Pensions Bill

Martin Horwood Excerpts

Tuesday 29th October 2013 Commons Chamber

[Steve Webb]

I beg to move, That the Bill be now read the Third time.

One of the problems on Report is that we get back into the weeds and the detail and lose track of the big picture. I think we can all be proud of producing a Bill that will be seen by history as a lasting and valuable reform to the pensions system, even if I say so myself.

To begin on a note of consensus, I thank the Select Committee on Work and Pensions and its Chair, the hon. Member for Aberdeen South (Dame Anne Begg), who is in her place, for its pre-legislative scrutiny of the draft Bill, or at least the parts relating to the single-tier pension. We are grateful for that input and made changes in the light of its recommendations, including putting the start date in the Bill and setting the maximum and minimum qualifying period at 10 qualifying years. We have discussed further some of the Committee’s recommendations as we have proceeded. We are grateful for its constructive and swift scrutiny of the Bill.

The reason for the Bill is that we have a state pension system still grounded in the models of the second world war, a system where men went out to work and women depended on men, and a system of mind-numbing complexity that made it impossible for people to plan rationally for their retirement. Each change by successive Governments has been made with the best of intentions, but, grafted on to the previous lot of changes, they left people with a system that nobody could hope to understand. That mattered in its own right, but it matters particularly in a world of automatic enrolment if we are to expect another 10 million people to save, in some cases, relatively small amounts for their retirement. They have to be able to do so confident that they will not see their hard-earned savings means-tested away. That is why the single-tier state pension, a single, simple decent state pension set above the level of the basic means test, is such a fundamental reform.

The Secretary of State for Work and Pensions has been supportive of this principle from day one. I am grateful to him and to my colleagues in the Department for the fact that the coalition has been able to introduce this reform, which is long overdue and will, I believe, stand the test of time. While we have had our differences with the Opposition, I am grateful to them for their support for the principle of the single-tier pension. We all want to see a pension system that is not constantly chopped and changed, but stands the test of time. I believe that the single-tier pension, subject to any further refinements their lordships might wish to make, will indeed stand the test of time and will provide a firm foundation for retirement saving.

The Bill does not only deal with the single-tier pension. Part 2 brings forward the increase in the state pension age to 67 and sets out a process for dealing with these things in a more rational and measured way. We envisage that as life expectancy increases, the majority of that time will be added to working life, but a period will be added also to retirement. It is a measured, balanced and systematic approach that will allow people to plan for their retirement in a way that all too often they cannot.

Part 3 reforms the bereavement support payment, which we have not been able to discuss today, and which is designed to focus support for bereaved families on that point immediately after bereavement and in the year thereafter, when bereaved families have told us they need the most support and cash. That is the purpose of the reform.

[Martin Horwood (Cheltenham) (LD)]

Like my hon. Friend, I welcome the Bill, which is an important, historic and long-overdue change in the pension system, but will he acknowledge that charities such as Winston’s Wish, based in my constituency, and the Childhood Bereavement Network have expressed concerns about the bereavement support arrangements in the Bill, particularly for parents who still need that support after one year—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. This is meant to be an intervention, not a speech. It is unfair on the other Members waiting to speak. In fairness, Mr Horwood, you ought to give a little more consideration and make shorter interventions.

--- Later in debate ---

[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.