State Pension Age Equalisation

Geraint Davies Excerpts

Wednesday 2nd December 2015 Westminster Hall

[Barbara Keeley]

That is absolutely true. The two years’ notice is clearly an issue when someone is deciding to retire to care for two people with dementia, particularly when looking after two people with dementia saves the state a great deal of money.

There are many such stories and examples. By not providing adequate notice of the change and by speeding up the process without putting in place any suitable transitional protection, the Government are failing to support the women born in the 1950s who are affected by their policies. Having promised much during debates, the only concession the Government made was to ensure that the additional increase in the state pension age could not be more than 18 months, but that small concession is of little comfort to those women who were not even informed of the change until very close to the age at which they expected to retire. They have worked hard and contributed to the system.

Throughout their lives, this generation of women has been disadvantaged in the workplace in terms of pay because of their gender. Even now, women in their 60s earn 14% less than men. Many of the women do not have private pensions. Until 1995, women who worked part-time were not allowed to join company pension schemes, and others did not qualify because they took time away from work owing to ill health or a caring role. Very many have no other sources of income, and they now find that once again they are being treated unfairly because of the way changes to the state pension have been enacted and because they are women.

I urge the Minister to look again at the issue and to look at ways of providing adequate transitional protection —the transitional protection that his ministerial colleagues repeatedly mentioned in the debates on the Pensions Act 2011.

[Geraint Davies (in the Chair)]

There are six speakers, and I will be calling the first of the Front Benchers at half-past 10. Each speaker has around five minutes if everyone is to get in. I call Richard Graham.

--- Later in debate ---

[Richard Graham]

Indeed. The hon. Gentleman is absolutely right.

[Geraint Davies (in the Chair)]

Order. Mr Graham, could you bring your comments to a conclusion quite quickly? I have seven other people wanting to speak.

[Richard Graham]

I will, Mr Davies. I was just taking as many interventions as possible.

The hon. Member for East Londonderry (Mr Campbell) is absolutely right. The deferral scheme depends on the individual’s circumstances. None the less, the actuaries would tell us that, on balance, most women will live longer than us men and that the four-year deferral may therefore be extremely advantageous for some people. It is just one example of the technicalities that are worth thinking about.

In conclusion, today’s debate is really important. The hon. Member for Worsley and Eccles South was absolutely right to have secured it. Women in their late 50s and early 60s are affected. There is a serious issue of communication. A lot of this will be hard to untangle, but if the Minister can shed more light on what did or did not happen between 1995 and 2009, that would help. There is a generic issue about what happens when Government communicate, but that communication is not read or is recycled. How can Government respond to that position of professed ignorance? Clearly, it would be fantastic if transitional arrangements could be delivered, but the financial cost may be considerable.

[Geraint Davies (in the Chair)]

I am afraid that I am imposing a time limit of four minutes because of the number of people who have indicated they wish to speak.

--- Later in debate ---

[Derek Twigg (Halton) (Lab)]

I congratulate my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) on securing this debate and on her excellent speech. There is not a great deal more that I can say, but I will try to add something. I also thank my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), who has campaigned assiduously on this issue and would have added greatly to the debate if he were here today.

There is no doubt in my mind that great hardship is being caused here. The unfairness and inequality stand out a mile. People have been hit twice—in 1995 and by the changes in 2011. One of the things that strikes me most clearly is that just because a person is born a few months either side of a particular date, they can lose out considerably. That patent unfairness is one of the key issues that my constituents have raised.

I have had numerous letters over the past few years about this issue. In October, a group of my constituents who support the WASPI campaign came to my advice surgery and set out starkly how the issue has affected their lives. That struck home to me how difficult and how much of a burden it is for women—particularly those in the 53 to 55 age group. They stressed that the main issue—some did not oppose the rise—is the way in which the change was implemented and the lack of personal notification in 1995 and 2011. Those aged 53 to 55 have been hit hardest.

My constituents also spoke about the financial hardship—we have heard examples of that today. Women in that period who became pregnant left work and, in many cases, never went back. That generation’s circumstances were different, in terms of the help and support they got and their ability to work. One of the key points that my constituents made to me is that they had no time to re-plan their lives; they reiterated that time and again.

The only available information was in the media, and that is not good enough. That seems to be part of the defence: the issue was discussed in the media and a few papers ran with it, so that is okay, but that is not good enough. The key issue for my constituents is not just that they are not able to plan, but that they have not been given enough time to add to their pension pots.

The hon. Member for Central Ayrshire (Dr Whitford) talked about the £27 billion leeway that the Chancellor found. This is a great example of how some of that money can be used, and if the money were used in that way, it would be reinvested back into the economy. The Government should look at that option and consider how they can recompense those women and make the change in a better way to ensure that they do not undergo financial hardship. I hope the Minister will revisit this issue.

[Geraint Davies (in the Chair)]

Thank you for your brevity.

--- Later in debate ---

[Nick Thomas-Symonds (Torfaen) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mr Davies. I congratulate my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) on securing the debate. The degree of interest in it and the number of contributions are testament to its importance.

My hon. Friend spoke well both about the transitional arrangements and the importance of notice, highlighting the fact that some people had to wait 14 years for notice under the Pensions Act 1995. The human stories that she put forward are extremely important. She also pointed out one of the supreme ironies that we face in this debate: the Pensions Minister in the other place, Baroness Altmann, campaigned on this issue in 2011 and showed some ability to bring about concessions. Now she is actually in a position of power, however, she claims that she does not have the power to do anything about it. I will return to her in due course.

There were a number of other contributions to the debate. The hon. Member for Gloucester (Richard Graham) spoke about the issue of communication, and I hope that the Department and the Minister will be able to answer in detail about what steps have been taken in that regard.

My hon. Friend the Member for Heywood and Middleton (Liz McInnes) spoke passionately about her constituent and highlighted what I am afraid is the growing problem of the gap in life expectancy between the wealthiest areas of our country and the less wealthy areas. She pointed, too, to the issue of those born in the 1950s, the very generation that should have been able to benefit from the cradle-to-grave welfare state introduced by Clement Attlee’s Labour Government of 1945 to 1951.

The hon. Member for Airdrie and Shotts (Neil Gray) set out precisely the categories of people who are affected by the changes. He spoke well about the unfair manner of the notice that was given and about the issue of transitional provisions. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) also spoke well about notification and fairness.

My hon. Friend the Member for Halton (Derek Twigg) highlighted well the issue of the generation born in the 1950s and the importance—which I will come back to—of people being given the time to plan their lives when changes in provision are made.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) brought out the point about emotional distress extremely well. I echo his compliments to WASPI and other campaign groups that are trying to do so much for women born in the 1950s and about the unfairnesses that they face.

My hon. Friend the Member for St Helens South and Whiston (Marie Rimmer) highlighted well the hardship for certain groups. She also made an important point about levels of awareness, which vary up and down the income scale.

We need look at the central issues of this debate: first, transitional provisions, and secondly, notice. The hon. Member for Ross, Skye and Lochaber (Ian Blackford) made the point about transitional provisions, but let us be absolutely precise about what the Secretary of State for Work and Pensions said on Second Reading of the Pensions Bill on 20 June 2011:

“Let me simply repeat what I said earlier—it is a bit like a recording, but I shall do it none the less: we have no plans to change equalisation in 2018, or the age of 66 for both men and women in 2020, but we will consider transitional arrangements.”—[Official Report, 20 June 2011; Vol. 530, c. 52.]

I repeated that direct quotation to the Economic Secretary to the Treasury in a debate here in Westminster Hall on 17 November 2015. She promised that the noble Lady Baroness Altmann would write to me about it. The next day I tabled a written parliamentary question, and I received an answer from an Under-Secretary of State in the Department for Work and Pensions, the hon. Member for North Swindon (Justin Tomlinson). He said:

“Ministers discussed and considered transitional arrangements during the passage of the Pensions Bill 2011.”

Sadly, at the end of his reply he added:

“The Government will not be revisiting the State Pension age arrangements for women affected by the 2011 Act.”

I had that answer on 23 November.

In a letter dated 25 November, I received my answer from the Pensions Minister:

“To clarify, the Secretary of State made this comment when Parliament was considering the Pensions Act 2011. You will wish to note that, later on in that process, the Government made a concession to reduce the delay that anyone would experience in claiming their State Pension as a result of state pension age changes to 18 months.”

Sadly, she also added:

“The policy was debated and passed into law, and there are no new arguments to consider.”

Can the Minister understand the intense disappointment that there will be about that response? The concession mentioned will come as little comfort to those affected by the changes. I urge the Minister not to give up, but to look at what can be done on transitional provisions. The hon. Member for East Worthing and Shoreham (Tim Loughton) made the point well in his intervention—do not slam the door shut on the women affected, who were born in the 1950s, as the Pensions Minister appears to have been doing in her letter.

Deeper matters are at stake in this debate. The hon. Member for Central Ayrshire (Dr Whitford) said that there is an issue about the ability of the affected generation of women to contribute to pension pots throughout their lives. Women born between 6 April 1951 and 5 April 1953 are not eligible for a single-tier state pension; a man born on exactly the same day will be. My hon. Friend the Member for Worsley and Eccles South brought out the dual impact of the increase introduced in the 1995 Act and the subsequent ineligibility for a single-tier pension—women have been affected not once but twice.

I put it to the Government that the issue of notice is fundamentally important. We talk about notice periods of 10 or 15 years because once people retire, their ability to top up their income is extraordinarily limited. Therefore, when we make changes to the pension age, it is vital that people are told about such changes in good time, so that they may change their lives to adjust to the new reality. That is the fundamental issue at stake. There is incredibly deep anger about the fact that appropriate notice was not given. I urge the Government not to turn their back on transitional provisions.

We have talked about the availability of money. I am one of the first people to say that there has to be an appropriate publicity campaign on auto-enrolment, but I raised my eyebrows slightly when I learned that in recent months the Department for Work and Pensions has spent £8.45 million on a multi-coloured teddy bear called Workie, which will apparently deal with the auto-enrolment awareness problem. It must be one of the most expensive teddy bears in British history.

The spending on the teddy bear is an indication of something deeper—the choices that the Government face. They can still make a choice to consider transitional provisions for those affected by the changes. I urge the Government to look again at transitional provisions, and not to slam the door on the 1950s women.

[Geraint Davies (in the Chair)]

If you wish, Minister, you may allow Barbara Keeley a minute at the end to respond, as a courtesy. It is your choice.

--- Later in debate ---

[Mr Vara]

I will also say that while this is an important subject, it is not something—[Interruption.]

[Geraint Davies (in the Chair)]

Order. Carry on, Minister.

[Mr Vara]

This was not mentioned in terms of redress in the Labour manifesto, either.