Pensions Bill [Lords]

Lord Sharma Excerpts

Tuesday 18th October 2011 Commons Chamber

[Gregg McClymont]

The Minister is of course right. I believe that since the Turner report, longevity predictions have risen by 6.5% for men and 5.5% for women. There is no doubt that the issue is complex—no one is denying that—and there may well be a case for going further faster, but the burden of my argument involves the half a million women who must wait for up to 18 months. Our view is that that is a disproportionate burden, imposed without fair and due notice.

[Alok Sharma (Reading West) (Con)]

Will the hon. Gentleman give way?

[Gregg McClymont]

I should like to make a little more progress first. I shall be happy to give way after that.

In 2005, in the days when the Conservative party was trying desperately to shift the perception that it had not changed, the present Prime Minister said:

“If you put eight Conservative men round a table and ask them to discuss what should be done about pensions, you'd get some good answers… but what you are less likely to get is a powerful insight into the massive unfairness relating to women's pensions.”

[Alok Sharma]

I am grateful to the hon. Gentleman for acknowledging that the Government have moved some way on the transitional arrangements, but may I ask him a question that I asked his predecessor, the hon. Member for Leeds West (Rachel Reeves), in Committee? How does he expect to fund the changes that he proposes?

[Gregg McClymont]

Is the hon. Gentleman aware that the savings that we are discussing have absolutely nothing to do with the deficit? They will accrue from 2016 onwards.

[Alok Sharma]

What the hon. Gentleman has said is interesting, given that when the Labour party was last in power, it did not really bother about saving for tomorrow. This is what his predecessor said when the point was raised in Committee:

“this is outside the period of the comprehensive spending review and the budget deficit reduction plan.”—[Official Report, Pensions Public Bill Committee, 5 July 2011; c. 8.]

As the hon. Gentleman knows, we are not going to suddenly stop spending and raising money after the budget deficit has gone. If we keep making unfunded pension commitments, that will add to the deficit and the debt in the future.

[Gregg McClymont]

That was not so much an intervention as a speech. The fact remains that the difference between the Government’s proposals and ours is £10 billion over 10 years. That is £1 billion a year. Is the hon. Gentleman really saying that a saving of that kind cannot be found in a more sophisticated way, without placing an unfair and disproportionate burden on those women? I do not agree, and nor does any other Opposition Member.

The Prime Minister was right when he suggested that if you put eight Conservative men around a table you would get some interesting answers on pensions, but you would not get the right answer. The Prime Minister was right then, and the Government are wrong now. The Minister’s amendments are welcome, and I am sure that he would personally like to go further, but he does not sit at the Cabinet table, although perhaps pensions Ministers should be in the Cabinet. This concession thus remains too limited. Some 500,000 women will still have to wait up to 18 months longer before reaching state pension age.

Turning to a point the Minister made earlier, this is not an easy issue, and there are great challenges, including that of longevity. As people live longer, the state pension age needs to rise to ensure a decent state pension for all. Labour set in train the Turner consensus: the state pension to rise in line with earnings; the retirement age to rise to 68 by 2046; and private pensions to be opt-out rather than opt-in. Labour also maintained the timetable for equalisation set out in the Pensions Act 1995.

Members on the Government Benches ask why we did not implement that, but Labour made great strides on pensions. Some 1 million pensioners were lifted out of poverty between 1997 and 2010. That is a real achievement. The poorest pensioners were lifted out of poverty. No pensioner lives in absolute poverty any longer. I must also point out that we had to do that because the previous Conservative Government left the pension system, and particularly the poorest pensioners, in a very difficult situation.

--- Later in debate ---

[Gregg McClymont]

My right hon. Friend again makes a telling point. The Liberal Democrats signed a pledge on tuition fees which they immediately went into government and trashed, yet they want the Labour party to tell them what the spending plans of a future Labour Government would be five years down the line. As my right hon. Friend says, that is pure cheek.

[Alok Sharma]

rose—

[Richard Graham]

rose—

--- Later in debate ---

[Gregg McClymont]

My hon. Friend is right. She represents a constituency where many women will be affected, particularly low-paid women. The proposed change has a socio-economic dimension of which I am sure the Minister is aware.

The amendment would make a real difference to the lives of the women affected. It is designed to secure a limited reform, targeted at a specific group whom the Government are not treating fairly, and it would give rise to costs representing just over 1%—one 100th—of the annual pensions budget.

The Chancellor has previously said that

“we are not going to balance the budget on the backs of the poorest and the most disadvantaged,”

but the costs of this Tory-led Government’s acceleration of the state pension age equalisation timetable targets a group with limited resources.

[Alok Sharma]

Will the hon. Gentleman give way?

[Gregg McClymont]

I hope that this is better than the previous intervention.

[Alok Sharma]

I thank the hon. Gentleman for giving way. He is making a passionate point, and he talks about social justice and fairness, but all those on whose behalf he speaks up will ask, “If the Labour party ever get back into power, will they enact these changes?” It is a fair question for everyone to ask, and it is fair that he gives us an answer today.

[Gregg McClymont]

After the hon. Gentleman’s previous intervention, he did not listen to the answer; given that intervention, he did not listen to the answer I gave the hon. Member for East Dunbartonshire. He just does not seem to get it.

--- Later in debate ---

[Jenny Willott]

I completely accept that political decisions are a matter of priorities and choices—all hon. Members understand that, because we are all involved in political debates and decisions. As I have said, in an ideal world, I would like the cap to be reduced. However, given the financial circumstances, the Government’s proposal is a compromise that I can accept. I understand that some will be negatively affected, but we have made significant progress. Half a million women and half a million men will benefit from the proposals, which I accept as a positive compromise.

[Alok Sharma]

My hon. Friend makes the point that we are not in an ideal world. A large part of the reason why we are not in the world that we would like to be in is that the previous Labour Government left us with a record deficit. Labour Members are now talking about another £10 billion. Does she agree that it is ludicrous for them to talk about unfunded commitments, and that they should instead apologise for the mess that they left the country in?

[Jenny Willott]

We need to focus on what is realistic and affordable. The Bill will affect people’s lives, and we need to ensure that the state pension is affordable and sustainable long into the future. I want to receive the state pension that I have paid into when I come to retire, and I am sure all hon. Members and people out there in the country would want the same thing.

I welcome the fact that Labour Front Benchers are now more positive toward to today’s proposals, and that they are prepared to accept that the Government have moved to the significant benefit of a large number of women, even if a realistic approach is somewhat lacking in their proposed amendments.