State Pension: Working-class Women

Caroline Nokes Excerpts

Thursday 9th February 2017 Westminster Hall

[The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes)]

It is a pleasure to serve under your chairmanship, Mr Flello. I congratulate you on having chaired this debate in a fair and exemplary manner, and for allowing those Members who were busy elsewhere in the House this afternoon the opportunity to speak, even if just briefly in an intervention. Important debates have been taking place this afternoon, and important work has been done in Bill Committees.

It is only right that I should take this opportunity to thank the hon. Members for Ross, Skye and Lochaber (Ian Blackford) and for Swansea East (Carolyn Harris) for being here. I know that they have been much occupied with the Under-Secretary of State for Pensions, my hon. Friend the Member for Watford (Richard Harrington) in the Pension Schemes Bill Committee, which explains why I am here instead of him. I thank the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) for opening the debate and hon. Members from all parties—and all parts of the British Isles, with the exception of Northern Ireland—who have contributed. It is most unusual for the hon. Member for Strangford (Jim Shannon) not to be present.

In recent decades, there has been a huge shift in how people spend later life. We are living longer, staying healthier for longer and leading far more active lifestyles, regardless of our age. More and more people are proving that age need not be a barrier to achieving great things. Some of the Olympians whom we sent out to Rio last summer were among the oldest athletes on record. I, for one, celebrate the fact that age increasingly places no bounds on those wishing to achieve new goals, try new things and play an active part in society.

The new state pension was introduced as a key reform to the UK pension system. The Government recognised that the pension system needed to change in response to the demographic and behavioural shifts of recent decades. For most people, we know that work is beneficial. It not only provides an income and a bedrock for saving, giving people greater control over their lives but crucially, the evidence shows that for most people, being in work can be immensely beneficial for both physical and mental health. The social and cultural benefits of remaining in work are sorely under-recognised. This Government’s pensions strategy does not focus only on the benefits to people. We know that the skills, experience and talents that older workers bring to organisations are invaluable. Older workers still have an incredible amount to offer.

It is also true that the living standards of pensioners have risen significantly, but we must remember that not all pensioners are in the same position. More than 1 million pensioners rely solely on the state for their income. That is why we introduced the triple lock in 2011 and have committed to continuing it over this Parliament. As well as guaranteeing increases to the state pension, we have fundamentally reformed it. Under our reforms, people will have a much better idea of what their pension will be, bringing more certainty and clarity where previously there was confusion. That design is integral to the Government’s ambition to provide a better foundation on which people can plan and build for a secure retirement. We want to make life easier and more comfortable for people in retirement.

[Ian Blackford]

How can people plan and build for retirement with 15 months’ notice of an increase in their retirement age?

[Caroline Nokes]

The hon. Gentleman will of course know that I am referring to the new state pension. That is exactly why we are introducing it, so that people have more certainty and clarity than previously. As well as being simpler, the new state pension will give more to many of those traditionally less well served in the past. By 2030, around three quarters of new pensioners will get a higher state pension than if the old system had continued. More than 3 million women will get around £550 more each year. It is estimated that women reaching state pension age in 2016-17 will receive more state pension on average over their lifetime than women ever have before. We have also created new pension freedoms that mean that savers have more control over their money and can use it in ways that suit them. In the new pensions marketplace, we are helping people make the right decisions for them through things such as Pension Wise, which provides free, impartial information.

I am pleased that Members from all parties agree that it is right that we have equalised the state pension age for men and women. It is part of the DWP’s wider objective of eliminating gender inequalities in social security provision.

[Patricia Gibson]

Does the Minister believe that the women whom we are debating were given sufficient notice to make correct and proper plans for their retirement?

[Caroline Nokes]

If the hon. Lady will give me time, I will come to exactly that point later in my contribution.

It is important that we all recognise that the age at which we receive the state pension must rise. Life expectancy continues to rise, and it is a key priority for this Government to ensure the long-term sustainability of the pension system. For that reason, the Government have introduced regular reviews of the state pension age. The issue is also likely to feature heavily in the Cridland review, which will be published in the coming months.

We recognise that employment prospects for women have changed dramatically since the state pension age was first set in 1940, especially for the women affected by the acceleration of the state pension age. Alongside the age increases under the new state pension, we have made huge progress in opening up employment opportunities for women and older workers. Since the 1970s, women have seen repeated increases in employment rates in later life compared with their male counterparts. The number of older women aged 50 to 64 who were in work in 2016 stood at more than 4 million, which is a record high. Approximately 150,000 more older women are in work than this time last year.

[Carolyn Harris]

Does the Minister acknowledge that women who are currently in work may be there not because they want to be, but because they have to be?

[Caroline Nokes]

The hon. Lady makes a valid point, but I would argue that there are also many men, and indeed many younger people, who have to be in work. We want to encourage more people to be in work and to play their part in society. As I said earlier, work is an important part of wellbeing. Work in itself provides emotional, physical and mental wellbeing effects.

The rate of employment for women aged between 60 and 64 is more than 40%—another record high. [Interruption.]

[Chi Onwurah]

Will the Minister give way?

[Caroline Nokes]

Well, I might if there were not a little private chat going on at the front of the Chamber. Still, I acknowledge that the hon. Lady is no part of that, so I give way.

[Chi Onwurah]

So far, the Minister’s contribution has not really reflected what this debate is about. I remind her that I asked her five specific questions and that I observed that this is a debate about working-class women. She has yet to use the word “working-class”; I hope she will before she sits down.

[Caroline Nokes]

I draw the hon. Lady’s attention to the specific title of the debate, which I believe I am covering: “That this House has considered the effect of state pension changes”. I have dealt with the new state pension thoroughly, and I hope that we will all acknowledge that we have indeed had a significant change with the introduction of the new state pension.

[Ian Blackford]

On a point of order, Mr Flello. I suggest, with regret, that we have not actually discussed the motion in front of us today. Unless the Minister does that in the short time that she has available, when we come to the appropriate point in the debate I will have no option but to move that we have not considered this matter.

[Robert Flello (in the Chair)]

I am not totally convinced that that was a point of order. Let us see how the debate continues.

[Caroline Nokes]

I hope you will forgive me, Mr Flello, if I take the opportunity to ask you for some advice. Do I have another 18 minutes or so? I certainly have several pages still to get through.

[Robert Flello (in the Chair)]

Indeed, although I would like to be able to call the mover of the motion for a minute or so at the end.

[Caroline Nokes]

Sixteen minutes, then.

In addition, independent research by the Institute for Fiscal Studies has shown that employment rates for women aged 60 and 61 have increased as a direct result of the changes in state pension age.

[Ian Blackford]

I must respectfully ask the Minister whether she has any idea of the disrespect that she is showing to the WASPI women by refusing to directly address the point that we are discussing. It has been pointed out that women have not been given effective notice. What are the Government going to do about it?

[Caroline Nokes]

I thank the hon. Gentleman for making another intervention, but he will be aware that I have 15 minutes in which to come to that point, and I have really only just begun.

The Government recognise the particular barriers that women face to remaining in the workplace and we have been quite clear that more action is needed to address them. For instance, we know that women with more children tend to take longer career breaks, which can impact on their retirement income. We also know that giving women the opportunities they need to continue working in later life, whether in a full-time or part-time role, is the best way in which we can help mitigate some of that impact, while of course making provision for those who may be unable to work or may have difficulty working. It is interesting to note that someone who draws on their pension pot at 65 instead of 55 and continues to receive average earnings for those extra years of working could increase their pension pot by half as much again. That is why we plan to do everything we can to change attitudes towards employing older female workers.

On a recent visit to the jobcentre in Eastbourne, I was struck by something that was said to me by a work coach who I met there. It was her view that women aged over 50 and seeking work were the most optimistic of the people she worked with and tried to place into jobs. It was that cohort who were the most open-minded and enthusiastic about trying new roles and learning new skills. My hon. Friend—and, indeed, neighbour—the Member for Eastleigh (Mims Davies), who is no longer in her place, raised absolutely that point. Actually, older women have the most flexibility and, as work coaches have said to me, the most open-minded attitude to trying new roles and being prepared to take on new challenges regardless of age. That is immensely encouraging. It tells me that what the Government are doing through the fuller working lives strategy, which the hon. Member for Newcastle upon Tyne Central mentioned earlier and which was published last week, is the right course of action.

I have seen at first hand the value that offering older workers a new opportunity can have; it can truly transform their lives. I am proud of the commitment that I have witnessed from work coaches up and down the country. The hon. Lady might also recognise that the claimant count in Newcastle, which she referenced earlier, is down by 28% since 2010. The female employment rate in the UK now stands at 69.9%—a near-record high.

[Ian Blackford]

On a point of order, Mr Flello. May I ask for your guidance on whether what we are hearing from the Government is indeed in order, given the subject of this debate?

[Robert Flello (in the Chair)]

Again, I do not think that that is a point of order; it is a matter for the debate.

[Caroline Nokes]

Hon. Members raised the increase in life expectancy. It has been experienced by all over the last few years, but it differs by occupation type—the hon. Member for Newcastle upon Tyne Central was certainly right to point that out. Women aged 65 who worked in higher managerial and professional occupations are expected to live more than three years longer than those in routine or manual roles; for men, that difference is greater, at four years. However, women in manual occupations have a similar life expectancy at 65 to men in professional occupations. Life expectancy also varies across regions—the hon. Lady was correct to point that out—but it would be wholly impractical to vary state pension age across the country.

The fuller working lives strategy aims to increase the retention, retraining and recruitment of older workers by bringing about a change in the perceptions and attitudes of employers and by challenging views of working in later life and retirement among individuals. As part of the strategy, the Government are taking account of the fact that people change jobs over their lifetimes. It is now extremely unusual for people to stay in one career throughout their entire working life.

[Patricia Gibson]

Does the Minister have anything to say to the women who are watching today, in the Gallery or at home, about the lack of notice that they were given and about how that has upset their retirement plans and put them in dire financial straits?

[Caroline Nokes]

I reassure that the hon. Lady that I will come to that point.

The fuller working lives strategy adopts a very new approach: it is led by employers, who rightly see themselves as the ones who understand the business case and can drive change. Specifically to support older claimants, the Department for Work and Pensions has introduced older claimant champions from April 2015 across each of its seven Jobcentre Plus groups. It plans to roll the initiative out to each of the 34 districts. These champions will work with work coaches and employers to raise the profile of that age group and highlight the benefits of employing older jobseekers. In addition, the Government Equalities Office continues to work with the Women’s Business Council to tackle the outdated assumptions that some employers make about women, particularly mothers.

In “Building our Industrial Strategy”, our Green Paper published last month, the Government set out how we will test ambitious new approaches to encourage lifelong learning to help adults who want to upskill or move around the labour market during their career. However, we recognise that some women may wish to continue to work and are unable to do so, so we continue to spend £90 billion a year on working-age benefits in this country. The welfare system provides a safety net for those of working age, and there are a range of benefits tailored to individual circumstances. The system is designed to deal with the problems, such as unemployment, disability and coping with caring responsibilities, that affect those who are unable to work and are therefore in most need as they approach their state pension age.

[Ian Blackford]

I suggest to the Minister that she should stop wasting everybody’s time and concede that she is not going to do anything, so that the WASPI women can get on with legal action and take the Government to court.

[Caroline Nokes]

I am sorry that the hon. Gentleman has become so frustrated. He will be conscious that I could still fill another nine or 10 minutes or so. There are some very important points that I would like to make and I am sure that people will want to hear them. If he continues to chunter—[Interruption.]

[Robert Flello (in the Chair)]

Order. Continue, Minister.

[Caroline Nokes]

Thank you, Mr Flello.

As I was saying, that is why we continue to spend £90 billion a year on working-age benefits to assist those in this country who are unable to work. For those seeking work, people in receipt of working-age benefits can access a range of support from Jobcentre Plus and tailored support from the Work programme.

Specifically, the evidence is clear, and we as a Government are clear, that work is the best route out of poverty. That is why this Government’s approach has been about recognising the value and importance of work, to make work pay and to support people into work, while protecting the most vulnerable in society.

Our reforms are transforming lives. Today’s labour market statistics show that we continue to have a record number of people in work—over 2.7 million more than in 2010. The number of workless households is down by 865,000, and the percentage of households in the social sector where no one works has fallen from 49% to 38%, which is a decrease of nearly 350,000 households.

We have made a real difference for women, with more than 1 million more women in work since 2010 and the highest rate of female employment on record. The gender pay gap is also at its lowest level since records began, and there are now 1.2 million women-led small and medium-sized enterprises, which is more than ever before. We are rightly proud of our record but recognise that there is more to do.

We had to equalise state pension age to eliminate gender inequalities in social security provision—it is the right thing to do—and we had to accelerate this process due to increases in longevity, in order to protect the long-term sustainability of state pension provision in this country.

We know that whenever things change, there have to be dividing lines, and I understand that the changes are most stark for those closest to the line. That is no different in this case. We understand that and the Government listened to the concerns expressed at the time. Therefore, a concession worth more than £1 billion was introduced, despite the fiscal situation, to lessen the impact of the changes on those worst affected. The concession reduced the delay that anyone would experience in claiming their state pension and benefited almost a quarter of a million women.

However, going further than that simply cannot be justified, given that the underlying imperative must be to focus public resources on those most in need. I have listened to Opposition Members, and I have heard and understood their concerns. However, let me be clear—we are making no further concessions on this issue. As well as being unaffordable, reversing the Pensions Act 1995 would create an anomaly, whereby women would be expected to work for less time than they work now, and it would be discriminatory to men. It is not practical to implement.

John Cridland’s independent report on state pension age will consider wider factors that should—

[Chi Onwurah]

I certainly thank the Minister for finally coming to matters that are relevant to this debate and the people here. However, does she recognise the point that because the women we are discussing today started work earlier—at the age of 15, which is long before she or I started work—they are the generation who are working longer than any other generation? When she says that giving a further “concession” would mean that they ended up working for less time than other women, does she not recognise that they have worked, and are working, for longer?

[Robert Flello (in the Chair)]

Just before I call the Minister to continue, may I suggest that she perhaps speaks for only a couple more minutes?

[Caroline Nokes]

The hon. Lady also needs to reflect that these women are also living longer; we are all living longer.

As I was saying, the Cridland independent report is coming forward and will be published in March. It is part of the Government’s review of state pension age, which is due in early 2017.

[Patricia Gibson]

rose—

[Caroline Nokes]

I will not give way again; the Chairman has made it very clear that he wants me to conclude my remarks.

A number of points have been made today about communications; in particular, the hon. Member for Ross, Skye and Lochaber has been quite forceful on this subject. He made the point that there were about 14 years between the decision being made and letters starting to go out. When he refers to “this Government”, I remind him that for the bulk of that time my party was not in Government, and if he wishes to lay the blame for a lack of communication, he might do well to direct it somewhere else.

We have continued this country’s long record of raising the living standards of pensioners, through our commitment to the triple lock and our reforms of the state pension, and we are revolutionising the world of private pensions through auto-enrolment, which is for everyone. However, we want continue our work aimed at providing older workers with greater choice and greater security in retirement, which is at the heart of our fuller working lives strategy. The results speak for themselves. We not only continue to increase the employment prospects for women above the age of 60 drastically, but the new state pension provides people with greater freedom and greater choice, and dignity in retirement.

[Robert Flello (in the Chair)]

I call Chi Onwurah to wind up the debate.