Pensions Bill [Lords]

Lilian Greenwood Excerpts

Tuesday 18th October 2011 Commons Chamber

[Gregg McClymont]

My hon. Friend is spot on. Caring is a very important issue in this context. A third of these women are already retired, in their late 50s, and are often caring for relatives. Of course, men have caring responsibilities too, but in significantly lower numbers than women.

These women also earn less, on average, than men. They have less chance of making up for the £7,800 in lost pension income that the 330,000 women waiting for 18 months are estimated to lose. If pension credit is added to that, some women are losing up to £11,000, and that is before taking into account the benefits that accrue at state pension age, such as the winter fuel allowance, free travel and so on. This is a serious financial loss to these women.

[Lilian Greenwood (Nottingham South) (Lab)]

My hon. Friend has made the very point that I was going to make. These women are losing out not only on pensions, and potentially pension credit, but on the passported benefits that are so important for low-paid pensioners, such as the winter fuel allowance, free bus travel, free dental work and free prescriptions. Those things are really important to this group of women, and they will have to wait longer to receive them.

[Gregg McClymont]

That is absolutely right. There is no doubt that this is a significant blow to these 500,000 women. That is why we have tabled our amendments. If they were passed this evening, the 330,000 women facing an 18-month hike in state pension age would have restored to them the average amount of £7,800. If they were on pension credit, they would also have restored to them up to £11,000 and all the other benefits that accrue at state pension age that my hon. Friend mentioned. I say it again: this is a serious, significant issue for a large group of women.

Our amendments offer the Government one last chance to show women that they get it. We are all aware of the Government’s growing problem with women voters. We hear the reports of the Prime Minister huddled in No. 10 surrounded by advisers and pollsters explaining to him just how grim the news is regarding the opinions of women voters. Support for this Government among women is falling off a cliff. According to the reports from inside No. 10, the pollsters are telling the Prime Minister that 25% more women than men believe that the economy is going in the wrong direction, while 10% more women than men are saying that cuts are falling unfairly on women—and no wonder, given this Bill, among other things. According to the leaks from inside No. 10, favourability towards the coalition among women is now 12 points lower than it was 18 months ago. Women are twice as likely to think that their children will have a worse life and less opportunity than their generation. Overall support from female voters for the Conservatives and for the Liberal Democrats has slipped significantly, and we know today that the Government are falling further behind in the polls.

Our amendments offer the Government a chance to show that they get it and that they understand that what matters to women is the impact of Government policies on their lives and the lives of their families. Our amendments offer the Government a chance to show belatedly, on an issue that matters, that they understand women’s priorities. I commend our amendments to the House.

[Jenny Willott (Cardiff Central) (LD)]

This is slightly earlier in the debate than I expected to be called. I will speak briefly on the amendments tabled by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and the Government amendments.

I know that we will have a fuller debate later, but much of the Bill has complete agreement across the House and is extremely welcome. The changes to the state pension age seem to have overshadowed many of the other issues in the Bill. As I said on Second Reading, I and many of my Liberal Democrat colleagues were deeply concerned about the effect of these changes on women who are being asked to work significantly longer at short notice.

The hon. Gentleman who has just spoken—I will not repeat his constituency name, as saying it once was an achievement—said that the state pension age has to rise, and I think that we all accept that. We are all living longer. The gains in life expectancy have been significant and are continuing. In 1970, someone reaching 60 could expect to live for 18 years. Last year, that had risen to 28 years. That puts a significant financial burden on the state. By the time I retire, I fully expect the retirement age to be somewhere north of 70. Goodness knows whether there will even be a state pension by that point.

When we are increasing the state pension age, we need to ensure that it is done as fairly as possible. I and my colleagues, a number of whom are present, have been vocal in our efforts to change the timetable. I know that the Minister and his colleagues in the Department for Work and Pensions have been actively working within Government to ensure that the timetable is fairer and that those who are worst affected by the changes are protected. In my view, the initial draft timetable was not fair to the women who were worst affected. I am pleased that the Government have listened to the concerns that were raised by many people and have tabled today’s amendments. I am sure that the Minister will tell us more about them in his summation.

[Lilian Greenwood]

I hear what the hon. Lady says, but will she explain to the 300,000 women who will have to wait longer than anybody else to receive their state pension—between a year and 18 months longer—why they should have to pay more of the burden than anyone else?

[Jenny Willott]

Later in my speech I will move on to comments that relate to the hon. Lady’s point.

Capping the state pension age increase to a maximum of 18 months will protect 250,000 women, as we have heard, and 250,000 men. Therefore, 500,000 people will be better off as a result of the Government amendments. As we have heard, that is costing more than £1 billion. I am grateful to the Secretary of State and the Minister for managing to get £1 billion out of the Treasury. That is no mean feat. A problem with any change to the state pension is that the costs are in the billions, not the millions.

--- Later in debate ---

[Kate Green]

As so much that I agree with and endorse has been said, I am sure I can be very brief.

That we have had any concessions at all from the Government today is a tribute to the many women who have contacted Members on both sides of the House. We are disappointed, however, as this is a half-baked measure. It is half-baked in two respects. It is half-baked as it deals with only part of the problem and only some of the women who are adversely affected, when, as my hon. Friend the Member for Aberdeen South (Dame Anne Begg) said, we had an opportunity to solve this problem and move forward. It is also half-baked because it does not offer a holistic response to the situation these women face. Rather, it addresses only the question of when we might grudgingly start to hand them their state pension, and it does not deal at all with the other elements of public policy that will be needed to support those women if they are not going to be eligible for a state pension until later.

Especially as we know that women’s private pension pots are significantly lower than men’s, it is regrettable that we are seeking to delay their access to the state pension before the new auto-enrolment in the National Employment Savings Trust has been in place for long enough for them to have had the opportunity to begin to build up a private pension pot. If these women are expected to remain in the workplace for longer, it is regrettable that there are no signs that the Government’s Work programme will be adapted to be better suited to helping older women find, or remain in, jobs. No thought has been given to how the Work programme will support those women.

I would be grateful if the Minister said what assessment has been made of the other financial benefits these women may have to rely on if they are not able to find paid work at the ages of 64, 65 or 66, and whether the cost the Government are talking about includes the additional level of those benefits. That is a particular concern because if women are using up their savings, they may have to draw further on the state when they reach retirement.

Other colleagues have pointed out that many older women provide child care for their children’s children. Will those children in future have to access paid-for child care that the Government will in due course be subsidising through the tax credit or universal credit?

Also, what is the health strategy in relation to the health needs of these women? We know that women in their 60s are more likely than men to suffer from functional disabilities. Some 40% of women at age 60 have limitations in activities of daily living, and 20% have severe limitations. I have not heard that the Minister has given any thought to that, or had any discussions with colleagues in the Department of Health to ensure that we are also securing better health for those women if we expect them to remain in paid work for longer.

The key additional points I wanted to make were about the absence of a holistic response from the Government. They have hastily introduced a half-baked measure—and a fairly vicious measure for the many hundreds of thousands of women who are still being put in a situation in which their retirement is substantially delayed without their having the resources to carry themselves through to that point. I urge the Minister to think again.

[Lilian Greenwood]

The Minister may feel that he has heard my speech before, as we discussed his Government’s plans to accelerate the rise in state pension age at some length in Committee. However, as he did not fully address the points I made then, I make no apology for making them again.

My constituent, Lorraine Smedley, e-mailed me on Friday asking if anything can be done even at this late stage. The answer must be yes. The Minister can still change his mind; he can accept our amendment that would ensure that no one would wait more than an extra 12 months to receive their pension. Also, if he chooses not to listen, Members on the Government Benches can still decide to join the Opposition in the Lobby tonight. I hope they will do so, although the contributions we have heard so far suggest that they will not.

Members who were not fortunate enough to serve on the Bill Committee will not know about my constituent Lorraine, so let me explain why she is so angry about the Government’s plans. Lorraine worked for the national health service for many years, but, having put aside some savings, she decided to take a part-time job as she moved towards her expected retirement date. She had worked out that she could supplement her part-time wage until her retirement. She told me:

“I thought I was close enough to my retirement age to know where I stood.”

Even with the Government’s welcome concession, Lorraine is still being asked to work for an extra 15 months, and she says she does not know what to do. Working those extra 15 months before she receives her state pension is not a prospect she relishes. Her job as a community care assistant is demanding, both physically and emotionally, and she is not sure that she will be able to continue; and with the cuts in public service spending and public sector jobs, she may not have a job anyway. The prospect of claiming benefits is anathema to Lorraine. She was determined to pay her own way her whole life, and having left school at 16 and paid into the state pension pot all those years she feels that she should not have to rely on benefits now.

Lorraine’s case highlights the two reasons why the Government’s proposals are unfair. First, they do not give women adequate notice of the change. The Minister has sprung these changes on women in their late 50s without giving them a realistic time scale in which to make preparations for the loss of pension payments that they have earned and expected over many years. In 1995, the then Government legislated for the equalisation of state pension ages. Women who were expecting to retire at 60 learned that they would have to wait until they were 65 to do so. They may not have liked it but they had many, many years to adjust. Yet that same group—those same women—who knew that they would have to work or wait for an extra five years for their pension, are now being asked to accept a further rise of more than a year with just five or seven years’ notice of the change.

The second reason why the Government have got it wrong is that the changes lead to one group being asked to bear an unfair share of the burden. According to the Department’s impact assessment, the proposals in the Bill affect about 5 million people—2.3 million men and 2.6 million women. About 4.5 million people will have their state pension age increased by a year or less, and their position is unaffected by the Minister’s last-minute amendment. An estimated 500,000 people, all of them women born between 6 October 1953 and 5 October 1954, will still have their pension age increased by more than a year. Some 300,000 women will experience an increase of exactly 18 months. No man will have to wait more than 12 months extra to receive his pension. How is that fair?

I accept that there has been a significant upward revision in the life expectancy of those reaching 65 over the next decade and that those benefiting from increased longevity should share in the costs. As we live longer, we need to pay more towards our income in retirement and/or work longer. The women like Lorraine who have written to me do not disagree—they understand that they may need to work longer—but they think that they should pay a fair share. The Minister did not explain in Committee so I hope he will explain now how it is fair that those 500,000 women have to pay a bigger share than anyone else, particularly given that we also know that they, as a group, are not well-equipped to bear a greater share of that burden.

As my hon. Friends have set out, these women are less financially secure than men and are much more likely to be reliant on the state pension. If they do have savings for their pension, those are likely to be much less than those of men. These women are likely to have taken time out of the labour market to care for children, thus affecting their contributions record and their salary level. They are likely to have worked part-time and to have been excluded from an occupational pension scheme until the 1990s. The Department’s own figures confirm this: the median pension savings of a 56-year-old woman are, as has been said, just £9,100, whereas the equivalent figure for men is £52,800, which is almost 600% higher.

Although, like Lorraine, I welcome the Minister’s amendment, it just does not go far enough. Women should not bear an unfair burden, which is why I support the Labour amendments. They would mean that 1.2 million fewer people would have to work longer and would ensure that nobody would be asked to work more than 12 months extra to receive their pension.

[Nia Griffith (Llanelli) (Lab)]

To be perfectly honest, it is disgraceful that the Government are not giving these women enough time to plan their retirement properly and it is clear that the changes that the Government are now proposing do not remedy the situation that they got themselves into with their initial proposals. It is wrong that women who have worked hard—doing all sorts of things, not necessarily paid work—for many years are now being denied their well-deserved pension for an extra 18 months with so little notice.

Nobody is denying the demands of longevity and the fact that we have to think ahead. However, we have to plan ahead properly and in a structured way. That is why in 2008 Labour legislated that the state pension age would become 66 by 2024 to 2026. That time scale was set out to give people 16 to 18 years in which to plan. As hon. Members will recall, the Turner report recommended a minimum of 15 years’ notice for any changes in the pension age and that is a very important point to note. Obviously the Government have brought that forward significantly, leaving many women with very little time in which to plan for a delayed retirement. Some 500,000 women will have a delay of up to 18 months before they get their pensions and about 330,000 women will have a delay of a full 18 months. The Government are determined to introduce this change, despite the fact that before the election we were given promises by both the Conservatives and the Liberal Democrats that there would be no change before 2020.

The particular women that we are talking about are the most vulnerable. Those who depend most on the state pension are those who have the lowest incomes, those who have perhaps had the least opportunity to make contributions and those who have worked in the least well-paid jobs. As has been clearly expressed by my hon. Friends, women are far more reliant than men on the state pension because their pension pot is usually very small. Very often they have been limited in the opportunities they have had in this regard. They may have taken years out for child care, limited themselves in order to be able to pick up their children after school or limited themselves by geographical location. Often this group of people are enabling their own sons and daughters to work and have a decent income for their families by providing very valuable child care for the grandchildren. We often refer to these women as the “sandwich generation” because at the same time as they are looking after those grandchildren they are often coping with their own elderly parents.

Of course, these women are often more vulnerable to the cuts. An enormous number of cuts are being made in all sorts of jobs, in not only the public sector, but the private sector. The Government’s growth strategy is clearly failing, and often it is not just the lack of public procurements, but the lowering of income levels in the whole of a region or town which is making it harder and harder even for private businesses to flourish. Women are often doing more casual work or are working part-time, and as they are the ones who have often come latest to the jobs they are often the ones facing redundancy. It is often extremely difficult for older women to find new posts, particularly in areas with geographical limitations or not very good bus services, and if they need to be back to collect the grandchildren from school.

A number of these women are widows. My right hon. Friend the Member for Croydon North (Malcolm Wicks) has clearly explained the demographics and set out the number of men in certain groups who die young. Some 19% of men in certain social categories die before the age of 65, many of whom leave widows and they, like other groups, are not best placed to face the difficulties of trying to keep house and home together in difficult financial circumstances. If they do not receive their pension until a certain age, they will be losing not only the state pension, but pension credit and the various concessions and entitlements that are limited to people of state pension age.

If there were a genuine growth strategy, the argument about freeing up jobs would not be valid, because as more jobs are generated people who stay in work longer have more money to spend and so it is easier to create more jobs that younger people can take up. When there is no economic growth and the spiral is downwards, there is more bed-blocking—or job-blocking—whereby older people staying in work makes it more difficult for youngsters to get started.

So although Labour Members welcome the fact that the Government have made something of a concession, we are very disappointed that it is only a half-measure. In fact, it is nothing but window dressing. It is the sort of Christmas present that is wrapping with absolutely nothing inside—an empty cardboard box with some paper round it. The correspondence that I have received indicates to me that my constituents are not fooled by it and are worried that they will still be facing much of the same difficulty as they were with the original proposals.

I shall support the amendments tabled by those on my Front Bench to ensure that we try to give the maximum number of women the maximum amount of benefit that we can, rather than the Government amendments, which are, quite frankly, laughable. They are a disgrace because they do not address the main thrust of the problem and they leave a lot of women with a large gap and very little time in which to work out how to deal with it.