Transitional State Pension Arrangements for Women

Helen Jones Excerpts

Monday 1st February 2016 Westminster Hall

[Helen Jones (Warrington North) (Lab)]

I beg to move,

That this House has considered e-petition 110776 relating to transitional state pension arrangements for women born in the 1950s.

It is a great pleasure to serve under your chairmanship, Mr Stringer. At the outset, I want to say that I have a personal interest in this issue, because I was born in 1954—[Interruption.] There is no use in members of my Committee trying to be kind to me; I am a TOG—one of Terry’s old gals.

I am, however, one of the very lucky members of that cohort of women because I belong to the parliamentary pension scheme, and when that scheme was changed in the previous Parliament, the Independent Parliamentary Standards Authority—I make it clear that this was done by that body, not MPs—decided that the new scheme would not apply to anyone who had reached 55 by a certain date. Sadly, although the reason for that decision was that people would not have time to make alternative arrangements for their retirement, we have not extended the same consideration to many women who will have to rely on their state pensions. I speak today for those women, not for myself. I am speaking for the thousands of women in this country who are having to change their retirement plans at short notice, to dig into their often meagre savings, or to rely on their husband’s pension. Many of them are being driven into poverty as a result.

This debate is not about the question of equalising the state pension age. Of all the many women who have contacted me, none has objected to that. This is about the speed of the changes, their impact on a particular group and the lack of notification, or totally inadequate notification, that women have received.

To explain the situation, I am afraid that we have to go back through the history. The Pensions Act 1995 sought to equalise the state pension age for men and women at 65. In 2007, the then Labour Government decided that the pension age would increase to 66, and then to 68, but over a very long period—from 2024 to 2046. However, the coalition Government then decided to pass the Pensions Act 2011, which speeded up the changes so that the state pension age for men and women would reach 66 in 2020. To achieve that, they brought forward the increase in the pension age to 65 for women from 2020 to 2018. At that time, the coalition Government were warned again and again about the problems that the changes would cause. In fact, the Opposition moved amendments that would have ensured that no one would wait more than a year longer for their state pension than would have been the case under the 1995 Act.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I, too, declare an interest as someone who was born in 1955. Does my hon. Friend agree that the really objectionable thing is that we know that people need to be able to plan for their pension provision? This cohort of women—we could be talking about factors such as reduced contributions, or not qualifying due to caring responsibilities all the way through their lives—has got it in the neck, so we need transitional arrangements to put that right.

[Helen Jones]

I absolutely agree with my right hon. Friend, and I will come to that point later.

As I said, the problem was recognised by many people at the time of the 2011 Act. My hon. Friend the Member for Erith and Thamesmead (Teresa Pearce), who has a great deal of expertise in this area, moved amendments that would have protected women born between October 1953 and April 1955 from waiting more than an extra year for their state pension.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Is it not also the case, as several of my constituents have said, that these changes compounded measures in the 1995 Act of which women were not informed? One lady said that until she got a letter saying, “You are no longer retiring at 64, but at 66,” she knew nothing about the fact that there had been a change, so for her the difference is six years.

[Helen Jones]

The hon. Lady is absolutely right. Again, I will come on to that point a bit later.

Part of the problem in 2011 was that the Government did not seem to understand the implications of their own Bill. When the former Pensions Minister gave an interview to the Institute for Government after the 2015 election, he said, somewhat ungrammatically, I think, but fairly clearly:

“We made a choice, and the implications of what we were doing suddenly, about two or three months later, it became clear that they were very different from what we thought.”

I have known a few Ministers in my time who did not seem to understand the implications of their own Bills, but this was a former Pensions Minister—an acknowledged expert on social security—who did not understand what was going to happen. If he did not understand the position, how on earth could he expect the many thousands of affected women to understand it?

[Rachel Reeves (Leeds West) (Lab)]

I thank my hon. Friend for securing the debate. She quotes the former Pensions Minister, but the current Minister for Pensions said in 2011:

“The Government has not given women enough time to change their plans…I believe the Government’s decision is unfair and disproportionately hits women who are now around 56 years old.”

She said that then, so it is a shame that now she is in government, she is not trying to change the situation.

[Helen Jones]

I could not agree more with my hon. Friend.

Let us remember that during our consideration of the 2011 Bill, the then Pensions Minister promised to look at transitional arrangements for some of the women affected. Towards the end of the Bill’s passage, the Government made amendments that at least prevented people from having to wait longer than an extra 18 months for their state pension. That certainly helped some women born between January and September 1954, but there was still a whole load of anomalies that were not dealt with. One of the things that has made the situation worse, as has been said, is the lack of notice that women received about the changes.

[Mr George Howarth (Knowsley) (Lab)]

My hon. Friend is making a powerful case. May I give her one instance of what she described? Somebody who was born in 1956 was notified in 2006 what her state pension would be at the age of 60. That was the last communication that she had, so in 2010, when she was offered early retirement as a teacher, she took it on the basis of that information, and retired in 2011. She was given absolutely no indication that she would be in this situation, but she has now been told that she will not get her state pension until she is 68.

[Helen Jones]

Absolutely. Many, many women have found themselves in a similar position. They have been given information that has never been corrected and they have relied on that information.

[Several hon. Members rose—]

[Helen Jones]

I need to make some progress, because lots of people want to speak in this debate and I do not want to take up too much time.

Let us remember that, way back, the Turner commission said that people should be given at least 15 years’ notice of changes to the state pension age. The Pensions Act 2014—we wait ages for a Pensions Act and then they are like buses; a load come along together—set up periodic reviews that aimed to give people at least 10 years’ notice. One could argue that, in principle, the 1995 Act gave that kind of notice, but lots of people did not know about it. There was no requirement under the Act to inform individual women who might be affected. Indeed, apparently what happened was that the Department produced a leaflet. That is very nice, but if people are going to request the leaflet, they must know about the changes coming forward. I certainly did not know that it existed, and I do not think anyone else did. There was an advertising campaign about preparing for retirement, but it was aimed at both men and women. It was not aimed specifically at those whose state pension age was changing. There were a few inserts and adverts in papers and magazines.

For most people, those things were background noise as they were getting on with their lives. No one wrote to the individual women who would be affected. It was not until 2009 that the Government started to do that, but that process was stopped in 2011 as we debated yet another Pensions Act to introduce more changes. That gross dereliction of duty on the part of the Department for Work and Pensions cannot be defended.

After the Pensions Act 2011 was enacted, the Government again began to write to people. They finished the process in 2013, but that meant that some women, if they were notified, received only between three and four years’ notice of changes to their pensions, which was not nearly enough time to make proper provision. In fact, some did not receive notification at all, as we have heard, because their letter were sent to their old address. Some received the wrong state pension forecast and they were not corrected.

Before she became Minister for Pensions, Baroness Altmann said that

“until recently, many of these women were expecting to receive their state pension at age 60, since they were unaware of the changes made in 1995”.

Indeed, the former Pensions Minister said the same thing. In 2015, when he gave evidence to the Work and Pensions Committee, he said that it was clear that there was a cohort of women who did not know about the changes and that

“there is no question about that.”

The rapid changes introduced by the 2011 Act have resulted in huge inequalities, because small differences between people’s date of birth may mean a big difference to the dates when they reach their pension age. Women born in the 1950s are particularly affected, and I am grateful to those women who have written to me with specific examples of what is happening. I shall quote some of them because I stress to the Government that this is not an academic exercise. Real people are on the receiving end of the changes and many of them are suffering.

One lady wrote to me pointing out that her husband was born in January 1954, meaning that he can retire at the age of 65 years and two months. She was born in August that year, but cannot retire until she is 65 years and 11 months. She said, “Whatever that is, it is not equality,” and it is not.

[Carolyn Harris (Swansea East) (Lab)]

Will my hon. Friend give way?

[Helen Jones]

I will give way, but then I want to make some progress.

[Carolyn Harris]

I congratulate my hon. Friend on securing the debate. If, in March 1953, Mrs Jones gave birth to twins, Jack would get £155 a week under the single-tier state pension, but Jill would get £131, because she was born a woman. Where is the justice in Jack getting £20,000 more over 20 years than his sister, Jill? That is ludicrous.

[Helen Jones]

My hon. Friend is right. The system is riddled with inequalities.

Many women have received wrong information. One lady who contacted me wrote:

“I have a pension calculation from the DWP telling me that I retire at 60 and this would not be reviewed until 2020”—

someone obviously keeps her paperwork carefully. She went on to say:

“I have had no notification or correspondence from the DWP informing me of these changes and have…just found out by applying for a State pension forecast…To be told at the age of 58 that you will not get any pension until you are 66 does not give enough time to plan or budget”—

she is right.

Many women have been caught out by the changes in the number of years’ contributions to national insurance required before receiving a full pension. One lady said:

“I was made redundant after 30 years and I contacted the NI people to ask about my contribution record…I was told because I had paid a full 30 years I didn’t need to pay anymore”.

She then found out that she

“was no longer getting a full pension but approximately £35 a week less because guess what I haven’t paid enough NI contributions in the last 7 years! I WAS TOLD I DIDN’T NEED TO!”

In any private pension scheme, that would be called mis-selling, but we see the same from the Government.

Another lady highlighted the fact that many of this cohort of women took time out to look after their children or to act as carers, meaning that they did not build up enough occupational pension. In some cases, women were not allowed to join occupational pension schemes at all and some were working before the Equal Pay Act 1970 came into force. She said:

“I am also penalised here because when I did return to work after my children were older I did not accrue enough to have a reasonable work pension…It is totally demeaning that I have to rely once again on my husband who is 67 this year and worked from the age of 18.”

That is not equality.

Another lady, who is also a carer, said:

“I will be 62 next month and found out that I will not be getting my state pension until I am 65 and some months. I made Choices in my mid fifties and gave up work to look after my husband expecting to only wait 5 years or so to get my pension but it came as a shock to find out that I wasn’t”.

People have made decisions based on information they were given at the time in good faith, but they then found that decisions had been overturned.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate my hon. Friend on securing the debate. This is the second debate on this matter that we have in a few weeks, but the Government have not taken a blind bit of notice. I have also received correspondence outlining similar cases. In fact, we received more than 3,500 examples in Coventry. Is there not a danger that women will be in the same position as they were before the Equal Pay Act? Equal pay has still not been achieved in some industries, and women are also being affected in terms of their pensions.

[Helen Jones]

Many women are losing out on their pensions in all sorts of ways, not least because of the change in the retirement age. One woman who wrote to me has, like many of those I have heard from, worked all her life. She suddenly found out that rather than her retirement age being 62, it was going to be 65. She said:

“I am really annoyed with the Government’s lack of respect for those of us that have worked hard all our lives.”

The phrase “lack of respect” sums up the situation. There has been failure to give proper notification—sometimes there has been no notification—a failure to understand that many of the women affected were working in low-paid jobs all their lives, a failure to understand that women could not change their plans at short notice and that many of them would have to rely on their husband’s pension, and a total failure to see the impact of the legislation on those real people. Many of these people are now living in poverty or working for longer in low-paid jobs, while many were made redundant in their early 60s and cannot get other employment.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Will my hon. Friend give way?

[Helen Jones]

I will give way once more and then make some progress.

[Paul Farrelly]

I congratulate my hon. Friend on her speech. Has she been able to obtain from the Treasury an estimate of the saving to its coffers due to this acceleration of equalisation? It seems to me and many others that, alongside measures such as the restriction to the lifetime allowance, this is part of the Chancellor’s great raid on the pensions of people around the country.

[Helen Jones]

The Chancellor’s financial calculations are always a little opaque, but I think that we are talking about something like £30 billion.

The Government have consistently undervalued these women and their contribution to the country through work, caring and childcare. These women are being forced into poverty, and they are angry, as they have every right to be, because they have been treated appallingly. Frankly, blaming the EU for the fiasco, as the Government have tried to do, will not work. I know that many MPs are being told to blame the EU in the standard letters that they send back. It is common for some Ministers to blame the EU if it rains three days in a row but, in this case, that is not correct.

EU directive 79/7/EEC promoted equal treatment in social security matters, but it specifically recognised that progress towards equal pensions would have to involve transitional arrangements. In fact, the European Commission’s 2007 report made it clear that it expected transitional arrangements to be made. What are other EU countries doing? Austria will equalise its state pension ages in 2033. France is doing that earlier—in 2020—but it is equalising them at 61. In fact, many European countries have a long transitional process in the move towards equalisation. The European Court of Justice judgment that is often cited applies to occupational pensions, not state pensions, which are specifically exempted under paragraph 1(a) of article 7 of the directive to which I referred.

The real reason behind this, as we heard earlier, is to save money. Again, the current Minister for Pensions agrees with that, because in an article for the Yorkshire Post—again, this was before she became Pensions Minister —she wrote:

“increasing state pension age saves significant sums, as millions must wait longer before their pension starts, but for many this is causing real hardship. Surely Ministers should be sensitive to the damage done to older people’s lives”.

Well, Ministers are not sensitive to that damage. The new Pensions Minister in particular is not sensitive to that damage, because she wrote to a member of Women Against State Pension Inequality—I congratulate it on its work—to say:

“there is no basis for me to demand spending public money when due process was followed.”

Well, let me ask this: who contributed to that public money? Many of those contributions came from women who have worked hard all their lives and have relieved the state of huge burdens through their caring responsibilities.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my hon. Friend on the way in which she is pursuing this argument. Is not that the very point? Women such as the many constituents who have come to see me have contributed to the state throughout their lives. They have put in, but now they are not allowed access at the point when it is their turn to get support.

[Helen Jones]

My hon. Friend is quite right. That is exactly why women are so angry about the situation. They rightly feel undervalued and ignored.

There are steps that the Government could take, many of which were suggested during the passage of the 2011 Bill. The Government could limit the amount of time that someone has to wait longer for their state pension to a year, as my hon. Friend the Member for Foyle (Mark Durkan) suggested at the time. They could ensure that the age for pension credit remains in line with that under the 1995 Act. They could also exempt some of these older women from parts of the Work programme, because it is frankly appalling that when women who have worked all their lives are made redundant in their early 60s, they are put on the Work programme and treated like a bunch of workshy teenagers. That is degrading to those women.

[Dr Tania Mathias (Twickenham) (Con)]

I thank the hon. Lady for securing the debate and absolutely agree with what she is saying. She talks about women being undervalued. Does she agree with me that these 1950s heroines not only have worked all their lives but, because they did not have notice in time, as she rightly says, have opted to be carers for their mothers or mothers-in-law and are contributing even now?

[Helen Jones]

That is exactly right. A number of these women, such as the one whose letter I read out earlier, have taken the decision to retire early from work to look after someone in their family on the basis that they can manage if they have only a few years to wait for their pension, but then have then found that they are waiting a lot longer.

It is clear that the Government have failed these women. They broke the coalition agreement by introducing the 2011 Act. They failed to communicate with women successfully and they have failed to listen to their representations since. In fact, they broke the contract with their citizens whereby people pay their national insurance on the understanding that they will get something back when they are in need. The contract with these women has been broken, and I say again that if this had been done by a private provider, we would be after it for mis-selling.

It is time, after these many debates, for the Government at last to bring forward proposals for transitional arrangements that can be properly debated in the House so that the injustice can be put right. It is time for the Government to listen to the women of this country, and I hope that the Minister, after so long prevaricating, will finally do so.

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

I congratulate the WASPI campaign on the success of its e-petition, which has led directly to today’s debate. I also congratulate the hon. Member for Warrington North (Helen Jones) on her speech, which made the case strongly on behalf of women born in the 1950s—she reminded us that, implausibly, she was too.

Today, we debate the WASPI e-petition and, in a sense, the consequences of it. I want to address in turn three separate parts of the e-petition: first, the changes to pensions for women born in the 1950s and the ask from the WASPI campaign; secondly, the communications to those women from the Government and in other ways, from 1995 onwards; and thirdly, the new state pension and the way in which information about that is being communicated. As I said, I will touch on each of those in turn, highlighting where I agree with the campaign and e-petition and where not.

Let me start at the heart of the WASPI e-petition. This is the third time that we have debated this issue in the House, and as we go around the course again today, I hope that we will focus as much on the facts of the ask and the consequences of that as on the understandable emotion of women born in the 1950s. By way of reassurance to those in the Chamber, let me say that that includes my wife and both my sisters.

[Helen Jones]

Will the hon. Gentleman give way?

[Richard Graham]

May I make a little progress before giving way to the hon. Lady?

First, I agree that the changes in the Pensions Act 1995 and the Pensions Act 2011 will undoubtedly be difficult for women born in the 1950s. Indeed, those changes have been underway for some time and the pension age for women is already 63. But—this is a significant but, and a challenge that has to be made today—I do not accept the proposed WASPI solution, and I will explain why.

The e-petition states:

“The Government must make fair transitional arrangements for all women born on or after 6th April 1951 who have unfairly borne the burden of the increase to the State Pension Age”.

The fair, transitional arrangement sought by the campaign is spelt out on the WASPI Facebook page, which reads:

“What is our ask?... put all women born in the 50s, or after 6th April 1951 and affected by the changes to the state pension age in the same financial position they would have been in had they been born on or before 5th April 1950.”

One of the key WASPI campaigners, Anne Keen, who I imagine is here today, said in her evidence to the Women and Equalities Committee,

“we feel this is a very fair ask”.

Now, the impact of the ask that appears on the WASPI Facebook page has been estimated at more than £30 billion. I hope that the Minister will be able to give us a little bit more clarity on that. The figure is a third more than the entire Transport budget, more than the entire budget of the Department for Business, Innovation and Skills, and probably the same as—possibly more than—the entire budget for Scotland. What we are talking about today may be considered a very fair ask by some people, but others may consider it an enormous and wholly inappropriate ask.

The petition states that the WASPI campaign agrees with equalisation, but the implication of the ask on the Facebook page, and as repeated to the Women and Equalities Committee, is to unwind the 1995 Act, which was brought in specifically to bring about the equality of gender.

--- Later in debate ---

[Richard Graham]

I am half grateful to the hon. Gentleman for his intervention. The SNP’s position has always been interesting, because its Members are in the happy situation of being able to say—and, if need be, to promise—whatever they like without any danger of having to fulfil a commitment on the pension age. I notice that he did not try to commit himself to any transitional arrangement, let alone the full transitional arrangement proposed by the WASPI campaign. It is fine for hon. Members to posture in this debate, and I am in no doubt that we will see a great deal of that, but it is unkind and unfair to the WASPI campaigners for Members not to speak honestly about what they and their party would do.

[Helen Jones]

I am grateful to the hon. Gentleman for giving way.

[Mr George Howarth]

On a point of order, Mr Stringer. Did I just hear the hon. Member for Gloucester (Richard Graham) correctly in his accusation that some people were behaving dishonestly? Is that a parliamentary expression?

--- Later in debate ---

[Helen Jones]

The hon. Gentleman said earlier that the women protesting about the change were being emotional. That is quite often a label attached to women who exhibit behaviour different from that of a doormat. What I said to him about the injustices in this scheme was based on fact, not on emotion.

[Richard Graham]

I am semi-grateful for that intervention as well.

--- Later in debate ---

[Ben Howlett (Bath) (Con)]

Hopefully I can be a little more measured.

I echo the opening remarks of the hon. Member for Warrington North (Helen Jones) and congratulate the WASPI petitioners on securing the debate. As a member of the Petitions Committee, may I say that I would not even contemplate the idea of treating the Chair of the Committee as a doormat?

[Helen Jones]

Very wise.

[Ben Howlett]

Thank you.

I think that both sides of the House agree that changes to the state pension age are necessary but, famously, when von Bismarck created the state pension in Germany in 1889 for all those of the age of 70, life expectancy was only 35, whereas a woman who reaches 65 in 2018 has a life expectancy of nearly 90 years. Increased life expectancy has presented a challenge to pension systems all over the world, and equalising the state pension age is an important step in addressing that.

--- Later in debate ---

[Mr Vara]

I will give way to the hon. Member for Warrington North, who moved the motion, but I will not give way to others as I have limited time.

[Helen Jones]

Very well then. The Minister cites average ages, but that does not address the issue. The issue is the extra time that women have to wait for their pension and the fact that they have not been informed. The average means nothing to that.

[Mr Vara]

If the hon. Lady is a little patient, I will tell her about the issue concerning communications.

--- Later in debate ---

[Helen Jones]

This has been an excellent debate, but in view of the Minister’s totally inadequate reply and his failure to address the issues raised, I intend to do what I would not normally do in this Chamber and press the matter to a vote. I urge my colleagues to join me in voting no.

Question put and negatived.