Pension Equality for Women

Patricia Gibson Excerpts

Thursday 14th December 2017 Commons Chamber

[James Cartlidge]

Actually my point was going to be that everyone will end up paying the price. Of course this debate is about a specific cohort that has been hit quite directly and over a specific period, and there is also the whole issue of notification. However, although young people going into the workforce know about the change in the retirement age and have had notification, that does not mean they will be able to save adequately for a pension. It also does not mean that they will be able to afford one, or to get a foot on the housing ladder, and they probably will not have an occupational pension. We cannot look at this issue in isolation; we need to look at the whole system.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Does the hon. Gentleman agree that we must get away from talking about women born in the 1950s as though they are some kind of burden on society? These women are asking only for what they were promised and what they themselves have paid for. They are not a burden; they are people looking for justice.

[James Cartlidge]

No one is saying that. My whole point is this: when the women say they have paid in, that does not exist. That is just a mathematical fact; it is not a nefarious thing. The system was not designed for this ageing population and the demographic changes that we are seeing. The duty on us in government and in this place is to be open and honest about that, and to try to come up with reforms that address it.

In my view—and this is a big deal—we should try to move to a funded pension system. Let us be honest: that is not a minor detail. If my hon. Friend the Minister asked his officials what they would think of that, they would say, “Sit down, put a cool, wet flannel on your head, have a cup of tea, and move on to the next issue.” What I suggest is not a minor deal. As I understand it, the only Government who ever moved from a pay-as-you-go system to a funded one was Pinochet’s in Chile—and he did not have to worry about Back-Bench rebellions and so on.

A funded pension would be extremely difficult to achieve because, of course, a generation would have to pay twice, but I believe that it could be done. We have had two proposals on this. During the April 1997 general election campaign, our party proposed basic pension plus. Peter Lilley came up with a system that would move us from the current state pension to a funded one. It would have been fully in place by 2040, so just 23 years from now, the liability for the state pension would have started to fall very dramatically. Instead, according to the Office for Budget Responsibility, the forecast for public spending 50 years from today, at current prices, is an extra £156 billion. That is mainly due to demographic change, higher costs of health care, more complex health needs and so on. That is an extraordinary position to be in and, as the OBR says, it is not remotely sustainable.

My hon. Friend the Member for Weston-super-Mare (John Penrose) has said that the other option is a sovereign wealth fund. Any funded state pension is effectively a sovereign wealth fund. It is a way of taking all the money that we pay into an unproductive, pay-as-you-go state pension system and investing it to meet our country’s needs, thereby boosting productivity and investment, and giving a greater return and greater ownership to people in an age when ownership in the capitalist system is under threat. There are huge benefits to be had. At the moment, the savings ratio is extremely low—that is one of the most worrying things in the Budget Red Book—but if the system forces people to save from a young age, it can be very effective. That is what we have with the new system.

There are specific issues, and we should look at the ladies who have been affected by this change, but if we really want to resolve it, we have to learn the long-term lessons. We owe it to those affected to ask how we can stop future generations being affected. If people own their pension—if it is theirs—the state cannot arbitrarily put in place this sort of change. It will take many years to establish a fully funded system, but there would be immediate short-term benefits as we moved to an economy on a more long-term keel. There would be more confidence in investment and we would move away from a more boom-and-bust, higher consumer debt model, which is why I think my hon. Friend has it spot on with a sovereign wealth fund. Either way, we need to start looking at the problem. We will need cross-party consensus, to be radical, and to look to the future rather than focusing on the short term.

--- Later in debate ---

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I thank the hon. Member for Easington (Grahame Morris) for securing this debate.

I was wondering what to say today, because I have spoken in every single WASPI debate since I was elected and I am struggling to find anything new. I would say that in their treatment of the WASPI women the Government are behaving like dodgy used-car salesmen. This is the political equivalent of being mugged in the street. I thought, “I know what I’ll do, I’ll talk about the injustice.” But the Government already know about the injustice. I am sure the Minister is going to trot out the old arguments about people living longer. Actually, that is no longer true, because life expectancy is in decline. Whether we are living to 80 or 150 is not the point at issue today. The point is that the WASPI women were not given proper notice. That is the issue today and that is the issue I would really like the Minister to focus on.

I was also going to talk about the hardship and the penury in which these women have been placed, but the Government and the Minister know about that—they have heard it time and again. I was also going to talk about the cruelty of moving somebody’s pension age further and further away every time they approach it, but of course the Minister knows about that as well. He has heard it a dozen times. I could also talk, as many other Members have, about the caring responsibilities these women have taken on, but the Minister knows about that, as well as everybody else in the Chamber.

What I will talk about briefly is the social contract. Members have talked about what this will cost and asked, “Can we afford it?” I suggest to the Minister that we cannot afford not to address this matter. This goes to the heart of the social contract between those govern us and those who are governed by us. If people cannot have faith in the contract they have with those they elect to represent them, where can they find justice and support? The Government have cruelly and callously ripped up that social contract. The hon. Member for Bury St Edmunds (Jo Churchill), who is no longer in her place, talked about WASPI women as though they are some kind of burden on the state. Nothing could be further from the truth.

The Minister and other Members have spoken about apprenticeships. There might be some WASPI women out there who are terribly excited at the prospect of a £3.50 an hour apprenticeship, but I just have not met them. Perhaps the Minister has. Perhaps his colleagues who have been lauding that have met them. WASPI women are not interested in whether they will get a telegram from the Queen. The fact is that that does not pay the bills and it does not put food on the table. Unless the card is edible, it is not much use.

We need to stick to the matter at hand. These women have been let down. They have been sold a pup. They are now living in hardship through no fault of their own. It really is time the Government recognised that in contrast to their impassive, stubborn and unfeeling lack of response, the WASPI women are showing dignity and fortitude. Everybody watching this debate can see the difference between the two camps. I urge the Minister to get a grip, do the right thing and give these women the money they are entitled to.

[Several hon. Members rose—]

--- Later in debate ---

[Patricia Gibson]

Will the Minister give way?

[Guy Opperman]

If the hon. Lady will bear with me, I will answer her point.

In relation to specific areas of Scotland, the long and short of it is that I do not have the life expectancies for specific constituencies, as has been asked for, but in the Glasgow city area, for example, life expectancy at birth, according to the December 2017 ONS figures, has increased by more than four years for men. Life expectancy at 65 in Glasgow city is 15 years for men and 18 years for women, an increase on 2001 to 2003. [Interruption.] The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) asserts from a sedentary position that I am using the wrong data. The data I am using is what the Office for National Statistics has said and from the Cridland report.

[Patricia Gibson]

rose—

[Guy Opperman]

I am conscious of your restrictions on the length of time available to me, Madam Deputy Speaker, so I will come back to the hon. Lady in a moment, if she will allow me.

The state pension was initially addressed in the 1995 Act. The need to do so arose because of life expectancy changes and the anticipated increase in the number of pensioners in the years to come. As I have said, the Labour Government introduced the Pensions Act 2007, which again increased the state pension age. I should point out that the Labour party has now resiled from that position and seeks to argue that both the Blair and Brown reforms were wrong.

The Government listened to concerned voices during the passage of the 2011 Act, as I indicated to the hon. Member for Easington. The proposed two-year acceleration was reduced to 18 months, benefiting more than a quarter of a million women, with the concession being worth more than £1 billion. Going as far as some campaigners have argued—he mentioned early-day motion 63 and what he described as “full compensation”—would represent a cost of more than £70 billion to the public purse. With respect, the requirements those changes would make in relation to taking into account the difference between men and women would require new legislation, meaning that an ongoing inequality would potentially be created between men and women.

[Patricia Gibson]

Perhaps the Minister could offer me some assistance. He talks about life expectancy increasing, and I do not want to argue the toss about whether it is or is not. I am curious about something, and I hope he will be able to explain this to me. Just because people are living longer, I do not understand why this particular generation of women should pay the price, given that they expected to receive their pensions at 60. The argument about life expectancy might be one about reforming pensions in the future, but we are talking about this particular group of women, who feel very let down and cheated because at 60 they have not got their pension.

[Guy Opperman]

I am conscious of Madam Deputy’s Speaker’s desire that I should end my speech speedily, so I will write to the hon. Lady with a detailed reply to the point she just raised.

I have barely had a chance to address the arguments made by my hon. Friends from Scotland, which include the point raised eloquently by my hon. Friend the Member for Moray (Douglas Ross) that Jeane Freeman, my opposite number as Pensions Minister in Scotland, has indicated that her Government have the powers to act under sections 24, 26 and 28 of the Scotland Act 2016. I stress the point strongly that there is no question but that they have this power, because this is not about dealing with pensioners as such; the provisions we are dealing with concern people who are of working age, according to the law. I rely strongly upon the words not of this Government but of the Scottish Government, as set out in her letter of 22 June.

The issue of notification was raised, and I can answer the points on that briefly. Clearly, there was massive parliamentary debate, on repeated occasions, in 1995. Thereafter, we saw multiple articles in the press and media; the distribution of a huge number of leaflets; a campaign in 2004 to educate people about their state pensions; adverts in a variety of ways; correspondence in two different ways, both prior to 2010 and after 2011; and state pension forecasts sent to 19 million people over the past 17 years.

I wish to make a couple of final points. We recognise that some men and women are forced to reduce their working hours or cannot work for reasons of sickness, disability or caring responsibilities. The Government are committed to supporting the vulnerable, and we spend about £50 billion a year on benefits to support disabled people, those with health conditions and carers, as my hon. Friend the Member for Eastleigh (Mims Davies) particularly mentioned. That equates to 6% of all Government spending. With increased financial pressures, we cannot change a policy that was implemented over 22 years ago and supported by all three political parties.

I finish with a point about life expectancy, as the hon. Member for Easington and I are good examples of that—we have both suffered from cancer. I am delighted to see that he has made a recovery from lymphatic cancer. I have made a recovery from a brain tumour. Those illnesses would have killed us both 30 to 40 years ago. There is no question but that the life expectancy changes are what has driven this approach on the part of successive Governments. With increased financial pressures, it would be unaffordable and not right, in the light of the changes we have had, to place an unfair financial burden on future generations.