Pensions Bill [Lords]

Yasmin Qureshi Excerpts

Tuesday 18th October 2011 Commons Chamber

[Yasmin Qureshi (Bolton South East) (Lab)]

This is an incredibly important stage of the Bill, about which I have received hundreds of e-mails. I am sure that Members of the House from across the political divide have received e-mails specifically concerning women aged 58 and 56. We have had a number of discussions about this matter, including a Westminster Hall debate at which the Minister was present.

I know that I may sound very boring if I repeat again the concerns of those women and of Opposition Members about why this particular provision should not go through. Everyone accepts that the state pension age needs to rise in order to pay for a more generous basic state pension. This principle underpinned Labour’s Pensions Act 2007, which continued the 1995 timetable for equalising women’s state pension age with men’s by increasing it to 65 by 2020, and then legislated to increase both SPAs to 66 by 2027, to 67 by 2036 and to 68 by 2046. That was agreed and there was cross-party consensus on that.

The coalition agreement stated:

“The parties agree to....hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for man and 2020 for women.”

However, the Bill proposes an acceleration in the equalisation for women by 2018 and increases both men’s and women’s state pension age to 66 by 2020. This will hit women aged between 56 and 58 particularly hard, as they will have very little time to prepare or amend their existing plans. As has been pointed out by my colleagues countless times, those women have worked very hard in their lives but often for not very high pay, so they will not be getting very generous pensions in any event, yet they are going to be hit even harder.

The proposal will affect 4.9 million people—2.6 million women and 2.3 million men. Some 500,000 women born between 6 October 1953 and 5 March 1955 will have their state pension age delayed by more than a year, and 300,000 women born between 6 December 1953 and 5 April 1954 will have theirs delayed by 18 months exactly. For the 300,000 women facing an 18-month delay, the loss of income will be around £7,500; for those in receipt of pension credit, the figure will be closer to £11,000. That sudden and dramatic change in women’s expectations regarding their state pension age and retirement income comes with just five to seven years’ notice, which simply is not long enough for them to make adequate alternative arrangements in their retirement planning.

Women are already at a disadvantage in terms of pension provision. The median pension saving of a 56-year-old woman is just £9,100, whereas the equivalent figure for men is £52,800—almost 600% higher. It is not fair to speed up the equalisation timetable because it will hurt women disproportionately, especially those aged between 56 and 58. I know that we hear about the financial constraints, but if the Government can find £3 billion for the completely unnecessary reorganisation of the national health service, which nobody wants—we have not heard any practitioners in the medical field say that those provisions are right—are they really saying that they cannot find a bit of money for women who have worked hard for so long in their lives? The proposal is measly penny-pinching. The Government are hurting the people who are already the poorest in our society and hitting them even harder. If money can be found for the wasteful reorganisation of the NHS, I am sure money can be found for the provision to be deleted.

I urge the Minister to reconsider this aspect of the Bill and think about those women, who have worked hard all their lives. He should think for once about ordinary working people who are looking forward to some kind of pension, although they will retire later than they thought they would, and he should give them time to prepare for their pensions.

[Steve Webb]

It is a pleasure to support Government amendments 13 and 14 and to ask the House to reject amendment 1.

I welcome the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) to his new role. With due deference to the good people of Kilsyth and Kirkintilloch East, I hope he will forgive me if henceforth I refer to him as the hon. Member for Cumbernauld—I hope they will not take offence at that. As he knows, his predecessor, the hon. Member for Leeds West (Rachel Reeves), to whom he referred in his speech, enjoyed a meteoric rise by shadowing me for 18 months. I hope to do the same for his career.

Before I move on to the amendments, I want to place on record my appreciation of one of the Department’s officials, Evelyn Arnold, who has worked for the Department for 36 years. I know that the right hon. Member for East Ham (Stephen Timms) will have enjoyed working alongside her as well. She is stepping down from a legendary career. It is not often that we pay tribute on the record to the officials who make us sound far better informed than we otherwise would, so I would like to do that formally today.

We have heard £1 billion described today as “window dressing”, “a bit of money” and “penny pinching”. That summarises the difference between opposition and government. It reminds us how we came to find ourselves borrowing £150 billion a year when £11 billion, which is the cost of amendment 1, is regarded as small change and not worth worrying too much about. When pressed about where the £11 billion would come from, the Opposition said, in effect, “We’ll find it at some point,” but there was no specific answer.

It was revealing that the hon. Member for Edinburgh East (Sheila Gilmore) said, “We keep being asked this question.” They keep being asked the question because they keep making unfunded promises. My right hon. Friend the Chancellor pointed out that last week’s Opposition amendment cost £20 billion. Today’s would cost another £11 billion and, as the man once said, “Soon you’re talking about serious money.”

The Government amendments are, as the Chair of the Select Committee graciously said, a huge achievement, which is to say that at a time when the public finances are, if anything—because of the global economic situation—under even more pressure than they were at the time of Second Reading back in June, to identify £1 billion is an important sign of the Government’s commitment to fairness in pension reform.

--- Later in debate ---

[Yasmin Qureshi]

The Opposition and Government agree on many things in the pensions debate. It was the previous Labour Government who introduced the Turner commission that looked into the ageing population and the need to sort out pensions, but that is not to say that a certain group of women—about 500,000 of them—should be penalised. [Interruption.] Government Members are smiling and talking, but we are talking about 500,000 women who will be drastically affected by the pension cuts. Everybody talks about how we do not have enough money, but the Government have found tens of billions of pounds for quantitative easing, and they can waste £3 billion on the unnecessary transformation or reorganisation of the NHS, and yet they find it difficult to find money for those ladies.

The Labour Government also wanted to introduce auto-enrolment, but under our proposals many more people would have benefited through enrolling automatically at £5,000; now the figure is £7,475, which means that 600,000 people will not be able to enrol automatically in a pension scheme, which again will hit women disproportionately. The Government have indicated that the rise is in line with income tax, but we know that in the next few years or so the increase will continue, which will exclude 1.5 million to 2 million people, as compared with the Labour party’s original plan. The Government have also introduced a three-month waiting period before auto-enrolment, which they predict will result in 500,000 fewer people being automatically enrolled in a pension scheme. We estimate that each person will have about 11 different employers overall. I know that it is very late—there are only three minutes to go—but in light of what has happened and the fact that 500,000 women will be affected, along with 600,000 people who will be affected by the changes in auto-enrolment, I would urge the Government to reconsider.

Hon. Members have claimed that the Labour party did nothing about pensions when it was in power, but we should remember that in 1997, after years of Conservative government, the biggest challenge that we faced was tackling pensioner poverty and improving older people’s quality of life. Between 1979 and 1997, the state pension declined from 20% of average male earnings to 14%. In 1997, 29% of our pensioners were living in poverty, which was absolutely disgraceful. Between 1997 and 2010, Labour made huge achievements, of which we are proud. Average gross pensioner income increased by more than 40% in real terms, ahead of the growth in average earnings. More than 1 million people were lifted out of poverty, with no pensioner living on less than £130 a week, compared with £69 a week in 1997.

The winter fuel allowance, free off-peak travel on local buses for 11 million people over 60, free TV licences for the over-75s and an increased threshold to ensure that 60% of pensioners pay no tax at all have made a difference. Those policies cost money, and of course money was spent, but this Government might remember that, when they were in opposition, they agreed to all Labour’s expenditure plans. For them now to turn round and say that they did not know what was going to happen, or that they did not know how much money there was in the Treasury, is completely wrong. The coalition agreement stated that there would be cross-party consensus on this matter, and at that point, the Government knew exactly what the state of the finances was. At the last minute, however, those promises have been reneged on, and they are not the only ones—