Pensions Bill [HL]

Baroness Murphy Excerpts

Tuesday 1st March 2011 Grand Committee

[Baroness Turner of Camden]

My Lords, I support my noble friend Lord McKenzie with regard to this section of the Bill. I have received many letters from various organisations about the Bill—like most people, I expect—and one thing that they all have in common is that they are all very concerned about what they regard as the acceleration of the timetable for women. I have had correspondence from Saga, which tells me that it believes that 2.6 million women will be adversely affected. It points out that the women concerned had not expected such an accelerated timetable. The TUC has also said that it is concerned about the acceleration and its effect upon women. Age UK is taking a similar posture, and so is Which?.

A number of noble Lords who contributed to our Second Reading debate concentrated on what they saw as the unfairness to women in the accelerated timetable. The amendments proposed by my noble friend are an attempt to deal with that, for which I thank him. I hope that the Government will be prepared to take on board that this is a real concern about a Bill that basically many people accept. Practically everyone who has written to me says that they accept the whole idea of auto-involvement—of people being in the pension industry, so to speak, and being pension savers for very often the first time in their lives. It therefore seems a shame that we might get some difficulty and some opposition to a Bill that I basically accept. I accept that we have to have a different age of retirement and so on because of longevity and the various other arguments that have been advanced in favour of the Bill, but on the other hand there is a lot of concern about the accelerated timetable. I hope that the Government can do something to help us in that regard.

[Baroness Murphy]

My Lords, I very much support the amendment of the noble Lord, Lord McKenzie, but I have to say I am very attracted to the halfway position, as it were, of the noble Lord, Lord Boswell. The difficulty is, as Machiavelli said, that you should not have a second line of defence—that you should just go straight through—so I am nervous in saying that I like the compromise idea but there is a basic serious unfairness to a very small group of women. We are talking about a one-off event over a period of three to four years, I think it is, and it would be a good idea to address this. If the halfway house makes more sense in overall financial terms, though, I would support that.

[Lord German]

There is a general sense that there is a group of people who are being treated unfairly because of the rate of acceleration, although maybe I will explain later that they shall actually be decelerating towards their pension. The general aspect here is that something needs to be done to ameliorate that unfairness. One of the key ways where that could take place, and I hope that the Government are minded to tell us about this, is to seek an upward revision and a much enhanced state pension as a right for all. That is an issue that would affect people in a much more radical way if it were the case. I have read many of the newspaper articles about the uprating of the state pension, but this seems to be almost a hand-in-glove issue. If you use the financing that comes from this measure and put it into a pot, you will be doing something to ameliorate the situation.

I am keen to examine the issue raised by my noble friend Lord Boswell about trying to make sure that we do not overly deal badly and unfairly with a particular cohort of people. The issue primarily relates to a singular group of women. This is a one-off group, because there will not normally be a similar group of people who are so badly affected by the one-year to two-year increase in such a rapid space of time. After all, there is an acceleration of something like three months in age and four months in pension age. You could not get much faster than that, unless you went to three months and 29 days, or whatever; you would be talking shades. It is a very fast rate of acceleration for a particular cohort of women, who will disappear when the system has worked its way through. That acceleration will not be apparent.

There must therefore be some measure which the Government can take to either improve the post-retirement abilities of women in this cohort or lengthen the timetable somewhat to accommodate the interests of a particularly badly-done-by group. When two people whose ages differ by as little as three, four or eight months, or whatever, stand shoulder to shoulder within a year, they will find that the differential in the rate of change in their retirement age is magnified. I hope that the Minister will reflect upon the amendments before us and try to see whether measures can be taken to ameliorate the situation of this group of women.

--- Later in debate ---

[Baroness Murphy]

My Lords, one cannot help but sympathise with the case put forward by the noble Baroness, Lady Turner of Camden. I think it is what we would call the plumber’s knees problem. The noble Baroness, Lady Hollis, is addressing another issue entirely. However, I am concerned about the procedures that would have to be put in place to give effect to the provision. We already have a vast machinery of state tribunals assessing when people do this and when they are entitled to that. If we were to vary the state pension age, through whatever reasonable means, you can bet your bottom dollar that a bureaucracy of tribunals would grow up to implement it, just as we have had now for other areas. Therefore, this needs addressing; certainly what has been called heavy-end caring needs addressing. In the case of the terrible differential between people who work in very physical environments and those who do not, where there is clearly often an age-related difficulty, this does not seem to be the mechanism.

If I may, I put in my epidemiologist’s tuppenceworth on the prediction of whether people who live longer have age-related disabilities—or disabilities of long duration, which is worse. The evidence is extremely difficult to predict because it changes from cohort to cohort and has changed during the course of my research life. It is true that disease-free life expectancy is growing dramatically, and so is the number of disability-burdened years, although the rate of disability-burdened years may not be growing very fast. It is extraordinarily difficult to predict, because of the lifestyles now of people aged 40 to 60, what the rate of disease-free life will be in 20 to 30 years. We all want to live longer, and die faster, do we not?

What the noble Baroness, Lady Hollis, said was correct, but the Minister’s response was equally correct. It is extremely difficult to predict. However, on this amdendment, I worry about the bureaucracy that might be put in place to respond to such flexibility, but I recognise that we ought through some mechanism to address the early disability of people to respond to their own employment and that they should have the flexibility to stop and not be impoverished by stopping.

[Lord Flight]

I echo the comments of the noble Baroness. One of our failings as a people is that, because people are decent, we try to provide for everything and clutter it up to the extent that the system becomes difficult and expensive to operate. I was interested to note, in seeking to check my state pension entitlements, that the office that you approach got them wrong; we had a pleasant correspondence. I hate to think, even as we stand, that in people’s combination of straightforward state pension, SERPS and whatever else they may have, the records are all over the place. We may sit here and think that it is lovely, but actually it is a shambles.

I can well imagine that, if you start adding all sorts of groups and special things out of decency, you will get, as the noble Baroness described, a huge increase in bureaucracy. It strikes me that pensions is one area that has suffered in this country from too much complexity. My view is that the issues raised need addressing, but that they will have to be addressed in a separate box through welfare arrangements.

Finally, I still take the view that when the arrangements came in after the war, the age of 65 then was something like 78 today in terms of equivalent fitness and health. I desperately want to see a decent state pension for everyone at the age of 70 that will lift them right away from dependency, pension credits and everything else. I should like to see things tidied up, slimmed down and done as cheaply as possible to achieve that as soon as possible. It strikes me that for the overwhelming majority, that is the need. Although there are cases of people who have done heavy work with physical demands and whose bodies have worn out, the great majority of people will be pretty fit until they are 70.