Pensions Bill [Lords]

Debate between Harriett Baldwin and Debbie Abrahams

Monday 20th June 2011 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Like other Members, I am encouraged by the agreement across the Chamber, particularly on issues related to fairness that mostly affect women. We agree, for instance, that we are all living longer and therefore need to extend our working lives. Contrary to what the hon. Member for South Dorset (Richard Drax) said, the last Labour Government took that into account in the Pensions Act 2007, following the recommendations of the Turner commission.

My right hon. Friend the Member for Croydon North (Malcolm Wicks) made a relevant point about variations in life expectancy connected with socio-economic inequalities, and about the time for which people in a healthy condition can expect to live. I agree that more research should be done on that.

[Harriett Baldwin]

The hon. Lady mentioned the steps that the last Government took to deal with increasing longevity. Does she agree that the figures produced by the original Turner commission suggest that things are moving much faster than was anticipated even in 2004, and that since then longevity has increased by at least a year?

[Debbie Abrahams]

I think that the hon. Lady is referring to the average. It is important for us to consider not just the average, but how the figure is spread across different socio-economic groups. It does not explain or excuse the Government’s failure to protect the women who are being detrimentally affected by the acceleration of the equalisation of the pension age.

As many people have pointed out, this is about fairness. We must focus on what is right, and the Bill fails the fairness test. Many figures have been cited in relation to what the Bill means nationally. Half a million women will have to wait more than a year longer to receive their state pensions, 300,000 will have to wait an additional 18 months, and an unfortunate 33,000 will have to wait a further two years. Moreover, the Government will increase the state pension age for both men and women to 66 in 2018.

I asked the House of Commons Library to conduct an analysis of the impact in my constituency. I discovered that 4,300 women and 3,800 men would be affected, and that approximately 200 women would experience a notional loss of income from their state pensions of up to £10,700. I have been contacted by dozens of women in my constituency who have been working since the age of 14 or 15, including one called Linda Murray. She gave me permission to use her name. She was born in 1954, and left school at 16 to start work. She wrote:

“I have never had a job that provided a pension or had the means to provide one for myself. I have worked full-time apart from a few years when I worked part-time while helping to look after my mother who needed 24-hour care. For most of my working life I expected to receive my pension at the age of 60. However when the age started to rise I accepted this, as did everyone else. My retirement date was set at 64. I now work 47 hours a week in a dry cleaners and it is hard manual work. Due to my personal circumstances, full retirement is not an option for me, at least for a few years, but I was planning to greatly reduce my hours. I know that I won’t be able to continue working as I am now until I’m 66.”

Many Members have mentioned that that is hard to do because of the physical wearing out of the body.

Linda continues:

“But my take-home pay is £267 a week—how am I going to be able to save enough from this to be able to work part-time when I’m 64?...This proposal is ill thought-out and cruel. It’s unfair to move the goalposts for a second time. Women of my age have worked hard and honestly and don’t deserve to be discriminated against in this way. We accept the need to equalise the retirement ages but it should be done in a fair way. I feel that this Act will create an underclass of women unable to continue in their present employment, unable to find another job and denied the pension to which they are entitled. In an interview in The Daily Telegraph…David Cameron said that a sudden rise in women’s retirement age was out of the question.”

So that is another broken promise. There are hundreds of women with similar stories, and there is considerable cross-party agreement that we need to do something about this. I therefore hope that Ministers are listening.

Another fairness issue is the switch from the retail prices index to the consumer prices index. The Department for Work and Pensions impact assessment produced figures that again suggest that the burden will shift from the Government and employers to the individual. Some £500 million will be taken from the Pension Protection Fund.

My final point is about the increase in income thresholds for automatic enrolment into occupational pensions and the delay in that regard. The former Labour Government introduced that measure in the Pensions Act 2008, but the current Government are restricting access to it by both increasing the threshold from £5,000 to almost £7,500 and introducing a three-month waiting period. Again, women and people in low-income jobs will be particularly affected. Indeed, the impact assessment suggests that those who will be most detrimentally affected will be women, people on low incomes, ethnic minority groups and people with disabilities.

We must not allow our pension system to be reformed in a way that pushes pensioners deeper into poverty. Labour did a lot to reduce inequalities—although I would have liked us to have done a lot more—but these reforms will make them worse.