State Pension Age: Women

Caroline Dinenage Excerpts

Wednesday 29th November 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Caroline Dinenage)]

I start by thanking everyone who has contributed to today’s debate on this important issue. Members on both sides of the House have made passionate and heartfelt speeches and interventions.

A welfare and pensions system is successful only as long as it is sustainable, and as the population balance shifts from working-age pension contributors to those aged over 65, an increase in the state pension age is necessary for the welfare of all. As the hon. Member for Eastbourne (Stephen Lloyd) pointed out, virtually every party in the House has either taken the opportunity to raise it, or not taken the opportunity to do something about it.

[Jamie Stone]

To support my hon. Friend the Member for Eastbourne (Stephen Lloyd), does the Minister agree that the failure to address the issue—for whatever reason, and by whatever party—reflects badly on this Parliament in general at a time when we could do with a much higher standing in public esteem?

[Caroline Dinenage]

We have taken forward transitional arrangements. It is insulting for Members from parties that have played their part in getting us to where we are today somehow to wash their hands of the matter. I will go on to make a few points, if the hon. Gentleman will forgive me.

Those who are able to work should support those who are not, confident in the expectation of similar support when they reach retirement. Today’s workers provide the support for today’s pensioners, and that is why it is so important that we have the right balance of the contributions that are paid in at present with the pensions that are being withdrawn, and that we adjust pension ages to maintain that balance. Women who retire today can still expect to receive the state pension for 24 and a half years, on average—almost three years longer than men.

As was outlined by the Pensions Minister, my hon. Friend the Member for Hexham (Guy Opperman), the Department for Work and Pensions has communicated the timetable for changes to the state pension age since they were first set in train 22 years ago. As my hon. Friend the Member for Redditch (Rachel Maclean) pointed out, in response to concerns raised during debates on the Pensions Act 2011 in both Houses, we introduced the £1.1 billion concession that has been mentioned, which staggered the changes and ensured that no one would wait more than 18 months for their pensions, compared with under the previous timetable.

Any further concession would cost significantly more. It would involve asking people of working age—more specifically, today’s younger people, as my hon. Friend the Member for Chelmsford (Vicky Ford) mentioned—to pay even more for it. Those outcomes simply cannot be justified.

[Ian Blackford]

Will the Minister give way?

[Caroline Dinenage]

I am not going to give way to the right hon. Gentleman. He made criticisms in relation to the Budget and the Chancellor, but he went on to speak for a considerable time today, taking more than 40 minutes for himself and depriving Back Benchers of the chance to have their say. I will make some progress—[Interruption.] I want to address some of the issues that have been raised by SNP Members, so if the right hon. Gentleman would like to listen, I will do so.

As has previously been stated—my hon. Friend the Member for Aberdeen South (Ross Thomson) pointed this out—if the Scottish National party disagrees with any of the UK Government’s welfare reforms, it has the power to do something about it in Scotland.

The right hon. Member for Ross, Skye and Lochaber (Ian Blackford) has mentioned on several occasions that the Scottish National party’s Westminster parliamentary group published a report by Landman Economics, which modelled—[Interruption.] I thought he would be keen to listen to this. The report modelled the impact of a number of options for compensating women affected by the 2011 Act. Of these, the Scottish National party’s preferred option was to abandon that Act entirely, returning us to the timetable under the Pensions Act 1995.

The SNP-commissioned report put the cost of this option at £7.9 billion for the period between 2016-17 to 2020-21. As it stands, that is simply unaffordable, but it has the double misfortune of also being wrong. The Landman report significantly underestimates the full costs of returning to the 1995 Act’s timetable. The Government estimate that the cost over that period would be about £14 billion—nearly double—and that figure includes the impact of lost revenue from tax and national insurance, which the Landman report does not fully take into account.

What is worse is that the SNP’s position applies the costs only to the five-year window between 2016-17 and 2020-21. The costs beyond this horizon are simply not included in the option put forward. If the changes we are implementing did not happen, the actual costs to working-age people would be more than £30 billion over an extended period, which is equivalent to over £1,100 per household. I am sure the right hon. Gentleman would like to justify that to his constituents.

The Scottish National party has also suggested using the national insurance fund to pay for the cost of scrapping the Pensions Act 2011. However, that is not the intended use of the fund, and it is worth reiterating that today’s national insurance contributions fund today’s pensions, with an excess of only two months’ outgoing payments at any given time.

The new state pension is actually much more generous for many women, who were historically worse off under the old system. By 2030, over 3 million women stand to gain an average of £550 extra per year as a result of these changes. The acceleration of the increase in the state pension age for both women and men is necessary to ensure the state pension system’s sustainability in the light of increasing life expectancy and more pressure on public resources. In fact, by 2035, there will be more than twice as many people aged 100 and over as there are now.

Failure to act in the light of such compelling evidence would be reckless. Given the increasing financial pressure that I have described, we cannot and should not unpick a policy that has been in place for 22 years. It is simply not affordable, especially when we take into account the fact that the average woman reaching state pension age will get a higher state pension income over her lifetime than an average woman reaching state pension age at any earlier point.

It is important to appreciate the modern lived experience of later life in the 21st century, which has altered significantly since the inception of the state pension in the 1940s. Longer life, better health and continued activity in later decades are reshaping the profile and participation of older people in our society. This includes sustaining work and other economic activity as those over 60 continue to learn, earn, contribute and participate.

[Rachel Maclean]

Contrary to the assertion by SNP Members that it is an insult to offer an apprenticeship, does my hon. Friend agree that saying that is actually an insult to women who would like to take up—

--- Later in debate ---

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am sorry, but I think the Minister had finished her speech.

[Caroline Dinenage]

In fact, I do not think that I had quite finished, Madam Deputy Speaker.

I do not think that anybody is suggesting that older women should be forced to take an apprenticeship. No one is even suggesting that they should be cajoled or encouraged to do so, but I find it insulting that SNP and Labour Members seem to be suggesting that women over the age of 60 should be put on the scrapheap and should not be allowed to do what they want. If they want to take an apprenticeship, they should be allowed to do so.

[Patrick Grady (Glasgow North) (SNP)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.