Social Security

Alison Thewliss Excerpts

Monday 4th February 2019 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

The pensions system is overly complex. People no longer work in one job for life; they have multiple jobs over a career. Keeping on top of lots of different pension schemes over a number of decades makes it incredibly difficult to plan for the future. Some people find it very difficult to make savings due to other financial pressures—indeed, before I came to this place my pension contribution was minimal as a huge chunk of my income went instead on paying nursery fees. I am sure that many younger women will have found the same. We are storing up problems for the future.

As my hon. Friend the Member for Airdrie and Shotts (Neil Gray) said, the Scottish National party has long argued for an independent pension commission, because this issue is too important to be kicked around by Governments of different political persuasions. People need to be able to make plans and future Governments need to be ready for the challenges that an ageing population will bring.

This Government have acknowledged the complexity of the pensions system, but they have not really done enough about it so far. Many of my constituents have contacted me as part of the campaign to show their support for a Government-funded pension dashboard, but the Government are still dragging their heels. The Department for Work and Pensions has indicated that it would prefer for the project to be led by industry, but there are many reasons why that is problematic. It would lead to a patchy system that would not encompass everything. If the Government do not step up and supply data from the Treasury on state pensions and non-contributory public sector pensions, that effectively renders the project useless.

The public’s relationship with the Government relies on a series of contracts. When people trust Government bodies such as Her Majesty’s Revenue and Customs to give them accurate information about the tax that they owe and then in good faith pay that amount, they do not then expect there to be all kinds of hoops to jump through to access their state pension. Stay-at-home mums, for example, need to be aware that they have to be registered for child benefit to clock up credits towards their state pension record. That is not well enough understood. The Government need to take extra steps to ensure people understand what their entitlement rests on.

People expect—this is not unreasonable—that a competent Government will inform them of their obligations and allow them to effectively plan for the future. You only have to ask one of the 3,400 WASPI women in my constituency how devastating it is to find out, and not because the Government have made any special effort to tell them, that retirement will come much later than planned. Rosemary Dickson, a leading light in the WASPI campaign in the west of Scotland, has been out on the streets. That will continue with a demo on 23 February to let people know, because too many women still do not know about it. There have not been 3,400 women at my constituency surgery to complain about it. The UK Government at the time waited 14 years before beginning to tell women that their retirement would be postponed. Women have been let down across the board by successive Governments in this place and that needs to stop now.

The WASPI women cannot retire when planned and they cannot spend time with their grandchildren as they planned. Many now struggle to make ends meet. The impact of this policy is already bearing out in labour market figures. According to the annual survey of hours and earnings, the gender pay gap for over-60s has increased by nearly 3% in just one year. The gender pension gap is nearly 40% in Scotland. The system is clearly failing women. If the Government are not willing to act to close the gap, they should devolve the powers and let the Scottish Government do it for them.

I am sure there will be those on the Government Benches who would say that the gender pension gap does not really matter, because it is the overall household income that counts. However, there are many reasons that a woman may not want to rely wholly on her partner for financial support. Relationships can and do break down, and it is most often women who are left worse off when they do. There is also a failure to recognise that many more women will be in same-sex relationships and may be doubly losing out as a result. They are reliant not on a man’s income, but on two female incomes in the household. That needs to be recognised, too.

Auto-enrolment has increased the number of people saving for retirement, but the policy needs some work to be more inclusive of those who need it most. With the trigger frozen at £10,000, those earning below that threshold—again, mainly women working part time—are missing out on auto-enrolment. The scheme is of even less use to those women working in insecure employment, such as zero-hours contracts, who do not have consistent earnings and perhaps have additional pressures relating to childcare.

Worse still, there is an incentive for employers to suppress wages to avoid contributing to these schemes. The figures show that 43% of self-employed people do not have a pension and that there are 4.8 million self-employed people in the UK. More work needs to be done to reach out to those self-employed people and to make sure that they do not store up problems for the future, too.

According to the UK Women’s Budget Group, auto-enrolment perpetuates the gender gap in pensions. As with all private pensions, it makes no allowances for the disproportionate caring responsibilities that many women still have. Pension inequality is not a new problem, nor is it going away any time soon. I would like to hear more from the Government about how they are going to have a serious, targeted strategy to address that, particularly for women.

Question put and agreed to.

Resolved,

That the draft Guaranteed Minimum Pensions Increase Order 2019, which was laid before this House on 16 January, be approved.

Social Security

Resolved,

That the draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019, which was laid before this House on 16 January, be approved.—(Guy Opperman.)