Pensions Bill

Baroness Turner of Camden Excerpts

Monday 13th January 2014 Grand Committee

[Baroness Turner of Camden (Lab)]

My Lords, Clause 25 increases the pensionable age to 67. It is a key clause, but I wish to oppose the question that it should stand part of the Bill, as I hope to get the Government to think again about it. I know that in legislation that has an impact on millions of people, as this Bill does, it is useful to have arrangements that are the same for everyone—the same benefits and the same retirement age—as that makes things much easier to administer. The problem with that is that we are not all the same. Even more important, jobs are not all the same.

As I said at Second Reading, some people are happy to work for longer. They like their jobs and the social aspect of working with others is important to them. Such people do not look forward to retirement; they like to go on working if they can. These people are often employed in administrative jobs, but for others things are very different. Some industries involve strenuous and often hazardous work—the construction industry is one such. Those who work in such industries do work that is necessary for the rest of us. Without them, we would not have the comfortable lives that we now have. Yet such industries often have a record of industrial accidents and disease, which we should all find unacceptable. It may be dangerous for older workers to work with others in such a working environment. Therefore, an earlier retirement may well be necessary. This simply cannot be left to the private sector. We cannot have legislation that says that all people must work longer before retiring.

It is not only industries that are hazardous where this is a problem. There are many low-paid workers in dreary jobs who are only too happy to retire, as long as they have enough money to do so. People who work in hospital cleaning and dreary jobs of that kind are only too happy to retire if it is possible for them to do so and to receive reasonable benefits when they are retired. Such people long to retire. It is not enough for us to say, “Oh well, you have to work for longer”.

We are often told of the evidence that we are all living longer, but it is not always sensible to use that as a reason for extending working life—not for everyone, anyway. We are not alone in thinking this. A number of my colleagues have tabled amendments to subsequent clauses to seek a review of retirement ages. I certainly think that that is necessary. Have the Government thought through what all this means? What is the impact on people working in particular jobs and their health? What happens when people live longer? What is the effect on their health? Therefore, it seems to me that this simple provision in legislation to ensure that people work for longer is not a good idea. I hope that the Government will be prepared to look at it again, in the light of some of the things that have been said both at Second Reading and in Committee today.

[Baroness Sherlock (Lab)]

My Lords, as this is the first discussion of Part 2 of the Bill, it may be worth setting out a couple of principles from these Benches at the outset. First, we agree with the principle of raising the state pension age to reflect longevity, as people are living longer than when the current arrangements were put in place, largely in post-war reforms. As I indicated at Second Reading, we also accept the need for periodic reviews of the state pension age, but we differ from the Government on how best to do that—we will return to that issue in the discussion of our later amendment.

Fixing the state pension age is never easy, and an issue of fairness is always at stake. There needs to be a balance between the interests of the generations on the funding of retirement incomes in a pay-as-you-go system, where today’s taxpayers fund today’s pensions. As we will discuss in later groups, our view is that having a careful, evidence-based review before taking any future decisions on changes to the state pension age is a crucial element of ensuring fairness between generations.

However the arguments made by my noble friend Lady Turner require careful attention from all of us. Sometimes fairness also requires at least a consideration of difference, and my noble friend has highlighted some crucial differences, particularly in relation to longevity and health. We all know that life expectancy is increasing, but that fact conceals as much as it reveals. Mortality rates vary widely, as do morbidity rates. There is a huge amount of socio-demographic data available to inform our debate—and I am sure we will hear a great deal of it in the groups to come—from the Wanless and Marmot reviews to government figures and other outside research. There are also some very interesting data from the TUC. I will say more on this later, but I do not want to pre-empt what I think could be a very substantial discussion coming up shortly.

There are no easy solutions to these problems. The biggest challenge to the Government is to address the question of differential mortality and morbidity rates through urgent attention to public health, but we also need time to reflect on how best to deal with these questions in relation to the state pension age. It is our view that the best way to do that is to ensure that the mechanism for reviewing the state pension age includes a review panel which has on it representatives of a wide range of interests in society, including employer and employee representatives and representatives of different parties and, indeed, our own Cross Benches. I shall move an amendment later today to that effect, but in the mean time, I hope very much that the Minister will take the concerns of my noble friend seriously. I look forward to his reply.