Women (Government Policies)

Anne Begg Excerpts

Wednesday 8th June 2011 Commons Chamber

[Yvette Cooper]

I will make progress and then take an intervention from the hon. Lady.

In area after area, whether it is income, employment, child care, public services or action on violence against women, we are seeing the clock turned back. Today we want to concentrate on the Government’s reforms to the pension age and what is happening to women as a result. We understand the Government’s concern about rising longevity; of course we are all living longer and that has consequences. However, the nature and timing of the changes they have chosen is hitting women much harder than men. Bringing equalisation down to 2016 from 2018, combined with increasing the age again straight after that, means that women currently in their late 50s are getting a very bad deal. No men will see their state pension age increase by more than a year, but half a million women will do so. Those women, who are already in their mid to late 50s, are suddenly seeing their retirement plans ripped up. A third of a million women will have to wait an extra 18 months, and 33,000 women will have to wait an extra two years.

Let us think about what that really means. These women are already around 57 years old. They have been expecting to get their retirement pension in about seven years’ time. They will already have made financial plans; many will already have made retirement plans. These women are often the rock of their families. They are the ones who stopped work to look after their grandchildren so that their daughters could work, or they are working part-time and looking after elderly relatives. They have worked out how they can manage it, and how they can stretch their savings until the pension kicks in, and suddenly the Government are ripping all that up.

[Dame Anne Begg (Aberdeen South) (Lab)]

The group of women who, when they started work, would have expected to retire at 60, had already accepted that because of the equalisation of the state pension age they would have to work until they were 64, but it is the two years on top of that which is very difficult for them to swallow.

[Yvette Cooper]

My hon. Friend is exactly right. Those women have already made changes to their retirement plans, but these further changes are very late in the day, when it is extremely difficult for them to rearrange their plans. The consequence is that the equivalent of about £5,000 is being taken from half a million women, £10,000 is being taken from thousands of women, and £15,000 is being taken from those who are hardest hit—and they have less than seven years to work out how to cope. For most of those women it is too late to make changes to their financial plans and their career plans.

Let us take the case of Christine. She was born in July 1954. She is still working as a self-employed bookkeeper, and works about 25 hours a week. Like a lot of women her age, Christine says that she put her career on hold to bring up her children, so she does not have much of a private pension. She does not have extra savings to help her to cope and to make good the gap. Women in their late 50s have average pension savings of £9,100 compared with an average of £52,000 for men of the same age. These are women who took time out to look after their families, who worked part-time, and who started work in the ’70s when the pay gap was bigger. The pension system never properly recognised the contributions that they made to their families and to society, and now, as a result of what the Government are doing, it is kicking them in the teeth again.

The Government cannot tell us that this is being done to cut the deficit, because in 2016, when these changes come in, their structural deficit is supposed to have been eliminated. The best that the coalition has been able to come up with in its defence is to say that some of the poorest male pensioners who get pension credit will be quite hard hit too. I do not think that people such as Christine will consider that much consolation. Today, the Prime Minister tried to claim, “Well, it’s all right, it means that pensioners will be £15,000 better off because this is restoring the link with earnings,” but the link with earnings had already been restored as part of the Turner review. Making such a change now does not provide any benefits for women for many years to come. Instead, in the next few years, it hits extremely hard women who have worked hard for their families and for society.

Women on the Government Front Bench and Back Benches ought to do something about this. They should stand up and be counted; otherwise they are letting down women in their constituencies.

[Dame Anne Begg]

Does my right hon. Friend agree that it was not good enough for the Minister responsible for pensions to say to my Select Committee that it is all right because these women can get jobseeker’s allowance or employment and support allowance instead?

[Yvette Cooper]

My hon. Friend is exactly right. It is appalling to suggest that these women can get jobseeker’s allowance, because many of them have claimed very little throughout their lives. They have believed in working hard, doing their bit, and making their contributions to their family and their society, and the state pension was what they had earned—what they had saved for and contributed towards. Saying to them that they should claim jobseeker’s allowance, which is set at a much lower level, or that, having perhaps taken early retirement to look after the grandchildren only now to find that they cannot do so because they cannot make their savings stretch, they must suddenly try to find work after so long out of the labour market, misunderstands the reality of their lives and the pressures they are under. Something needs to change. The Government have done U-turns on issues such as forests; they have paused on the NHS; and they should make a massive change on this policy.

--- Later in debate ---

[Mrs May]

As the hon. Lady knows, we have had a consultation on how we deal with the child maintenance issue. I hope that she would agree that despite the efforts of both Conservative and Labour persuasions over several years, we have not got the child maintenance system right in this country. There are too many people who do not see the absent parent paying child maintenance and we need to do everything we can to get a system that will work. As she will know, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), is looking at this issue and the alternatives available under the child maintenance proposals.

As well as giving all women better opportunities in the workplace, we need to do more to help those who aspire to the very top. Last year, only 12.5 % of all FTSE 100 board members were women. That is simply not good enough, and that is why the Government commissioned Lord Davies to look at how we can increase the number of women on company boards. We have made good progress in implementing Lord Davies’ recommendations. In May, the Financial Reporting Council launched a consultation on changes to the UK corporate governance code in order to help to achieve more diverse and more effective boards. The head-hunting industry has agreed a voluntary code on diversity, and we are building a strong sense of ownership and action in FTSE 100 companies. We have agreed with them a plan for how company aspirational targets should be published by September.

The latest figures suggest there has already been an improvement in FTSE 100 companies, just by our shining a light on this area. Some 31% of new board members appointed since Lord Davies’ report have been women, up from just 13% last year, and the number of male-only boards has dropped from 21 in October to 14.

We are also helping women to break through the glass ceiling by providing an all-age careers service. The new service will be fully operational by next April, and will provide high quality, professional careers guidance that will be open to all young people and adults. That will help women to make the right choices for themselves and for their careers. For the lowest paid, we will raise the minimum wage to £6.08—two thirds of those on the minimum wage are women.

In other areas we are also making the right decisions to help the most vulnerable. On pensions, again we have had to make some difficult decisions. Yes, we have proposed accelerating the rate at which the state pension age for women becomes the same as the state pension age for men. With life expectancy rising—and one in nine women pensioners is now expected to live to more than 100—and with the overwhelming need to reduce the deficit, this was a decision we could not duck. But it means that at the same time we have been able to commit to a triple guarantee, which will increase the basic state pension by earnings, prices or by 2.5%, whichever is highest.

The right hon. Member for Normanton, Pontefract and Castleford claimed that the earnings link had been restored by the Turner report. Of course the Turner review referred to the earnings link, but the last Government did not restore it. This Government have restored the earnings link and gone further with the triple guarantee.

[Dame Anne Begg]

Do I take it from what the Home Secretary says that the reason for the acceleration of the state pension age to 66 by 2020 is that the Government can pay for the triple lock on today’s pensions? It cannot be about deficit reduction because it comes after the deficit is supposed to have been abolished.

[Mrs May]

In fact, by the end of the comprehensive spending review period we will still have a debt of £1.4 trillion, which is three times the debt in 2006-07, so we will still need to look carefully at our public sector finances. It is this Government who have introduced that triple lock on pensions that will benefit today’s pensioners. For too long under the previous Government, older women had to rely on means-tested benefits, with many not claiming their entitlements at all. Our triple guarantee will help to improve the value of the state pension, giving real security and a decent income for all women pensioners. Although women will experience the rise in the state pension age more quickly than previously planned, they will still draw the state pension for an average of 23 years.

[Dame Anne Begg]

To be clear, is the Home Secretary agreeing that the triple lock will be paid for by the 500,000 women who will have to wait longer for their state pension in order to reduce Government debt? That returns us to the essence of this debate—why should women bear a higher proportion of reducing the deficit than men?

[Mrs May]

It is not the case that there is a simple link between the acceleration of women’s pension age and the expenditure on the triple lock. What is happening with pensions is more complex. Two things are happening in relation to the state pension age. The first is the overall acceleration for men and women, raising the age of state pension entitlement. That will bring in significant sums of money and is a reflection not only of Government finance issues but of increased longevity. When the state pension was first introduced, people lived for a very short period, comparatively speaking—a matter of two to five years—beyond their retirement. Today, people live for a significant length of time beyond their retirement. The Government therefore need to raise the state pension age, as has been recognised by previous Governments—the initial decisions to accelerate the rise and raise the state pension age were taken by previous Governments. We have had to take these difficult decisions. As I said, however, although women will experience the rise more quickly than previously planned, they will still draw the pension for an average of 23 years.

--- Later in debate ---

[Emma Reynolds (Wolverhampton North East) (Lab)]

I am sure that Members on both sides of the House will agree that discrimination and prejudice have blighted women’s lives for many decades and centuries, and we will all have stories of how our own families have been affected by it. In the 1950s, my grandmother, who was a midwife, was nearly forced out of work purely because she got married and started having children. In the 1970s, when my mother was pregnant with me, she was sacked because she was pregnant. She took the case to court, but was unsuccessful. Furthermore, it was only 20 years ago that marital rape was criminalised. It is incredible and horrific to think that until 1991 a man could rape his wife without her having any recourse to justice.

As my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) said, much progress has been made in recent decades. However, it has been hard-fought, and I worry that it is fragile. Much more remains to be done. Girls do better at school and university than boys, but that is not filtering through into the labour market. Women earn less than men, and women own less than men. Men dominate the FTSE 100 companies, and one in four women at some point in their life will experience domestic violence. I also have to say that for every five men in this Parliament there is only one woman.

The case for gender equality is often expressed in the language of fairness and social justice, but there is also a powerful economic case for gender equality. It simply does not make sense to under-utilise the potential of half the population. A gender-equal society is not just fairer; it will be stronger, too. My worry is that the Government are complacent about the progress that has been made and that their policies might set us back years, or perhaps decades. The devastating economic impact of the Government’s policies on women is particularly distressing. Let us face it, the Government did not get off to a great start. This time last year, they failed to do an equalities impact assessment of their emergency Budget.

As my right hon. Friend the Member for Normanton, Pontefract and Castleford set out, the deficit reduction measures are going to hit women much harder than men. Just as I am worried that the midlands and the north will be less able to cope with the economic gamble of this Government’s deep cuts, with the private sector less likely to take up the slack in those areas than in the south, I am also deeply concerned that women’s employment and pay will be disproportionately hit by the Government’s policies. Of the 500,000 jobs estimated to be lost in the public sector, an estimated 65% to 80% will be women’s jobs. It is not clear that the loss of jobs held by women in the public sector will be offset by an increase in the private sector. Therefore, the employment gap between men and women is likely to widen. Moreover, the gender pay gap is also likely to widen, as the private sector has a much higher pay gap than the public sector, with men earning over 20% more than women.

[Dame Anne Begg]

I have to give my hon. Friend the bad news that in some areas the gender pay gap is even wider. In my constituency the gender pay gap is 30%, partly because a lot of the men have high-paid jobs in the oil industry, whereas the women generally work in the service industry.

[Emma Reynolds]

The gender pay gap has been a problem for decades. Even though we legislated in this country in the 1970s, there has not been enough movement to narrow the pay gap.

Let me turn to the commitment in the coalition programme to

“promote equal pay and take a range of measures to end discrimination in the workplace.”

When the Minister winds up, I would like her to explain exactly how the actions that I have described will further that commitment. I fear that we will go backwards, not forwards.

The benefit cuts and changes also have a disproportionate effect on women. I support the eventual equalisation of the pension age for men and women, but again, we have seen the Government’s total disregard for the 500,000 women aged between 56 and 57 who, at very short notice, will have to wait two years longer before receiving their pensions. Also, cuts to child benefits and the working family tax credit, which involve help for child care costs, will make it harder for women to combine parenthood and work. For women with children, those benefits do not create dependence, but give them independence and a real choice of whether to stay at home or work part time or full time. Now that choice will only get harder.