State Pension Age (Women)

Philippa Whitford Excerpts

Thursday 7th January 2016 Commons Chamber

[Chloe Smith]

My hon. Friend puts it very well. Let me repeat what a constituent has more recently told me. She came to my surgery and explained that it had come as a shock to her that she would have to wait until she was 66 before she could retire, she was not informed, and found out only when she requested a pension statement. That goes to the heart of this matter of being informed and of having time to plan.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I would like some clarification from the hon. Lady. Freedom of information requests suggest that details were not sent out until the late 2000s. Is she implying that all these women who say that they were not contacted were contacted after 1995, but just ignored the notification? I find it hard to believe that that is what she is saying.

[Chloe Smith]

No, the hon. Lady is mishearing me. I am citing directly from constituents. I will ensure that the Official Report reflects my citations. Let me be absolutely clear. I do not know whether the woman in question received the letter; how could I possibly know that? I know what my constituents tell me. I look forward to the Minister’s explanation of what has happened historically. I understand the point made by the hon. Member for Paisley and Renfrewshire South (Mhairi Black) who opened the debate that the past is the past and that there is only a certain amount that we can do if we are looking back at a problem that has its roots in 1995.

Let me now explain what I am looking for as we move forward. I have already listed a set of principles that we could apply. The first is that we should protect those who can no longer work. Secondly, we should provide the right support for those who can work. Thirdly, we should maintain sound public finances, as to fail to do so hurts every single person in the economy. Fourthly, we should of course promote better communications to enable people to plan. That is my main message to Ministers today.

Let me dwell on the point of equalisation. Earlier in the debate, there was a hubbub of people saying, “Yes, we all agree on equalisation.” Let me provide a few figures on why we need to do that. When the state pension age was first set at 65 in 1926, male life expectancy at birth was 64 compared with 89 today. Indeed, if the state pension age had risen in line with the average life expectancy at 65 since 1926, it would now be at least 75. We have a significant gap that we need to make up. Indeed, if we looked even further back in the history books, we would see that when the state pension was set in 1908, the average life expectancy was 41. Members can see very clearly the difference with which we have to deal. Lord Turner’s report on pensions, commissioned by the previous Government, acknowledged that a more generous state pension had to be funded by an increase in the pension age.

Let us also make sure that we are aware of the costs. I understand that there would be costs to the tune of £30 billion to return to the 1995 timetable. Let us compare that with a few other things, simply so that we have a well informed debate. The 2015-16 spending figures, as shown in the July Budget, include expenditure of £28 billion on housing and the environment and £34 billion on public order or safety. All that we spend on housing or on public order and safety is broadly equivalent to the sum we are talking about today.

--- Later in debate ---

[Huw Merriman]

I absolutely take that point, but it would be naive not to recognise that as we live and expect to live healthier lives, we not only can but want to work for longer.

[Dr Philippa Whitford]

Will the hon. Gentleman give way?

[Huw Merriman]

No. I will make some progress, if I may.

The question remains: what, if anything, can be done to lessen the impact on those who will now have to work for longer before qualifying for their state pension, particularly those who it can be demonstrated were not notified over time, as they should have been?

--- Later in debate ---

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

A lot of the issues have already been covered. The issue of equalisation is totally accepted, but in response to a Government Member who is no longer in his place I should say that we did point out that the life expectancy increase is not equal. In parts of Scotland we have huge differences in life expectancy, which relates to wealth, in particular. Women who are lower paid, who are unlikely to have a decent pension, who have no chance of having any other kind of pension are exactly the ones who do not get this extended life expectancy.

We also heard from a Government Member that women were definitely written to and that maybe they chose to ignore it. However, we know from FOI 3231 that the information campaign was from 2009 to 2013; in other words, 14 years later. I am sad to challenge Labour Members, but the DWP in 2004, under a Labour Government, recognised from its survey that only 46% of women knew what was coming. For most of these women it is not an extension of a year or 18 months; it is literally a change from 60 to 66.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

One of my constituents from Strathaven contacted me this week to say that she had only heard about the changes through word of mouth and a web search. At 59, the Government website suggested she could retire at 62. That was then changed and put up to 64-and-a-half. The changes are unfair because they penalise people at the later stages, when they cannot make alternative arrangements.

[Dr Whitford]

We have heard from right across the Chamber about the lack of communication and the acceleration of the age extension, and the fact that women could do nothing about it. This is built on a generation of women who had a lifetime of poor pay. We need to think about that going forward.

Auto-enrolment does not cover the modern worker who has multiple mini-jobs, as they are called. Their combined earnings are not considered. We will therefore have another pension debate in another 30 years about the people who have been left with no pension because of current approaches to work. We know that the derived pension benefit from their husbands is not counted. We know that only 22% of women who retire this year will qualify for the full flat-rate pension. This is just unacceptable. We are talking about women who are often unemployed at 60. They are facing jobseeker’s allowance and multiple job applications. They do not qualify for free transport here in England, free prescriptions or any other benefits, such as cold weather fuel payments. For these women, this is a multiple and accelerating problem.

We have been asked by those on the Government Benches—they are now horrifically empty for such an important debate—to come up with a solution. I understand that HMRC is looking at the higher rate of pension relief, which may claw back £45 billion. That more than covers the £30 billion, which we are told would cover full transitional arrangements. High level tax relief is for the wealthiest people, those who this week, the first proper working week of the year, have already earned more than the average wage. Three-quarters of them are men. The route we should be following is to take away money that goes to people who probably, despite their long life expectancy, will not live long enough to spend it, and share it more equally with women who have been very badly treated. This is an issue of fairness and the Government have a responsibility to deal with it.