State Pension Age: Women

Alison McGovern Excerpts

Tuesday 15th November 2016 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Nuttall, and I thank my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) for securing the debate.

I find myself speaking on the Women Against State Pension Inequality women for, I think, the fourth time. Frustratingly, despite three previous debates and the launch of a UK-wide petition, which attracted 2,534 signatures in my constituency and would have attracted more had there been more time; despite legal action from the WASPI women being seriously on the table due to what has been, in effect, the mis-selling of this group of women’s pensions; and after a Work and Pensions Committee report concluded that

“more could and should have been done”

to communicate the changes, we seem to be no further forward. Everyone is feeling the frustration.

[Alison McGovern (Wirral South) (Lab)]

The situation is worse than the hon. Lady described. Five and a half years ago I stood in this Chamber with my colleague, my hon. Friend the Member for Leeds West (Rachel Reeves)—our then Front-Bench spokesperson—and challenged the Government on this issue. We did that again the year after and again the year after that. The hon. Lady described recent action, but the situation is even worse: we have been telling the Government that this is wrong since 2011.

[Patricia Gibson]

I thank the hon. Lady for that intervention, and I go back to my original point: after all this time, all this activity, all the warnings, and all the stories of hardship, we are still no further forward. When will this Government wake up to the fact that pensions are not a benefit? The hon. Member for Fermanagh and South Tyrone (Tom Elliott) described them as a promise. They are not a promise; they are a social contract, which has been cruelly and thoughtlessly broken. It is time for the Government to step up and take responsibility for the way in which this matter has been mishandled over a number of years, and stop dragging this misery out for the women caught up in this injustice.

--- Later in debate ---

[Jessica Morden]

Or maybe not in that case, but I will leave that there.

Another constituent explained to me the impact of her pension date being deferred for the second time with little time to make compensatory arrangements. She has worked for 45 years and paid her way, and the changes to the pension age, which mean that she is not in receipt of her state pension at 60, will deny her more than £38,000. She, too, has cancer and is considering whether she has to give up work.

[Alison McGovern]

My hon. Friend was also in the debate with me and our hon. Friend the Member for Leeds West (Rachel Reeves) back in 2011, so we are veterans of this campaign. Does she think that the Government should look at the net cost of any transitional arrangements? As she points out, many women who are missing out on their pension are now relying on disability benefits because of the incidence of ill health among the women affected.

[Jessica Morden]

My hon. Friend makes a crucial point. The change to the state pension age is affecting people who are ill and on disability benefits, and the Government should look into that.

My constituent who has cancer and is considering giving up work tells me that instead of seeing retirement as a positive development, she is dreading the financial insecurity after having worked for 45 years. These women had a picture of what their retirement might look like and it has been cruelly taken away. They did not expect the Government to change the rules. It would be good to know whether the Minister gets just how tough it is for many trying to find work at this stage, especially those who are ill or who have a disability. What will Ministers do for that group of women?

Women who have contacted me from Newport East add their voices to the calls for more reasonable transitional arrangements that are particularly mindful of those who are ill, who depend more on the state pension in retirement and who have limits on their ability to work. We need the Government to move on this issue and ease the impact of the changes on those most affected. The Government have an opportunity in the autumn statement. There are a number of options on the table and they are all ways in which the Government could act. We need them to take responsibility for what has happened to these women.

--- Later in debate ---

[Carol Monaghan (Glasgow North West) (SNP)]

Will the Minister give way?

[Alison McGovern]

Will the Minister give way?

[Richard Harrington]

I really cannot take any more interventions, simply because of the time. It is not in my nature, because I like interventions, but I really cannot.

The hon. Member for Paisley and Renfrewshire South (Mhairi Black) and others mentioned a notional national insurance surplus fund. The fact is that, in order to maintain the minimum work balance of the national insurance fund, a Treasury grant of £9.6 billion was made in 2015-16. Public sector finance is complicated. It is easy just to pick out one bit.

I wish to spend a little time discussing the Scottish National party’s proposals. Its independent report suggests rolling back the 2011 Act and returning to the timetable in the Pensions Acts of 1995 and 2007, but that is simply too expensive for the Government to consider. The report puts the cost at £7.9 billion, but my Department’s direct comparison for the same period is £14 billion. We can discuss it however many times, but our modelling is comprehensive and no one is trying to take advantage of anybody else. I really believe that the SNP report has underestimated the impact by somewhere in the region of 50%. It has done so by ignoring most of the costs and applying costs only to the five-year window from 2016-17. Costs beyond that horizon have simply been ignored.

The Pensions Act 2011 not only increased the female state pension age to 65 sooner, but brought forward the increase to 66 for both men and women. The increase to 66 generates significant savings of more than £25 billion, yet such an important element of the Act is omitted from the paper, along with the associated costings.

John Ralfe Consulting, which is independent, reviewed the SNP option. Mr Ralfe concluded that:

“Sadly, the SNP has not managed to pull a Rabbit out of its Hat. The real cost of Option 2”—

the SNP’s preferred option—

“is almost £30bn…The SNP can claim the cost is much lower simply because it has chosen to ignore most of the costs.”

I hope that demonstrates that that option is simply not deliverable.

In the limited time remaining, I shall address the notification issue. In answer to the hon. Member for Fermanagh and South Tyrone (Tom Elliott), between 2003 and 2006, the DWP issued 16 million unprompted products called automatic pension forecasts. People contacted the Department and it gave out all those forecasts. In 2004, the Department ran a pensions campaign that included informing people of the future equalisation of the state pension age. The Government made sure that the information was there, but I accept that it was not communicated by individual letter, as it was later when, as I am sure Members will be aware, millions of letters were sent out.

To say that nothing happened is not true. I have seen a leaflet on equality in the state pension age that was widely circulated, with many, many copies printed. A summary of the changes was issued and the general public were advised, although I accept that they were not informed by specific direct mailing in the way mentioned by some Members.

[Richard Harrington]

I certainly will not take that message back to the Prime Minister, because I do not accept that anything I have said today is incompatible with what the Prime Minister said on the steps of 10 Downing Street. Governments have to make difficult decisions, and the allocation of public spending is one of the most difficult.

It is not fair to say that the acceleration of the women’s state pension age has not been fully considered. It went through Parliament, there was a public call for evidence and there was extensive debate in both Houses. The Government listened during the process and made a substantial concession worth more than £1 billion. Finally, Parliament came to a clear decision. As it stands now, it would cost more than £30 billion to reverse the 2011 Act.

[Alison McGovern]

Will the Minister give way?

[Richard Harrington]

I am very sorry but I cannot give way because there are only three minutes remaining.

I conclude by reiterating what I have told the House and, indeed, the public before: we will not revisit the policy or make any further concessions. The acceleration of state pension age was necessary to ensure the system’s sustainability in the light of increasing life expectancy and increasing pressure on public resources. Mr Nuttall, I have left three minutes, as requested.