Women’s State Pension Age: Ombudsman Report

Debate between John McDonnell and Grahame Morris

Thursday 16th May 2024 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I have lived this campaign for about 10 years, as have a number of other hon. Members. Today, we have heard unanimity from speakers from all political parties across the House. Unless we can get some action quickly, I despair of what parliamentary procedure is left to us. I do not want to go back to swinging the Mace about again, but something needs to happen fairly quickly because anger is building up, in the Chamber, outside and among the WASPI women.

I do not share the view of some hon. Members about the equalisation of pensions. I supported the equalisation of pensions, but not on the basis of the retirement age for women increasing. I thought we were entering a period when we would be reducing the age that men had to work until, so we would equalise pensions that way. The argument then was about whether the economy could afford it. The reason I was trying to equalise pensions by reducing men’s working age was largely for working-class people.

In many of our cities, the difference between the life expectancy of the rich and the poor is something like 20 years. We were told then that life expectancy would be continuously improving, but it has stagnated. Many people do not work in a sedentary role, so as we increase the retirement age—it is now going up to 68 and beyond—they will work until they drop. That is not acceptable, particularly in the economy that we have, where we could redistribute wealth, lower people’s retirement age and give them a decent pension.

I was involved in designing the scheme proposed in 2019. We commissioned Lord Bryn Davies, who is one of the most respected pensions experts in the country, and worked for two years with WASPI and the different groups to design the scheme. My commentary on the proposals by the ombudsman reflects some of the work that was done. We looked at a straightforward scheme. Going into individual cases would take decades, to be frank, so we looked at a flat-rate scheme for everybody, based on an average loss of £100 a week. That resulted in an average payment of £15,000, which is a lot of money. We costed it at more than £50 billion, which seemed a lot of money at the time, but it is less than a third of what the Government saved by increasing the pension age for these women. In addition, we looked at different options: should we pay it over a four or five-year period and reduce the cost to £12 billion a year. When I said during the debate that this was a large amount of money, somebody said that we had just paid out £500 billion to bail out the banks when they had crippled the economy. Then we went into 2020 and covid hit us.

[Grahame Morris]

The hon. Member for South West Bedfordshire (Andrew Selous) made some excellent points, but he asked us how we could fund decent pensions and the requisite compensation. I looked up the figures. As a percentage of GDP, the UK spends 5.7% on state pensions and pensions benefits. In Italy, the figure is 16%. In France, it is 13.9%. In Denmark, it is 10.1%. The OECD average is 8.2%. By any measure, we are miles adrift.

[John McDonnell]

I also looked at what had been provided in tax cuts to some of the wealthiest in our country since 2010. It was £100 billion. I looked at how much had been given in corporate welfare benefits, and, again, it was £100 billion. Therefore, although it sounded like a lot of money at the time, in the context of fairness, it was the right amount. That is why the ombudsman’s offer of between £3,000 and £10,000 is derisory; it has to be more than that. The reason for having a flat-rate compensation scheme is for ease of administration, and I would recommend that wholeheartedly.

We have heard today about the individual hardships that people have endured. We cannot allow that to go on any further, which is why this scheme must be expedited. The ombudsman reports and is accountable to the Public Administration and Constitutional Affairs Committee, on which I serve. We have considered each of the reports as they have come forward. We were critical about the delays that were taking place, so we impressed on the ombudsman the urgency of the situation. When we got the report back, we found that it had at least accepted that there had been an injustice and that there needed to be a compensation scheme. We waited with bated breath for the Secretary of State to announce at least the timescale and the timetable for that compensation scheme, but all we heard was that the Government would go away and consider it. That was weeks ago.

PACAC wrote to the Secretary of State and asked for a timetable, stressing the urgency of the matter, because, exactly as Members have said, people are dying. Some people cannot wait, because they either will literally not be here any more, or they are living in poverty and hardship.

We received a reply this week. The Secretary of State said that he would be bringing forward a statement “in due course”. What that means is nothing; it is meaningless. As a Committee, we have agreed to write again to say that that is unacceptable and that we need a clear timetable in which this matter will be addressed and proposals brought forward that we can vote on and, if necessary, amend in this House.

If this Parliament is sovereign and the Government are accountable to this House, I believe that there is a majority, an overwhelming majority, of Members who will vote for a compensation scheme that is readily accessible, and also at a level that reflects the hardship that people have suffered and the scale that most Members would want to see.

As we go into a general election, the issue will not go away. The WASPI women and their campaign will not go away. People have expressed admiration for that campaign, which is not just impressive; it is terrifying. Unless a proposal is brought forward, it will become an election issue. I think people’s votes will stand or fall in many constituencies on the basis of the decision coming out of all the political parties. Voters will, however, blame the Government the most, because there is an opportunity now, as others have said, to make a statement by the recess with a timetable for implementation. We could almost certainly agree the funding. We looked at how to raise the funds. Some could be borrowing, but the Government normally have contingencies for legal liabilities. This is a legal liability. We have the opportunity to act now, and I urge the Government to wake up and listen to what the whole House is saying. If today’s response is not satisfactory, we will be back next week, and if necessary every day until the recess until we get some sense out of the Government.

Budget Resolutions

Debate between John McDonnell and Grahame Morris

Tuesday 30th October 2018 Commons Chamber

[John McDonnell]

Of course we welcome more money for mental health, but what was required was £4 billion, not £2 billion; and that £2 billion was contained within the £20 billion that had already been announced, so it is not additional money. There are some things that we can work on on a cross-party basis in this House, but we have to be honest about the needs and the requirements, and we have to be straightforward in saying how they can be funded.

[Grahame Morris (Easington) (Lab)]

My right hon. Friend is being a little unfair; some people have done very well from austerity. A thousand of the richest people in the United Kingdom have seen their personal wealth increase by £274 billion over the past five years.

[John McDonnell]

The facts speak for themselves.

To make a real difference to the lives of young people, the Chancellor needed to address the housing crisis, deal with the toppling mountain of student loans, and restore work allowances for single people and couples without children. Instead we got piecemeal, unambitious housing announcements and re-announcements, nothing on student finances, and nothing on universal credit recipients who are single and without children.

Palestine

Debate between John McDonnell and Grahame Morris

Monday 1st December 2014 Westminster Hall

[Grahame M. Morris]

Thank you, Mr Pritchard. On applying pressure to move things towards a negotiated settlement, trade is rather asymmetrical and there are strong arguments to support it as a legitimate tactic for bringing about negotiations, because the obstacle seems to be that the Israelis achieve their ends through the status quo and have no interest in pursuing a peaceful solution.

There was a tremendous outpouring of emotion from the British public this summer. Hundreds of thousands of people took to the streets in protest, not just in London, where there were huge demonstrations with more than 100,000 people, and where 50,000 protested outside the Israeli embassy, but all across the great cities of the north, in my region, and in Wales, Scotland and Northern Ireland, as well as in smaller towns and villages. The protests did not come from the Palestinian diaspora; they came from people with a burning sense of injustice at the completely disproportionate actions of the Israeli Government in relation to Gaza, and people who had seen some of the horrors perpetrated against Gaza. They showed the strength of feeling among the UK population. It behoves the Government to do something about the issue.

In such circumstances, I believe that all arms export licences should be suspended. Moreover, given Israel’s record of violating international law, the arms trade with Israel should be completely banned in both directions. The UK and the European Union have some of the world’s strictest rules in place for controlling the export of arms and components. Considering that Israel already has a history of using UK-supplied arms in the occupied territories, including Gaza, in breach of those rules, there is no excuse for the rules not being enforced. The UK’s relationship with Israel may have been profitable for arms companies, but it has had a devastating impact on the people of Gaza, which at the current rate of progress will not be rebuilt for many decades.

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise for the fact that I will be intervening and then leaving; ironically, I am going to a sitting of the Select Committee on Justice. Is it not true that any country currently allowing the arms trade with Israel is complicit in the crimes that Israel is committing against the people of Palestine?

[Grahame M. Morris]

We need to search our conscience and consider how those arms and components have been put to use, and ask ourselves whether that complies with British policies and our sense of decency, if we are to be consistent in how we approach our dealings with Israel and other countries. In my view, if we fail to set clear parameters, targets and consequences, including economic sanctions, for failures to end violations and make progress on the peace process, we are perpetuating the conflict.

Jobseekers (Back to Work Schemes) Bill

Debate between John McDonnell and Grahame Morris

Tuesday 19th March 2013 Commons Chamber

[Grahame M. Morris]

My hon. Friend, who is very knowledgeable and has a background as an economist, has hit the nail on the head. The general public, my constituents and many Opposition Members do not understand why the Government do not address this problem. There is a relatively straightforward way to do so: by legislating for a general principle of tax avoidance. The Government are quite happy to use primary legislation retrospectively to deprive people who have been illegally sanctioned of £130 million, but they will not use the same route to recover moneys properly due to the Exchequer.

There is a contradiction here. Although the Government have been highly critical of what has happened, they continue to push the case for further deregulation. Just yesterday, in a Delegated Legislation Committee the statutory period of notice for compulsory redundancies for employers employing more than 100 people was reduced from 90 days to 45. This Government are still very much pursuing the Beecroft agenda.

[John McDonnell]

It is worth noting that, according to the Government’s impact assessment of that delegated legislation, employers will gain £290 million and employees will lose £250 million.

[Grahame M. Morris]

That just goes to show that we are all in this together—or rather, we are not.

I have seen the graphs and the charts showing that the poorest are being hardest hit. We should consider the effect of a 5% cut in their weekly income. Other Members have spoken about the sort of cuts that individuals are going to experience. I do not know whether the Minister, other Front Benchers or even Conservative Back Benchers know what it is like to exist on £71 a week, but it is a real struggle. Taking up to £25 a week from the poorest families, most of whom are in social housing, can mean a choice between eating or having proper heating. How can this be fair, when the Government’s priority is to make millionaires richer, to the tune of £2,000 a week? Such a tax cut is unimaginable for someone who would be sanctioned under the Work programme. In fact, the £2,000 a week tax cut for millionaires that we anticipate tomorrow equates to 28 weeks’ income for somebody on jobseeker’s allowance.

CPI/RPI Pensions Uprating

Debate between John McDonnell and Grahame Morris

Thursday 1st March 2012 Commons Chamber

[Grahame M. Morris]

I was alluding to the FBU’s response to the judgment. I apologise if I have misled the Minister in that regard.

It is worth noting that significant changes to public sector pensions were negotiated with the trade union side by the previous Labour Government. Those changes recognised some of the issues that have been highlighted about people living longer, which is genuinely a good thing, and about affordability. The trade unions demonstrated a genuine desire to reach an accommodation that was fair and just. The response to the switch to CPI that I am hearing says that it is an enforced settlement that is not fair or just.

[John McDonnell]

In order that nobody misleads the House whatsoever, let me quote from the judgment. Judge Elias said:

“There can be no doubt that the immediate driving force behind the change from RPI to CPI was the need to secure cuts in the welfare budget.”

[Grahame M. Morris]

I am grateful for my hon. Friend’s intervention, as I did not have the judgment to hand. I am sure that the Minister will have taken note. [Hon. Members: “That was a dissenting judge.”] Even so, it is a fairly radical criticism of the justification for this change, and the Government would do well to take note of it from such a learned source.

The TUC’s general secretary, Brendan Barber, has said of the general pensions crisis:

“The real pension crisis in the UK is the retreat by employers from providing pensions in the private sector”—

that point has been acknowledged by Government Members—

“and the big unexpected looming bill for tax-payers is the cost of means-tested benefits for the millions let down by their employers.”

That is another reference to the issue of false economy, which the whole House should take into consideration. There are risks in implementing this strategy. If we try to balance the books now on the basis of future payouts to pensioners, we may well be storing up costs for the future as people decide to opt out of pensions altogether. That would mean that when they retired they qualified for means-tested benefits, so the cost to the Exchequer would be higher.

In the private sector, large numbers of pensioners are already starting to feel the pinch from these moves.

[John McDonnell]

I am sorry to interrupt my hon. Friend again, but as hon. Members said from a sedentary position, “That was a dissenting judge”, let me quote a second judge, who said that he accepted the submission of Mr Beloff QC for the Police Negotiating Board claimants on the basis that, on any fair reading of the evidence, the need for deficit reduction was the driver and that the other merits of CPI were essentially deployed in order publicly to justify the switch.

[Grahame M. Morris]

I am grateful for that point of clarification. By my arithmetic, that makes two judges out of three, which is a majority.

That strengthens the argument that the Government should at least be honest that this measure is not designed around fairness but is placing the cost of deficit reduction, or cuts in public expenditure—whatever terminology one uses—on to public sector pensioners instead of looking for an alternative. As my hon. Friends have said, there is a simple alternative. The case for more cuts to pensions and public services has now been lost on the back of evidence that growth in our economy has been falling for two years and unemployment continues to rise. The Chancellor himself has indicated that we are borrowing £158 billion more than he originally anticipated. We need to offer people security in their jobs and in their retirement.

The case put forward by Conservative Members, in particular—notably yesterday in a Westminster Hall debate—for rolling back workers’ rights, as well as slashing pensions, was this week shown the red card by the Bank of England in an evidence session in a House Committee. No less a person than Sir Mervyn King said that making it easier for companies to sack staff would make no difference to his economic forecasts. Instead, we need to get the economy growing. We should be creating jobs to boost the economy, giving people job and pension security. From the perspective of the economy, the bonus—I am not referring to bankers’ bonuses, because I do not think that those should be paid—is that that is more likely to cut the deficit. As my hon. Friend the Member for Bolton North East (Mr Crausby) indicated, many pensioners use that money directly in the local economy. Reducing pensions has an immediate negative effect in local economies and the national economy. To argue otherwise is disingenuous and, indeed, nonsense. Cutting jobs and pensions will damage the economy now and in the future. What is worse, it will increase the deficit.

Like elsewhere in national policy, my view is that the Government have it wrong on this issue. We should be investing in housing and public transport. We should be looking at the issues that Labour has set out in its five-point plan for jobs and growth. Given the news this week about tax avoidance and evasion, I think that we should be taking measures on that issue. I welcome the fact that the Government have closed one particular loophole, so that Barclays and others will have to pay their fair share of tax and not be able to dodge it. However, the Government are penalising pensioners before even asking about the millions that Vodafone is refusing to pay in taxes on the profits that it made from activities in this country. That is an absolute disgrace.

In conclusion, the House should support the motion and send the message to the Government that their priorities are at best mixed up and at worst explicitly wrong. We should value the pensions that take care of our ageing population, and we should not put people off saving for their future.