State Pension Age (Women)

Fiona Mactaggart Excerpts

Wednesday 11th May 2011 Westminster Hall

[Annette Brooke]

I ask the hon. Gentleman to wait for me to identify the injustice. My point was about the cliff edge; there could be two women living next door to one another with one day’s difference in their birthdays, and there would be a cliff edge. Changes need to be phased in. In 2007, there was no phasing in, so some women missed out on as much as £28,000 over the course of their retirement because of one day. Whenever there is a sharp cut-off date, there is an injustice.

[Fiona Mactaggart (Slough) (Lab)]

rose—

[Annette Brooke]

I want to make a fairly brief speech.

We have a long history of injustice towards women and I am illustrating that with a few examples from the past. On many of those issues, the Minister has an excellent record in fighting for the cause of women, particularly the married women’s contribution and the cliff edge, so I feel that we could get a very sympathetic hearing today.

As the hon. Member for Erith and Thamesmead said, women born between 1953 and 1954 particularly will be hit very hard. Some 500,000 women will have their state pension age delayed by more than a year, 300,000 women will have it delayed by 18 months or more and a small but badly hit group of 33,000 women will have it delayed by exactly two years—just because they happen to be born in a particular month. That picks up my point about the cliff edge of the previous change, because there are parallels with this change. We should not say that because it happened in the past, there will always be a one-day cliff edge. There are always opportunities to look at things again.

[Fiona Mactaggart]

I agree that there is an injustice for people born within a day of each other when there is a sudden change, but there is a difference between this change and the one to which the hon. Lady refers. That change increased the number of women who had an opportunity to get a full pension, but this change will negatively affect some women. When people feel an injustice, the difference is this—if someone gets a good thing, it is not completely fair, but if all of us get an appalling thing, it is certainly unfair.

[Annette Brooke]

I am sure that the hon. Lady appreciates that I am trying to show that there are a lot of instances in which women have had a very unjust settlement, and this is yet another instance of that. We all have an opportunity to speak out against it now, when there is time to do so.

Obviously, the proposals to speed up the increase of the pension age will deny large numbers of people the notice they need to plan effectively for a later retirement, and I am concerned that the poorest and the unemployed could face real hardship as they struggle to manage without the state pension and benefits on which they were relying. As other Members have mentioned, this particular change is not in the coalition agreement. I shall give one example of the effects of the change on one of my constituents:

“My birth date is 10/11/1954. I reluctantly accepted the raise of my retirement age to 64 years and 7 months…Now I am shocked to hear I will now have my pension at 66 years of age. I have had no opportunity to plan for this increased time scale, what do I do?????”

That is the question: what do these women do?

“I have no private pension and I am now being forced to work another 18 months after starting work at 15 years of age!!!!! I’ve already missed out on retiring at 60, like my mum. The older we get, the goal posts are continually being moved.”

For me, that says it all.

We know that this is not about a large number of people, so money could be found by the coalition Government. We need to know how much it would cost to even out matters. This is an opportunity for the coalition Government to say, “We really do care about giving equal treatment to the citizens of this country.”

--- Later in debate ---

[Steve Webb]

I am grateful to the hon. Lady for raising the position of women in the pension system. Assuming that some of the pension reform proposals in the Green Paper that we published last month go ahead, for example the single flat-rate decent state pension, the group of women most affected by this change would be the first group of women to benefit, and potentially very substantially. At the moment, women draw a state pension of £40 a week, on average, less than men, but under the single-tier pension proposal, which I have been very involved in introducing, many women would be the main beneficiaries.

Various Members have raised the important issue of women whose pension rights have been hampered by time spent bringing up children or caring for relatives, and under the single-tier pension proposal a year spent at home with children or a relative will be worth just as much to a state pension as a year spent running a FTSE 100 company. So much do I take the view—in government as I did in opposition—that the work that men and women do, whether paid work or bringing up a family, is of equal value, that for the first time we are proposing that that be manifest in the pension system, and that will be transformative, particularly for women.

[Fiona Mactaggart]

Will the Minister agree to publish figures? I am interested in what effect the single-tier pension will have on women, and I am finding it difficult to work out how many women will be affected by the abolition of the state second pension and the cost of their different contributions. I am unaware of any figures working out how many women and men will be affected by the change respectively. I am not as sanguine as he is that all women will benefit. There are many women whose contributions to the state second pension are important to their retirement.

[Steve Webb]

On how the proposed single-tier pension will work, it is a Green Paper with options, so the sort of detailed figures for which the hon. Lady asks will be produced when we have identified which of the two options we will go for and refined the proposition. That information will be made available when the proposition is refined further.

To clarify, at the moment, many women in the age cohort that we have been discussing will have spent time at home with their children before the state second pension was introduced. Whereas the state second pension offers protection for time at home with children, the state earnings-related pension scheme did not. That set of women is approaching pension age. People have accused me of moving the goalposts. I am indeed moving the goalposts for those women, but in their direction. They will draw a state pension—yes, later, but for an average of more than 20 years. Compared with when we first started debating the changes in state pension age last summer, that is a significant difference.