Pensions Bill

Debate between Richard Graham and Gregg McClymont

Monday 17th March 2014 Commons Chamber

[Gregg McClymont]

The Minister made that point in his speech, as he has done repeatedly, and he has now put it on the record again. Let me pick him up on something he said. In what has become his quite common style, he suggested that it was rather peculiar to give the Secretary of State powers to ensure that transaction costs are disclosed. However, he must be aware—in fact, he alluded to this—that the FCA already has powers to require transparency of transaction costs, but has never exercised them. Making the Secretary of State responsible does not mean that the Government should not use the FCA’s expertise. Indeed, the Government’s amendment states that the Secretary of State must consult the FCA when setting transaction costs for those pensions over which he wishes to retain responsibility, so why could the same model not be maintained for contract-based pensions? Of course it could be so maintained.

On the Minister’s suggestion that it is somehow peculiar in his world to list the transaction costs that must be disclosed in amendment (a), I have to tell him that we used Lord Lawson’s amendment in the House of Lords, where it was commended by Members on all sides, including by the Government spokesman, Lord Freud. [Interruption.] The Minister is mumbling, but he suggested that the amendment was peculiar, although Lord Lawson’s amendment was along exactly the same lines. I am afraid that the Minister is disagreeing not just with the Opposition, but with Government Members.

Let me say a little about our additions to Lord Lawson’s list. I make it very clear that our list of transaction costs is the same as that tabled by Lord Lawson in the Lords, with two additions—transaction costs in underlying funds; and interest on client cash balances or profits from stock lending retained by the fund manager. The reason for including such additional transaction costs is that it needs to be strongly signalled to the body setting the rule—whether the FCA or the Secretary of State—that those items should be declared.

Let us remember that the Investment Management Association has deliberately failed to include those items in its draft statement of recommended practice. Amendment (a) should be discussed in that context, not the diversionary trail thrown up by the Minister. It is important that transaction costs in underlying schemes are disclosed because a transparency regime can otherwise easily be bypassed by any fund manager that operates multiple funds. The fund receiving moneys can simply use them to purchase units in another house fund. The IMA SORP recognises that the fixed charges in underlying funds should be reported, but it fails to apply the same principle to transaction costs, which is why they are laid down in the amendment.

The House should be aware of the wider context. The Government have previously left it to the fund managers’ trade association to decide what, if any, transaction costs should be declared. The IMA has put forward a draft statement of recommended practice, which would require fund managers to declare some transaction costs in their annual accounts. The SORP must be agreed by a Government quango called the Financial Reporting Council. The concern that the SORP failed to include significant types of transaction costs led a cross-party group of MPs and peers to write to the FRC to say that it would be inappropriate for it to agree to a statement of transaction costs that omits significant types of transaction costs. That was widely reported at the time. It is common knowledge that a number of critical submissions were made to the FRC. Unusually, those submissions were not released at the end of the consultation period, and we still await them.

[Richard Graham]

Will the hon. Gentleman give way?

[Gregg McClymont]

I am always delighted to hear from the hon. Gentleman, but I must make progress.

It is worth adding that the FCA sits on the working group that reviews the IMA’s SORP.

To put the SORP of the IMA—the fund managers’ trade association—in context, the Government refused to accept Labour amendments in Committee and on Report that specified a non-exhaustive list of transaction costs that needed to be made transparent. The noble Lord Lawson then made it clear that the Government’s position was not acceptable. He said that it was like putting the fox in charge of the hen coop. He added that there is a reason why fund managers meet in Monte Carlo and pension fund trustees meet in Manchester. That was the context in which Lords amendment 9 appeared. Lord Lawson, who sits on the Government Benches, made it clear that he agreed with the Opposition, rather than the Minister, who has failed to get to grips with the disclosure of transaction costs. That is the context in which this debate has been taking place for the past year and a half.

Lords amendment 9 does not state which transaction costs will be included. It gives the Secretary of State the right to include

“some or all of the transaction costs”.

It also allows the Secretary of State to not require full transparency in contract-based defined contribution schemes—those that are provided by insurance companies —if the transparency regime is “equivalent”. Lord Freud, speaking for the Government, emphasised that those words were intended to ensure that no costs were missed and that they were not an attempt to water down the regime for contract-based DC pensions.

Lords amendment 9 removes the responsibility to set transparency rules for workplace DC pension schemes from the Secretary of State and gives that power to the FCA. The FCA does not currently require the publication of transaction costs for workplace pension schemes. Its view is that any transparency requirements should be identical to those for retail investment products.

[Richard Graham]

Is not the key point that is under discussion whether the list of charges to be covered should be included in the Bill? We agree that there are many issues of detail, especially on the transaction side, that should be consulted on. The Minister has said that that will happen. The hon. Gentleman has not answered the central question of why the list should be included in primary legislation.

[Gregg McClymont]

The answer to the hon. Gentleman’s question is that nobody who looks at this matter reasonably can have confidence that the Government will deliver the disclosure of any transaction costs. The only reason we have the inadequate Lords amendment 9 is that there was a rebellion among Conservatives in the House of Lords that was supported by Cross Benchers. Before that, the Government had no intention of disclosing transaction costs, as far as one could see. To answer his question, amendment (a) is a way of ensuring that the Government deliver what they say they want to deliver.

To sum up, the Government have brought forward in the Bill a hard, fast, rapid wind-up of the state second pension. If that is to be successful for those who can no longer accrue into the state second pension, there must be similarly speedy action to ensure that there is an adequate, meaningful pensions cap as quickly as possible. Alongside that pensions cap, all transaction costs must be disclosed. Before the campaign by the Opposition and, more recently, Lord Lawson, the Government had been very slow to get to grips with the disclosure of transaction costs, never mind the pensions cap. The intervention of Lord Lawson has led the Government some of the way down the necessary path towards ensuring that there is disclosure of transaction costs, but they have got to that stage only because of the threat of a rebellion in the other place.

Annuities for Pensioners

Debate between Richard Graham and Gregg McClymont

Tuesday 7th January 2014 Westminster Hall

[Gregg McClymont]

The hon. Gentleman referred to the Turner commission. The thrust of its conclusions—and, indeed, of the auto-enrolment pensions policy pursued by the previous Labour Government and the current Government—was that inertia is a fact of pensions markets. Auto-enrolment is an attempt to use inertia for the good of the public and the consumer. That is the basis on which pensions policy is developing under the pensions Minister—a process that began under the previous Labour Government.

There is a massive lack of engagement and involvement in pensions. Leaving aside the ABI, there is general recognition in the pensions world that the open market option is simply not going to do the job. That is the thrust of the FCA consumer report, which has been mentioned several times. Having looked at the matter closely over two years, and based on the Turner commission consensus, which we wish to maintain, I am prepared to say that inertia in the annuities market is a reality that leads to excess profits. That is not only my description, but the description given by the pensions Minister, who said in a recent television documentary that excess profits were being made by insurers, which is a product of inertia.

[Richard Graham]

The interesting point about inertia is that that is precisely the context in which I recommended that a change be considered to the current requirement for an individual to buy an annuity for life, whatever their circumstances or however those circumstances change. That crucial change would affect the inertia about which the hon. Gentleman is concerned, because it would enable people to reconsider and change their annuity if circumstances demanded that. Does he agree?

[Gregg McClymont]

No, I do not agree. The problem in the market is that people do not shop around, but the hon. Gentleman suggests that we should solve that problem by creating an even more complex product, in which people will magically start to engage in trading and moving from one annuity to another.

[Richard Graham]

Will the hon. Gentleman give way?

[Gregg McClymont]

No, let me continue. It is simply not feasible or credible. The idea of tradable annuities is a non-starter, and I will set out the response to it from across the industry. Phil Loney from Royal London said they had not been thought through by the Minister. Mark Wood from JLT Employee Benefits described it as misleading to compare annuities to mortgages. Tom McPhail, who is present in the Public Gallery, said that the Government

“should not try to invent products which…aren’t likely to be…value for money.”

The Actuary magazine described the wider response from the industry as “scathing”. The idea is a non-starter.

[Richard Graham]

Will the hon. Gentleman give way?

[Gregg McClymont]

We have heard from the hon. Gentleman, who gave a long and interesting speech, and it is now my duty to respond. I shall make a little more progress and then I will let him back in. He diagnosed the problem effectively, but provided no solution. The airy-fairy, half-baked suggestion that we should think about tradable annuities does not deal with the reality, which more than one Conservative Member has set out this morning, that hundreds of thousands of people are annuitising every year, right now. What are the Government doing about that now, in real time?

Interestingly, the hon. Member for Gloucester diagnosed the problem very well, and understood that transparency will not solve it. The solution cannot be based on a utopian hope for greater individual engagement; it must be like what the OFT report did more widely for pensions. The demand side—the buy side—is too weak; how can we strengthen consumer weight or consumers’ ability to get a good deal? My view is that although individual engagement is a good thing, and anything that encourages it should be welcomed, it will not solve the problem, given that inertia is a central fact of the pensions marketplace.

The Opposition tabled a sensible amendment to the Pensions Bill which would at least have begun to tackle the problem, by ensuring that in the existing market—in the real world, right now—those who annuitise would get access to properly regulated, independent brokerage. That is not a panacea, but it is a reasonable starting point. It bears positive comparison with the Government’s lack of action. They have done nothing on annuities; there are no clauses about them in the Pensions Bill. That may or may not be an indictment of Government policy. No one says that the problem can be solved overnight, but surely an amendment of the kind tabled by Labour is a reasonable starting point.

More widely, the only answer is more purchasing power on the side of the consumer. That means we need to move to mandatory independent brokering, ideally in-house rather than external. [Interruption.] The hon. Member for South Derbyshire (Heather Wheeler) looks puzzled. In 2012, the National Association of Pension Funds, which is represented in the Public Gallery, rightly suggested that the annuity-buying process should be part of a pension scheme—that goes to the point that building up a pension pot is entirely part of the same process as producing an income at the end. Pension schemes should have a role in providing annuity brokering advice—that is what I mean by “in-house”.

Of course, that leads us into the argument about pension schemes being big enough for that to happen. I know that the hon. Member for Gloucester is aware, although it was not mentioned in the debate, that the market is fragmented. There are hundreds of thousands of pension schemes, but the providers of annuities are four or five insurance companies and three or four specialists. It is worth asking why market entrants do not emerge to compete with the giants. It is probably to do with the amount of capital needed, and the fact that on the insurer side it is possible to cross-subsidise products, because of being involved during the phase of building up the pension pot, as well as in the creation of a retirement income at the end. We need pension schemes to be involved as a matter of course in ensuring that their members get the best possible annuity at the end of the saving process. That seems a sensible way to proceed.

The hon. Member for Warrington South, who has done doughty work in the area we are debating, suggested that there should be a Government-backed annuity provider, and the hon. Member for Gloucester intervened and said that that was nationalisation. If it is, then so is the National Employment Savings Trust, which the Government support. NEST is a Government-backed scheme intended to bring down the benchmark for charges during the phase of building up a pension pot, and it has been very successful. That is not nationalisation, and nor is the suggestion of the hon. Member for Warrington South.

[Richard Graham]

The hon. Gentleman’s earlier reluctance to give way is uncharacteristic, especially as 45 minutes were left in the debate for Front-Bench spokesmen. He has two or three times confused issues, especially on my exchange with my hon. Friend the Member for Warrington South about nationalisation. My hon. Friend clarified that and explained that he was looking for participation in the market, not domination of it. Members on both sides of the House have an opportunity today to express their views and reach a consensus; the review by the Financial Conduct Authority and the consultation by the Department for Work and Pensions provide an opportunity for the House to move forward on an issue of concern to all our constituents. Does the hon. Gentleman agree? He should surely reach for consensus, not political division.

Pensions Bill

Debate between Richard Graham and Gregg McClymont

Tuesday 29th October 2013 Commons Chamber

[Gregg McClymont]

Thank you for that wise advice, Madam Deputy Speaker. I was somewhat sidetracked by the excellent intervention—[Interruption.] That is another intervention from the Parliamentary Private Secretary. If Members want to stand up and say something, I am happy to take an intervention. If they want to heckle from the back row, I will continue to respond to those heckles.

Where are we? The Minister wants to be seen to be taking decisive action on pension charges but today he has called for yet another consultation. He has moved on during the past year, as he had said that Labour was scaremongering and he could see no need for a cap. The consultation is a development, but we need action now. Our amendment (a) to new clause 1 would ensure full disclosure of all costs and charges and our other proposals would ensure a private pension system that would mean that everyone who was auto-enrolled would get value for money. The Minister is right that auto-enrolment started well, but he knows as well as I do that the key is the smaller employers. We are determined that everyone should get a good deal from auto-enrolment and I therefore commend our new clauses and amendments to the House.

[Richard Graham (Gloucester) (Con)]

This is the first time I have made a speech while you have been in the Chair, Madam Deputy Speaker, so let me add my warm congratulations to the many that you have already been given.

Our debate today has been a pretty specialist affair so far, in a different language from that which many of our constituents speak. It has no doubt been a struggle for many in the Public Gallery to remain awake throughout. As we dive into the detail, let us not forget the goal: the Bill’s aims are simplicity, clarity, a reduction in the flaws in means-testing and, above all, to ensure that it always pays to save. Some of that was rather lost in the 85 minutes for which the shadow Minister, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) spoke, so let me try to bring us swiftly back to the main points of detail.

Earlier we tackled auto-enrolment, small pots, aggregators, charges, scale and annuities. No doubt that would be enough to put many people off listening to any more, but let me add my thoughts briefly on each in turn. First, on auto-enrolment, the Minister outlined the success so far—1.7 million people already enrolled and 90% of them staying in. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East said that he was cautious and that that percentage might not be sustainable as we started enrolling those in smaller firms across the country. He may well be right about that. The Minister will be acutely aware of that, which is why he is right to tackle some of the detail now, ahead of the smallest companies enrolling.

The important thing in the section on auto-enrolment was the changes outlined today—two opt-outs: one for those who have already given notice of leaving their employer and one for those who would suffer negative tax penalties because they had already accumulated more than the maximum allowed for tax-free savings. The Minister confirmed that there is absolutely no intention of excluding small and medium-sized enterprises, the lifeblood of every Member’s constituency. That is important, and he rightly summarised Labour’s amendment 53 as unnecessary, unclear and ineffectual.

The discussion of small pots, importantly, covered the differences between the pot follows member approach recommended by the coalition Government and the aggregator approach proposed by the Opposition. The precedent of Australia is relevant. Those 5 million lost accounts worth some 20 billion Australian dollars are not a small matter. Millions of our constituents are affected. Those of us who have accumulated small pots at different periods in our life know that it is extremely hard to keep track of them and to have any idea of what our savings really are. The whole business of pensions is ultimately about savings. It is about accumulating a pot of money which will see us safely through retirement, ensuring that we can live after retirement without having to fall back on savings.

--- Later in debate ---

[Gregg McClymont]

There is a joke in that somewhere, but I will not go there. I was just struck that the hon. Gentleman—we have debated this in Committee—said that he was not a member of the Forty Group. I have in front of me a copy of “40 Policy Ideas from the 40”, which states that the group

“consists of the forty most marginal Conservative seats”,

and he is one of the Members listed.

[Richard Graham]

The shadow Minister must learn to be more precise in what he says. His letter referred to

‘“40 ideas from the 40”, to which you were a contributor’

but I did not contribute. When I have good ideas, which is rarely, I either keep them to myself or share them with colleagues verbally. I do not put them down on pieces of paper for him to read, or not read as the case may be. I hope that he will take on board that correction. I am a member of the Forty Group, but I was not a contributor, and there is a difference.

[Gregg McClymont]

This is all very curious, because the front cover of the document refers to “40 Policy Ideas from the 40”, and its states:

“The Forty Group consists of the forty most marginal Conservative seats”.

One of the MPs listed is the hon. Gentleman—

[Madam Deputy Speaker (Mrs Laing)]

Order. We are straying somewhat from the amendments and new clauses before us. If there is a difference of opinion, it will have to remain as such. I urge hon. Gentlemen on both sides of the Chamber please to stick to the points before us on private pensions.

Pensions Bill

Debate between Richard Graham and Gregg McClymont

Monday 17th June 2013 Commons Chamber

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The hon. Gentleman has enticed me from my sedentary position. Can he confirm what his colleague the pensions Minister, the hon. Member for Thornbury and Yate (Steve Webb), said in the Financial Times this morning—that the triple lock is guaranteed only for the lifetime of this Parliament and that neither the Conservative party nor the Liberal Democrat party is committed to it beyond 2015?

[Richard Graham]

Alas, I was not at the pensions Minister’s meeting with the Financial Times. However, the hon. Gentleman has raised a rather different question from the one I asked; I had mentioned his description of the current triple lock as a triumph of rhetoric over reality. Most of my pensioner constituents would describe it as a triumph of financial reality for their pensions.

[Richard Graham]

I read modern history, not ancient history, at university. My clear recollection of recent and modern history is that the hon. Lady’s party contributed three things to the evolution of pensions. First, there was the abolition of the advance corporation tax on dividends, which has been estimated to have cost occupational pension schemes about £100 billion. Secondly, although the hon. Lady’s Government made great play of criticising the breaking of the link between pensions and earnings by an earlier Conservative Government, over 13 years her Governments failed to do anything at all about it.

Thirdly, the contrast between the 75p increase and the £234 that I have just described represents, by any standards, a pretty compellingly disappointing story for the Labour party. I will not dwell on the Labour party’s shame on the matter of pensions, because it is well known to the House. However, the shadow Minister, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, recently described his Government’s approach over 13 years as “evolutionary”. Evolving an approach towards a single state pension over 13 years is different from putting forward a Bill and implementing a single state pension, which is what this coalition Government are doing today.

[Gregg McClymont]

rose—

[Richard Graham]

The shadow Minister rises again from his place. I welcome him.

--- Later in debate ---

[Gregg McClymont]

I thank the hon. Gentleman. I note that he did not clarify whether the pensions Minister had indeed said in the Financial Times this morning that neither party is committed to the triple lock beyond 2015.

Let me take the hon. Gentleman up on a specific point. He is a reasonable man, so does he not accept that the breaking of the link with earnings meant that by 1997, when Labour came into office, there was a genuine crisis of pensioner poverty for a significant section of the pensioner population? Pension credit was a significant and substantial response targeted on those most in need. Given the hon. Gentleman’s comments today, that would seem to fit his own approach to pensions more generally.

[Richard Graham]

The hon. Gentleman is correct. The break between pensions and earnings caused considerable upset across the country and was the reason why the Gloucestershire Pensioners Forum was founded some 30 years ago during that earlier Conservative Government. However, let us imagine the forum’s disappointment that nothing at all was done about the matter in 13 years of Labour Governments. The Gloucestershire Pensioners Forum had to continue into a coalition Government to see the wrong righted. The hon. Gentleman’s party had a great opportunity to resolve that disappointment from ancient history, but, as with so much, it has been left to us.

I move on to other aspects of the Opposition’s response today. Many of us will recall that the shadow Secretary of State has promised us a laser-like approach to public expenditure, but it was not clear today whether he was advocating that the 700,000 women born between April ’51 and ’53 should be given the additional £4.5 billion that it would cost to put them on precisely the same footing as those born later. Perhaps in his winding-up speech the shadow Minister will confirm whether the laser-like approach to public expenditure will revert to the “Sorry, there’s no money left” approach for which the shadow Secretary of State is so renowned.

What we have heard from Members across the House today is an extraordinary amount of unanimity and consensus on the fact that, although means-tested pension credit was well intentioned, it is not the solution and should be replaced. Many Members, including the distinguished Chair of the Work and Pensions Committee, have welcomed the approach of a single state pension and the doing away with the means-tested pension. For many of us, the means-tested pension has caused sad arguments between neighbours, some of whom have small amounts of savings. Someone needs only more than £10,000 not to qualify for the means-tested pension credit; the income generated from £10,000 is tiny in a low-interest-rate environment. The consensus has been encouraging, but some things have clearly not been covered in the Bill today. It is worth touching on those; perhaps the Minister will address some of them in his summing up.

I start in no particular order. In the creation of a new single-tier state pension, it is clear, as always, that there will be losers as well as winners. Some members with private sector pension funds will be affected and it would be interesting to hear more from the Minister on who those losers will be. Then there is the question of the defined ambition pension, which the pensions Minister has advocated. We are promised a Government paper on that soon. Will the Minister confirm when it will come? Sometimes “summer” is taken to extend all the way through to November; it would be helpful to have an idea of what stage of the summer is meant.

I understand from some of the professional associations that the business of contracting out requires a statutory override, so there is a question of when that will come in secondary legislation. Will the Minister say something on that? One or two Opposition Members rightly raised the National Employment Savings Trust, the restrictions on it and its competitiveness against other products in the marketplace. None of us would wish NEST to be penalised as the Post Office was inadvertently by the previous Government in respect of private sector competition. NEST must not be prevented from succeeding as we all wish it will.

On the small pots, there is an issue about a cost assessment of bundling them all together. What sort of safeguards might there be in moving from a strong scheme into a weaker one?

On the issue of bereavement, I would like to read a small part of a letter I have received from a constituent. She raises the question of whether the regular income available to widows from the widowed parents allowance, which will be replaced by a bigger but shorter-term amount, could

“leave future widows and widowers worse off than most other single parents who can claim child maintenance from the other parent in the case of a relationship breakdown.”

She goes on:

“It seems so unfair that in future someone like my husband who has worked for 20 years will never claim a state pension but the government would not support his children either.”

Perhaps that issue can be raised in Committee and a discussion had on the potential unintended consequences of the changes for those affected by bereavement.

Lastly, there is the new objective laid down for the pensions regulator

“to minimise any adverse impact on the sustainable growth of an employer”.

That raises the question of the definition of an employer. Charities and non-governmental organisations with pension schemes, for example, do not necessarily focus on growth. Perhaps some clarity on precisely what changes are implied by the new objective for the pensions regulator could be discussed in more detail.

The Chair of the Select Committee and the right hon. Member for Birkenhead—both of whom have huge experience of this sector and the world of pensions—welcome the Bill and I welcome it, too. I think that there should be consensus on pensions and that this is a great opportunity for the Opposition to say, as my hon. Friend the Member for Rochester and Strood (Mark Reckless) has said, that the glass is not half empty, as I mistakenly suggested, but half full. They should be enthusiastically supportive of the fact that there is a lot in the glass and we want more: we want a single state pension and we want it to succeed.

I am delighted that Opposition Front Benchers are wriggling—some more comfortably than others—towards a recognition that this coalition Government are taking the right steps to simplify and clarify pensions and, above all, to enable all our constituents to believe that it will always pay to save. The value of that is enormous and it is this Government’s duty to return us to that principle and remind the whole House of why we should endorse this Bill and its objectives.

CPI/RPI Pensions Uprating

Debate between Richard Graham and Gregg McClymont

Thursday 1st March 2012 Commons Chamber

[Richard Graham]

Thank you, Madam Deputy Speaker. I do apologise. I was following the example of the shadow Chancellor.

Will the hon. Gentleman confirm for the record that his party’s policy, therefore, is to revert to an indexed inflation link with RPI if it gains power?

[Gregg McClymont]

Alas, the hon. Gentleman must wait for the next Labour party manifesto to satisfy his curiosity.

Clearly, the issue is whether CPI is an accurate measure of inflation. The Government and the Minister are clear that it is, but some important authorities, including the Royal Statistical Society, have emphasised that CPI fails to reflect the spending patterns of pensioners and the rising costs they face, especially housing costs, which were mentioned by some of my hon. Friends. The UK Statistics Authority has indicated that it does not believe that CPI should become the primary measure of data inflation until housing costs are included.

I know from our previous discussions that the Minister will look closely at the consumer prices advisory committee proposals on adding housing costs to CPI. We await that with great interest. Heating, which was also mentioned by a number of my hon. Friends, is also important in that context. Heating costs have been rising fast, which could mean that pensioners face higher inflation on average than other groups in society, which is significant given the removal of £100 from the winter fuel allowance.

In the end, this is a political decision. The UK Statistics Authority observed last year:

“Questions about compensation, who to compensate and what for, are straightforwardly political questions, not for statisticians.”

We cannot support adopting that approach in the long term. In just five of the last 20 years has RPI been lower than CPI. As was mentioned by my hon. Friend the Member for Hayes and Harlington, the Office for Budget Responsibility November economic and fiscal outlook states that the long-run difference between RPI and CPI is likely to be 1.4% rather than the current 0.7%.

Pensions Bill [Lords]

Debate between Richard Graham and Gregg McClymont

Tuesday 18th October 2011 Commons Chamber

[Gregg McClymont]

That was not so much an intervention as a speech. The fact remains that the difference between the Government’s proposals and ours is £10 billion over 10 years. That is £1 billion a year. Is the hon. Gentleman really saying that a saving of that kind cannot be found in a more sophisticated way, without placing an unfair and disproportionate burden on those women? I do not agree, and nor does any other Opposition Member.

The Prime Minister was right when he suggested that if you put eight Conservative men around a table you would get some interesting answers on pensions, but you would not get the right answer. The Prime Minister was right then, and the Government are wrong now. The Minister’s amendments are welcome, and I am sure that he would personally like to go further, but he does not sit at the Cabinet table, although perhaps pensions Ministers should be in the Cabinet. This concession thus remains too limited. Some 500,000 women will still have to wait up to 18 months longer before reaching state pension age.

Turning to a point the Minister made earlier, this is not an easy issue, and there are great challenges, including that of longevity. As people live longer, the state pension age needs to rise to ensure a decent state pension for all. Labour set in train the Turner consensus: the state pension to rise in line with earnings; the retirement age to rise to 68 by 2046; and private pensions to be opt-out rather than opt-in. Labour also maintained the timetable for equalisation set out in the Pensions Act 1995.

Members on the Government Benches ask why we did not implement that, but Labour made great strides on pensions. Some 1 million pensioners were lifted out of poverty between 1997 and 2010. That is a real achievement. The poorest pensioners were lifted out of poverty. No pensioner lives in absolute poverty any longer. I must also point out that we had to do that because the previous Conservative Government left the pension system, and particularly the poorest pensioners, in a very difficult situation.

[Richard Graham (Gloucester) (Con)]

The hon. Gentleman takes us back into the mists of history, but surely today’s announcement can be warmly welcomed by all Members on both sides of the House? The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) describes this announcement as “just a sticking plaster”, however. I cannot think of any other sticking plaster in history which has cost £1.1 billion and helped 250,000 people. That cannot have been the case even when the right hon. Gentleman was at the Treasury.

[Gregg McClymont]

Perhaps because I have a historian’s perspective, I do not consider 35 years ago to be the mists of time. I think that that era is relevant to our discussion of pensions today.

We cannot sit still and do nothing on pensions. We accept that changes have to be made; we have no complaint about that, and we accept the Minister’s point about rising longevity.

--- Later in debate ---

[Gregg McClymont]

I thank my right hon. Friend for that very important point. This all bears on the fact that, for all the talk, the Government do not understand the difference between a deficit and a national debt. That is pretty clear from our discussion so far.

[Richard Graham]

Will the hon. Gentleman give way?

[Gregg McClymont]

No, I will not.

Let me restate our case. The Bill fails our two tests: first, it fails to give fair and due notice of the rise in pension age to the 500,000 women concerned; and secondly, the burden falls disproportionately on this group of women.

--- Later in debate ---

[Richard Graham]

rose—

[Gregg McClymont]

In the event that a modification in the timetable is necessary, and in answer to the questions about where the savings would come from, it may well be that the Government would do better to speed up the timetable for a state pension age of 67 and 68. That is something that we would consider. It is a much more sensible option than this disproportionate, unfair and unjust hit on women aged 57 and 58, of whom there are 500,000.