Pensions Bill

Pamela Nash Excerpts

Monday 17th June 2013 Commons Chamber

[Mr Duncan Smith]

Yes, I can confirm that to the right hon. Gentleman. Unless there is some reason why he disagrees with that and wants to come back at me, I will make progress.

[Pamela Nash (Airdrie and Shotts) (Lab)]

I thank the Secretary of State for giving way before he moves on. We are talking about winners and losers. Is it not the case that the average payment that a pensioner will receive per week under the single-tier pension is less than the current average payment?

[Mr Duncan Smith]

No. I am not sure how the hon. Lady arrived at that conclusion. It is not the case. The vast majority will get more in decades to come. We are happy to discuss that further if she has some information that she wants to share with us.

In 2020 three quarters of new pensioners will get the higher state pension, following the introduction of the single tier, particularly benefiting those who have historically had poorer state pension outcomes. There will be better provision for the low-paid, including 60% of the lowest income pensioners who will have higher incomes in retirement by 2040, compared with rolling forward the current system. There will be better provision also for the self-employed—this is a big plus—who for the first time in about 40 years will be treated the same as employees for the purpose of state pension entitlement. That is a genuine gain.

There will be better provision for those with broken contribution records, especially women and those with caring responsibilities. I hope that this will be seen in all parts of the House as part of a rolling process to try to include them in the process and reward them for doing a hugely responsible job in society. More than 700,000 women who reach state pension age in the first decade after single tier is introduced will receive on average £9 a week more. That is quite a significant change. By bringing forward implementation to 2016 rather than 2017, an additional 85,000 women will retire under the single tier. That was a debate that took place previously and I hope the measure will be welcomed in all parts of the House. However, this better provision will be sustainable only if we get to grips with the unprecedented demographic shifts reflecting and affecting our population.

--- Later in debate ---

[Pamela Nash]

The pensions Minister gave the figure of £4.5 billion to put this group of women born between April ‘51 and ‘53 on equal terms with men. We have been hearing during the debate that this is about winners and losers, but does that not show that women born between ‘51 and ‘53 are losing out to the tune of £4.5 billion?

[Mr Byrne]

It is hard to refute my hon. Friend’s argument. I suppose we must look at the position of those women together with the consequences of the reforms that the Secretary of State has authored to auto-enrolment—I know he will do that. One of the first decisions he took in the Pensions Act 2011 was to link the threshold for participation in auto-enrolment to the personal allowance. As the personal allowance has gone up, more and more low-paid people have fallen out of the auto-enrolment system. In 2011-12, 600,000 people fell out of auto-enrolment, and another 100,000 in 2012-12. In 2013-14, 420,000 people will fall out of the auto-enrolment system—1.1 million people have been carved out of that system.

This is an incredibly important part of the pensions saving architecture for the future, and I am extremely concerned that a number of low-paid people—more than 1 million, most of them women—have been shut out of the auto-enrolment system. To that mix we now say to 720,000 women who had the misfortune to be born between April 1951 and 1952, that they will not get the new system either.