Pensions Bill [Lords]

Debate between Anne Begg and Richard Graham

Tuesday 18th October 2011 Commons Chamber

[Richard Graham]

My hon. Friend is absolutely correct. As an American economist once said, “A billion here, a billion there, and sooner or later you have a large sum of money”. It is disappointing to hear such an irresponsible approach to spending and to the interest being paid by everybody in this country on our vast mountain of national debt.

Let me conclude. Tonight, I shall vote in favour of amendments 13 and 14. I recognise the significant achievement, to which Age UK has paid tribute, represented by the welcome changes that will benefit large numbers of women across the country. I pay tribute again to those women in my constituency who lobbied me on the issue, for whom I fought a long and quiet campaign with Ministers. I shall not vote for amendments 1 to 7, and I greatly regret the fact that the Opposition continue to table motions that they would not implement were they in power.

[Dame Anne Begg]

The Government’s amendments are an admission that they realise, at long last, that they got it very wrong about the acceleration of the new state pension age for women. On Second Reading and in Committee, there was always a promise that the Government would come up with some sort of transitional arrangements for the group of 500,000 women who will have to wait more than a year, and particularly for the group of 33,000 women who will have to wait for two years before qualifying for the state pension. However,all they have done is to shift the timetable six months later. Why cannot they go the whole hog and take the anomaly out of the system altogether? If they were to do as the Opposition ask and delay all the increases to the age of 66 until after 2020, once the initial transition is over for women between 60 and 65, there would be no anomaly that would require transitional or any special arrangements at all. There would then be no unfairness specifically to women—it is, of course, only women who have been affected by the changes—and that would also answer the question posed by my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) about the lack of time available for the group of women affected to prepare for the new pension age.

If the Government have recognised that issue, it is a shame that they could not go further. I suspect it is probably because the Minister, to whom I pay tribute, has found that getting anything out of the Treasury is like getting blood out of a stone. I recognise that getting just over £1 billion is a huge achievement, but in the overall scheme of things, and given the effects of the change, it would have been better—it would have been better if acceleration had not been proposed in the first place—if the problems had been properly recognised.

Before Government Members applaud themselves and welcome the change too much, perhaps we should think about the enormous campaign that was waged against the proposals. Would that campaign have existed if the Government had proposed at the outset what they propose now? In other words, when all this started, if it had been proposed that there would be an acceleration of the women’s state pension age up to 66 before 2020 so that 300,000 women would have to wait 18 months longer—on top of the delay they were already facing because of the timetable already set—would there have been the same outcry and the same campaign? I think that the answer to that question is unequivocally yes.

Just because the Government have made something bad slightly less worse, it does not mean that what is being proposed is not particularly bad. Someone who, after an accident, is told by a surgeon that they will lose both their legs, and who finds out after they come out of the anaesthetic that they have lost only one might feel a degree of elation that this was better than they had expected. However, someone going into an operation expecting to lose a leg who does lose one would still feel disappointed. In other words, the amendments that we are being asked to vote on still do not amount to a good deal for the group of women concerned.

[Richard Graham]

I simply want to observe that if any of us went into an operation expecting to lose both legs and a doctor managed to save one of them, surely we would feel that the doctor had done rather a good job. The analogy with the Minister’s announcement this evening is not irrelevant.

[Dame Anne Begg]

The hon. Gentleman has just made my point for me. Yes, we would feel a lot better, but if we had gone into the operation not expecting to lose either leg, but discovered afterwards that we had lost one, we would be absolutely devastated. The result would appear to be the same, but the emotional trauma caused in the meantime is quite different. That is exactly the position faced by these women.

The women we are talking about are not rich; they are not people for whom a billion pounds here or there amounts to pennies or not much money. These are women who have made the financial calculation that they will be able to get their state pension at a particular age. Some of them are still making the calculation that they will get the state pension at 60. I received an e-mail today from someone who could not understand why her pension age had gone up by 30 months. It is because she had not taken into account the original equalisation. That is no fault of the Government, but it illustrates the fact that people need a lot of time to prepare for the change, and even if they have had the time, they are not always prepared for it.

For the group of women who had not realised that the state pension age was going up to 65, it is a double whammy to discover that it is now going up to 66 and that they must face waiting that extra time, perhaps with no income at all. Many of these women will be in that position, even if they have taken early retirement for one reason or another. We know that by the age of 65, only about 40% of women are still in work; they might have fallen out of work for various reasons. Those women will have been depending on getting not just the basic state pension, but probably pension credit and all the other passported benefits that were mentioned earlier. For these women, there is a big hole in their financial planning. We have heard much about the Government’s debt meaning that they cannot possibly afford to do right by the group of women concerned, but the effect will be on those women’s personal debt. They will have to borrow money or in many cases live in pretty dire circumstances if they do not get the pension when they were expecting to get it.

Work and Pensions (CSR)

Debate between Anne Begg and Richard Graham

Thursday 4th November 2010 Westminster Hall

[Miss Begg]

I echo that point. In many cases, we are not arguing about the principle but the detail.

The last way in which the Government can save money is to do away with some benefits. This aspect has both positives and negatives, as we heard from my hon. Friend, the hon. Member for North East Hertfordshire (Mr Heald). Extra money has been identified in the CSR, and £2 billion will be set aside over the next four years for the introduction of a universal credit. That will get rid of many benefits, and probably almost all working-age benefits, which will be subsumed into the universal credit. That is the right thing to do, and it certainly takes us in the right direction of travel, but as with all these matters the devil is in the detail. I look forward to the White Paper, which I hope will give more detail on how things should work. I hope that, within the next couple of weeks, the Minister will give us some indication of when it will be published. We are all waiting with bated breath, as it will make sense of some of the other things that the Government have been doing.

[Richard Graham (Gloucester) (Con)]

Given the hon. Lady’s approach to the difficult question of restructuring benefits at a time of economic depression, from which we are slowly emerging, does she accept that for some of us the concept that benefits can only ever increase is philosophically difficult? For instance, in my constituency of Gloucester 10,000 jobs in the private sector were lost during the five or six years between 2004 and 2009, wages went down in many companies and people often worked fewer hours and fewer days to enable companies not to cut jobs. Charities prefer to see housing benefit linked to RPI rather than CPI, but RPI went down sharply in 2008-09. Does the hon. Lady not agree that, in that situation, benefits paid from taxpayer revenue have to be tailored according to how much is available—

[Richard Graham]

I apologise, Mr Turner. Does the hon. Lady agree that in this situation, whichever party was in power, it would be incumbent on the Government to find ways of reducing the ever-increasing benefits bill?

[Miss Begg]

There is no dispute about the fact that we would like to see the benefit bill reduced. The best way of doing that is to get those who can work into jobs so that they do not need benefits on which to live. As for pensioners, the Government, with their triple lock, have taken the decision that they do not want to see them getting less benefit. That is partly why the cuts have fallen so heavily on working-age people. The Government have protected benefits and increases in benefits for those who are on the basic state pension and other related benefits. They have made a value judgment and decided that some people deserve increases in their benefits while others do not.

Let us not forget the bigger economic argument. Poor people will spend their benefits in the local community. Problems can arise if benefits are cut: the money going into the local economy drops, jobs are lost and shops close. Cuts will cause problems in the local economy. Very often it is the benefits’ pound that keeps many things working in some of the poorer communities. There is not an absolute answer as to whether benefits should go up or down depending on the economic wealth of the country, but there is an absolute measure of poverty in which we should not expect people to live. Sometimes, some of our benefits are at a level that keeps an individual living in poverty.

--- Later in debate ---

[Miss Begg]

The rich have got richer, which I would have thought the hon. Gentleman would welcome. The poor have also got richer, but the gap is wider because of what has happened at the top end. There is no doubt that those who live in poverty have a relatively higher income than they would have done without the measures that the previous Government put in place.

[Richard Graham]

rose—

[Miss Begg]

I had better make some progress. I was going to read out a list of other organisations, but I need to make some progress. I am sure that other Members have lots of concerns to voice from organisations such as Mencap, the Centre for Economic and Social Inclusion and so on. However, I have spoken for longer than I meant to. I thought that I had a 10-minute speech, Mr Turner, so I apologise.

In conclusion, the cuts in the DWP budget are not just to bureaucracy. They are far more profound than that. It is the benefits themselves that have been cut. The running costs of the Department are small in comparison to the costs of benefits paid. The DWP has already stripped £2 billion from its daily expenditure, so it is already quite efficiently run, which is why the big cuts have to come from the money paid out to individuals. None the less, behind the figures that I have mentioned are real people leading real lives. Finding £6 a week to make up the shortfall between the amount received in housing benefit and rent costs might not seem a lot to us, but it is a huge amount for someone who only receives £65 on JSA. That £65 has to cover all other living expenses, utilities and food.

Most people would feel the loss of £50 a week towards their transport costs. How much more acute is that loss for people who live in residential homes? Such people are to lose the mobility element of their disability living allowance. When their total income is only £22 a week as a personal allowance, how will they get out and about at all? I have given just two examples of people who will be directly affected by the cuts, but there are many more individuals who will be hit. Whatever Members believe philosophically about what the Government are doing, such individuals will have less income as a result of these decisions. It is beholden on all of us as politicians to recognise that for some of our constituents, life will be very hard as a result of the decisions in the comprehensive spending review. Even if Members believe that the Government are doing everything right, they should please remember that some of their constituents will have a really hard time in the years to come.