State Pension Age (Women)

Tim Loughton Excerpts

Thursday 7th January 2016 Commons Chamber

[Tim Loughton (East Worthing and Shoreham) (Con)]

I congratulate the hon. Member for Paisley and Renfrewshire South (Mhairi Black) on leading today’s debate, for which there is an extraordinary turnout, showing the considerable interest of so many Members in this subject. I became involved in this campaign somewhat by accident. I was approached, as were many other hon. Members, by several constituents who said they were going to be disadvantaged. None of us realised the extent of the hundreds of thousands of women who stand to be treated disproportionately unfairly.

I went along to the Westminster Hall debate, which was led by the hon. Member for Worsley and Eccles South (Barbara Keeley). I expressed my sympathies and I recorded a short podcast on the subject, which has now been followed by 145,000 people, many of whom have written to me about it—and not just my own constituents either.

I want to pay tribute to the Women Against State Pension Inequality campaign, which has articulated the case so well in front of the Select Committee. Its petition has now been signed, I believe, by more than 103,000 people. I want to thank the WASPI campaign for the help and support it gave me, not least in telling non-constituents to write to their own MPs rather than have them all writing to me—and I am exceedingly grateful for that.

We all agree with equalisation of the pension age. Large sums of money are involved and difficult decisions have to be made, but it is important that the rule of fairness is applied as much as possible, and it is clear that a sizeable group of women seem to be bearing the brunt of these changes disproportionately.

[Alison McGovern]

The hon. Gentleman is making an important speech. I would like to ask him, while he talks about fairness, whether he realises how this feels for women of my generation who owe everything to those women who were born in the ’50s and who fought for the Equal Pay Act 1970 and for all the advantages that have given us any chance. Does he feel that unfairness to those women, as I do?

[Tim Loughton]

I applaud the hon. Lady. I have had representations from constituents who were in low-paid jobs with huge caring responsibilities for children and other family members when they did not have access to free child care and other things—and we have them to thank. Yet it is those people for whom I believe there has been a breach of trust, as these changes hit them disproportionately. We have a large duty of care to them, but I do not think we are going to fulfil it.

[Robert Neill]

I very much agree with everything my hon. Friend is saying. Will he concede that in other pension reforms, we were anxious as a Government to make sure that there was protection for those who were not able to change their circumstances? This operates particularly unfairly on people such as one of my constituents who has worked all her life but is unable to return to work because of a pre-existing medical condition, so she cannot change her circumstances.

[Tim Loughton]

My hon. Friend is absolutely right. That is why fairness needs to be applied to everybody, and in this case, there is a cohort of women who are simply not being treated fairly. Our state pension system is funded on the contributory principle. This is not a state benefit for which no prior commitment is involved, yet this group of women who have been paying national insurance contributions over many years in good faith and who have fulfilled their end of the deal face being short-changed retrospectively.

We need to bear in mind many other factors. Fewer than one in four women who qualify for the new state pension in 2016-17 will get the full amount. Right up to 2054, fewer women than men will qualify for the full standard pension. Women are significantly more likely than men to work part time, and to do so for longer periods throughout their working lives, largely driven by caring roles, as hon. Members have mentioned. They therefore tend to be under-pensioned.

I welcome the fact that the new single-tier pension will recognise periods of time spent caring, which will help in the future, and I acknowledge that the Government have made progress on shrinking the gender pay gap—an issue on which consultation is in place. Progress has been made, with more women in work than ever before. We have seen lots of generous reforms—on entitlement to free child care, the national living wage and so forth—but all those are far too late for a generation of women who relied on work without many of the benefits that we now take for granted, while bringing up their families and discharging their caring responsibilities. Because of the number of women who are going out to work, many others have caring responsibilities for grandchildren as well as having to hold down part-time jobs.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

Will the hon. Gentleman give way?

[Tim Loughton]

I will not give way again, because so many other Members wish to speak.

It is right for the rise in the pension age to reflect growing life expectancy, but a number of recent medical and actuarial studies show that life expectancy for women aged 65, 75, 85 and 95 fell in 2012, while rates among men continued to rise. There are big discrepancies in life expectancy among some of the poorest women in society, and, of course, those born in the 1950s—the ones whom we are discussing today—are the most reliant on the state pension, and therefore the most vulnerable to the changes. There are grounds for querying why members of that group are being hit disproportionately.

There is also the question of whether the women were given proper and adequate notice. I think we all agree that that clearly did not happen. The money expert Paul Lewis, who has helped to articulate this campaign so successfully, has given details about how little notice some women received:

“Approximately 650,000 women worst affected by the speed up— those born 6 April 1953 to 5 April 1955—were written to in…February 2012.

That means they got their letters between the ages of 57 and almost 59 that their pension age would not be 60.”

Some women received no notification at all.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Will the hon. Gentleman give way?

[Tim Loughton]

I will not give way.

Those women had precious little time in which to make alternative arrangements, even if they could afford to. That could not happen now because of changes introduced in the state pension review of 2015. However, Angela Heasman, one of my Shoreham constituents, pointed out:

“A very important point that I feel has been missed here is that if one considers what if ten or 15 years notice bad been given? For the women, like myself, who are low earners in part-time work, they would not have had enough or any disposable income to pay into a private pension on top of the high and ever rising contributions to National Insurance.

To put this in perspective, in order to save enough into a private pension for an annuity of £6,000 pa you are looking at…£100,000. This is why for low paid people their National Insurance contributions are all they can afford and consequently totally dependent upon a state pension. Therefore even ten years notice is not enough time for the low paid to pay into a private pension that would equal the State Pension.”

She suggested that

“the reintroduction of Pension Credit, which is means tested, would alleviate, at a stroke, those who find themselves in this invidious position. If Pension Credit could be reinstated from 60, and add on Pensioner Benefits this would lift those who are genuinely hit the hardest out of extreme poverty.”

I ask the Minister to consider that suggestion.

It is difficult for many older women to stay in the workplace or get back into it. Unemployment rates among women over 50 are well above the national average. The gender pay gap is at its worst for women in their 50s—exactly the sort of women whom we are discussing.

Recent comments from Steve Webb, the former Pensions Minister, strongly indicate that he acknowledged that the Department for Work and Pensions had been at fault in failing to provide adequate notice for the women affected when he made a big fuss about negotiating a six-month concession at the time. That has been compounded by his recent comment that the Government had “made a bad decision” about the state pension age, and had been badly briefed.

During previous debates, when the last changes were made, the Minister gave strong indications that transitional arrangements would be made for the worst affected, but that has not happened. Why not? Will the Minister please revisit that undertaking?

As I said earlier, I have received many e-mails from around the country and from my own constituents. Let me end my speech by quoting the closing paragraph of a letter from a woman in Worthing. She wrote:

“I have also heard some MPs say that older people should downsize their homes to free up the housing stock for families. We did this so that our larger house, where my husband had lived all his life, could be enjoyed by a family but we are quickly using up any money for normal day to day expenses…It seems that we older women who have contributed to society are considered unimportant and not worth the financial support that we have earned over the years.”

I believe that we risk breaching the trust of women who have made many sacrifices, and who do not now have the expectations for their retirement that they were led to believe they would have.