State Pension: Women born in the 1950s

Mhairi Black Excerpts

Thursday 22nd November 2018 Westminster Hall

[Alex Burghart]

I am grateful for my hon. Friend’s scene setting. Forgive me if I skipped a sentence earlier— I should have said that the retirement age of 65 was introduced in the Contributory Pensions Act 1925, so I am grateful to have been put right.

The Pensions Act 2011 dealt with the circumstances of 2008 and was introduced in the context of the emergency Budget brought forward by the then Chancellor in 2010, which offered the triple lock. To remind Members, that guarantees, each and every year, a rise in the basic state pension in line with earnings, prices or a 2.5% increase, whichever is the greatest. That policy meant that between April 2010 and April 2016, the value of the state pension rose by more than 22%, compared with growth in earnings of about 7.5% and growth in prices of 12%. Pensioners saw their incomes rise at almost double the pace of the average worker in that period. In 2018-19, the state pension is more than £1,450 a year higher than it was in 2010.

We know that the triple lock will be in place for the duration of this Parliament. For people reaching state pension age after April 2016, a new pension has been introduced at a single flat rate of £159.55 a week, which also has been triple-locked. All the women affected by the 2011 state pension age changes will draw their state pension under the new system.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I am quite confused. It is lovely to hear all this information about what happens when people retire, but we are debating the issue of those women being left in limbo, where they are expected just to fend for themselves.

[Alex Burghart]

I appreciate the hon. Lady’s point, which I am coming to.

The Pensions Act 2011 sped up the equalisation of women’s state pension age and required men and women’s state pension age to be raised to 66 by 2020. During the passage of that Act, the Government spent £1.1 billion—we might dispute the amount—on capping the maximum increase that any woman would see in her state pension age at 18 months, relative to the timetable set out in the Pensions Act 1995. Having heard the stories and spoken to some of the women involved, I know that this has been a hard transition and has caused difficulties and distress for many of them.

--- Later in debate ---

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I will try to sum up as succinctly as I can. First, let me say that it is a pleasure to follow the hon. Member for Isle of Wight (Mr Seely). His was one of the few sincere speeches we heard from Government Members. Since this problem first rose to prominence, I have made every effort to be as factual and politically neutral as possible. I think everyone who has been active in the campaign throughout would agree with me about that. It is great to see the same sensible comment and genuine constructiveness in the Conservative party, because this issue affects every constituency in the UK. It is an honour to follow the hon. Gentleman.

I congratulate my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson)—also known as Patricia—on bringing this issue forward for debate again. I honestly cannot remember how many times we have debated it—this must be the 13th or 14th. I find myself thinking, “What the hang am I supposed to say that’s new? What more evidence can we give?”

While I praised the sincere comments by Government Members, I want to address some of their more insincere comments. First, however, I want to try to frame this issue a little. What underlies the entire issue is the fact that austerity does not work. We have been arguing that for years. If someone is a millionaire, their money sits in the bank—it is not the most productive—whereas if we make a conscious effort to ensure that the average worker has more money in their pocket, they spend it and we find that local economies start booming, people start picking themselves up off the ground and communities thrive. We have witnessed from consecutive Conservative Governments the total destruction of any chance of recovery after the economic crash. That is the underlying thing.

The Government say problems such as WASPI just have to be suffered because they are all in the national economic interest. They also say things such as, “The national debt has fallen.” It has not—it has just been transferred to households. Household debt is getting worse because people are being forced to face all the debts for which the Government have decided, “That’s not my responsibility, end of.” That just cannot be okay.

As well as transferring that debt to households, the Government are trying to transfer political responsibility for this issue to the Scottish Government. When I say this issue is too important to play politics with, that is exactly that kind of guff I am talking about. I notice that the hon. Member for Brentwood and Ongar (Alex Burghart) is not here to hear my responses to what he said, but I will indulge other hon. Members with my comments.

Let me make this absolutely clear: section 28 of the Scotland Act 2016 states that the Scottish Government cannot assist

“by reason of old age.”

I do not know how that could be clearer. We cannot pick a group of people and say, “We’re going to give you money because of your age.” This Government are trying to peddle the mistruth that we can but are choosing not to. The Scottish National party, along with individuals from other parties, has been at the forefront of doing the Government’s work for them. We provided a report—I hand-delivered it to Downing Street, so I know they have a copy—yet there has been no progress. We have yet to hear anything from the Government other than, “Look, we tried our best. We’re just going to ignore it.” That is not good enough from any Government.

I was amazed that the hon. Gentleman also said that this was typical SNP and that we did not want any of the responsibility. I am sorry, but that is just untrue. The SNP’s stance is for independence. We want all the powers because we want responsibility. We are tired of having Governments we did not vote for dictating to us, creating problems and then turning to us and saying, “You fix it.” The idea that Scottish people should be taxed more to fix it by a Parliament and a party they voted for who are completely against austerity is ridiculous. If anything, I suggest that any tax increases to mitigate the Tories’ policies should be referred to as a Union tax, because that is the price Scotland will pay so long as it is part of this Union and allows the Conservatives to have control over pensions.

Let me make it clear again, in case it has been lost in previous debates: if the Minister wants to give us power over pensions we will gladly accept it. We will accept that responsibility and try to do our utmost, but please stop peddling mistruths and trying to deliberately confuse people.

[Joan Ryan (in the Chair)]

Can I give the hon. Member some advice?

[Mhairi Black]

Yes.

[Joan Ryan (in the Chair)]

You could say that an hon. Member or a Minister is incorrect but you cannot say that it is an untruth. I hope that is helpful.

[Mhairi Black]

Even if it is untrue?

[Joan Ryan (in the Chair)]

I have given you my advice.

[Mhairi Black]

Okay. Of course, out of respect for this place that is absolutely fine.

[Joan Ryan (in the Chair)]

I think you know the rules about implying that an hon. Member has told a lie.

[Mhairi Black]

Forgive me. I am just explaining things as they are in front of me. Of course, I will take that back now.

[Joan Ryan (in the Chair)]

Thank you.

[Mhairi Black]

I will happily accept that the Ministers and several Conservatives might just be very confused and they may have got their facts wrong, which in itself is quite worrying. I would suggest that they do not make statements making demands of other Governments until they have read the Act themselves.

My last point is that this is all about equality—that is the one thing that pretty much everyone in the Chamber can agree on, and we will no doubt hear the Minister say that this is all about equality. Yesterday I took part in a panel at the Fawcett Society. As hon. Members will be aware, we have had 100 years of women in Parliament—we have had many events. Last night, we had a big photograph on the Terrace with all the male and female MPs and it was all great, with everyone celebrating how far we have come, but these things mean something only if the Government’s actions back them up.

Equality is defined as

“the state of being equal, especially in status, rights, and opportunities.”

We have to accept that this generation of women have not had equality throughout their lives. They have suffered so much. To be honest, we are still only at the tip of the iceberg in understanding just the effect on them. I am not talking just about the money in their purses; I am talking about anxiety, depression and other different things, the repercussions of which we are still trying to work out fully. Yet here we are battling the Government again at the last hurdle. It cannot be justified in any sense.

The events in Parliament should be solidifying and celebrating how far women have come, to prove how much we have learned from feminism, to show a true understanding of the double burden that has been placed on women for generation after generation, and to show a true understanding of why the female experience of life has been so different. But here we are. These women are still being patronised, misled and ignored. They are constantly treated as less and by repeating something for long enough the Minister is hoping it will just become true. That is not the case.

Let me be clear: equality is not about treating everyone exactly the same. It is about treating everyone fairly. It is acknowledging who they are, what they have been through, what their experience of life has been, what their experience of Government and policy structures have been and what it has done to affect them. The job of Government now is to make sure that our policies help to mould a society that satisfies and respects all its citizens and their needs—

“the state of being equal especially in status, rights and opportunities.”

If the Minister truly believes that the Government has delivered on that then I am afraid he has not listened. If he, like me, cannot argue that the Government is furthering these women’s rights or opportunities, that should be his starting point. I can only hope that his conscience takes him there.

--- Later in debate ---

[Guy Opperman]

I take the hon. Lady’s point, but that matter was unquestionably considered by female Ministers such as the right hon. and learned Member for Camberwell and Peckham and the right hon. Member for Normanton, Pontefract and Castleford. As the matter has been debated on an ongoing basis, it has been an evolutionary process throughout the past 23 years. I am the latest of many different Ministers who have stood in this post, and I continue to defend the actions of Governments and Ministers who went before me.

[Mhairi Black]

Will the Minister give way?

[Guy Opperman]

I will give way to the hon. Lady, but first I want to address the point about complaints that was raised by the hon. Member for Weaver Vale (Mike Amesbury) and others.

A number of different processes were raised in respect of complaints, including departmental complaints. The Government have worked extensively—there is no change in the policy approach to departmental complaints under this Government or previous Governments—to engage with a significant amount of correspondence from women who have contacted them on this issue. There have been approximately 8,000 complaints on the topic and a significant amount of resource has been dedicated to it. The Government believe there has been no maladministration within the Department for Work and Pensions with regard to the communication of state pension age changes under this or previous Governments.

We have an Independent Case Examiner. If the House will bear with me, I will explain the processes. The steps the Department took to notify the general public about changes to state pension age have undergone additional scrutiny by the Independent Case Examiner, an independent office holder who reviews complaints about the Department for Work and Pensions. The Independent Case Examiner does not consider policy or legislative issues, but examines whether the Department for Work and Pensions has appropriately administered stated policies or procedures. The Independent Case Examiner’s team has concluded investigations into approximately 185 women’s state pension cases to date, and in every case there was no finding that the Department had failed to provide appropriate notice of the changes.

I will finish the last two aspects on complaints and then I will give way to the hon. Member for Paisley and Renfrewshire South.

We also have a Parliamentary and Health Service Ombudsman. Some complaints have been escalated to the ombudsman, who has identified a sample of cases that they feel reflect the issues raised in the WASPI complaints. They are now considering whether to investigate, and, if so, the scope of that investigation. Should they decide to investigate, the Government will co-operate in full with that process.

Finally, colleagues will be aware that there is an ongoing judicial review application. It would be inappropriate for me to comment in any detail on the legal case. I can confirm that the High Court has refused the claimant permission to apply for judicial review, but I understand there is a reapplication for oral permission. I spent 10 years both suing and defending the Government as a judicial review lawyer. My last client was a gentleman by the name of Ed Balls when he was Secretary of State for Children, Schools and Families. I will not comment on the merit of the matter, because it is for an individual judge to decide. Now I give way to the hon. Lady.

[Mhairi Black]

I am genuinely grateful to the Minister for giving way; no doubt I am probably getting on his nerves after all this time. Can the Government not concede that there has clearly been terrible communication? It was 14 years before letters went out, and now that women are coming forward and saying how hard this issue is hitting them—and bearing in mind the lives and the inequalities that they have suffered—the Government are still not listening to them. When he talks about intergenerational fairness, my generation is looking at how the Government are treating the older generation because they are our aunties or grannies, so how can we have any faith in the pension system? Will there even be a pension system years from now?

[Guy Opperman]

The point of having a balance between spending on state pensions and the number of people coming into receipt of the state pension is to ensure that there is a state pension in the future. With a larger number of people becoming pensioners, any Government has to make assessments, as has been shown, and that is what has happened.

--- Later in debate ---

[Guy Opperman]

We may take some time to dissect the specific figures on that, but I will attempt to do so—[Interruption.]—if the hon. Lady bears with me.

One starts with the basic principle that the figure used to be at 40% for relative poverty and is now down to 16%. The reason for the 300,000 increase is that more pensioners are in relative poverty after housing costs. That is the issue in relation to relative poverty, because in the past few years the housing costs of those of working age have reduced, because of lower mortgage rates. That reduction in housing costs increases income for those with mortgages, and that pushes median income up. That then feeds through to increase the number of pensioners who are below the 60% of median income poverty line, as the vast majority of pensioners do not have a mortgage and so do not see any benefit from lower mortgage rates. There can be a discussion about relative and absolute poverty and how to measure them, but the overall trend is dramatically down for such poverty, and I believe the explanation of what the rapporteur said is as I have just set out.

I have not addressed the specific point about the Scottish National party proposals and the vexed question of the Scotland Act 2016. As I understand it, various previous proposals—and specifically the one outlined today—would reverse the 2011 Act in its entirety. The SNP’s projected cost for that is £8 billion. We manifestly disagree and suggest it would be in the region of £30 billion, with further costs as long as women’s state pension age was below 66.

As to the Scotland Act powers, I accept that the hon. Members for North Ayrshire and Arran and for Paisley and Renfrewshire South (Mhairi Black) and I have had robust debate on many such occasions, but I would always say as I have previously, “Don’t take this from me.” I will read the letter from Jeane Freeman of 22 June 2017, in which she sets out what payments can potentially be made under sections 26, 28 and 24 of the Scotland Act 2016. Under the heading of section 26 she states:

“This power is limited to providing help with ‘short term needs’, and those needs must require to be met to avoid a risk to a person’s wellbeing… Their needs and the risks to their well-being would have to be assessed individually.”

[Mhairi Black]

Will the Minister give way?

[Guy Opperman]

I will set these things out, and then the hon. Lady can come back at me.

On the creation of the benefit under section 28, I point out with great respect to the hon. Member for Paisley and Renfrewshire South that in paragraph 3 of the same letter, her own party’s Pensions Minister in Scotland rebuts the point on old age—and she puts “old age” in inverted commas:

“I accept that ‘old age’ is not defined in the legislation, and that most people would not regard this age group as old”.

Under section 28, there is the capability to create a new benefit. That is the heading that Jeane Freeman gives to the relevant part of the letter: “Creation of a new benefit using section 28”. Finally, the situation on top-up and reserve benefits under section 24 is also set out.

[Mhairi Black]

I am very appreciative again that the Minister has given way. I want to say something very directly. First, if he is suggesting that the Scottish Government should mitigate the situation, that does not solve the problem for the rest of the UK, where women are suffering just as much. Secondly, that leads me to question who is responsible. If he wants us to take the burden, will he devolve pensions control to us to let us do it? Currently he is saying, “With the limited powers you have, try and fix this whole problem.” It is like giving us control over the window wipers and complaining about the direction of the car. What he suggests has nothing to do with the issue. Does the Minister support the Scottish Government taking full responsibility for pensions?

[Guy Opperman]

I am not going to re-litigate and re-debate the Scotland Act 2016. I accept that the Scottish Parliament cannot provide assistance by way of a pension to individuals who qualify by reason of old age. However, those who have not attained state pension age are, by definition, of working age, and are not therefore being provided support by reason of old age, and therefore the restriction relied upon by the hon. Members for Paisley and Renfrewshire South and for North Ayrshire and Arran does not apply.

We spend about £50 billion a year on welfare disability support in this country, and the key choice facing any Government of any form when seeking to control and manage state pension spend is whether to increase the state pension age or to pay lower pensions, with an inevitable impact on pensioner poverty. The only alternative is to ask the working generation to pay an ever-larger share of their income to support pensioners. Successive Governments have made appropriate, difficult decisions to equalise and increase the state pension age, and we do not intend to change that today.