State Pension Age (Women)

Julian Knight Excerpts

Thursday 7th January 2016 Commons Chamber

[Julian Knight (Solihull) (Con)]

It is a great pleasure to follow the right hon. Member for Knowsley (Mr Howarth). I should like to praise the reasonableness of the Women Against State Pension Inequality—WASPI—campaign. Several campaigners have come to my constituency office, and they have put forward their arguments in a cogent, respectful and thoughtful manner.

Since 2010, this Government have been taking the difficult decisions necessary to get Britain’s deficit under control. This has often been contentious and involved many political disagreements with the Opposition. Since the Turner report, however, the one area on which Members on both sides of the House have in no small degree agreed is pensions. For more than a decade, MPs from all parties have been working together to tackle the challenges posed by an ageing population and to ensure the long-term financial security of elderly people. This quite unusual political consensus was both necessary and heartening in dealing with a long-term issue.

It is no secret that, without change, our current state pension arrangements will simply not be financially sustainable. People are living longer than ever: a teenager today can expect to live until the age of 90. That is to be celebrated, but it also imposes serious burdens on welfare systems that were designed in another age. In the last Parliament, the Government estimated the cost of abandoning state pension age reforms at a completely unaffordable £23 billion, the equivalent of putting 7p on income tax.

Much of this debate focuses on the impact of these measures on women, so perhaps we should reflect on how much this Government have done to improve the position of women in the pensions system.

[Helen Goodman]

Before the hon. Gentleman tells us that everything is okay, would he like to hear the experience of one of my constituents? She says:

“I have worked full time since leaving school at 16. I am now 61. I have worked through 10 years of kidney failure, dialysis and finally a kidney transplant. The effects have taken their toll. I cannot afford to retire without a state pension so I have another five years of my current life to look forward to, assuming my kidney does not fail or I die of something else.”

Surely that level of hardship is unacceptable.

[Julian Knight]

I thank the hon. Lady for putting the words into my mouth that everything was okay. I remind her that she is a member of the party that was in government from 1997 to 2010, and if there is anything amiss regarding the publicising of these changes, Labour Members ought to look to themselves in that respect.

The motion regrets that the Government have

“failed to address a lifetime of low pay and inequality faced by many women”.

I really do not recognise that. Let us consider two central planks of this Government’s policy—namely, raising personal allowances and increasing the minimum wage to the living wage. Both those initiatives benefit women tremendously. In addition, the Government are looking at options to reform pensions tax relief, which was left unaltered by the Labour Government.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

Following the Budget, research carried out by the House of Commons Library showed that women would be twice as likely—if not more—to be hit harder than men as a result of the Chancellor’s measures. If the disproportionate way in which women have been treated and the discrimination that they have suffered are not addressed by this Government, that will simply add to a long list of ways in which the Government have continued to fail the women of this country. Does the hon. Gentleman not agree with that?

[Julian Knight]

I really do not agree with what the hon. Lady says whatsoever. The raising of the personal allowance, combined with the rise in the minimum wage, will give a huge boost to British workers and to women in this country, and she should recognise that fact.

In addition, the Government are looking at options to reform pensions tax relief. If Ministers choose the option that I am calling for, as others are, and they dispense with the top rate of tax relief and move to a single rate of relief, somewhere around the 30p in the pound mark, it will hugely advantage women in the workforce. It would be a real game-changer for the retirement savings of millions of hard-working British women. Equalising the pension age may pose short-term challenges, but it is an overdue acknowledgement of the role women play in the modern workforce. It is quite wrong for the Government to structure the pension system around the assumption that women’s careers—

[Nusrat Ghani (Wealden) (Con)]

My hon. Friend made an important point about there being more women in the workforce. There is evidence to show that women directly affected by the state pension age equalisation have increased their employment rate by 6.8%, to 40.7%, according to the Department for Work and Pensions in November. Older working-age women are now more likely to be in employment than at any time over the past 30 years.

[Julian Knight]

I thank my hon. Friend for making that point. Let me add to it. Many people are coming to retirement age—this is before they collect the state pension—and we need to encourage older people’s involvement in the workforce as well.

[Several hon. Members rose—]

[Julian Knight]

I am sorry, but I cannot give way again.

One of the most encouraging things we have seen under this Government is that people are staying in work for longer. The move to equalise the pension age may pose short-term challenges but it was an overdue acknowledgement of the role women play in the modern workforce. We are also enacting very important reforms to the period for which someone has to pay national insurance before qualifying for the full state pension. Until relatively recently, that stood at 39 years for women and 44 years for men. That is surely the worst of both worlds, in that it is structurally unequal while being long enough to penalise women who take time out of work to have children. Under the new arrangements, time taken out of employment for caring or to raise a family will be counted towards someone’s national insurance record, and the new, equal length of 35 years no longer penalises such women. Moreover, by bringing the male contribution periods down to the same level, the Government have recognised that many men may also desire a different work-life balance than was traditionally the case in the past.

I am not in the habit of quoting Liberal Democrats, but I will make an exception in this instance over the Government’s decision to defer the date at which the state pension age will rise to 66, at a cost of £1.1 billion. While in office, Steve Webb, the former Pensions Minister, put it as follows:

“a billion quid is a serious amount of money.”

This decision means that almost a quarter of a million women who faced a sudden increase of 18 months or more in their pension age no longer face that possibility. We have also instituted the triple lock, which ensures that pensions are increased by the highest of three measures: price inflation, growth in earnings or 2.5%. That means no more of the sort of infamous bag-of-peanuts increases we saw under the Labour party. Also, we must not forget that the new state pension will be higher in value than the old one and far less complex.

We in Britain are rightly proud of the care we take of our elderly citizens, which has been shown by a marked reduction in levels of pensioner poverty in the previous two decades. It would be wrong to take serious risks with long-term economic sustainability and our pension system for the sake of winning short-term political battles.