imbalance. As my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), who was then Secretary of State, said at the time:

“Back in 1926, when the state pension age was first set, there were nine people of working age for every pensioner. The ratio is now 3:1 and is set to fall closer to 2:1 by the latter half of the 21st century. Some of these changes can be put down to the retirement of the baby boomers, but it is also driven by consistent increases in life expectancy. The facts are stark: life expectancy at 65 has increased by more than 10 years since the 1920s, when the state pension age was first set. The first five of those years were added between 1920 and 1990. What is really interesting is that the next five were added in just 20 years, from 1990 to 2010.”—[Official Report, 20 June 2011; Vol. 530, c. 45.]

[Sandy Martin (Ipswich) (Lab)]

My predecessor as MP for Ipswich is reported to have characterised the demands of the WASPI women as “intergenerational theft”. Will the hon. Gentleman dissociate himself from that comment?

[Alex Burghart]

I feel that the hon. Gentleman has achieved his purpose by putting such a claim on record. I am not aware of his predecessor having made such remarks and I am not aware of the context, so he will forgive me if I do not comment on them, although I am sure that he did not really make that intervention to get my response.

[Chris Elmore]

Although a potted history of where the state pension has come from and why changes have been introduced under whichever Government is interesting, the debate is not about that; it is about the fact that the Government have taken an archaic view and are essentially punishing women born in the 1950s, who have already faced discrimination through maternity laws, previous pension changes and national insurance changes. The debate is not about a potted history of why we are where we are. It is about some sort of redress for those women, who have already faced unnecessary burdens throughout their working lives. I am not trying to suggest that the hon. Gentleman is trying to move the agenda on, but the debate is not about why we have they pensions that we do. It is about the fact that the Government are accelerating the change and not giving any redress to the women affected, who quite frankly deserve it.

[Alex Burghart]

I thank the hon. Gentleman for his lengthy intervention. I am making my own speech and will make my points in the way that I wish to make them, although I am grateful to him for telling me how I should speak.

The major demographic change needed to be addressed. A girl born in 1951 was expected to live to 81, and a boy to 77. By this year, the Office for National Statistics cohort figures showed an increase of more than 10 years for newborn girls and more than 12 years for boys, to 92 and 89 respectively.

[Grahame Morris (Easington) (Lab)]

The hon. Member for North Ayrshire and Arran (Patricia Gibson), who secured the debate, has indicated that it is not about life expectancy. With due respect, can I mention an issue raised with me by my county council, which is healthy active life expectancy? In many of the constituencies that Opposition Members represent, healthy active life expectancy is considerably shorter than elsewhere. It is 10 years shorter in County Durham than in parts of the south and south-east. Surely we should be relieving the burden on women who are subject to such discrimination and injustice.

[Alex Burghart]

The hon. Gentleman makes a genuinely interesting point about healthy life expectancy, the figures on which should feature more largely in the debate than they often do. I acknowledge that point.

When Lloyd George first brought in the state pension in the Old Age Pensions Act 1908, it was at 70, when life expectancy was considerably lower.

[Graham Stringer (Blackley and Broughton) (Lab)]

I have no reason to doubt the hon. Gentleman’s statistics, but is it not just as interesting that the country is now three times as rich as it was when these ladies were born in the 1950s? When there have been other mistakes or crises in the economy, the Government have found money to bail out the bankers. If one compares the equity of this case to that, does the hon. Gentleman not think the Government should change their mind?

[Alex Burghart]

Presenting the case in the way that the hon. Gentleman does is slightly misrepresentative, because the cost of not bailing out the banks would have been extraordinarily high and would have seen businesses all over the country go bankrupt and people go out of work. It would have damaged their lives and would have become a cost to the state. I simply cannot see things in the binary way that he sets them out.

In 1942, William Beveridge wrote about the purpose of his pensions proposals, saying that

“giving to each individual an incentive to continue at work so long as he can, in place of retiring, is a necessary attempt to lighten the burden that will otherwise fall on the British community, through the large and growing proportion of people at the higher ages”.

Under the last Labour Government, it was acknowledged that we must not reach a position where women would be expected to spend 40% of their adult lives in retirement—that proportion is due to increase continually. No Government could have sustained that without dramatically curtailing services for younger people. On top of those demographic concerns, the Pensions Act 2011 had to deal with the circumstances that were dictated by the great financial crisis of 2008.

[Sir Peter Bottomley]

My hon. Friend talks about the introduction in 1908 of the state pension age of 70, but he could have told us that it was reduced to 65 in 1925, and that the inequality of the earlier retirement age for women was introduced, I think, in 1940. I am not arguing with him; I am trying just to set the scene.

[Alex Burghart]

I am grateful for my hon. Friend’s scene setting. Forgive me if I skipped a sentence earlier— I should have said that the retirement age of 65 was introduced in the Contributory Pensions Act 1925, so I am grateful to have been put right.

The Pensions Act 2011 dealt with the circumstances of 2008 and was introduced in the context of the emergency Budget brought forward by the then Chancellor in 2010, which offered the triple lock. To remind Members, that guarantees, each and every year, a rise in the basic state pension in line with earnings, prices or a 2.5% increase, whichever is the greatest. That policy meant that between April 2010 and April 2016, the value of the state pension rose by more than 22%, compared with growth in earnings of about 7.5% and growth in prices of 12%. Pensioners saw their incomes rise at almost double the pace of the average worker in that period. In 2018-19, the state pension is more than £1,450 a year higher than it was in 2010.

We know that the triple lock will be in place for the duration of this Parliament. For people reaching state pension age after April 2016, a new pension has been introduced at a single flat rate of £159.55 a week, which also has been triple-locked. All the women affected by the 2011 state pension age changes will draw their state pension under the new system.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I am quite confused. It is lovely to hear all this information about what happens when people retire, but we are debating the issue of those women being left in limbo, where they are expected just to fend for themselves.

[Alex Burghart]

I appreciate the hon. Lady’s point, which I am coming to.

The Pensions Act 2011 sped up the equalisation of women’s state pension age and required men and women’s state pension age to be raised to 66 by 2020. During the passage of that Act, the Government spent £1.1 billion—we might dispute the amount—on capping the maximum increase that any woman would see in her state pension age at 18 months, relative to the timetable set out in the Pensions Act 1995. Having heard the stories and spoken to some of the women involved, I know that this has been a hard transition and has caused difficulties and distress for many of them.

[Martin Whitfield (East Lothian) (Lab)]

On the point of equalisation, will the hon. Gentleman give way?

[Alex Burghart]

Yes, I will.

[Mr Peter Bone (in the Chair)]

Order. Before the hon. Gentleman gives way, let me say that I am grateful to him for making brief remarks, which have gone on for more than 12 minutes.

--- Later in debate ---

[Martin Whitfield]

I am grateful to the hon. Gentleman for giving way. He has given his analysis of the equalisation, but does he find it ironic that the women who were told that they had to work for an additional 18 months were given only five years to sort out that problem, but the men who were asked to work an additional 12 months were given seven years to plan for that change?

[Alex Burghart]

The hon. Gentleman makes a good point. Having spoken to women in my constituency, I understand the stress and difficulty that this change has caused. However, is clear that any attempt to reverse the policy would be extraordinarily expensive.

[Dr Drew]

Will the hon. Gentleman give way?

[Alex Burghart]

I look to you, Chair, to know whether I am entitled to take any more interventions.

[Mr Peter Bone (in the Chair)]

The hon. Gentleman is entitled to go on for as long as he wants, but I would prefer him not to.

[Alex Burghart]

That makes two of us, Mr Bone.

The hon. Member for North Ayrshire and Arran did not talk much about the cost of reversing Government policy, which is a shame. I understand that the SNP has costed the reversal of the Pensions Act 2011 at £8 billion, but other experts see that as a vast underestimate. It would actually cost the taxpayer £30 billion or more. There is no doubt that the Scotland Act 2016 gives the Scottish Government the powers that they need to address the issue.

[Patricia Gibson]

I am really disappointed that we have a speech from somebody who clearly has not read the Scotland Act 2016 and has just lifted the headline from the Daily Mail or whatever it is that he reads. There is no power in that Act to mitigate yet more Tory cuts. We already mitigate Tory cuts to the tune of tens of millions of pounds. Even if we wanted to, under section 28 of the Act—the hon. Gentleman can look it up—we do not have the power. Once again, I urge him to stick to the focus of this debate. He says that I did not talk about money, but I talked about what it has saved the Treasury. Let us spend that money on these women.

[Alex Burghart]

The focus of the debate is compensation for the women involved. It is a fact that the Scottish Government could do more than they are doing.

[Ross Thomson (Aberdeen South) (Con)]

I want this issue to be addressed at UK level—that is absolutely right—but devolution across the UK means that different choices can be taken by those who are in power. It is not just section 28 that gives the Scottish Government the powers to act. Section 26 allows them to make short-term payments to people who need them to

“avoid a risk to the well-being of an individual.”

I genuinely believe that the Scottish Government should act where they can, and they should not play politics with this issue.

[Alex Burghart]

I am sure we all agree that that was a very interesting intervention. Once again, the SNP wants all the power and none of the responsibility. The Labour party has made multiple suggestions about how it would address the situation, and many Opposition Members seek the full compensation package of £70 billion. They proposed in their manifesto to keep the state pension age at 66, which reversed the Labour decision of 2007. It would cost at least £250 billion more than the Government’s preferred timetable, and that is not covered by the party’s 2017 manifesto.

In addition, I understand that there are particular legal difficulties in reintroducing a different retirement age for men and women. Unquestionably, any amendment to the current legislation that introduced a new inequality would be challenged. This is an unsatisfactory situation. I admire the very good campaign that the WASPI campaigners have put together. Having met them, I know that they are principled people who wish to see policy change for entirely understandable reasons. However, I see the cost of change as absolutely prohibitive, and I see no solution from either Opposition party.