Transitional State Pension Arrangements for Women

Victoria Atkins Excerpts

Wednesday 24th February 2016 Commons Chamber

[Richard Graham (Gloucester) (Con)]

Nobody in this House can doubt the sincerity of the WASPI campaign or the number of women who have signed the petition, but as this is the fifth debate, we should start with what has changed since the last one. Today’s motion is all about bringing forward “transitional arrangements”, and those are the precise words used on the WASPI campaign’s petition. They sound fairly harmless, but what are these transitional arrangements?

In the last debate, the shadow Pensions Minister, who is in her place, included a specific proposal—a perfectly reasonable one—about extending pension credit. However, that had been specifically ruled out by WASPI spokeswomen in evidence to the Select Committee. Today, the shadow Work and Pensions Secretary, like the Scottish National party spokesman, talked passionately about doing the right thing, but they did not say what that was, what their commitment is or what their parties would do if they were ever in the position—in some cases, that is unlikely—of actually being responsible for the finances of the pension arrangements for the United Kingdom. There is a serious danger of Opposition Members, in their sympathy for the cause of the WASPI campaign, leading these women up the garden path—encouraging them with sympathy but giving no commitment whatsoever.

It is important that the House understands for what these women are mainly asking. It is exactly as I spelled it out from their Facebook page in the last debate. It is to ask for

“all women born in the 50s”—

to be—

“in the same financial position they would have been in had they been born on or before…April 1950.”

That is their main ask and it would reverse the 1995 Act in important ways. What would that cost? Since the last debate, the Department for Work and Pensions has provided data to the Select Committee, showing that the cost is much, much greater than any of us imagined. There would be an immediate cost of £29 billion in 2016-17—bigger than the entire budget for Scotland. The total cost up to 2020 alone would be £77 billion.

When I discuss this issue with my wife and my sisters and others born in the 1950s and I explain to them that pensions are paid every year not out of some magic protected pot called national insurance, but out of general taxpayer-provided revenue paid by the next generation—our children and our grandchildren—none of them believes that that cost of £77 billion is remotely practicable.

[Victoria Atkins (Louth and Horncastle) (Con)]

Will my hon. Friend give way?

[Richard Graham]

I had better not.

That is why the Opposition will never make that proposal or agree to it under any circumstances. The question is whether any other arrangements are possible. The other potential arrangements are being considered by the Select Committee in a report on the new state pension Act, which will include a section specifically on the WASPI campaign. Members should wait until that report has come out—it will be only about three weeks from now—and the conclusions may be seen and studied by everyone, and then they will see the real impact and the real cost of some of the suggestions that have been made today.

We should be clear about this: the WASPI campaign is genuine and it is principled. Its members care passionately. They feel that they have been badly treated, but this House has an obligation not to mislead them and pretend that things will be done when they will never be done. That is why the main ask is not possible.

--- Later in debate ---

[Huw Merriman (Bexhill and Battle) (Con)]

In the past few months I have met a number of constituents who have been impacted by these changes. They detailed how the increases in the state pension age have had an impact on them owing to their being on the wrong side of the dateline. I have every sympathy with them, and I understand their frustration.

I spoke during the Back-Bench business debate on this matter on 7 January, and I congratulated the WASPI campaign on driving the debate. Although it is true that any criteria changes regarding pensions, benefits or taxation in general are always going to have an impact on some people, I am conscious that many of the individuals we are talking about have worked for decades on the basis that they would receive their pensions at a prescribed time. However, I am also conscious that when actuaries calculated life expectancy, and therefore the number of years for which a pension would pay out, they did not expect it to reach the level that many currently enjoy, and they would not have anticipated the current rising levels of health. Those factors have driven successive Governments, and most OECD nations, to increase the pension age.

The issue I have with the motion is that it deals with legislation that was settled in previous Parliaments. It implores the use of

“transitional arrangements for women adversely affected”.

My understanding is that when the last set of changes were made in 2011, a transitional programme was implemented, to the tune of over £1 billion. In order to manage expectations, it would be better if the motion had recognised that changing these rules for those impacted would cost £39 billion and then outlined where the additional money would be saved in Government spending in order to pay for it to be delivered. I spoke earlier today about the need for the Government to continue to support spending on mental health provision, particularly for young people. Would that be hit? Would it be the police budget, the subject of the next Opposition day motion, which is critical about the lack of funding?

I stood on a manifesto commitment pledging the delivery of a budget surplus by 2020, which means that compensation in this matter would have to be paid for by another group of my constituents. Opposition parties also attempted to cost their commitments in their manifestos. I do not recall finding a commitment to reverse this policy, and it concerns me that we are not managing expectations. This issue is already settled, and none of the parties seeking to reopen it has explained where the £39 billion hit would be taken were we to rip up the equalisation rules.

[Victoria Atkins]

I am grateful to my hon. Friend for giving way, because it enables me to make the point that I wanted to make to the hon. Member for Paisley and Renfrewshire South (Mhairi Black). To put this in context, if we compare the £39 billion with the approximately £120 billion annual spend on the NHS, we begin to see how difficult it is to make the sums add up. Does my hon. Friend agree?

[Huw Merriman]

I absolutely do. When it comes to footing the bill, I also have concerns about another age group in my constituency—those in their 20s and 30s. They are sometimes referred to as the packhorse generation because they are saddled with debts from university, which I, and many others of my age group and those older than me did not have to endure; they are less likely to be in receipt of occupational pension schemes; they are paying high rents and struggling to afford a home of their own; and they are likely to be the subject of pension changes in decades to come, if life expectancy continues to increase.

Half-measured mitigation, even if it were introduced, would reveal the next pension age group to be impacted, and we would never be able to move on. The issue of pensions is becoming increasingly vexed. Post-retirement life expectancy is undoubtedly much greater than was envisaged when pensions calculators were put in place. Additionally, with advances allowing those in their sixties to remain fit and active, many people in their sixties and beyond are working in a manner that was not envisaged when those pensions calculators were put in place.

There has been a general change in life and working-age expectancy, which we all rightly celebrate because it shows that many people are living longer and leading fitter lives in their advanced years. However, it also means that there is a funding gap, and to avoid placing a financial obligation on those in their 20s and 30s, who are struggling to get on, the country has had to revise the pension age to take into account the changes in life and work expectancy.

This is a settled matter. Until it can be explained to me which of the current spending commitments will be axed to cover the cost of this £39 billion change, I cannot support this motion.