Transitional State Pension Arrangements for Women

Debate between Shailesh Vara and Lord Hanson of Flint

Monday 1st February 2016 Westminster Hall

[Caroline Flint]

No, I am not.

[Mr David Hanson (in the Chair)]

Order. I call Mr Vara to continue.

[Mr Vara]

In only a decade, the time that 65-year-olds live in good health has gone up by just over a year. Of course, this is welcome news, but the reality is that it puts increasing pressure on the state pension scheme. Even when the state pension age changes are taken into account, women in this group will on average receive a higher state pension over their lifetime than any generation before them.

--- Later in debate ---

[Ian Blackford]

On a point of order, Mr Hanson. May I ask for your guidance about what can be done? This is a specific debate about the WASPI campaign, but the points that the Minister is addressing have nothing to do with that debate—

[Mr David Hanson (in the Chair)]

Order. With due respect to the hon. Gentleman, the content of the Minister’s speech is for the Minister to elucidate and defend accordingly. It is not for the hon. Gentleman to comment on in a point of order.

[Mr Vara]

We have also abolished the default retirement age so that people can work for as long as they wish without fear of age discrimination. We have introduced the most fundamental reform to how people can access their pension in almost a century through pension freedom, which has abolished the effective requirement to buy an annuity.

No one can say that the changes have not been fully considered. The parliamentary process was fully followed. We held a full, public call for evidence alongside extensive debate in both Houses. Between January 2012 and November 2013, the Department for Work and Pensions wrote to all those affected.

[Mr Vara]

I will not.

More than 5 million letters were sent to addresses then recorded by HMRC. Crucially, the Government also listened during the process. On Second Reading of the Pensions Bill in 2011, the Government said:

“we will consider transitional arrangements.”—[Official Report, 20 June 2011; Vol. 530, c. 52.]

On Report, after considering the matter, Ministers made a concession worth £1.1 billion, and the time period was reduced from two years to 18 months. For 81% of those affected, the increase in the time period will be no more than 12 months.

To reverse the Pensions Act 2011 would cost more than £30 billion, which simply is not sustainable, and nor is it sustainable to reverse the 1995 changes, which some wish to do, as that would cost many billions more. It is noteworthy that if we went back to the 1995 position, it would mean that women would be campaigning for a state pension age of 60—[Interruption.]

[Mr David Hanson (in the Chair)]

Order.

[Mr Vara]

Over the past decade, women have on average stopped working later than 60. In the first quarter of 2010, the average age of stopping work was 62.6 years, while in 2015 it was 63.1 years. In fact, the actual women’s state pension age is approaching 63 years.

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[Rachel Reeves]

Get on with it then.

[Mr David Hanson (in the Chair)]

Order.

[Mr Vara]

If the hon. Lady will stop interrupting, I will get on.

I mentioned in the House earlier and I say it again now that when people need extra funds, other benefits are available. That is the case for those who are in work and those who are not. A 2004 Department for Work and Pensions report entitled “Public Awareness of State Pension Age Equalisation” found that 73% of those aged between 45 and 54 were aware of changes to women’s state pension. In 2012, further research by the DWP found that only 6% of women who were within 10 years of receiving their pension thought that their state pension age was still 60.

Several hon. Members have mentioned Steve Webb’s comments. If one reads the full transcript, one sees that he referred to £30 billion. He said that he sought a concession of £3 billion, but got £1 billion. He added that

“a billion quid is a serious amount of money”.

Reference has been made to other European countries. To put the balance right, I point out that there are countries that have already accelerated the process and equalised the pension age for men and women, such as Germany, Denmark, the Czech Republic and Greece.

The Government recognise the huge contribution that older workers make to the workforce and the country, and we are working with stakeholders to ensure that they recognise those benefits. The number of women aged 50 to 64 is at a record high, as I mentioned earlier. Hon. Members talked about carers. Under the new state pension, people who care for others will qualify for credits that will go towards their contributions to that pension.

Our collective responsibility now is to support the package of reforms. Rather than causing continuous confusion for those affected, we need to build further awareness of the measures I have set out. I again thank all those who have contributed.

Oral Answers to Questions

Debate between Shailesh Vara and Lord Hanson of Flint

Monday 7th December 2015 Commons Chamber

[Mr David Hanson (Delyn) (Lab)]

10. What assessment he has made of the effectiveness of the trial of locating jobcentre advisers at food banks.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)]

Jobcentre work coaches undertake outreach work every day in local communities and have recently been helping people with back-to-work support and advice at the Lalley Welcome Centre in Manchester, where a food bank sits alongside other support services. The test is at an early stage and the Department will make the findings public in due course.

[Mr Vara]

May I gently remind the hon. Lady that we were invited, at the request of Sister Rita, to go to Lalley Welcome Centre, which also hosts other agencies? I might also say to the hon. Lady that that particular centre has a job club, which makes eminent sense. I presume she does not object to that. If she is happy to have a job club there, why on earth does she object to our going there to help people when we have been invited to go there?

[Mr Hanson]

Will the Minister confirm whether Lord Prior will join in the evaluation of services at that job centre and food bank? As the Minister will know, Lord Prior has indicated that obesity seems to be a problem, rather than poverty. Will the Minister confirm whether the evaluation will include an examination of the reasons why sanctions and benefit delays cause problems for those going to food banks?

[Mr Vara]

There are now fewer delays in getting benefits than there were under the Government in which the right hon. Gentleman served. The number of JSA applications is down compared with 2009-10, as is the number of ESA applications.