Raising the State Pension Age to 68

Natalie Elphicke Excerpts

Wednesday 1st February 2023 Commons Chamber

[Mrs Natalie Elphicke (Dover) (Con)]

It is a pleasure to follow the right hon. Member for East Ham (Sir Stephen Timms). He is very knowledgeable about these matters, as his comments demonstrated; I thank him for them. I am grateful to my hon. Friend the Member for Amber Valley (Nigel Mills) for securing the debate and to the Backbench Business Committee for agreeing to it, because statutory pension age and pension amounts are of such importance to my constituents in Dover and Deal.

For a person of my age, the statutory pension is like one of those Scottish mountains. It is an optical illusion: as we get ever closer, it seems that there is just that bit further to go. When I started my working life, my pension age was 60. When it was changed in 2010, I was already roughly two thirds of the way through my expected working life. Should the pension age be raised to 68, a woman of my age, at current rates, will have lost out on the equivalent of between £59,000 and £77,000. That matters because of the basis on which I began paying national insurance contributions when I started work.

The first point that I would like to raise on behalf of all pensioners-to-be is that pensions are an unusual area because the rules on grandfathering rights that are usually applied are simply not followed. Surely it would be fairer to use the basis that applied at the point at which people started to work and started to pay national insurance contributions. If someone’s pension age is to be changed, it should be changed in the first third of their expected working life, not right towards the end. No one affected by a date change can go back in time to take out an ISA, top up their pension or use their income differently, as they might have done if they had known that such changes were due. People affected by the changes might have made different decisions if they had known that they would have to work for considerably longer, and it might have made a difference to their quality of life at an older age.

Secondly, people might have made different career choices or made career changes if they had known that they would have to work for longer. Thirdly, the expected extra years of work—eight whole years, in the case of women of my age—may mean that people will need extra skills training and support during their working life. If the pension age is to be extended even further, budgetary consideration will need to be given to support for lifelong learning, with leave being given for skilling up and study being prioritised for people affected by the change.

For many people, the ages of 60 to 68 represent a period in which, in the eyes of bosses or fellow workers, they may be considered past the peak of employability. I am pleased to say that that is not the case for contributions in this place, but age discrimination in our society is very real. I suggest that no further changes should be made to pension age unless such age discrimination is firmly and clearly tackled.

If we want people to work later in life, we have to give them the tools, support and legal protection that they need to do so. That is all the more important because age discrimination in particular terms and conditions of employment is currently perfectly legal. If the pension age is to be extended, the law needs to be changed. Age discrimination, like any other form of discrimination, is humiliating, demeaning and damaging. We do not want to subject people to it by making them remain in work while such prejudice continues.

I have a constituent, Stephen, who at the age of 66 —the current statutory pensionable age—is facing just such lawful age discrimination. He has worked for a very large Kent company for more than 30 years. He is an effective, respected and well-liked employee with a fantastic track record of work. When Stephen reached his 66th birthday, he did not get a birthday card from his bosses; he got a letter to the effect that it was not possible to sack him on grounds of age, so instead they were terminating his life insurance, his health insurance and all his other insurance benefits.

Stephen was doing the same job at 66, at 66 minus one day and at 66 plus one day, but now he does not get the same money’s worth in relation to his contract of employment. If he falls ill, he cannot get the same access to speedy private healthcare that other people working for the company can. If—heaven forbid—he died, his wife would no longer have compensatory insurance. However, he is doing exactly the same job as someone else. It is the same job he did before, and the same job he will do the day after. The attitude demonstrated by the company communicates to him and to the wider employment community in Kent that it thinks a person who is older is worth less. We must tackle that issue if people are to stay in the workplace longer.

I have looked into the policy considerations that are sometimes put forward. The first, essentially, is that an older person does not need to work. As a woman who has been in the workplace for quite a long time now, I remember a time when employers would say that a woman did not need to work, did not need to get the same bonuses as a man, and did not need to be offered overtime, because it was men who had families to feed. We have outlawed that, because equal pay at work is not about who is doing the work, but about what the work is. Allowing age discrimination, as we do now, sends a message that an older person is not worth the same as a younger one. The continual changes in the pension age also send a clear message that older people’s safety, stability and security in managing their own lives are not a priority.

The second reason put forward is that it becomes more expensive for everyone—the premium for the company itself goes up—if older people are included in corporate benefits, or global benefits, beyond the statutory age. To apply that logic, would it be okay to disallow health cover in an employment context to someone who had a chronic condition that could give rise, or had given rise, to needing that policy? Of course not; we would say that that was discriminatory and wrong. At the heart of equalities law is the fundamental view that employers cannot discriminate between those they employ based on characteristics that are not relevant to whether they can carry out the job. By continuing a discussion of the type that has been happening about the pension age moving and whether people will be supported in older-age working, we are failing to address this absolutely dreadful discriminatory environment.

The third and final reason given is that a disincentive to recruit older workers would be created, because the costs I have mentioned would be higher for the company. I agree that we do not want to create disincentives to employing older people, particularly if we are to require people to work for years and years more than they had expected, but the argument sounds awfully similar to the well-known discussion about whether the cost of maternity leave would dissuade employers from employing women who become pregnant. We outlawed that, and we know that a woman can still add value, be productive and be effective when pregnant, so why are we making people work longer? Why are we raising the statutory pension age and communicating from this Parliament that it is okay to discriminate against older workers? It is not, and it is wrong—all the more so if the pension age is raised from 66 to 68, because we would be raising it above an age at which employers are already discriminating against workers, as I have illustrated. Unless we tackle age discrimination, we will continue to have an environment in which it will be very difficult for people who are working in older age.

As these pension changes are brought forward, I do not feel that enough has been done to support, encourage and incentivise employers to look favourably on an older workforce. For example, national insurance contributions could be reduced for older workers. Also, if people are excluded from benefits by reason of the current law, older workers should receive money or money’s worth in cash or vouchers to make up for the work benefits that have been removed from them.

By way of conclusion, I am not persuaded by the arguments for increasing the pension age further or discriminating on the grounds of age. It is simply not acceptable. There is no justification for the treatment of my hard-working and loyal constituent Stephen with the discrimination he has faced in his workplace. If the pension age is to be raised again and we are going to keep making these changes, forcing people to stay in work for longer, age discrimination must be tackled first. We should be taking steps now to change behaviours in the workplace to make sure that older people who now have to work longer will be able to do so and will be treated fairly and equitably. We should be outlawing this outdated and discriminatory law against older workers.

Draft Bereavement Benefits (Remedial) Order 2022

Natalie Elphicke Excerpts

Tuesday 24th January 2023 General Committees

[Mims Davies]

Thank you, Mr Dowd. I think that, as I go on to talk about the qualifying numbers and the way this measure will be applied, it will be helpful if I look at those details and give the hon. Member for Birmingham, Hall Green a confirmed answer in writing, because this is quite complicated and we of course need to be clarifying the numbers.

To go back for the benefit of my hon. Friend the Member for Reigate, who has just joined us, this draft order applies to those who would have been entitled to either of these benefits on or from 30 August 2018. I recognise that that is a particular point of interest for hon. Members. I understand that, so I want to reiterate to Members why we have chosen that date. It was on 30 August 2018 that the Supreme Court, in the McLaughlin case, ruled that widowed parent’s allowance legislation was incompatible with the European convention on human rights. That was in effect the date on which the incompatibility was accepted as final. It is exceptional to make social security changes retrospectively, and we consider that a logical and fair start date. For bereavement support payment, where the death occurred before this draft order becomes law and the claim is received within 12 months of that date, claimants will get the full amount due to them. If the claim is received later, the claimant will get up to three backdated monthly payments, plus any remaining monthly payments due.

[Mrs Natalie Elphicke (Dover) (Con)]

My hon. Friend is helpfully setting out the time limits. If I have understood correctly, within 12 months is for the higher claim, but it has been more than four years—four and a half years—since the relevant case. Can the Minister confirm whether, in the unfortunate situation in which the surviving parent has died—is deceased—a claim is possible in relation to payments that would otherwise have been made?

[Mims Davies]

I fully appreciate that there has been a long gap between laying the proposed draft and the draft order. During the period, there has been a small cross-departmental team of officials looking at exactly the point that my hon. Friend makes, in terms of the complexity and ensuring that the policy is drafted properly and the implementation issues are covered. It is important that we get this right, and that throughout the process, the remedial order is made the priority for the Department to look into. My hon. Friend is absolutely right that we are looking at the issue. That goes to the point about who will be captured. I will be happy to confirm that more fully later in my comments, if that helps.

When deaths occur after the order comes into force, the bereavement support payment will be paid, subject to the usual claim time limits, which are 12 months for the initial lump sum, and three months for each instalment. It will help the Committee to learn that claimants will be eligible for widowed parent’s allowance if their partner died before 6 April 2017 and they continued to meet the entitlement conditions on 30 August 2018. They, too, must claim within 12 months of the date on which the order comes into force. They may also be entitled to ongoing payments if they continue to meet the widowed parent’s allowance eligibility criteria at the point of claim. I hope that gives my hon. Friend clarity.

The extension of the benefits to cohabiting partners means that there may be cases in which more than one person claims for the same death. That could apply in cases of polygamy, or of people dividing their time between two households, or where a separated spouse no longer lives with the deceased. As hon. Members can appreciate, this is a complex area, and my officials have been working hard to develop an approach that not only balances the need to protect taxpayers’ money with the contributory principle, but reflects people’s real-life circumstances. In such cases, the order proposes that we pay just once per death, prioritising the person who was living with the claimant on the date of death. If there are claims from different addresses, entitlement would be established as part of the normal decision-making and appeals processes.

In very rare cases, more than one potential claimant may have been living with the deceased on the date of death. Here, entitlement will be decided according to a hierarchy that is intended to reflect which claimant had the most established relationship with the deceased, as that person would usually bear the majority of the bereavement costs. Should that leave more than one potential claimant, the Secretary of State would determine who was entitled to the benefit.

--- Later in debate ---

[Mims Davies]

I thank all members of the Committee for their important contributions, challenging insights and constructive points, particularly from the hon. Member for Westminster North.

Despite the complex nature of the topics discussed today, at its core the draft order aims to achieve something quite simple and very important—parity and fairness—to ensure that surviving partners with dependent children can access the same financial support as those who were in a legal union with their deceased partner. I am content that this order achieves that purpose, and I am glad to see that it has been welcomed and agreed by the JCHR.

Under the draft order we propose—I hope I have made this clear this morning—a sympathetic approach that recognises the challenging circumstances, as outlined by the hon. Member for Westminster North, that follow a bereavement. In fact, in this case, several years later, we are tackling all of those challenges.

As Members will recognise, losing someone close is incredibly difficult. That is especially so when a child or children lose a caring parent. We appreciate that bereaved people will feel that such additional support is long overdue. From my work at DWP, I know that the loss of a parent and a close loved one is an extremely adverse childhood experience. I and my colleague in the other place, Lord Younger, vow to do what we can to mitigate that effect.

The hon. Member for Westminster North kindly indicated that she intended to raise lots of complicated points this morning, and I will do my best to address them. I know that we are dealing with a complicated matter when Hansard sends a message saying, “Please can we have your notes”. I will try to address all the detailed points raised by the hon. Lady.

By giving individuals who have already lost a partner a full 12 months to claim from when the order becomes law, introducing a disregard to protect existing entitlement to an income-related benefit where a retrospective lump sum is due, and introducing an approach to evidencing that reflects the reality of people’s lives, I hope that claimants will find the process of benefiting from the proposed change straightforward and sympathetic. As I mentioned in my opening speech, this draft order also ensures those individuals with dependent children who are sadly bereaved after the order becomes law can access the higher rate of bereavement support payment. We have built on some of the recent improvements that we have made to the core bereavement support payment offer to ensure a streamlined service for claimants. That includes providing an option to submit a claim online.

I echo the hon. Lady in thanking all interested organisations, including the Childhood Bereavement Network, Widowed and Young and the Low Incomes Tax Reform Group, for their fantastic work in support of this change, which they have welcomed and assisted.

On the expected numbers of claimants, I do not want to be held down to exact figures because this is a moving situation, but we expect the proposed changes to increase the BSP and WPA caseloads by between 4,000 and 5,000 a year. That is the projection running through to 2025-26. Obviously, we at DWP need to manage that correctly, so that people’s expectations and experience of engaging with us is likewise managed.

On how the retrospective elements of the remedial order will work, we proposed an extension of the WPA and a higher rate of BSP to cohabitees with dependent children, and that will apply from 30 August 2018.

[Mrs Elphicke]

On the retrospective nature of the order, if a married spouse had made a claim and, as result of the retrospective proposals, a second person was subsequently also entitled to make a claim, what would be the position of the person who had already been paid by reason of being the spouse?

[Mims Davies]

I understand my hon. Friend’s point. She has described a secondary, competing claim, and I think it is important that I set out my response to her and fellow members of the Committee in writing, because it is an issue that we are closely studying in terms of its management. We are looking at cases sympathetically, but I think I need to set out in writing the detail of how they will be managed. I think that would be helpful.

[Mrs Elphicke]

Can my hon. Friend clarify whether someone who was entitled as the married spouse would have to repay any sums by reason of the retrospective application?

[Mims Davies]

I can see some slightly puzzled looks, which is why I am keen to give my hon. Friend a proper response, rather than one in Committee. She makes an important point. I cannot see that in my notes, so there we go. I am sure that the officials present will send something over to me if they can give further clarity now. This morning’s conversation has absolutely shone a light on the fact that we are dealing with a mixture of retrospective, family and changed situations—as the hon. Member for Westminster North mentioned—and that is why we are trying to come up with something that is fair and right, based on what we have learned from engagement with stakeholders and what occurred in the court cases. I hope that will help.

The hon. Member for Westminster North made a point about proving cohabitation. The onus will be on the claimant to prove cohabitation, but we intend to use the existing DWP IT systems to verify information provided by the claimant as part of their claim. If the information provided cannot be confirmed, the claimant will be required to provide two forms of documentary evidence. We will accept evidence in line with that currently accepted by the DWP for proof of address, for example. That approach follows the existing evidence strategy for married couples and those in civil partnerships. Where claimants are unable to provide documents and the claim is retrospective, we will take the customer declaration on the telephone. That is a pragmatic and compassionate approach, which minimises the impact on the claimant, is deliverable and balances the risk of fraud. I hope that is helpful to the Committee.

On the implementation of the order and DWP staffing, the changes will be delivered by the DWP bereavement services team. Officials have been developing guidance and training on other products to ensure operational readiness on the go-live date. Even this morning, however, we have discussed more points we need to ensure are covered. Forgive me if I have missed anything. I am happy to pick things back up with the operational team.

We have spoken about the time taken to lay the remedial order. I hope that the Committee and those in the other place understand why it has taken some time. It is important to recognise not only the time taken, but the amount of challenges that we need to balance against that in getting it right. On the long gap, some cross-departmental work will ensure that the policy of the drafting works and that, ultimately, the implementation issues are battled through, taking full consideration of all the points. It is vital to get this right, and that remains the absolute focus.

On making a claim, we do not routinely keep details of people who have claimed before and been refused benefits on the basis of being in a cohabiting relationship. We therefore do not intend to contact previous claimants directly. Any claimant whose previous application was rejected, however, will have the opportunity to make a new claim. That is where the communication point—engagement with partners and stakeholders—will be important. We will ensure that the information on gov.uk is fully updated to help support people in making that new claim.

On the ease of claiming, we already know that the process of claiming bereavement support payment is quick, easy and well explained. We published a recent evaluation of that on gov.uk in December 2021. Overwhelmingly, claimants have reported a positive experience when claiming bereavement support—as I said, 97% satisfaction with the current claiming process. I do not want that to change because of the complexity of what we are discussing this morning. We are very mindful of that.

On the size of the award, the differences and the inequitability—if I have that word right, early on a Tuesday—I will write to the hon. Member for Westminster North. On deaths occurring before the order comes into force, the claimant has 12 months to apply to get their full entitlement. If a claim is made after that period, the usual rules will apply. Under those, a claimant can normally receive three backdated monthly payments—as I said earlier—of BSP, provided that the claim is made within 21 months of the order coming into force. The 12-month window provides a generous timescale for a prospective claimant to apply for either a WPA payment or the bereavement support payment but, for deaths occurring after the date of the order, normal rules will apply.

With regard to extending payments for the ex gratia scheme, it is our intention that the families should receive the same amount of the higher rate of BSP or WPA as their married counterparts, and only in respect of the entitlement after the August date, which goes back to the point of the hon. Member for Westminster North. It is not routine for social security changes to be made retrospectively and, as I say, we consider the date of 30 August 2018 to be logical and fair.

The hon. Member for Westminster North also mentioned the focus on online claims. The widowed parent’s allowance is a complex legacy benefit that has been closed to claims since 6 April 2017. Under the order, claims for WPA will be eligible only for a 12-month period, after which it will then close again. On that basis, it would prove disproportionate to introduce a brand-new online claim route that would have to be set up from scratch. Instead, we found that ensuring we have an online claim form that is as simple as possible, with clear guidance, is probably the best and most straightforward way forward. However, I take the points raised by the hon. Lady.

With regard to the claimants’ use of their retrospective payments being viewed as deprivation of capital, as spoken about by the hon. Member for Westminster North, we have a duty to ensure that means-tested benefits are paid to those who need them when they need them most and also to ensure fairness to the taxpayer. The deprivation of capital rules are intended to apply to those who act with the intention to access benefit or to get more benefit. Therefore, provided that any capital is spent reasonably and not with the purpose of accessing or getting more benefit, claimants should not be treated as having notional capital, which is taken into account in the same way as normal capital when they get a retrospective lump sum. I hope that that helps the hon. Lady.

With regard to how payments under the order will be treated for income tax purposes, we do not propose any changes on how either benefit is treated for income tax purposes, as I said earlier. BSP is already tax-free, and WPA will be taxed according to the period of entitlement as per those existing rules. To once again address the point raised by the hon. Member for Westminster North, this is a matter that needs to be spelled out to the Committee and both Houses to help those in that particular scenario.

I hope that I have covered all the points raised. Anyone who gets a benefit will be protected if in receipt on the day that the order goes live. It will be paid until the end of the award for unmarried claimants, which goes back to the point of the hon. Member for Westminster North. If and when the order goes live and someone is paid, and a second, rightful claimant comes forward, we will stop payments but we will not claw back any benefit, which was the point made by my hon. Friend the Member for Dover. Again, clarity on such particularly complex scenarios will be very important.

I thank Committee members for their important, constructive and helpful engagement. I emphasise to any of those who feel that they may be affected, those who represent stakeholders and those concerned regarding the order that the claim will be easy to make. It will absolutely focus on getting it right for all those who should be entitled. We have provided a paper form especially for cohabitees and an accessible, online gov.uk form as well. I reiterate DWP’s engagement with Citizens Advice on help to claim. Anybody who is struggling should look at the benefits calculator on gov.uk and the support for households with the cost of living as well. Remember that the DWP bereavement support service is there for people to call, and there will be an option to talk to somebody and claim online. I commend the order to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Bereavement Benefits (Remedial) Order 2022.

Draft Chemicals (Health and Safety) Trade and Miscellaneous Amendments Regulations 2022

Natalie Elphicke Excerpts

Wednesday 7th September 2022 General Committees

[Julie Marson]

I thank the hon. Gentleman for his question. I would just point out that REACH is a completely different issue. That is covered by the Department for Environment, Food & Rural Affairs. I take his point about the changes that have ensued from the changes in bringing EU law into UK law, but I would emphasise to his question that there are no costs involved in this SI—in these changes to UK businesses. In fact, this is about moving barriers to trade through replicating EU trade agreements with other countries, so it is actually working to remove costs and trade barriers.

[Mrs Natalie Elphicke (Dover) (Con)]

In relation to harmful organisms and the provisions relating to harmful biocides, does the Minister agree that ensuring that we have effective, physical border controls, and good monitoring of the cross-border arrangements, is vital to ensure the safety and security of our country in these matters?

Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill

Natalie Elphicke Excerpts

2nd reading
Friday 26th November 2021 Commons Chamber

[Mrs Natalie Elphicke (Dover) (Con)]

I warmly thank the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) for bringing this issue to our attention today through the excellent proposals in her Bill, and for her clear explanation of this very technical matter, its impact on people and why it matters—particularly to women in the workplace, but also to others who do not experience equity and fairness. Her remarks brought to life the fact that equal pay must also mean equal pensions, and that complexity in this matter must be no excuse for not ending up with the right result for people who are due their pensions.

There have been huge changes in pensions over recent decades—certainly in almost every year of my working life—and it is welcome that compulsory pensions are now part of employment rights. However, because of those changes and people’s changing work practices, which mean that they may be in and out of several pension schemes within their working life, there needs to be even greater focus on securing the best possible protection for any changes to pension calculations before they become due. Buy-in and buy-out schemes and other pensions management processes feature more and more as companies experience increasing pressure on their own accounts, and over their accountability for the management of pensions.

I have a constituent who has an occupational pension, and he has heroically battled with referrals to the pensions ombudsman and the FCA for many years over a matter relating to the conversion of a minimum pension floor. The pension had two elements: a minimum guaranteed pension floor and an assessed projected income, in the usual way of pensions. I recall when my constituent first showed me his original pension statement, which said, in absolutely clear and unequivocal words, that the pension would not be less than a specified amount per year. Separately, the same statement expressed the projected value of the pension. Somewhat surprisingly, in my view, the Pensions Regulator has found that, in essence, because that pension statement did not use the word “guarantee”, the words “the pension will not be less than x” did not represent a guaranteed pension amount. I ask the hon. Lady and my hon. Friend the Minister to look again at the definition of guaranteed minimum pensions, particularly in schemes established before the Pension Schemes Act 1993.

I also made a referral to the FCA about mis-selling, and it said that it did not have responsibility for pension buy-out arrangements. It seems to me that we have made great strides in stopping small-print explanations—such that anyone who looked at the small print would have realised that even if the statement said they would get a certain amount, that might change—and mis-selling in many areas of financial services. There seems, however, still to be a gap in pensions protection that leaves individuals such as my constituent rightly angry and disappointed. There can be nothing plainer, it seems to me, than a formal statement saying “You will receive x a year”. That is not a qualified statement, and we must not let people get away with the small print.

My constituent was absolutely right to feel angry and disappointed in this case, but it highlights a wider issue of equity and fairness in relation to conversions from one scheme to another, and other pension changes. There must be no possibility of discrimination when it comes to converting such schemes, and greater safeguards are vital in this regard. It is not allowed to dock pay for work already done or to cut holiday or other entitlements, and stronger protection may be required for pension rights. The fact that these accrue in the future does not make them any less important than what people are paid today.

I recognise that company schemes are set up over a long period of time, and many set up a long time ago now need to be dealt with differently. Where they are problematic for companies, some may find themselves unable to operate without making substantial changes to assessing how the pensions are dealt with. Recent changes to the calculation and treatment of future pension obligations in company accounts have created additional and specific responsibilities, but also severe and significant pressures. I hope that the Minister and the hon. Member for Rutherglen and Hamilton West will agree that any such changes to pension rights must have at their heart equity and fairness. It is part of the basic corporate responsibility that we should and do expect of companies operating all such schemes.