Pensions Bill

Julie Hilling Excerpts

Tuesday 29th October 2013 Commons Chamber

[Gregg McClymont]

I certainly think the Minister should undertake a review.

The perception I am talking about has developed, so let me quote something that the Minister might be aware of. I cited it a couple of years ago, but he has probably forgotten.

[Julie Hilling (Bolton West) (Lab)]

Before my hon. Friend moves on, I wonder whether he would be interested to hear the Minister’s response to my constituent Maureen Davenport. The Minister said that the maximum state pension under the new system will be “significantly lower” than under the current system. He also said:

“In some ways the new system will be less generous for those who retire after April 2016”.

That is somewhat different from the fanfare and the Government saying that these new pensions would be wonderful for everybody.

[Gregg McClymont]

I thank my hon. Friend for that powerful intervention. There has been an issue of this Government, certainly in the early stages, overselling some of the things they are doing.

The Government would be doing themselves a favour by undertaking this review, given the sense among significant groups of women that the Government do not care enough about their pension provision. In 2005, in the days when the Conservative party was still trying to say that it had changed, the Prime Minister said:

“If you put eight Conservative men round a table and ask them to discuss what should be done about pensions, you’d get some good answers…but what you are less likely to get is a powerful insight into the massive unfairness relating to women’s pensions.”

It is in that context—the sense that the Government have so far had their eye a little off the ball in respect of treating women fairly on pensions—that I intend to test the House’s opinion on our call for a review by the Government of these provisions.

--- Later in debate ---

[Julie Hilling]

Is the Minister saying that those people who fall short of the 35-year rule will receive their £144 a week pension or that, for life, it will be less than that?

[Steve Webb]

To be clear, someone with 30 years and no SERPS under the current system gets 30/30ths of £110, a basic pension. Under our system, they get 30/35ths of £144, which is more. The fact they have not got 35 years does not matter. They get a bigger pension. It does depend on how much SERPS someone has, which is why I say that some will get more. But no one will get less because our starting point for the calculation is the better of the two numbers. The move to 35 years for people already in the system cannot give them less pension than they have already built up but does give them the opportunity to build up more.

The opportunity to talk about the Bill is enticing and I could go on at great length, but the key point is that notwithstanding the differences we have had about the detail, this is a Bill of which the House can be proud. It introduces—for the first time, essentially, in 50 years—a single, simple and decent state pension that provides a firm foundation for auto-enrolment. It rationalises the process of raising state pension ages. It reforms the bereavement support system. It gives us a private pension system that is fit for purpose for the world we are moving into and it is with considerable pride that I commend it to the House.

--- Later in debate ---

[Julie Hilling]

I am grateful for this opportunity to speak briefly in the debate. I want to speak up on behalf of Maureen Davenport and the many other women who have contacted me about what is happening to their pensions. Let me start by quoting Maureen Davenport, a retired head teacher. She says:

“I have worked all my life and paid taxes and other contributions, as required. I also have an occupational pension. I have just turned sixty years of age and I am fully aware of the Pensions Act 1995 which twice deferred the age at which I could access my state pension. What I am currently told is that I am now in the age bracket where I am not able to access the new flat rate higher pension as I was born between 5 April 1952 and July 1953. As is said by many in the media, I am one of many women facing a ‘State Pension Double Whammy’: deferred pension and a potential loss of nearly £40 per week for life. It would seem logical and fair to have grouped all women who have a deferred pension into the higher flat rate pension rather than penalise this age group. I feel very strongly that I have, once again, been penalised at a time when I cannot affect my retirement income and have very little voice and opportunity to affect change.”

Maureen is typical of the many women who have contacted me, and they are just a few of the 720,000 women who will be worse off as a result of the Government’s changes to the state pension.

[Steve Webb]

In the event that the record might suggest that the hon. Lady’s constituent will be worse off, I want to confirm that the only change we have made to her constituent’s pension is to introduce the triple lock, which will give her more generous indexation than she would have had. That is the only change that we have made to that lady’s pension.

[Julie Hilling]

My understanding is that that is not the only change: my constituent will not be able to access £144 a week because the second state pension has been done away with and she will not be entitled to that money. If I am wrong, perhaps the Minister will tell me that my constituent will receive the equivalent of £144 a week. No, she will not receive that, so she is being penalised by this action, because she will not be able to receive her second state pension. [Interruption.]

I will continue to make progress. Like me, these women are angry and upset because they have done the right things all their lives, yet will be disadvantaged in comparison with a man born on exactly the same day as they were.

This is not the only issue that hurts women. Raising the number of necessary years for national insurance contributions to 35 again disproportionately hits women. We know that women are the ones who normally take time off to look after children and, indeed, to look after ageing parents and ageing parents-in-law. This Government will undo the good work done by the last Labour Government to improve the lot of women’s pensions, with a further 100,000 fewer qualifying for a full pension. This is particularly unfair to those who are close to retirement age, who will not have the opportunity to make up the extra years—unless they work well into their 70s.

I wrote to the Minister about Maureen and my other constituents. The letter I received back was illuminating and, frankly, complacent. Let me quote some of it:

“It is important to note that we are not proposing simply to increase the pension from £110 per week for today’s pensioners to around £144 week for new pensioners…Future pensioners will simply build up towards a flat rate pension of around £144—there will be no additional State Pension on top of this figure, so the maximum State Pension attainable under the new system will be significantly lower than under the current system. I should also add that in some ways the new system will be less generous for those who retire after April 2016.”

The letter went on to say:

“While women born shortly after your constituent may receive a single-tier pension, they will have to wait several months longer than your constituent before they can start to draw a pension. Furthermore, the average entitlement for women reaching State Pension age shortly after the new system’s introduction is projected to be £131 per week and not the illustrative single-tier full rate of £144 per week. In comparison, women reaching State Pension age shortly before the new system is introduced will receive an average of £125 per week under the current system, made up from a combination of basic and additional State Pension.”

It seems clear to me that women born in that age bracket will be disadvantaged, yet the Government announced their proposed changes with a grand fanfare about how much better off all pensioners would be under the new system. They have failed to tell people, particularly women, that some of them would be worse off. I just wonder why everything this Government do seems to make things worse for women, who are hit by so many things—hit twice as hard, for example, by the Budget and three times as hard by other Government actions.

[Martin Horwood]

Will the hon. Lady explain why the triple lock made things worse for women?

[Julie Hilling]

Of course the triple lock affects everybody; it does not just affect women. Some of the changes, however, affect women only. That is my point. It is not that this Government are doing nothing—I applaud the triple lock—but I deplore the fact that whenever the Budget and other measures are taken, it is often women who suffer. Women are worse affected, as they are on this pensions issue.

I finish by asking why the Government are trying to turn the clock back to times when things were worse for women than for men. This Government continue to act in that way, which greatly disappoints me.

Question put and agreed to.

Bill accordingly read the Third time and passed.