Pensions Bill [Lords]

Debate between John Glen and Sheila Gilmore

Monday 20th June 2011 Commons Chamber

[John Glen (Salisbury) (Con)]

I would like to open my remarks by reflecting on a tale of two 64-year-olds. My great-grandfather died in Salisbury in 1944. In the words of my grandmother, who is now 90, he was seen at the time as an old man. Next week, my father will turn 64. He will retire having done a manual job for 48 years, and with the expectation of perhaps living, as his father did, to 90 or 92. But we do not know, which goes to the heart of the problem faced by the Government: changing expectations of how long we will live and what to do about it versus the reality that decisions will have to be made with finite resources.

I think that the Government have made an excellent start with this Bill, which addresses three interlocking issues. The first is our ageing population. Only a few weeks ago a lady came to my constituency surgery, sat down in front of me and asked whether I could help her. I said I would do what I could. I really thought it would be about an issue of care for herself or her aged husband, but in fact she wanted to talk about her 99-year-old mother. We have a ticking time bomb that, over the past two generations, Governments of all colours and parties and at all times failed properly to grasp. We cannot go on like that.

[Sheila Gilmore]

Will the hon. Gentleman accept that it is a gross generalisation to say that this problem has been ignored? The Bill makes a relatively minor change compared with the major changes proposed in the Turner report and the last Pensions Bill. It is wrong to suggest that this has not been looked at.

[John Glen]

I thank the hon. Lady for her intervention. I think I will address the thrust of her comments in a few minutes.

The second issue is our active ageing population. Notwithstanding the remarks of the right hon. Member for Croydon North (Malcolm Wicks), who pointed out the differences in life expectancy between regions and socio-economic backgrounds, many people expect to lead an active retirement, which is why I welcome the proposal to remove the default retirement age. That will be important in allowing people to do more and to continue working if they wish.

The third problem that the Bill addresses is the lack of saving. It has been said that 7 million people are not saving enough for retirement. The problem is the general sentiment that things will be all right on the night—people expect to be able to sell a property or make some money to put in a pension pot. The Government are facing up to these tough issues, and have realised that that is not a realistic proposition.

I recognise that there is a gap between the long-term solution and the needs of those currently near the pensionable age, and many have acute concerns about what will happen—many Members have referred to the cohort of women who face a particularly tough time. All the indications are that the Government are prepared to acknowledge and address those concerns, and I am sure that my hon. Friend the Pensions Minister will have an ingenious solution. However, I would like briefly to draw the House’s attention to a few specific issues.

Despite the welcome introduction of the triple lock, it is clear that pensioners feel a great sense of vulnerability. They know that they have a reasonable expectation of living many years, and are anxious that at a time of low interest rates and little investment income their basic state pension should grow. I therefore welcome the Government’s proposal. I recognise that it will cost a lot of money and will take time to work out, but its general thrust is the right one.

It has to be acknowledged that we have seen massive changes as a result of the increase in life expectancy over the past 50 or 60 years. Life expectancy at 65 has grown upwards of 10 to 15 years over the past two generations, and it would be helpful if the Government set out what we are aiming for. Notionally, we will have parity between genders over the next 10 years, but what are we aiming for? Are we saying that everyone should have a right to expect a fixed number of pensionable years? Are we seeking to address the statistical evidence on demographics and regional differences, or should we recognise, building on the comments of the right hon. Member for Croydon North about the level of complexity and a complexity deficit, that we will not be able to make the pensions system sufficiently complex to address every one of those factors?

We have to recognise that we need to do something, particularly about the 33,000 women who face this two-year delay, but it would help if we set out some broader principles. My generation—those under 40—will have to bear a much greater responsibility. I expect to work much longer, although I might have a different job from my father, who worked on the land. We need to send the message so that the next generation and those after know to put more into their pension pots and expect to retire later. My hon. Friend the Member for Gloucester (Richard Graham) has already mentioned the fact that 10 million people now living will live to 100. That is beyond the realistic expectations or assessments of most people today, but it will impose strains on public finances, health care costs and end-of-life care, which are the issues that we must address. We must not fail to consider my generation and those that come after because they do not seem to matter today.

I welcome the changes to auto-enrolment, but I ask the Government to avoid unnecessary and bureaucratic changes for small business people, especially those in the tourism or retail sectors, where staff turnover is high. Too often justice is not done in the detail to the headlines of Government. We need to ensure that small employers do not bear a disproportionate cost.

The free eye tests, free prescriptions, free bus passes, free television licences for the over-75s and the free winter fuel payments, along with the Government’s commitment to solidify the £25 payment in bad weather, are welcomed by many. Certainly, they are welcomed by the poorest members of my constituency—in Bemerton Heath and the Friary, for example—who rely on the payments year in, year out. I hesitate to say it, however, but is it really fair for those earning more than, say, £50,000 a year in retirement to have that extra money? There is usually a snigger, a gasp and a “Well, we don’t really need it.” However, in the assessment of true fairness, what value accrues to the public purse from expenditure on those people?

I welcome the Bill, which establishes the right direction, but there is still work to be done in certain areas, which I hope I have set out. No Government, past or present, will get everything right. I applaud the work of my hon. Friend the Pensions Minister and wish him well as he unravels these complex issues and develops a pensions system fit, in all respects, for the nation we live in and the number of years we can expect to live.