PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES

Public Bill Committee

PENSIONS BILL [LORDS]

Second Sitting Tuesday 5 July 2011 (Afternoon)

CONTENTS Written evidence reported to the House. CLAUSE 1 under consideration when the Committee adjourned till Thursday 7 July at Nine o’clock.

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© Parliamentary Copyright House of Commons 2011 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 43 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 44

The Committee consisted of the following Members:

Chairs: MR GRAHAM BRADY,†KATY CLARK

† Baldwin, Harriett (West Worcestershire) (Con) † Reeves, Rachel (Leeds West) (Lab) † Bingham, Andrew (High Peak) (Con) † Rudd, Amber (Hastings and Rye) (Con) † Boles, Nick (Grantham and Stamford) (Con) † Selous, Andrew (South West Bedfordshire) (Con) Evans, Chris (Islwyn) (Lab/Co-op) † Sharma, Alok (Reading West) (Con) † Gilmore, Sheila (Edinburgh East) (Lab) † Smith, Miss Chloe (Norwich North) (Con) † Greenwood, Lilian (Nottingham South) (Lab) † Webb, Steve (Minister of State, Department for † Jamieson, Cathy (Kilmarnock and Loudoun) (Lab/ Work and Pensions) Co-op) † Wicks, Malcolm (Croydon North) (Lab) † Jones, Mr Marcus (Nuneaton) (Con) † Williams, Hywel (Arfon) (PC) † Lloyd, Stephen (Eastbourne) (LD) † Metcalfe, Stephen (South Basildon and East Annette Toft, Committee Clerk Thurrock) (Con) † Pearce, Teresa (Erith and Thamesmead) (Lab) † attended the Committee 45 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 46

Malcolm Wicks (Croydon North) (Lab): I welcome Public Bill Committee you, Miss Clark, to our proceedings. You will find that generally we are a well-behaved bunch, despite the best efforts of one or two of us to break from that norm. Tuesday 5 July 2011 Just before we broke for lunch, I was on my feet for just a minute, probably not without hesitation and (Afternoon) certainly not without deviation, as I acknowledged that it was the birthday of the national health service. I will now focus rather more smartly, I hope, on the amendment [KATY CLARK in the Chair] moved by my hon. Friend the Member for Leeds West, which I rise to support. By way of context, I shall reflect Pensions Bill [Lords] on the policy implications of increasing life expectancy. I will also argue that generalisations about demography and longevity might create new injustices unless pensions Written evidence to be reported to the policy becomes more sophisticated and is supported by House wider measures. P 01 Age UK The Government’s proposals have an obvious context, but perhaps it is not so obvious. It is demographic—several colleagues have spelled out the demographic trends, and Clause 1 I will note one or two statistics myself. We also need to view the issues, albeit briefly, as we are in Committee, in EQUALISATION OF AND INCREASE IN PENSIONABLE AGE a wider context of trends that have affected life cycles in FOR MEN AND WOMEN the 20th century and are now affecting them in the 21st century. Today and in future, typical life cycles are Amendment proposed (this day): 16, in clause 1, and will be characterised by later entry into the labour page 1, line 6, leave out ‘“December 1953”’ and insert market, as well as lives that are lived longer. Therefore, ‘“April 1955”’.—(Rachel Reeves.) many years are spent in retirement. Today, many of our children and grandchildren will 4pm not enter the labour market properly—there will be Question again proposed, That the amendment be holiday jobs, I know—until the age of 21, or, with made. postgraduate qualifications and training, perhaps closer to the age of 25. In other words, in a modern society The Chair: I remind the Committee that with this we and economy, people may take 25 years to get started, are discussing the following: amendment 17, in at enormous expense to different people, such as families clause 1, page 1, line 7, leave out subsection (3) and and the state. I will not talk about education, but insert— although arguments about tuition fees may seem distant ‘(3) In sub-paragraph (4) leave out “6 April 1959” and insert from a discussion on pensions, in terms of how we “6 April 1955”. understand life cycles, those two subjects seem closer intellectually than might be thought. Amendment 18, in clause 1, page 1, line 9, leave out subsection (4). We have seen statistics on longevity. I thank the Minister and the Department for their useful background Amendment 19, in clause 1, page 2, leave out lines 10 statistical documents. One page tells us that in 1926, to 16 and insert— women who survived to 65—many did not, of course, and I will talk about that in the modern era—lived a ‘6th April 1955 to 5th May 1955 6th May 2020 further 13 years. Recent evidence suggests that that 6th May 1955 to 5th June 1955 6th July 2020 average has increased to 24 years in the recent past. The 6th June 1955 to 5th July 1955 6th September 2020 Department, presenting new data from the Office for 6th July 1955 to 5th August 1955 6th November 2020 National Statistics, issued projections that revised that 6th August 1955 to 5th September 1955 6th January 2021 still further upwards to 28.7 years; that is for women. I 6th September 1955 to 5th October 1955 6th March 2021 hope that I have got the figures roughly right; the 6th October 1955 to 5th November 1955 6th May 2021 Minister will correct them if I am wrong, although they 6th November 1955 to 5th December 1955 6th July 2021 are his figures. 6th December 1955 to 5th January 1955 6th September 2021 One of the interesting figures in the documents shows 6th January 1956 to 5th February 1956 6th November 2021 that longevity now means that women could spend 42% 6th February 1956 to 5th March 1956 6th January 2022 of their adult life at state pension age, many of them, 6th March 1956 to 5th April 1956 6th March 2022’. but perhaps not all, retired. That is an extraordinary thought and in many respects, one could argue, a slightly Amendment 20, in clause 1, page 2, line 17, leave out scary one. It would certainly require us to be a little ‘1954’ and insert ‘1956’. more robust about what we mean by the strange and Amendment 21, in schedule 1, page 20, line 19, leave old-fashioned word, “retirement”, but that goes a bit out paragraph (6) and insert— further. ‘6 In section 126 of the Pensions Act 1995 (equalisation of and Previous Conservative and Labour Governments increase in pensionable age etc.) in paragraph (a) delete “2024” and accepted the demographic logic, the implications of replace with “April 2020”.’. longevity and life expectancy, and have legislated Amendment 22, in schedule 1, page 20, line 31, leave accordingly. In other words, the judgment was made out ‘December 2018’ and insert ‘April 2020’. that people will have to take their state pension at a later 47 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 48 age and the nettle was grasped rightly to bring about It is interesting to examine such results by social equality between men and women because of the class. I must say that the social class of the husband was strangeness—although we can understand it historically— used methodologically in the process. The Library advised that women could have their state pension at the age of me that that was the best measure to go by, although 60, while men had to wait until the age of 65 despite the distinguished social scientists might disagree. When we fact that women live longer because they are stronger look at the figures, we see that 4% of women from the than men. higher managerial and professional class—so-called “social Both previous Governments planned for the long class I”—die before the age of 60; for the next group, term, as many thoughtful individuals do. However, the the lower managerial and professional class, the figure nub of our critique is that the Bill is more about an is 5%; and for intermediates, it is 5%. Women doing interpretation and a response to deficit. I am not routine occupations—women in the poorest social class, encouraging the hon. Member for Reading West to get if you like—tend to be manual workers. Many of them to his feet; he made a good intervention, and I enjoyed do the grottiest jobs in care homes, or are cleaners, and it the first time. [Interruption.] Members of the Committee so on. When we look at those women from the routine were not meant to laugh. In my judgment, the Bill is social class, we see that fully 10% of them die before the more a response to deficit and the crisis that we are age of 60. We can argue about the implications of that; undoubtedly in than sound, social policy planning and, I am bound to say that they are not obvious, although I as a consequence, it heaps a spectacular burden on the will have a proposition on Thursday to put about them. shoulders of the relatively few women—albeit up to Nevertheless, I hope that that figure will make us stop half a million—who will be adversely affected. and think that this demographic trend is not so clear-cut and general as might be thought. After changes to other social policy measures such as child tax credits and child benefits, many people are Of course, the other interesting thing is that when we entitled to ask whether the coalition has a problem with look at people who reach state pension age—most women because many of the severest cuts will fall on the people from all social classes do reach it—we again see, necks and shoulders of women. I noted earlier that past because of differentials in mortality through social class, reforms have met with little resistance or controversy. that women and men from the poorest social class enjoy That is true, and if we compare the gradual planning of or experience fewer pension years than those in the both Conservative and Labour Governments with the professional class. I am focusing today on women, but huge disturbances in Paris, for example, when pension the difference for both men and women is about four changes were mooted, it is a tribute to those previous years. Governments that the long-term planning seemed fair My thesis would be, “Look, let’s be a bit careful to the public. There might have been the odd grumble about this”. Quite a few of those women in the poorest here or there, but it did not create huge controversy. It social class—we are talking about women today—die was not about conflict. Indeed, it was more about before they get their pension at 60, putting aside any consensus. consideration of wanting to push the pension age up The Bill is undoubtedly different. It has brought still further. Of course, when women in the poorest conflict into the pension policy process because of new social class get their pension, they generally get it for forms of injustice. There is a now a serious danger that four fewer years than people in very different circumstances, that risks shaking and undermining public acceptance who did not leave school at 14 or 15 and who did not do of the demographic challenge, and I would regret it if cleaning or manual work. Despite the stresses and strains that turned out to be the case. I would also regret it if of a Committee on a Tuesday afternoon, many people the Bill further undermined our support for the contributory in the professions, such as ourselves, do not suffer the principle in national insurance. It did not always work physical hardships that many manual jobs involve. out well in practice because people paid in when they could because it was their duty, but they drew out as of Harriett Baldwin (West Worcestershire) (Con): The right when they needed to, because that was their right, right hon. Gentleman is making an absolutely truthful but if we start to undermine the principle in different statement that since we have had a state pension there ways, we will be in trouble. have been differences in longevity between different I want to ask two questions, although I shall be socio-economic groups. Does he accept that longevity careful not to say too much about such matters because for all socio-economic groups is increasing? both more than touch on the amendment that I shall discuss either today or Thursday, when I shall probably Malcolm Wicks: Yes, I do. The Minister very be talking more about men. However, I shall focus on helpfully—to truth, let alone his own case—presented women now and the danger of overgeneralising about some evidence on that. Of course, I recognise that that longevity and life expectancy. statement is true. Indeed, someone else could make a I have known for some years about the logic of further point that surely health inequalities fall outside longevity and life expectancy. There is no quarrel, but the range of pensions and we need to tackle those we get into difficulty when we assume that everyone, inequalities, and the Marmot review has just been published, regardless of background, will live 20 or 30 years in which reminded me of the Black report of many years retirement so they must all understand the nature of the ago. I understand all that. challenge. I wanted to e-mail all members of the Committee Nevertheless, I am trying to say to the Minister— a paper, but I do not know whether I did. With support although he has heard this argument from me once or from the Library, which had support from the Office for twice in recent months—“Let’s just pause for thought National Statistics, I looked at the likelihood of women about whether we have absolutely got this right as we dying before they reached the current state pension age move the state pension age up rather quickly for this of 60. group of women.” I do not know whether the Minister, 49 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 50

[Malcolm Wicks] I sometimes think that when people talk about this—not in this place, because I think we are more realistic, but perhaps with ONS’s help, has been able to establish some of the great commentators on this—it is assumed whether the increase in state pension age that we now that out there is a world where everyone hitting 65 or 66 propose for women runs ahead, as it were, of increasing will develop some sort of portfolio of interests. There life expectancy, if he understands what I mean. At the will be company directorships, and lectures, and books moment, x% die before the age of 60; I have said that it to write, and all these other things. Well, what is the is about 10% of the poorest. Could that percentage equivalent for the lady who cleans our lavatories? What nudge up a bit, because of the things that we have been does her portfolio look like? Many of these people, discussing? I do not know whether he has any figures on because of their manual work, and because often they that. I genuinely do not know what the answer would have been in the employment market since the age of 15 be. It may be that things remain much the same. or 16, are actually worn out. Many of those who have written to me have talked about aching limbs and strained backs. In a very old-fashioned way, for these 4.15 pm social groups, retirement is very important as a chance This morning, the hon. Member for Arfon raised to have a rest and to relax after a lifetime of labour. I issues about location, which we discussed. It is worth think we should be cautious before we readily assume putting some of this on the record further. I will read that we can just keep on increasing the state pension from my own paper, if that is allowed; one can plagiarise age—in terms of this amendment, quite rapidly—for oneself, I think. This general social class difference is this group of women. reflected in geographical differences. Considering drastic local variations in longevity, if we compare Kensington Stephen Lloyd (Eastbourne) (LD): I concur with many and Chelsea with Glasgow—the hon. Gentleman used of the points the right hon. Gentleman makes; they are this example himself—there is a difference of almost very valid and serious points. My question is that we are 10 years. That is for men, but there is of course a talking about, relatively speaking, a minimal difference. difference for women too. Across Sheffield, there is a Exactly the same issues that the right hon. Gentleman is difference of more than 14 years if we look at longevity. discussing would have applied to his Government when Even in Kensington and Chelsea—I alluded to this they were in power, where women who, as the right hon. without the reference in front of me—which is, as he Gentleman said, started work at 15 or 16, would be said, the borough with the highest life expectancy, there worn out, to coin a phrase. I am unsure what alternatives is a difference of eight years between the most and least the previous Government brought forward, because deprived wards. As we represent different constituencies, they were following the same narrative. and different social groups within our constituencies, my plea is to move away from generalisations and think Malcolm Wicks: I certainly understand that, to be whether a future policy which simply says that everyone fair, the ugly spectre of social class variations by mortality has to reach a certain age before they get their state has not suddenly appeared under this coalition Government. pension, might be insensitive to the way in which life I am being fair-minded. All sorts of other evils have cycles are being acted out. appeared, which we can discuss on another occasion. The other point I wanted to raise, which has been Of course, it has always been an issue, but it goes back touched upon by colleagues, is about employment. Various to the point that I raised earlier—my hon. Friend the people have referred to the very good documentation Member for Leeds West put it better than I did—that we have had from the Department. Again, my plea past Governments have approached the problem rather would be: let us not generalise. Let us not assume that cautiously and over a long term, so that individuals as we raise the state pension age—in this case for could plan and think through their future. The rush to women—everyone will somehow be able to maintain judgment on increasing the state pension age for women their place in the labour market, keep their job, or, if is different from what preceded it, which is one difference. they are not in a job already, readily be able to acquire a If and when I introduce my amendment later in the new job at the age of 60 or 61, 64 or 65. Common sense week—I am not 100% confident about it, because this is suggests that that is quite a proposition for the coalition not easy stuff—I have some ideas about possible solutions Government to put forward. The figures I have—I may to put to the Minister. be repeating one given this morning—is that, looking at The Minister of State, Department for Work and economic inactivity rates by age, by the age of 59 Pensions (Steve Webb): Good afternoon, Miss Clark. almost 40% of women are so-called economically inactive, This morning, you missed a ripsnorter—as it is known for different reasons. In fact, it increases quite rapidly in in the trade—of a discussion on the important issue of the late 50s. You only have to go back to the age of 57 the state pension age. That has been the focus of much where the economic activity rate is only—and I say attention, and it is proper that it is the first clause of the “only”, in inverted commas—26.7%. It suddenly shoots Bill. I want to respond to the points made by every up in those last few years before the current state Opposition Member, except by the hon. Member for pension age. Erith and Thamesmead, who I think will speak on the As we proceed to raise the state pension age, quite next group of amendments. rapidly for women, which is our main point, how confident It is interesting to follow the right hon. Member for is the Committee that, in our different constituencies, Croydon North. I have indeed read his paper, which I faced with these different occupational groups, jobs will commend to Committee members—if they do not have be available for those women who want to work? Others a copy, I will sell them one. In the paragraph headed have caring responsibilities, and I understand that, although “Policy implications”, he condemns many people, of course, combine work and care. Are we “macho commentators, from privileged backgrounds, who recommend confident about the employment implications of this? higher and higher pension ages”. 51 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 52

I am sure that he does not mean the Secretary of State individuals and at the real human beings behind the or me—I might take some pride in it—but it is not an statistics. We heard some individual case studies, and I entirely accurate description of the Government’s approach. was struck by some of them, but exactly the same However, from the speech that the right hon. Member arguments would be used under amendment 16, only in for Croydon North has just given and most others, one a few years’ time. We would have exactly the same could be forgiven for thinking that amendment 16 and conversation about the long and hard-working life. I the others in the group would not raise the state pension might even have met the lady whose testimony the hon. age to 66; of course, they would. In response to an Member for Leeds West read out, because we had a intervention, the hon. Member for Leeds West went Fabian Women’s event in Parliament and I think the further and said that the current legislative timetable for lady told her story. Under the proposed amendments, moving to 67 and 68 is too pedestrian. [Interruption.] I folk who have difficulty working in their late 50s and so think she did. She also said that that move should on will face precisely the same set of issues in a few probably be faster to pay for the effect of the amendments. years’ time, so I am not sure how the amendments will All the points made by the right hon. Member for make the problem any easier. Croydon North and other Members about people feeling worn out in their late 50s and struggling to find jobs in Rachel Reeves (Leeds West) (Lab): The woman the their 60s will be true whenever we move to a pension age Minister met was Kathryn Greaves, the stories I have of 66, 67 and 68. Nothing in the group of amendments given were those of Barbara Bates and Linda Murray. would address the points that have been raised; they The amendments deal with two issues that the Bill would still be true, but true just a few years later. I will does not. First, those women have already had their come on to the question of notice, but I thought it was state pension age moved once, under the changes in important to make the point that the general trend to 1995; the goalposts are now being moved for a second longer life expectancy and later state pension ages will time. Also, both Barbara and Linda, as well as other raise precisely the issues referred to by Opposition women, say that it is impossible. Linda made it particularly Members, which are not remotely dealt with in the clear in her testimony: she earns only £270 a week, and amendments. It is important to put on the record that it would be impossible for her to save anything like what the amendments would raise precisely the same issues. is necessary for her to be able to make the adjustments I was struck during the debate by the fact that Opposition that she wanted to given the impact that her job is Members are asking the single figure of the state pension having on her health. In two important ways, therefore, age to do a huge number of different jobs. It is meant to the amendments deal with the concerns of the women. tackle local labour market difficulties in Wales and the fact that some working-class men—and women, for Steve Webb: I am slightly confused. The hon. Lady that matter—leave school at 16 and have amassed 49 years seems to be critical of us for moving the state pension of contributions by the pension age. It is being asked to age “for a second time”, but any woman who reaches address differences in healthy life expectancy and differences state pension age after 2022 has already had her state between regions. One number cannot do all that work. pension age raised to 65 and would now find it raised to The issues raised are perfectly proper, but the idea that 66 by the hon. Lady’s amendments. The amendments we should respond to them through the state pension would raise the state pension age twice. age is where the logic goes wrong. There is clearly an issue to do with people having Teresa Pearce (Erith and Thamesmead) (Lab): I am a time to save. The hon. Lady is fond of quoting the fact little confused by what the Minister is saying. I did not that many women in their late 50s, after 13 years of a hear what he heard. My colleagues argued that, although Labour Government, have not got much in savings. we may be living longer—that, too, is not a single fact, How will that change dramatically because of her proposed because there are mitigating circumstances for different delay of a couple of years? If they got to their late 50s types of people—it is not only that the pension age is with minimal savings, putting the date back by a couple moving, but that people are different and need different of years might help a little, but will not make a radical ways of planning for future changes. They have already difference to their ability to put right a system that has planned for one set of changes, and they need more worked against them over their whole lives, as we have time to plan for the next. What I heard was that we heard from many hon. Members. That is why we are cannot just say that people are living longer, which is a proud to press ahead next year with auto-enrolment fact or statement that is being made to fit all circumstances. into workplace pensions, which we will come on to later I think the Minister perhaps misunderstood what was said. in the Bill. The second reason for dealing with the problem, Steve Webb: I know that the hon. Lady missed the which no Opposition Member has mentioned at all, is first half hour of the sitting this morning for the entirely not only the pension age but what people get at the proper reason that she had a debate in Westminster pension age. I hope to be present in future, perhaps with Hall, but it does mean that she missed the exchanges I the same cast, to address the question of what sort of was talking about. Perhaps, before accusing me of pension that specific group of women who perhaps misunderstanding something she did not hear, she will retire in a decade or so should expect. My firm conviction think again. is that the state pension system presided over by the previous Government is not adequate for those women; Teresa Pearce: I apologise. we have time to change it, although we need to move quickly, to a system that is far fairer precisely for those Steve Webb: The right hon. Gentleman made some women who spent time out of the labour market bringing general remarks about the danger of generalisations, up children. We have heard a lot about their needs, and and I agree with him on that. We need to look at specific we have a Green Paper that proposes solutions very 53 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 54

[Steve Webb] another £10 billion of public expenditure, but there is another £2.5 billion of income tax and national insurance much benefiting exactly that group of women. I will go that the Exchequer would not get if the change was not no further down that avenue, but it provides an important made. Those figures are in the impact assessment before context for our debate. the Committee. We are, in fact, therefore talking about One of the key contexts for the amendments is the £12.5 billion that would have to be found. fiscal climate. The position of the Opposition party seems to be that its amendments would leave us £10 billion Sheila Gilmore (Edinburgh East) (Lab): Presumably down on the Bill. When asked by my hon. Friend the the figures on income tax and so forth are predicated on Member for Reading West where that £10 billion would all the women in question being in employment during come from, the answer as far as I understood it was the period. from the taxpayers and firms of 2035—that is when the money would come in from moving to 67 earlier. I think Steve Webb: They are predicated on realistic assumptions that even 68 was mentioned, so it would be the taxpayers of the proportion of those women who will be working. of 2045 as well. As one of my hon. Friends said, that is The right hon. Member for Croydon North, my predecessor the children and grandchildren of the very women we but six, would agree with me that the well-established are talking about. The silent voices in the room are the macro-economic evidence is that if we can get people next generation of taxpayers. The hon. Member for working longer—raising the state pension age is part of Arfon said that he had only had a small number of that, although it is not quite the same thing—we benefit letters, and perhaps some women affected did not write the macro-economy as a whole, and get enhanced income in, but the other people who did not write in were those tax and national insurance revenues. That is what we who do not know about the £10 billion that they are risk losing if we delay. It is a case of “Make me chaste, about to be asked to pay in decades to come, because but not yet”; we all agree that we are living longer, but the Labour party leaflet possibly did not mention that we do not want to do anything about it for another bit. That is the flip side: if we are going to spend decade. If we stick to the timetable in amendment 16, £10 billion on this group of amendments, someone has men’s state pension age in 2020 will be roughly what it to pay for it. was a century earlier. That does not feel to me like It has been pointed out that the change is not in the undue haste. current comprehensive spending review. Pensions reform has a knack of not being in the current CSR, but it is Rachel Reeves: On page 35 of the impact assessment, still essential to think about the fiscal context. My hon. in the table headed “Description and scale of key Friend for Grantham and Stamford put it very well monetised costs by ‘main affected groups’”, below when he said, if we are taking about such vast sums of “Reduced DWP spending on pensions”, money, we have to look at what bang for our buck we it says: are getting, and not just at an aggregate level. We know “Increased income tax and National Insurance receipts £12,700 how many people are affected, but how many people million.” are so adversely affected that we need to spend £10 billion I am surprised that the Minister now says that the putting it right? I thought that was absolutely pertinent national insurance and income tax impacts have not to our discussions. been taken into account in the impact assessment that was published. Rachel Reeves: Does the hon. Gentleman really believe that it is fair that 500,000 women are so disproportionately Steve Webb: We published the figures in the impact affected by the changes? Even if the Government want assessment, and published two sorts of impacts: first, to save the full £30 billion, does the Minister think it the annually managed expenditure impacts, which are right that one group of women should have to pay the the £30 billion and £20 billion numbers, and then the highest price for it? income tax and national insurance impacts, which go from about £8 billion to £5 billion and a bit, if I remember rightly. That is all published in the impact Steve Webb: The question of why more women than assessment; if the hon. Lady leafs through it a bit men are affected is important, and the answer is that we further, she will find those numbers. are treating men and women equally sooner. An inevitable consequence of treating men and women the same Malcolm Wicks: To be fair, the hon. Gentleman has more quickly is that it will be women who lose in the always had a reputation in social policy for concern process when we level-up state pension ages. As we may about greater equality and social justice. When he looks go on to discuss, moving men first would breach our at these very large figures of billions of pounds of duties under equality legislation, because it increases revenue, the causes of the deficit, and the different the gap between men and women. If the hon. Lady had groups in our society—including the top 2% who are another hat on, she would be urging us to close the gap now doing terribly well, in terms of increases in their between men and women. That is what we are doing, income and wealth—is he satisfied, as a man concerned and that is why more women than men are affected. with fairness, that this is the place to put billions of I have to say to the Committee that I have been pounds-worth of burden? He must have a conscience uncharacteristically generous to Labour Members on about this. their amendment; I suggested that it would cost the Exchequer only £10 billion, but I am guilty of understating Steve Webb: My hon. Friend the Member for Grantham the case. As is the way of Departments, we have a slight and Stamford said, “Let’s take this group and examine tendency to think only about our bit. The Department who they are and what their characteristics are.” The for Work and Pensions would indeed have to find first thing we established is that roughly seven out of 55 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 56

10 women in their late 50s—the group most affected—are changing the state pension age later. The hon. Lady’s in paid employment at the moment. It was suggested amendments would introduce the age of 66, and therefore that many are carers, and I take the point made by the bring forward the number of women who face the exact right hon. Member for Croydon North that people difficulty that she has just described. She cannot suggest combine caring with paid work. Just 3% of that group that there is a substantive difference—apart from in the are on carer’s allowance. If they cannot get by on carer’s issue of notice, which I will return to—between her allowance and whatever else is coming into the household, amendments and what the Bill says; the situation would that is a problem when they are 57, not only when they apply in both cases. are 64. If they cannot get by on what they have coming Returning to the fiscal context, we have heard the in now and it is not sustainable, that should worry us comment that the issue is a long way off, and that it today, and we should do something about that today. does not matter from the point of view of the deficit. I Even if amendment 16 is accepted, they will still have to think we even heard that the days of tackling the deficit live on that standard of living for seven years. If that is will be over, and that the deficit will be some sort of totally unsustainable, then we should do something history. What will not be history is the interest burden about that. Delaying putting up state pension ages of the nearly £1.4 trillion of national debt that we will because of that does not seem to follow logically. face at the end of this Parliament, despite the difficult decisions that we have had to make. The children and Rachel Reeves: There are two key points here. One of grandchildren of those women will be paying that interest the points that Age UK makes in its analysis is that a lot for generations to come. A person who glibly says, “We of women start to draw on their savings, whether that is need another £10 billion, but we will find it in the because they are taking on caring responsibilities, going 2030s” or something like that does not seem to be living part-time for another reason, or find the physical stress in the real world. There is always a case for looking at of work too difficult for them to carry on. They make the impact on particular groups, which we will do, but those decisions based on their savings, so they are able simply to say, “Tomorrow, and tomorrow, and tomorrow” to maintain a decent standard of living. However, carrying was the hallmark of the previous Administration, who on for another two years, which is what the Bill asks got us into the situation in the first place. 33,000 women to do, would be beyond their financial The hon. Member for Edinburgh East asked about means. Many women who will be affected have said to the role of employment and support allowance in me that they have never claimed benefits in their life and supporting people in their late 50s and beyond who are will continue to work as long as they have to, even if the no longer able to work because of sickness. She referred physical demand takes an enormous toll. They might to the 12-month limit under the Welfare Reform Bill. not claim sickness benefits, but carry on under extreme As my hon. Friend the Member for Grantham and physical strain, and the Government are asking them to Stamford said, it is worth breaking that group down. do that for another two years. Nearly a quarter of ESA recipients over 55 are in the Regarding national insurance, pages 35 and 37 of the support group, so they are not affected by the issue impact assessment state that the figure is £12.7 million raised by the hon. Member for Edinburgh East. Nearly under option one and £8.8 million under option two. I half of those who start claiming ESA over the age of 55 am surprised that the Minister says that that was not come off it within a year, so that is pretty typical for included. people. The majority of ESA claimants over 55 are men, in any case. When we start to narrow it down, the Steve Webb: The hon. Lady is referring to the White number of women who would otherwise have been on Paper. With the Bill, we have published a revised impact contributory ESA, who would not be in the support assessment, which she will find on page 11 of the Bill’s group or receiving income-related benefits, and would impact assessment. The Treasury revised its estimates of be on ESA for more than a year would be small. I am the income tax and national insurance impact, which is not saying that no one would be affected, but we should why the numbers are different. consider the matter relative to a £10 billion amendment; it is important to keep a certain sense of perspective. The hon. Lady is right that a set of people, particularly women, might have no choice and might, perhaps because The hon. Member for Arfon asked about the impact of family circumstances, find themselves with a caring on Wales. I assure him that we took close cognisance of responsibility in their late 50s. If that is a difficult that. When we published our call for evidence, we situation for them, which I am sure it is, that will still highlighted in the document the improvement of life happen regardless of amendment 16 and related expectancy in Wales from 84.8 years under the 2004 amendments. There will still be, in a few years’ time, projections to 86 years in the 2008 projections. One of women in their late 50s who find that they have caring the questions that we asked was what evidence concerning responsibilities and that they run down their modest changes in life expectancy should be taken into account. savings in the run-up to a pension age of 66, which she In the impact assessment that we published with the supports. Indeed, she has tabled amendments to introduce Bill, which I am sure he will have seen, we gave on page the age of 66. 16 separate figures for life expectancy at state pension There is an inconsistency here. I accept that there is age in England, Wales and Scotland, under the different an issue about notice, but she is not talking about scenarios. notice. People in their late 50s who have been forced We have been very much aware that the policies will into caring responsibilities unexpectedly do not make have a different impact on different nations of the carefully calculated choices and nuanced decisions about United Kingdom, and as the hon. Gentleman rightly it; it just happens to them. That will go on happening says, from community to community. I was interested in generation after generation, and that problem has to be the example that he gave of the Welsh Assembly dealt with by giving proper support to carers, not by Government looking at ward-by-ward measures, and it 57 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 58

[Steve Webb] was the discussion? Where was the listening?” Instead, we have come to the Committee and, given the process was good to hear some constructive ideas. I do not we have, Opposition Members had the chance to come consider that issues about state pension age are best forward with fresh new thinking on transition. What do addressed on a ward-by-ward basis, but I am grateful to we have in front of us? The amendment that they tabled him for his constructive suggestion, and for his candour in the House of Lords, which has already been rejected. in saying that it is easier to point out the differences than to work out, under a national social security Rachel Reeves: The Minister knows that I wrote to policy, what to do about them; he was fair in his him on 22 June asking whether we could discuss this remarks. and work together on it. He did not even have the The hon. Member for Kilmarnock and Loudoun courtesy to reply to that letter. We wanted to build on referred to the availability of jobs. One of the interesting the Turner consensus, which built consensus across things about the recent recession is that the market for business, unions and all parts of the House. The older workers has held up the best. In fact, the market Government can decide to unravel that consensus, that for workers over the age of 60 has had a positive is their choice, but I offered that opportunity, and I growth, relative to negative growth for younger workers. want the Minister to acknowledge that. That is not glibly dismissing the issues facing older workers, but the evidence shows that it is the growth Steve Webb: I have indeed received the hon. Lady’s area in the jobs market. Jobs are often part-time, and a letter and she will receive a reply. She wrote a couple of part-time job could well pay the equivalent of the basic weeks ago, saying that she wanted to help us with state pension, for example, so those jobs are relevant to transition. I look forward to the ideas and fresh thinking that group. She raised an important point. that I assumed she would bring to the Committee. That The hon. Member for Nottingham South talked about is what the Committee is for. This part of the process is her constituents who faced 15-month increases, and was for the Opposition to say what they think should be worried about the impact on women who do the right done, to table amendments and to bring forward fresh thing. She cited women who leave school, work a full thinking. We have had some fresh thinking from her working life and then face a pension age of 66. In four right hon. Friend the Member for Croydon North, years’ time, when her policy would come in of bringing which we will debate later. We have had some helpful the age of 66 forward by four years to 2022, there will probing amendments from her hon. Friend the Member also be women who do the right thing. Why would the for Erith and Thamesmead, who suggested some other issue of women who do the right thing not be equally alternatives that have not been done to death. I hoped applicable under the amendment that she is asking the that the Labour Front Bench would come to the Committee Committee to support? I think that it would. with some fresh thinking of that sort. We have had the The hon. Lady raised a particular issue about local same old arguments, the same debate and the same government workers, many of whom will, as she says, amendments. I am happy to talk to anyone who will have a decent occupational pension, which will assist give us fresh thinking on transition. We have plenty of with later state pension ages. However, again, if there is ideas and we want to get this right. an issue about how the local government pension scheme and re-grading in local government affects people’s Sheila Gilmore: The Minister will have to concede pension choices, that is something to fix within the that our position has been clear from the outset, as it context of the local government pension scheme and was on Second Reading, on where we stood on accelerating local government, rather than by delaying state pension this. It was the Government’s proposal that the problems age changes. That would be using a sledgehammer to might be alleviated through transitional proposals. Is it crack a nut. not therefore up to the Government to come forward I now come to a couple of other issues; I want to with some proposal that we could discuss, rather than make sure that I have responded in full to the debate. I throwing it back and suggesting that we should be was asked about transition, which is obviously a key doing the Government’s job? issue. I was pleased that my right hon. Friend the Secretary of State said on Second Reading that he Steve Webb: I am not sure if the hon. Lady speaks for stood by the principles of the Bill, such as faster equalisation her Front-Bench spokespeople when she says that, because and a faster move to 66, but that he heard the specific they are saying that they have lots of ideas that they worry expressed by several Opposition Members, as want to share with us. Either they have not got any well as some Government Members, who have been ideas, or they have got ideas and just have not told us commendably restrained, but have properly raised their what they are yet. This is the forum for telling us. constituents’ worries with me in writing, for which I am grateful. Alok Sharma (Reading West) (Con): I thank the There was a specific concern about a relatively small Minister for indicating that the Government are thinking number of women; my right hon. Friend the Secretary about transitional arrangements. I look forward, with of State confirmed that we are willing to get the transition all hon. Members, to finding out exactly what they are. I right. I have been asked, “Well, where’s the amendment?” want to come back to this point: when the hon. Member This is a classic case of “Damned if you do, damned if for Leeds West wrote to the Minister, one would have you don’t.” The Bill had its Second Reading a fortnight expected her to put forward some proposals of her own ago, at which time we voiced our willingness to consider and to bring some to the Committee today. That has transition. If we then scuttled away and presented our not happened. She cannot have it both ways. I am transitional amendments to the Committee, the Committee delighted that the Government are thinking along these would have said, “Where was the consultation? Where lines. 59 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 60

Steve Webb: I am grateful to my hon. Friend. I through Parliament, it is important that we look at the remain open to constructive suggestions on transition. debate in this Committee. That is the point of this The hon. Member for Leeds West told the Daily Mirror process: to refine legislation and get it right. That is why that she was disappointed when she saw when the we welcome—I vaguely think we are meeting now, for amendment paper, but she was not half as disappointed many hours—any fresh thinking. as I was, when I saw the lack of fresh thinking from her. Malcolm Wicks: The Minister says he does not want Rachel Reeves: The Opposition Front Bench team to start hares running, so in a way he has answered the has proposed two amendments. One is around the pension question I was going to raise. When I think of the credit to help the poorest people affected by these Liberal Democrats—in my better moments, over recent changes. As the Minister knows, the gap between the years—it has been a party, and not least the hon. Government’s proposals and our proposals is a lot less Gentleman, which has been committed to freedom of than £10 billion. There are also two amendments tabled information, a more open politics, with the Executive of by Labour Back Benchers, with nothing from Government which he is now a distinguished member treating the Members. legislature with greater respect than, perhaps, under Following up on the Secretary of State, who said he previous Governments. Given all of that, would it not would happily discuss transitional arrangements with have been sensible if the work going on in the Department, anyone who wanted to do so, I set out in my letter to the which I suspect preceded Second Reading debate on Minister on 22 June that I would like to do so, but I was transitional arrangements, could be published as a kind not given a meeting with the Minister. In the final of Green Paper so we could have a more well-informed paragraph of my letter I said: debate? He would have supported this a little while ago. “It is important that we resolve this confusion during the Committee Stage of the Bill. We are willing to work with you. I would be grateful, therefore, if you could share with me the Steve Webb: I do not think anyone would thank me proposals that you are working on.” for a Green Paper in the middle of a Bill that has The Minister has said that he did not want to rush already been through the House of Lords. I really do something to bring it to Committee, so at what stage not think that is going to help us. will he bring something back, and who will he be consulting with? Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co- op): To press a point that my hon. Friend the Member Steve Webb: The hon. Lady says that she referred, in for Leeds West has made, if there has been no opportunity her letter, to confusion—as indeed she did—and I was for the Opposition Front-Bench spokespersons to meet confused about what she was confused about. We had to discuss this, and nothing has been brought forward made it clear that we stood by the principles of the Bill, by the Government into Committee, how are we to get but that we recognised that, particularly for the most any sense, or any flavour, of the types of amendments affected group, we would need to look at the transitional that the Government propose? I find myself quite bemused situation. We look forward to anyone, frankly, who to know how we are going to scrutinise something in wants to feed into that process, and who has specific the absence of any information. propositions on that transition. The hon. Lady mentioned the pension credit amendment which, if I recall correctly, Steve Webb: My right hon. Friend the Secretary of was also tabled by her hon. Friends in the Lords and State could not have been clearer on Second Reading was rejected. We are very happy to hear from anyone when he said that he was aware of the issues facing a who has any fresh thinking on these ideas. specific group, and wanted to ease the transition. Obviously, there are a variety of ways in which that could be Rachel Reeves: On Second Reading, the Pensions tackled. As I say, I am keen that we get it right, and Minister said that he was willing to work to get the anything that involves primary legislation will have to transition right, which I presumed meant that he thought be brought before the House. I think hon. Members that at the moment they had not got the transition have been here long enough to know that there are right, and in fact had it wrong. If that was the case, I further stages that this Bill has to go through, so anything presumed that they would be willing to talk to us, and that requires primary legislation will go before the when I asked to have a meeting, that that offer would be House and be properly scrutinised in the normal way. taken up. Amber Rudd (Hastings and Rye) (Con): Does my Steve Webb: I get the feeling of dancing on pin heads, hon. Friend agree that the Opposition do not have a here. I repeat what I said, and what my right hon. monopoly on proposals for transitional agreements? I Friend said at Second Reading: we hear the specific know that several Government Members here have concern about a particular, relatively small number of made proposals, despite comments from an hon. Member women, and we will consider it, and are willing to work here about school prefects. I hope that he will give to get the transition right. That remains our position. careful consideration to those, so that the best proposals What I will not do is start off a whole range of speculation. can come forward. As soon as I say, “We could look at this, we could do that,” then all sorts of hares get set running. A set of people hear a newspaper story that says, “Government Steve Webb: My hon. Friend is quite right, and a set to do X,” and their hopes are raised, and then we do number of hon. Members who have written in, including not do that, and they are disappointed. Given the herself, have not simply said, “There is a problem here,” uncertainty that is inevitable when something is going which is a slight shade of what we heard this morning, 61 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 62

[Steve Webb] unlistening, and if you amend it, you are scrabbling round in the dust for amendments, whichever takes but: “Why don’t you do this?” There have been various your fancy. very practical, constructive suggestions, which are welcomed I meet organisations to which tribute has quite properly at this particularly critical phase. been paid—Age UK, Ros Altmann at Saga, and many others—regularly. It will not surprise the Committee to Sheila Gilmore: It might have been appropriate to know that those issues have come up from time to time have had a pause, in order to bring forward proposals. and we have benefited from their insight. The invitation remains open for the Opposition to make specific, costed proposals for transition that they believe would address Steve Webb: Amendment 16 is a 10-year pause, if I the issues. I would be very happy to look at them. understand it correctly. Let me try to draw the threads together because I am aware that a whole range of other debates is closely Mr Marcus Jones (Nuneaton) (Con): The Minister linked to this one. The fundamental point is that, since may be aware that I have written to him on the very the 2007 Act was published, based on 2004 projections, subject of transitional arrangements, advocating that life expectancy has improved not just a bit, but like an the Government consider putting transitional arrangements express train. In four years, between 2004 and 2008, in place for women who are in this particular cohort roughly a year and a half was added to life expectancy and may be disadvantaged by the changes. Regardless at pension age. The bill attached to that is tens of of that, would the Minister not agree that Government billions of pounds. The question is, who pays it? Does it must look at this very carefully and take their time to all fall on the next generation of national insurance make sure that they get the proposals right in the payers, taxpayers, and interest on debt payers or does interests of both the cohort of women who may be some of it fall upon those who will benefit from the disadvantaged and the wider interests of the taxpayer? increased longevity? The hon. Member for Leeds, West said that we are Steve Webb: I am grateful to my hon. Friend for moving up pension ages faster than the improvement in inserting the interests of the taxpayer into the debate. life expectancy. I remind her that in 1990 when the Women in their 50s are taxpayers too, but we have to pension age was 60, the average woman reaching pension think of the taxpayers of today and tomorrow and the age—I forget the exact figure—could expect to get a trade-offs involved. It is important that he highlights pension for a certain number of years and by 2020, that that context. I remind the House that we had Second figure was exactly the same even with a six-year increase Reading on 22 June and amendments had to be tabled in state pension age. In other words, precisely over that for today. As Mr Brady reminded us at the start, they period, the number of years for which a woman could were tabled last Thursday, so within about 10 days of expect to receive a state pension in 30 years, despite a Second Reading, we suddenly have to produce finely six-year increase in the state pension age, has not changed. honed legislation. Doing those things in a rush is not Again, this does not suggest breakneck speed, right, but clearly, there will be proper parliamentary disproportionate impact. scrutiny of anything that requires primary legislation. Clearly there are trade-offs and we have aired them quite extensively in Committee. I simply say that we are Sheila Gilmore: I simply suggest that the timetable for mindful of the very specific group and the very specific Committee is within the Government’s powers. If more issues that my hon. Friends and Opposition Members time was required, perhaps it would have been appropriate have raised. We will work to get that transition right, to have a pause before we moved to Committee Stage. but I resolutely stand by the principle of grasping those difficult issues today rather than putting them off till Steve Webb: The hon. Lady will know that we have tomorrow for someone else to tackle. Therefore, I urge five whole days in Committee and all the time that is the Committee to reject the amendments. needed to consider all the Opposition amendments has been allocated. I do not think that any Opposition 5pm amendment that has been tabled will not get a proper chance to be discussed—there are just not very many Rachel Reeves: It is good to serve under you in the and we have had most of them before. Chair this afternoon, Miss Clark. I thank hon. Members I think that we have pretty much exhausted the issue. for their speeches, their questions about the amendment, and for the debate this morning and this afternoon. The purpose of the group of amendments should be clear: Rachel Reeves: The Minister said previously that he collectively, they seek to amend the Bill’s acceleration of was willing to talk to people who had other suggestions. the equalisation of the state pension age for men and Is he having conversations with other groups? If so, women and ensure that there is no rise to 66 before who are they? Also, does he agree that it is usually 2020, as in the coalition agreement, but allow for a sensible to take time to get it right before a Bill is faster increase to 66 between 2020 and 2022. published rather than scrabbling around afterwards to A petition has been signed by more than 12,000 try to find the right answers? people, and an early-day motion, calling for precisely the same changes, has been signed by 180 Members, Steve Webb: Once again we are in “damned if you do, including the hon. Members for Colchester (Bob Russell), damned if you don’t” territory. If you publish a Bill and for Portsmouth South (Mr Hancock), for Mid Dorset regard it as holy writ, immutable, unamendable and and North Poole (Annette Brooke), for Ceredigion perfect from birth, you are regarded as arrogant and (Mr Williams), for Edinburgh West (Mike Crockart), 63 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 64 for Cheltenham (Martin Horwood), for St Austell and Committee stage so that we can scrutinise them, which I Newquay (Stephen Gilbert) and for Birmingham, Yardley thought was the purpose of a Bill Committee. If the (John Hemming), the right hon. Member for Ross, Skye Government have ideas, the Committee is the perfect and Lochaber (Mr Kennedy), the hon. Members for place to debate them. However, on consistency grounds, St Ives (Andrew George), for Torbay (Mr Sanders), for I find it strange that the hon. Gentleman would support Caithness, Sutherland and Easter Ross (John Thurso), an early-day motion but vote against an amendment for Argyll and Bute (Mr Reid) and for Bradford East that would do precisely what is in the early-day motion. (Mr Ward), the right hon. Member for Gordon (Malcolm On Second Reading, just two weeks ago, hon. Members Bruce), the hon. Member for North Cornwall (Dan of all parties spoke passionately about the need to Rogerson), the right hon. and learned Member for address exactly that issue—it is a shame that more of North East Fife (Sir Menzies Campbell), the hon. Members them are not here today—and the need to find a better for Brecon and Radnorshire (Roger Williams), for West and fairer way that does not fall so disproportionately Aberdeenshire and Kincardine (Sir Robert Smith) and on one group of women. I remind the Committee of for Manchester, Withington (Mr Leech), the right hon. what was said on Second Reading. My hon. Friend the Member for Bath (Mr Foster), the hon. Members for Member for St Helens North (Mr Watts) asked: Wells (Tessa Munt), for Southport (John Pugh), for “Is it not clear to the Secretary of State and the Government Solihull (Lorely Burt), for North Wiltshire (Mr Gray), that although everyone accepts that there have to be changes, for Worthing West (Sir Peter Bottomley) and for St Albans some of the proposals in the Bill are, for 500,000 women, unfair (Mrs Main)—in other words, Government Members as and unjustified?” well as Opposition Members. My hon. Friend the Member for Huddersfield It is important to state exactly what the early-day (Mr Sheerman) said that motion says, which is: “we need to know very early in the debate whether that group of “That this House welcomes the equalisation of the state pension women will be fairly treated and whether the Government will age for men and women, but notes with concern the Government’s think again, because those of us who feel positive about many of proposals to accelerate the timetable for doing so; recognises that the reforms would find that a sticking point.”—[Official Report, 300,000 women born between December 1953 and October 1954 20 June 2011; Vol. 530, c. 42.] will have to work an additional 18 months or more of which 33,000 will have to work an extra two years; further recognises My hon. Friend the Member for West Bromwich West that these women have less than the 15 years of preparation time (Mr Bailey) said that the Bill will cause recommended by the Turner Commission before the changes take “certain loss for many thousands of women facing retirement.” place; and calls on the Government to take these issues into account and revise the timetable in order to maintain the commitment He asked the Secretary of State to given in the Coalition Agreement.” “sketch out a little more how he intends to give them security”.— I read out the early-day motion because the group of [Official Report, 20 June 2011; Vol. 530, c. 44.] amendments would do exactly that. My hon. Friend the Member for Slough (Fiona The early-day motion was also signed by the hon. Mactaggart) asked: Member for Eastbourne, so I look forward to receiving “Which of the facts that the Secretary of State has cited was he his support when we vote on the amendment later this unaware of 12 and a half months ago, when in the coalition afternoon. agreement the Government signed up to not introducing these changes before 2020?”—[Official Report, 20 June 2011; Vol. 530, c. 48.] Stephen Lloyd: I thank the hon. Lady for reminding me of that, which I really appreciate. I return to what I That point was touched on early in today’s debate. asked several Opposition Members this morning: does The hon. Member for Epping Forest (Mrs Laing) she agree that the Secretary of State made a commitment said: to transition arrangements, or is she saying that he is “No one can object to the equalisation of pension ages for men not telling the truth? and women when we are fighting so hard for other areas of equality. However, does he”— Rachel Reeves: I thank the hon. Gentleman for his the Secretary of State— question. We are discussing transition arrangements. “recognise that for a particular group of some 300,000 women The early-day motion that he signed and the plans we born in 1954 the transition arrangements are rather more difficult are discussing today relate to the transition to 66, but at than for any other group in society? Although he should not a slower rate to give people more preparation time. He change his policy, will he look at other ways to help that particular supported that when he signed the early-day motion, group of women?”—[Official Report, 20 June 2011; Vol. 530, and I expect that he told his constituents that he supported c. 49.] it, so for consistency he should support the amendment The hon. Member for North Wiltshire asked the Secretary this afternoon. of State: “Will he give particular consideration to the small group of Stephen Lloyd: That is why I look forward with—I 33,000 women born in March 1954, on whom the change will bear down disproportionately harshly? Surely there is a way of would even say—excitement to the Secretary of State’s finding a transition method that takes account of that small transition arrangements, which I am told will come out group of women.” in the very near future. My hon. Friend the Member for Scunthorpe (Nic Dakin) asked the Secretary of State: Rachel Reeves: The hon. Gentleman may well have “My constituents, the class that left Foxhills comprehensive been told that, but it is the first I have heard of their school in 1970, who were all born in 1953-54, have written to me coming out in the very near future. I hope that he is to ask why the pensions goalposts should be moved twice so close right, and that they will appear before the end of to their retirement. What would he say to those women?” 65 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 66

[Rachel Reeves] The NAPF’s recommendations are particularly germane to this debate today because the NAPF says that it The hon. Member for East Dunbartonshire (Jo Swinson) would expect the transition plans to come in said: “the Committee Stages of the Bill” “I think there is general acceptance that with increased longevity, the pension age needs to be considered, including the current and that it would expect the Government to introduce unfair differentiation between men and women. However, there is those proposals. That is what many Members in the a particular group of women who will be badly affected. I House expected when they urged the Secretary of State welcome the Secretary of State’s saying that he will consider to think about the impact on the 33,000 women whom transitional arrangements. Is he willing to consider with an open we have mentioned and the 500,000 women who will mind amendments in Committee and on Report, or other solutions that might be brought forward, to help that particular group of have to wait for more than a year longer than they had women?” —[Official Report, 20 June 2011; Vol. 530, c. 51-52.] thought for their pension. The hon. Member for— An awful lot of pressure from inside the House—indeed, from all parts of the House—and from outside the The Chair: Order. The hon. Lady has cited a number House has been brought to bear. So I was pleased that of Members who have made the points that she is the Secretary of State acknowledged this issue and referring to. The purpose of the Committee is not to repeatedly informed the House that he would be happy regurgitate the Second Reading debate but to focus on to discuss the transitional arrangements. the clause that is before us. Perhaps she could do As with the Turner report, I still believe that the best that—I think that she has made her point. way to go about these things is by achieving consensus. As I said to the Minister during his contribution, I Rachel Reeves: The point that I am trying to make is wrote to him, asking him to share with me the proposal that on Second Reading Members asked time and time that he was working on, in order that we could scrutinise again if the Government would consider the impact on the arrangements. That is what the previous Government this group of women. The Secretary of State said that did when they put forward proposals for increasing the they would and I think that many Members, including state pension age. We managed to build cross-party the hon. Member for Cardiff North (Jonathan Evans) consensus for those changes, both inside and outside who made the case very forcefully on Second Reading, the House. It is a shame that the Government have expected that these transition arrangements that the deviated from that approach to pensions policy and it is Government said they were looking at and were willing one that will negatively affect those people, both in to discuss would be introduced in Committee. The retirement and approaching retirement. disappointment felt by the Opposition and, I believe, across the House, reflects the fact that despite giving a It is disappointing that no proposals were forthcoming commitment on Second Reading that transition and a further blow that we have heard nothing of their arrangements would be considered, we are not being plans today. Will the Minister explain the confusion? given the chance to scrutinise them. Those transition Why did he and the Secretary of State say that transitional arrangements relate to the part of the Bill that was arrangements would be looked at, yet nothing is on the probably debated most on Second Reading. The hon. table before us today? As the postbags and e-mail Member for Eastbourne says that he thinks they are accounts of the Members of this Committee and Members forthcoming and the Minister says that the Government from across the House will no doubt attest, this is an are looking at them. Yet in the very forum in which they issue that has real impact in all of our constituencies. should be debated—this Committee—we do not have In my constituency, almost 1,000 women will be any such amendments to consider, even though we are affected by these changes by more than a year. How will being asked to scrutinise a Bill that may or may not Government Members, such as the hon. Member for impact this group of 500,000 women in the way that it West Worcestershire, who has 1,300 women affected in currently does. If transition arrangements are made for her constituency, explain that she has not put forward those 500,000 women, or those 33,000 women, perhaps transitional arrangements or supported the ones that we will be in a different place. Frankly, we do not know are on the table. The hon. Member for High Peak has that, because the Government are not sharing the 1,200 women aged 56 and 57 in his constituency. The information about what those transition arrangements hon. Member for Grantham and Stamford has 1,300 will look like. women aged 56 and 57. In Nuneaton, there are 1,100 As well as Age UK and Saga, external organisations women; Eastbourne 1,200; South Basildon and East such as the National Association of Pension Funds Thurrock 1,300; Hastings and Rye 1,400; South West have also called for the Government to rethink. The Bedfordshire 1,200; Reading West 1,000; Norwich North NAPF has said: 1,000; Thornbury and Yate 1,100; and Arfon 600—the “This is unfair as women have too little time to plan for these Member with the fewest women in his constituency changes. MPs from all side of the house have expressed their aged 56 and 57 seems to care more about them than concerns on this issue. The NAPF urges the Government to those with perhaps twice as many women of those ages re-consider the situation for this group of women during the in their constituencies. Committee Stages of the Bill and come forward with detailed proposals on transitional arrangements to the State Pension All of those women would have been reassured and Age.” comforted by what the Secretary of State and the Pensions The NAPF goes on to make a series of recommendations: Minister said during Second Reading, which acknowledged no changes until 2020; the increase to 66 should occur the unfairness of their situation and spoke of the possibility for both men and women from 2020 to 2022; and the of transitional arrangements that would seek to address Government need to do more to help people to work for that. I know from letters and e-mails to me, that people longer. have said that it looked like the Government were 67 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 68 willing to make concessions, perhaps do a U-turn as Lloyd, Stephen Sharma, Alok Metcalfe, Stephen they have in other areas of policies. Yetno such transitional Smith, Miss Chloe proposals have been presented by the Government. Rudd, Amber Selous, Andrew Webb, Steve This Committee could have had a fruitful discussion of the transitional arrangements, yet the Government have failed to come forward with options, as women in Question accordingly negatived. all our constituencies and the National Association of Pension Funds, Saga and Age UK would have liked Teresa Pearce: I beg to move amendment 24, in them to have done. Instead we have had no actions and clause 1, page 1, leave out from line 11 to end of line 4 empty words. It is only the Opposition and Opposition on page 2 and insert— Back Benchers who have tabled amendments with regard to the state pension age. We have set out—as I did on ‘06April-5May1953 06 June 2016 Second Reading—that any proposals must give women 06 May 1953 06 September 2016 and men time to plan. They should impact on men and 06 June 1953 06 December 2016 women equally and no one should have to wait more 06 July 1953 06 March 2017 than a year before they get their state pension. 06 August 1953 06 June 2017 We recognise that the state pension age needs to 06 September 1953 06 September 2017 increase and I believe that the amendments grouped 06 October 1953 06 December 2017 together here would ease the transition, but still get to 06 November 1953 06 March 2018’. 66 earlier than under the previous timetable, to reflect increasing longevity. Ministers say they wanted to investigate: we could have an investigation and discussion The Chair: With this it will be convenient to discuss in this Committee. Instead, we have only Opposition the following: Amendment 25, in clause 1, page 2, leave amendments, but I hope today that the hon. Member out lines 10 to 16 and insert— for Eastbourne and all hon. Members will support this group of amendments. ‘06 December 1953 06 June 2018 Question put, That the amendment be made. 06 January 1954 06 September 2018 The Committee divided: Ayes 7, Noes 11. 06 February 1954 06 December 2018 Division No. 1] 06 March 1954 06 March 2019 06 April 1954 06 April 2019 AYES 06 May 1954 06 June 2019 Gilmore, Sheila Reeves, Rachel 06 June 1954 06 August 2019 Greenwood, Lilian Wicks, rh Malcolm 06 July 1954 06 October 2019 Jamieson, Cathy 06 August 1954 06 December 2019 Pearce, Teresa Williams, Hywel 06 September 1954 06 February 2020 06 October 1954 06 April 2020 NOES 06 November 1954 06 June 2020 Baldwin, Harriett Rudd, Amber 06 December 1954 06 August 2020 Bingham, Andrew Selous, Andrew 06 January 1955 06 October 2020 Boles, Nick Sharma, Alok Jones, Mr Marcus 06 February 1955 06 December 2020 Lloyd, Stephen Smith, Miss Chloe 06 March 1955 06 February 2021 Metcalfe, Stephen Webb, Steve 06 April 1955 06 April 2021’. Amendment 26, in clause 1, page 2, line 17, leave out Question accordingly negatived. ‘1954’ and insert ‘1955’. 5.15 pm Teresa Pearce: During the debate on Second Reading, Amendment proposed: 17, in clause 1, page 1, line 7, leave Members in all parts of the House expressed concern out subsection (3) and insert— about how their constituents will be affected by the ‘(3) In sub-paragraph (4) leave out “6 April 1959” and insert accelerated timetable and the equalisation of the state “6 April 1955”.—(Rachel Reeves.) pension age between men and women. The Secretary of Question put, That the amendment be made. State for Work and Pensions, in his closing remarks, The Committee divided: Ayes 7, Noes 11. said that he would consider introducing transitional arrangements. Since no amendments have been tabled Division No. 2] by the Government, I have introduced my amendment in an attempt to make the Bill fairer. We have heard AYES from Government Members that they have submitted Gilmore, Sheila Reeves, Rachel ideas to the Minister, so if they wish to intervene and Greenwood, Lilian Wicks, rh Malcolm share those ideas, I will be grateful to hear them. Jamieson, Cathy Pearce, Teresa Williams, Hywel It is interesting that my aim is to mitigate the detrimental effect; on 9 March, the Minister gave evidence to the Select Committee on Work and Pensions, of which NOES three other members are present. This matter formed Baldwin, Harriett Boles, Nick the early part of the evidence and there was quite a Bingham, Andrew Jones, Mr Marcus debate about it, as you will remember. At one point, it 69 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 70

[Teresa Pearce] change soon, she made a decision to take a pay-off that would see her through to her expected retirement age. was mentioned that the 33,000 women are 1% of the Now that retirement age is going to be moved by two women affected. As it was such a small number, I asked years and that money will not last. What am I to say to the Minister if anything could be done to mitigate the her? Am I to say that she was foolish to make those effects on these women. The Minister said the challenge plans, or that it is unfortunate but she has just got to to that was if you fixed for that group of women, a pay the price because future generations can not pay for larger part of the group will say, “What about us?” and her pension? What do I say to that woman? the line would just move to another place. That is a fair comment. Steve Webb: So that I can respond helpfully—I do However, the Government now seem to be considering not have the benefit of having met her constituent—is mitigation and I would be interested to know how that she able-bodied? Did she take sick leave? Why did she could be achieved without moving the line to another actually stop work? place. Were some of the suggestions that have been made to the Minister, which we are not party to, about Teresa Pearce: My constituent worked in local means-testing certain groups of people? I would be government and they were looking to reduce numbers. really interested to hear what those solutions are, because She thought, “I am fairly near retirement age. If I take there is much in this Bill that we all agree upon, but this voluntary redundancy, I will be able to last until my is a particular sticking point that most people in this pension age”. She looked around and saw younger room want to find a solution to. Surely the more voices people who perhaps needed that job more. She made and ideas we hear, the more likely we are to find a way the decision that she would be able to manage. She was to help this group of women. It is my aim to try to nearing the end of her working life, and decided that mitigate the detrimental effect that the accelerated timetable she could take the pay-off because she would be able to will have on this small group of women who are hardest manage until her state retirement kicked in. It was a hit. I am part of the larger group of women and I would calculated decision based on her finances. like to hear the ideas that Government Members have. If the compromise that I have put forward is accepted, Rachel Reeves: If my hon. Friend’s constituent had it would mean that no woman born between 6 October known that she would have had to wait an extra two 1953 and 5 April 1955 will have longer than one year to years, would that lady have continued in her job? Would reach state pension age from the present position. On she have made different financial plans if she had had Second Reading, I made it clear that I am not opposed the correct information? to the principle of equalisation, nor am I opposed to the idea of increasing the state pension age to reflect Teresa Pearce: The lady might well have done, because growing life expectancy. We live in an ageing society and she had calculated that the amount she had been offered the pension age needs to rise to ensure that people’s to take voluntary redundancy would last that length of retirements remain financially secure and enjoyable. I time. Clearly, it will not last another two years so she do not want to see a time when people are too old to might well have made a different decision. enjoy their retirement; it is something people have earned. As I said earlier, it is important to note that those However, I cannot support the changes that the women have already accepted changes to their state Government propose. Speeding up the timetable for pension age. Originally—as I was—they were expecting equalising the state pension age in this manner is unfair to retire at the age of 60. Depending on the electorate, I to a large group of women. There is a feeling of injustice. might still do that. They were disappointed when it was People have said to me they feel conned. They thought announced that retirement age would increase from they were contributing to one thing, but now they are 60 to 65 years, but they accepted it and planned accordingly. getting something else. A common theme runs through Now those women find that they are nearing the end of the letters that I have received from constituents. They their time in the labour market. The goalposts have do not disagree about the state pension age rising and been moved yet again, and it is not surprising that they they did not complain when it rose earlier. They recognise are angry and losing faith in the pensions system. That that increasing life expectancy makes that logical. The is important, because there are aspects of the Bill that issue is that moving the goalposts at short notice is we will discuss later on auto-enrolment, which are welcome. creating serious financial harm and causing worries. As It is about getting people to engage in the pensions a result, some are considering working beyond their market—a market in which people have lost faith over state pension age but that should be a choice; it should recent years. not be forced upon them. Retirement, and especially the To now be saying to a group of people who have age at which people decide to retire, should be about perhaps worked for 40 years that, although a promise choice. was made to them and they have kept their side of the Some of these women have made a choice. There is a promise, the goalposts will now be moved, further weakens woman in my constituency who over a year ago decided people’s faith in pensions. That is not what anyone in that she would take a voluntary pay-off from local this room wants to do. The women are facing a large government. People were being encouraged to do that. gap, which must be filled. Their main complaint is the At that time, she looked on the DWP website and at her insufficient notice that they have received. My amendment pension forecast and she made the decision based on hopes to minimise that to a certain extent. The women that. This is a point that I have raised with the Minister are about seven years away from their pension date, before. At that time he said the website could only which is well below the 15 years that the Turner commission reflect the law as it was at the time. Without any other recommends. I should be interested to know why the information or flag on the website that things might Minister disregarded that, and opted for fewer years. 71 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 72

I have heard the hon. Gentleman refer to the rapidity What are the options for the women in these situations? of the increase in the living age. I heard him say that on The accelerated timetable means that women who have Second Reading, as I did when he spoke to the Select taken up caring for relatives or providing child care on Committee. However, the particular group of women their retirement, so that the next generation can join the who were targeted before, and are now targeted again, work force, will not be able to do so. As we heard earlier, feel so angry and unhappy about such matters. I understand many women will not have enough savings to fall back what the Minister said about our arguments about on if they cannot hang on in the labour market. Women caring responsibilities and volunteering, but that will who have been employed in low-paid work or who have just happen later on. I am not referring to a group of taken time out to have children or act as carers will have complaining women. They form the same group whose few savings to cover them between the time when they pension age was moved before. They did not complain expected to retire and the proposed state pension date. about that, but said, “Okay, fair enough. We will be able They may be able to cover a smaller period of time, but to deal with that, although it is a disappointment.” But, two years is too much. as I said before, it is the rapidity and the lack of time in We must remember that it is not only women that will which to plan for such a change that is the problem. be affected; their families and their partners will be too. I wish to cite some examples of how my constituents Extended family members may have to contribute will be affected by the Bill. Susan Harris from Belvedere financially to help women cover the costs of the period was a teacher for 30 years. In 2005, she took early between when they expected to get a pension and when retirement and a reduced pension. She had made they receive it. The change will also affect many men of calculations based on when she thought she would pensionable age, because they cannot claim pension receive her state pension. She thought she was making credit until their wife or partner reaches pension age. an informed decision. Sadly, now she is one of the The change will therefore affect the whole household. unfortunate women facing a two-year wait and a loss in The 12-month limit outlined in the timetable in my pension income. I know plenty examples of women in amendment is the maximum that women should have to the same position, but I do not intend to go into each wait or make alternative plans for. Any longer is unfair one because we would be here for a long time. Women and disproportionate. with manual jobs have also contacted me, one of whom When my hon. Friend the Member for Sunderland is a forklift truck driver. She said that she will not be Central (Julie Elliott) wrote to the Minister asking able to do such work when she is in her later 60s, and about his plans for the state pension age, he replied: asks what she will do. “While overall there are some aspects of the change that will affect women more strongly than men, we consider the effect is not disproportionate”. Stephen Metcalfe (South Basildon and East Thurrock) (Con): The hon. Lady makes some good points, but she I disagree with him. No man will have to wait longer is straying into territory that is about the raising of the than a year, but thousands of women will. If that is not state pension age, not necessarily the transition. I can disproportionate, what is? When it comes to the state understand why people are worried that they cannot pension, women are already at a disadvantage. The work into later life, but that is a very separate issue from median pension savings of a 56-year-old women are the transitional arrangements. We should focus on those almost six times lower than a man of the same age. and talk about them rather than the emotive subject of Women will have decided to have children, work part-time whether people will be able to work later into life. and raise families. That is a valid decision and one for which they should not be penalised. It is the very type of responsible behaviour that we should encourage. Teresa Pearce: I understand the hon. Gentleman’s Retirement is an opportunity for those who have point, but what will happen to such people matters. If contributed all they can to society to rest with peace of they are meant to work to a later age, will they be able to mind, knowing that their contributions will be recognised work? That is relevant. Another woman who came to and that they will be adequately provided for. I worry, me, who has also done the calculations, had an illness in however, about the long-term cost for these women. I the family, which could not have been expected. She had suspect that there will be significant hardship, anxiety some savings and a couple of private pensions. She was and stress about financial matters. I also worry that ill lucky, because a lot of women of that age do not have health will result from working to an older age. private pensions, because they worked at a time when During my Adjournment debate on this topic, my they were not eligible to join the schemes or they were hon. Friend the Member for Makerfield (Yvonne Fovargue) part-time workers who were not eligible. She decided quoted a constituent who felt that she was discriminated that she could manage with her deferred pension being against when she started work 30 years ago, because she paid at 60 and her state pension not being paid until she was barred from joining a personal pension scheme. She was 63, so she left work to look after her elderly feels discriminated against once again because of her relatives. Now she has to wait for an extra two years, date of birth and because her pension will be delayed. that money will not last. Does the Minister think that is fair? I have also raised with the Minister the issue of how 5.30 pm the women affected who are not in work are meant to What will the Minister do to mitigate the circumstances balance their finances. I raised that issue in the Chamber of people like that, who made the right decisions at the and in the Select Committee. The Minister said that it right time and took responsibility? What will happen to was an important question to ask. What will these them? A large number of people have to wait, but only a women live on in this two-year period? Take the women small number are badly affected. Does not that woman we are talking about. They are roughly 57 years old deserve any transitional arrangements? I think she does. currently. What will they be doing when they are 63, 73 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 74 which is before any of them would have had their state from the accelerated timetable by £10 billion, then we pension age anyway? A good proportion of them will heard it might actually be more than that. From those still be working. We do not know how many, because we comments, such a proposition seemed unacceptable. I do not know the working patterns of 63-year-olds in a therefore moved amendment 24 as a compromise. Based world where the state pension age is higher than 63. We on comments by Lord Freud, it will reduce savings from cannot say with certainty. We know that 70% of these the accelerated timetable by less than my hon. Friend’s women are working now. If they are working at 63, the amendment would have—by about £7 billion. If that is consequences of this change for that particular group not acceptable, will the Minister tell us what is acceptable? will be to look at working longer. By accepting the amendments, the Government would The Minister then went on to talk about what such demonstrate that they want to help the women most women would live on if they were not working. If they affected by the change to the state pension age. Mitigation were not working because they were out of a job but is what we are looking for; it is what I asked about in trying to find one, jobseeker’s allowance is there. I know March and it has been asked about in the Chamber. On people say that they do not want to go on the dole, and I Second Reading, it was clear that people were looking understand that, but working-age benefits will take the for a solution. As I said earlier, I am happy to take place of pension benefits. In that two-year period, those interventions from anyone on the Government Benches women will be able to claim jobseeker’s allowance if who has written to the Minister with different suggestions they are unemployed. However, the issue I raised in the of mitigation for those women. Sadly, no one has Chamber with the Minister was that, if they were out of intervened. work and had a small savings pot, perhaps from a redundancy, or had a small pension, it is my understanding Malcolm Wicks: Not yet. Give them time. that they could only claim jobseeker’s allowance for six months. What would they do for the remaining 18 months? Teresa Pearce: By accepting the amendments, the I do not know whether the Minister has any ideas Government would demonstrate that they wanted to about mitigating factors or that cohort of women, but if help those women. I very much hope that the Minister he does they would be very welcome. It does not seem will accept them or, if he cannot, that he will lay out fair that because they have a small widow’s pension or a what he believes would be mitigating circumstances that small amount put away which they have saved towards were costed, affordable and acceptable to the whole their retirement, they would not be supported in any Committee. way even though they were out of work through no fault of their own. In my constituency, for instance, more than 3,000 people are registered as unemployed Sheila Gilmore: I want to speak briefly to address and there are 107 vacancies. For women of that age, some of the issues that I know will be raised by the competing in such a labour market would be hard. Minister, and which were raised in response to the earlier group of amendments. I want to look again at The Government’s aim is to eliminate the deficit by whether it is unfair and unaffordable to make some of 2015. The provision we are discussing will not help the suggested changes. It is very easy to say that one is them achieve that goal, because it does not come into concerned about the future. This is, as we know, not effect until well after. Therefore, the argument that the about deficit reduction. It now appears to be an issue proposal will help eliminate the deficit, as has been about not burdening our daughters, our grand-daughters, agreed, is not valid. However, the Minister says that our great-grand-daughters, and so forth. there will still be debt after that. My understanding is However, in Government, over such a long period, that the pensions paid to pensioners today are paid by there will be many changes that take place, which have the people who work today—that has always been the to be put into the scales when one is looking at what is case—and the pensions paid in future will be paid by fair and proportionate. The amendment would not the people who work at that time. It appears that mean such a great deal of savings forgone as the previous Government policy, with the Work programme and all group of amendments, but I suspect, though I might be the changes to welfare benefits, is to get everyone back pleasantly surprised, that we will have a similar response into work, so surely that would be achievable. to them. At all times, there will be changes and money Another point that I wanted to make about the wider spent in different ways. I understand that just today the Bill is that there is much in it that we agree on. Let us Chancellor has been able to find some £50 million as a look at this particular issue and at what the Government concession to the oil and gas industry. Not in 10, 20 or are trying to achieve. People are living longer, we agree— 35 years’ time, but in this financial year. Now, £50 million perhaps people in every region are not living as long as is not £2 billion, but it is getting on towards £2 billion. I in other regions, but we agree—and male and female would suggest that in the future there will be other pensions should be brought into line, we agree. The things that we will choose, if we want to, to spend Minister was a pensions expert, and spent 10 years money on. We have to ask ourselves, what is important working for women’s pensions and talking about here? What is important in terms of fairness? And are pensions—never stopping talking about pensions—so we really in such a difficult position that this relatively he knows that pension planning needs three things: due small concession could not be made? notice, time to prepare and proportionality of impact. I listened with some interest to what the Minister said But that is where this part of the Bill fails—on those about transitional proposals, which may or may not three issues, the Bill fails. come forward in the near future or the not quite so near During this morning’s debate, the focus of Government future. This is not a new issue. It did not suddenly come Members was very much on the amendment moved by to light on Second Reading in this House. Indeed, the my hon. Friend the Member for Leeds West. They said matter was debated at some considerable length in the that her amendment would reduce projected savings other place. The issue has been at the forefront of a 75 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 76 great deal of campaigning since well before the beginning The amendment would mean that women born between of this year, so there has been some considerable time to 6 June 1953 and 6 March 1955 will have to wait for a come forward with proposals and suggestions that could shorter period before they receive their state pension. have been discussed. I remain disappointed that that There will still be a delay before they receive that opportunity has not been taken. If this proposal is not pension, but it will be of up to 12 months, rather than the one that the Minister considers will tackle these 24 months. For women born between 6 April 1954 and issues, I look forward to hearing at least some indication—in 5 December—those most impacted by the current Bill—the general terms, if not in detail—of what he considers amendment would mean a delay of up to 11 months will address these problems, which have been a matter before reaching state pension age, not 23 months as in of considerable debate for several months, and were not the Bill. Women born between 6 March 1954 and 5 April suddenly brought to the Government’s attention on 1954—the 33,000 so adversely affected by the Bill because Second Reading a couple of weeks back. they have to wait an extra two years—would receive their state pension on 6 March 2019. That would mean Rachel Reeves: I congratulate my hon. Friend the a delay of 12 months rather than the 24 months set out Member for Erith and Thamesmead on tabling this in the Bill. amendment, which addresses a large number of concerns As hon. Members will recognise, the amendment that were raised on Second Reading. It smoothes the goes a long way to support women and give people time position, so that nobody, man or woman, has to endure to prepare. Crucially, it would mean that the delay in a delay of more than 12 months to their state pension. I receiving the state pension is no longer than a year, welcome the principle that underpins this amendment. which would make it much easier financially for that The amendment also demonstrates that there are many group of women to cope. The amendment would provide options open to the Government, of which this is one. some of that help with transition that hon. Members We have debated our preferred amendment, and many sought on Second Reading. of the issues are the same. We have to get this right, now, which is why it is imperative that Members do not Lilian Greenwood (Nottingham South) (Lab): Will shy away from doing the right thing by their constituents my hon. Friend confirm that the amendment is different today. I welcome this contribution to the debate. from that tabled in the Lords, which may have been As we have already discussed today, the state pension rejected on the grounds that it was not consistent with age needs to rise in order to pay for a more generous equality legislation, and provides an excellent opportunity basic state pension linked to earnings, and also as to smooth the transition, and is a new suggestion for the longevity increases. This was a principle established by Government to consider? the Labour Government in the Pensions Acts of 2007 and 200, and it is one that we continue to support. Rachel Reeves: I agree with my hon. Friend and I will As my right hon. Friend the Member for Croydon come on to the points discussed in the House of Lords. North said, we do not challenge the life expectancy As hon. Members will know, the amendment bears projections used by the Government to underpin their some resemblance to those tabled in the other place by policy changes, and we understand that life expectancy Lord Boswell and Baroness Greengross. The advantage has increased since the Turner report. of my hon. Friend’s amendment, however, is that it at no point widens the gap in the state pension age for men 5.45 pm and women, which was the objection of the Minister in The amendment addresses the underlying unfairness the other place, but I will come on to that matter in a at the heart of today’s debate and throughout the moment. passage of the Bill. It accepts the rise in the state We have dealt at length with the effects of the changes pension age as a necessity, as do I, but it recognises that in the Bill, and the fact that women who face a two-year it is unfair to hit certain women disproportionately—a delay in reaching state pension age stand to lose up to point that my hon. Friend the Member for Erith and £10,000, or £15,000 if they receive pension credit. There Thamesmead made forcefully in her speech. The has also been some discussion about passported benefits amendment would ensure that the accelerated timetable such as bus passes, dental and medical prescriptions, proposed by the Government is smoothed out, so that sight tests, Warm Front grants, the winter fuel allowance no man or woman will need to wait for their pension for and cold weather payments. For someone receiving more than an extra 12 months. pension credit, there is also help with housing benefit, The Age UK survey and focus groups included one council tax benefit and crisis loans. Delaying the state woman who stated: pension age by up to 12 months rather than 24 months will make a huge financial difference to those women “Having retired early because of health issues I am living off a who are bearing the brunt of the changes. A compromise combination of capital and a small pension. Pushing back my retirement age by another 10 months will impact hugely on my such as the one we are debating will minimise the savings. The changes are too…fast and do not provide the opportunity burden for the group of 500,000 women who will have to make extra savings. The job market is pretty desolate, so to wait for more than a year, and in particular, alleviate part-time jobs are non-existent.” the impact on the 33,000 women by changing the delay The amendment would mean that that woman will have from 24 months to 12 months so that no woman has to to wait only an extra five months before she receives her wait longer than any of the men affected by these state pension. It would make the transition easier, and changes. mean that she is less likely to fall into debt during the Many of the women who are helped by these changes, intervening period. Such debt is a blight on the start of as my hon. Friend for Erith and Thamesmead mentioned, many pensioners’ retirements, which we all believe should have already left the labour market for reasons discussed be a happy time. by members on both sides of the Committee today, 77 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 78

[Rachel Reeves] behave in broadly similar ways in the years running up to their state pension age. Therefore, the hon. Lady’s whether it is about taking early retirement, a redundancy argument is a bit circuitous. payment, or taking time to care for families. According to Age UK, 68% of women aged 55 to 59 were economically Rachel Reeves: I do not think it is, because these active in the first quarter of 2010, but the figure for 60 women thought that their state pension age was at 63 or to 64-year-old women was only 35%. Once women leave 64 and have made decisions based on that state pension the labour market it may be very difficult for them to age. It may well be the case that if you adjust the state return, as was highlighted earlier in the case of one of pension age, people’s behaviours will change. We know the constituents in Erith and Thamesmead. from the constituents who have written to us and the evidence from Age UK that if you give people just five Steve Webb: The hon. Lady is trying to draw some years’ notice of these changes—because of course they sort of inference about the likelihood of women working kick in 2016—or just seven years notice for the 33,000 into their early 60s on the basis of current figures, when most affected women, many of these people have already the state pension age is just above 60. Is that not based their decisions on that information. It is not meaningless? necessarily that women and men make different choices because of their state pension age, but that people have Rachel Reeves: From the impact assessment that the made decisions based on the information available. Department published, there is also a big fall off between They have done what, I guess, we hope everybody does, 50 and 55, and 55 and 59. which is take on board all the information available about our occupational pensions, about the state pensions Steve Webb: Produce the figures. and when we will receive those. We do our calculations based on those and what we can afford. Many of the women, including the women whom my hon. Friend Rachel Reeves: It is in the impact assessment that I met, did exactly that. They checked the Department for took you through earlier. Work and Pensions website and made their decisions based on that and then they had the goalposts moved. Steve Webb: I am not arguing with you. Harriett Baldwin: Does the hon. Lady accept that Rachel Reeves: Okay. If you want me to produce the there may be just as many women who see that their figures— state pension age is changing and therefore change their expectations as to when they might retire, and change The Chair: Order. I remind hon. Members to speak their behaviour? through the Chair. Rachel Reeves: Yes. We have already seen that, because of the changes that the Government made in 1995 to Rachel Reeves: I am sorry. From a sedentary position, the state pension age, many women are working longer. the Minister said he wanted me to produce the figures. Earlier, I gave the example of Barbara Bates, who said The figures are available in the impact assessment published that since 1995 she had known what her state pension by the Government. The point is that, for all the reasons age was going to be and she had accepted that that was discussed earlier, which I do not think anyone will fair and that her pension age would increase to 64. dispute, women drop out of the labour market earlier What she finds very difficult—given her circumstances, for a variety of reasons, particularly caring responsibilities. the nature of job she does and her level of savings—is We know from the interventions and the speech earlier to carry on for another two years with such little notice. by the hon. Member for Arfon that many of these This is the heart of the issue. I have had so many letters women take up caring responsibilities. The point that from constituents and people across the country who my hon. Friend the Member for Erith and Thamesmead say, “I recognise that my state pension age needs to mentioned earlier was that a lot of these women are increase. I accept that and I accept that people need to making informed decisions. They are not just taking work longer, but I had done my calculations.” As the early retirement or taking on caring responsibilities lady mentioned by my hon. Friend said, they have done hoping that somehow they will make ends meet. They their calculations based on the information available. have done the financial calculations, based on the That is why the Pensions Policy Institute says that information that was available to them. Many of these people need 10 years’ notice. It actually says that women women feel that, very late in the day, the goalposts are need more notice because women adjust their plans, for being moved without them having the time to prepare. example, going part-time at an earlier age compared At age 56, 27.3% of women are economically inactive with their state pension age than men. Turner said compared with 20% of men—to make the point about people needed 15 years’ notice and Age UK says people the difference between labour market participation rates need 10 years’ notice. These changes obviously give only for men and women, given their different caring five years’ notice. responsibilities. Harriett Baldwin: The hon. Lady raises the question Harriett Baldwin: The hon. Lady is making the case of part-time working. Women working part-time in the that retirement age drives behaviour; that when you are 25 to 54 age group, according to the ONS statistics, are approaching retirement, you are more likely to take the broadly similar to women working part-time in the year early retirement package. If she looks at the table in the group 55 to 59. Yes, more women work part-time than Library research paper, based on the ONS labour force men, but there does not seem to be a meaningful survey statistics, she will see that men and women statistical difference in terms of their age. 79 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 80

Rachel Reeves: One thing the hon. Lady will not see Rachel Reeves: The Minister shakes his head, but that from those numbers is what hours they do part-time. A is the reality. These women have been making decisions woman might have been working four days a week and based on their occupational pensions, the state pension have gone down to two days a week to take on a caring and the age at which they will receive those pensions. role, so those numbers need to be combined with average Women such as the one who was mentioned earlier, hours of work. What the Pensions Policy Institute, women who spoke to Age UK and women who have which is much respected in its area of expertise, say is written to me have all made decisions about caring. For that women change their plans further away from their example, the woman that I mentioned made the decision retirement than men, and that largely reflects their to care for her grandchildren. However, if she had caring responsibilities. known that she would have to wait an extra two years The hon. Member for Arfon mentioned earlier the before receiving her state pension, she might not have higher proportion of women who take up caring made that decision. That is exactly the point made by responsibilities. I am not totally disputing what the hon. my hon. Friend the Member for Erith and Thamesmead, Lady says, but I am saying that there is still a pertinent who spoke about a woman who had accepted redundancy point here, for two reasons. First, women were making payment on the basis that she would receive her state plans based on a retirement age that they thought they pension at a particular age, but who now finds that her were going to have. Secondly, the Pensions Policy Institute redundancy money has to last an extra two years. and others say that women adjust their plans earlier than men. Steve Webb: It is slightly invidious to discuss constituents To elaborate on the issue of carers, which my hon. not knowing the full details, but a woman in that Friend the Member for Erith and Thamesmead also situation—I presume that she is 57 or thereabouts—has mentioned, Age UK’s statistics reveal that nearly three taken voluntary redundancy. Is it Labour policy that out of 10 of the women affected have caring responsibilities. able-bodied 57-year-old women should not be expected This builds on the point that the hon. Member for to do any more paid work and that we should shape our Grantham and Stamford mentioned earlier. The Age pension policy around that assumption? UK report said about the women who were part of their focus group: Rachel Reeves: As I said earlier, the circumstances of these 500,000 women are all different, but they all made “Some women had already left work or had reduced their hours due to caring responsibilities. One of the reasons given for decisions based on what they thought was a contract being concerned about further rises in their state pension age was with the Government—that they had paid into the that some wanted or needed to do more caring in a situation system for a certain number of years and would get where the cared-for person’s health was deteriorating or where their state pension at a certain age. they would have liked to have offered to care for their grandchildren”. As others have said, particularly my right hon. Friend That is the sort of scenario that we are talking about. the Member for Croydon North, there were no riots or There are two specific stories from Age UK, published huge objections when the state pension age was increased in its report about three weeks ago. The first says: from 60 to 65, because that group of women recognised “I am desperate to get the government to listen. I work part that it was fair, and they were given 15 years’ notice, as time with a net salary of just over £7,000 per annum to enable me Turner had recommended. For these changes, however, to look after my grandchildren. My daughter needs to work to they are not being given adequate notice. In 1995, few pay her mortgage and child care is too expensive. My parents are of those women had envisaged their retirement plans in their 80s and in need of more care as age and infirmity catch up but now, with only six or seven years to go, many of with them. Looking after my family is my greatest privilege and them are well on their way to planning for retirement. pleasure but it is demanding and knowing that I will now have to work for almost two more years has left me completely dismayed.” They have done the right thing. They have carefully planned their finances and taken on caring responsibilities 6pm that they could afford, but they now find that those caring responsibilities are unaffordable because they Steve Webb: One of the consequences of this group will lose up to £15,000 of pension income. That is the of amendments is that the state pension age will still rise key point. to 66. Will there not be absolutely identical stories to The second woman cited by Age UK said: the ones that the hon. Lady cites of women who, for all “My proposed State Pension age will now be 66. I had accepted sorts of reasons, are being forced to become carers and that the age had been pushed back from 60 but will now have to who have a long wait to reach pension age—to 66—that work extra years. I have 2 children, 1 still at university, and will result from amendments that she supports? Why is 2 grandchildren under school age who I look after 2 days a week that any different? to help my daughter with childcare costs. I had worked all my life with just breaks for maternity, until 2009 when I took early Rachel Reeves: As I said earlier, the reason that there retirement to become full-time carer for a parent with Alzheimer’s. Since their death I have returned to work 3 afternoons a week to is a difference is twofold. The first is about giving supplement the household income. I feel that I and hundreds of people adequate notice. The other is the time difference. other women with similar stories are being penalised for trying to A 12-month delay in the state pension will cost those on do the best for our families without asking for State help.” the basic rate £5,000; a delay of two years will cost That may be only one example, but it is similar to many £10,000. Those on pension credit who have to wait one others up and down the country. Again, that woman year will lose £7,500, and for two years it will be did the right thing. She has cared for her family. She has £15,000. Those women will have done the financial worked all her life. She has made what she thought were calculations based on the state pension age that they robust financial plans, based on information that she were told would apply to them. was given, but her plans have been blown out of the water by the rapid changes that the Government are Steve Webb indicated dissent. pushing through. 81 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 82

[Rachel Reeves] I urge the Minister to study the timetable and confirm that, measured against the 1995 timetable, the timetable Under the amendment, the state pension age would laid down by the amendment would ensure that at no still go up, but the impact on those 500,000 women point would the gap in the pension age between men would be greatly reduced. Instead of having to wait for and women get wider. If the equal treatment directive more than a year, they would have to wait for less than a was the objection—and it was—that the Government year. The 33,000 who would have had to wait exactly raised to a similar amendment in the House of Lords, two years would have to wait just one year. The 300,000 we need to revisit their objections to the amendment who would have had to wait 18 months would wait for that we are discussing, as the debate in the other place 11 months or less. There is a difference. It is a balance was about the legal obstacles to the Bill rather than between the finances and supporting the women on anything else. What, if any, is the reason for the whom the changes would have the greatest impact, Government’s opposition, if the Government oppose which is why I support the amendment. the amendment? I want to come to the point mentioned by my hon. The amendment represents a middle road between Friend the Member for Nottingham South. As Members the Government’s proposals and the amendments debated who have followed the Bill’s progress will know, a similar earlier today. The Government’s timetable, which will amendment to the one tabled by my hon. Friend the disproportionately affect women and leave people Member for Erith and Thamesmead was debated in the approaching retirement with little time to plan for the other place. The Minister for Welfare Reform said in change, is expected to save £30 billion by 2026. The the other place that any alterations to the Pensions Bill amendment that we discussed earlier would save £20 billion must be measured against the 1995 timetable—that is over a similar timetable. However, it is clear that this is a correct—and that they must not contravene the middle way. As my hon. Friend the Member for Erith requirements of the equal treatment directive. In response and Thamesmead said, the estimates for what this might to an amendment tabled by Baroness Greengross, the save are roughly somewhere in between. The estimate Minister for Welfare Reform said: for the amendment tabled by Lord Boswell was £7 billion. “Directive 79/7 deals with the progressive implementation of It will be interesting to know whether the Minister and the principle of equal treatment for men and women in matters of his Department have costed the impact of this amendment social security. It provides that there shall be no discrimination on and whether it fails for legal reasons or for other reasons. grounds of sex in relation to the benefits to which it applies. When The Minister for Welfare Reform said in the other the Pensions Act 1995 was passed, the UK legislated to end gender discrimination in the state pension age by April 2020.” place: “Bringing forward the increase to 66 is about helping to That refers to the proposals that are already in place. He maintain fiscal sustainability beyond 2015…my noble friend’s continued: compromise proposal—the third-way proposal—would still cost “Any change we now wish to make needs to be considered in more than £7 billion.”—[Official Report, House of Lords, 1 March relation to the position left by the 1995 Act. In particular, we need 2011; Vol. 725, c. GC123.] to consider whether any alteration would hinder progress towards Although we cannot be sure in the absence of an impact equal treatment by either increasing the present gender gap in assessment, we think that this proposal, given its similarity pension age or prolonging the period of unequal pension ages.”— [Official Report, House of Lords, 30 March 2011; Vol. 726, c. 1279.] to the proposal debated in the other place, will fall between the savings of the Government’s plans and the The issue was brought up on Second Reading, referring amendment that we discussed earlier today. to the coalition agreement and the amendments tabled by Baroness Greengross and Lord Boswell. The Secretary As well as transitional arrangements, the amendment of State said, regarding the legality: shows that the Government have a number of options on the table, and this is just one of them. Would not this “There is a slight problem with that element of the coalition measure amount to a suitable alternative that deals with agreement. It was done in that way at the time, and that is fair enough, but we have since looked at it carefully and taken legal the fundamental unfairness at the heart of the Government’s advice. The agreement talks about men’s pension age being accelerated timetable—an unfairness that was acknowledged on to 66, which would breach our legal commitment to equalisation Second Reading? As my hon. Friend asked, what are and then not to separating the ages again. There are reasons for the parameters of an acceptable set of transitional needing to revisit that, and we have done so and made changes.”— arrangements? If this measure does not meet them, [Official Report, 20 June 2011; Vol. 530, c. 48.] what would the parameters look like? The Secretary of State refused, when I asked, to publish Would not this set of amendments deal with the the legal advice, but the Pensions Minister defined the concerns that we have heard from thousands of women, issue by saying that groups such as Saga and Age UK, unions and newspapers “the legal issue is that we deviate from equalisation if at any point as diverse as the Daily Mail and The Guardian? Would it we widen the gap. The coalition reference to moving men in 2016 not cost the public purse less than any alternative and women in 2020 would widen that gap. The issue is directive arrangements? Will the Minister pay close attention to 79/7, which ‘deals with the progressive implementation of the this amendment, to the benefits that it could bring to principle of equal treatment for men and women in matters of women in the affected group and to its status under the social security…Any change we now wish to make needs to be equal treatment directive? considered in relation to the position left by the 1995 Act.’—[Official Report, House of Lords, 30 March 2011; Vol. 726, c. 1279.]”—[Official Report, 20 June 2011; Vol. 530, c. 126.] Steve Webb: I congratulate the hon. Member for The amendment would deal with the problems identified Erith and Thamesmead on doing what this Committee in amendments in the Lords, so those legal objections is here to do, which is to probe the legislation to come would not stand. The timetable proposed in this amendment up with creative alternatives and to present them in a can be measured against the 1995 timetable, and it is thoughtful and well-informed way. I appreciate the fact crafted in such a way that the gap would not be widened. that she did all those things. It has given us a good 83 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 84 opportunity to revisit one or two of the arguments Steve Webb: Yes. I was trying to keep my powder dry that we had earlier on today and to take the debate for the right hon. Gentleman’s next group of amendments. forward. She did the Committee a valuable service in I wish to put him on notice that we will get to them that regard. today, if possible. He raises an important point, but my In the last 24 hours, I saw a performance of the point to the hon. Member for Erith and Thamesmead is musical “Fame”, the theme song of which is “I’m not so much about whether people will make it to gonna live forever”—a song that is dreaded by all pension age—the vast majority of people who reach 57 Pensions Ministers. Unfortunately, the consequence of will—but about whether they will be too old to enjoy this set of amendments for a number of women would their retirement. I take the right hon. Gentleman’s point be, “I’m gonna work forever.” The amendments are about averages, but we have to deal with the most flawed and would provide for large numbers of women common outcomes as well as the extreme ones, and in a particular age group no pension age at all. Amendment what he suggests is not a feature of our proposals. 24 is defective in that it provides no pension age for The hon. Member for Erith and Thamesmead quite women who were born between 7 May 1953 and properly mentioned the information that we put on our 5 December 1953 except for those born on the 6th of websites. I saw a figure the other day of something like the month. 500,000, or perhaps 1 million, hits on one of our state pension age calculator websites—I think most of them I appreciate that we overdo our impact assessments a were by me. I can assure the Committee that on the bit with ethnicity and gender and all the rest of it, but pension age websites we are clear about the current we have yet to conduct an impact assessment on the legal position, which is the only thing we can definitively people who were born on the 6th of the month. This state because the Committee is, I think, urging us to amendment would have a particular effect on them, change what is in the Bill. I ask the hon. Lady to which was clearly not the hon. Lady’s intention. If she imagine a situation in which we put the current legal were to pursue her amendment to a Division, I would position and a calculator based on what is in the Bill on encourage my hon. Friends to reject it on that basis, if the website and people print that off and go away no other. without looking at it again, but we then amend the Bill The amendment has another slightly odd consequence, and come up with another timetable. I hope she appreciates which is that it would reduce men’s state pension age. that information on websites has to be based on the The proposed timetable would reduce the state pension current state of the law. The website clearly flags up, on age for men born between December 1953 and February both the entry page and the forecast page that estimates 1954 from 65 to between 64 and six months and 64 and when someone can get a pension, the sorts of things 10 months. I feel duty-bound to point that out, but I say that are being considered. I accept that the site has been it in no criticism of the hon. Lady because I know how improved to make things clearer, and I agree that we difficult it is to get such things right. This perhaps need clear information for people to act upon. provides further evidence for the point that I made in a Notice periods have been mentioned—the issue often previous debate, which is that doing these things in a comes up. The hon. Member for Leeds West told us hurry is not a terribly good idea. We as a Government what Age UK, Saga and the NAPF have said, but not should take our time to get these things right. what the women themselves say. She quoted a lot of I will not dwell on the technical flaws in the amendment research by Age UK but missed out a table. Women because that would be unfair and unhelpful to the aged 50 to 57 were asked how much notice they thought Committee. None the less, the hon. Lady raises some they needed of changes in the state pension age, and important issues, which I want to try to address without their replies were rather surprising. Some 31% of the duplicating the comments that I made earlier. She said sample thought that they needed a notice period of five that she does not want to see a time when people are too years or less and 25% thought they needed six to 10 old to enjoy their retirement, and I absolutely agree years, so more women said that getting on for five years with her. rather than six to 10 was about right. In addition, 9% A little while ago we had people standing outside the said they needed 20 years, 3% said 25 years, and 4% said Department wearing T-shirts that said, “I don’t want to they would like to have known when they left school. It work till I drop.” I asked my private office where the is important to say that it is tempting for us to speak for departmental T-shirt saying the same thing was, because others, but in this case when people were spoken to I do not want to work till I drop either. Raising the state directly they said something rather surprising. pension age to 66 will leave most people with more than two decades in retirement, and is a recognition that, Rachel Reeves: Will the Minister confirm that in the compared with the previous generation and the one work by Age UK the mode was 10 years and the average before that, our life expectancy, including healthy life was just under that, at 9.6 years? expectancy, is improving dramatically. There is nothing in the Bill that means that people will be too old to Steve Webb: The hon. Lady is right. The table I have enjoy their retirement. here shows the mode as 10 years, but various bands have been aggregated so I am not absolutely sure about the calculation. The point remains, however, that more 6.15 pm women said five years or less than said six to 10. Malcolm Wicks: A lot of people drop—to use a Rachel Reeves: And the mean? horrible term—before they get to state pension age, so has the Department calculated how many extra people Steve Webb: The mean? My mental arithmetic on a will die before they get to the increased state pension banded table fails me, I am afraid, but this gives us the age that the Minister advocates? chance to pause to reflect. When we presume that we 85 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 86

[Steve Webb] might have assumed that she was talking about a majority rather than a minority. That is what “many” tends to know what people think it is sometimes worth asking suggest to most people. them and considering what they have to say. Notice The hon. Lady asked about the compliance of this periods are an important issue, but opinions on them amendment with directive 79/7. I am happy to confirm clearly vary. that because the amendment would not cause the pension The hon. Lady was absolutely right to make the point age between men and women to diverge—whereas the that today’s pensions are paid for by today’s workers amendment in another place did have that property—there and tomorrow’s will be paid for by tomorrow’s workers. is no objection on that basis. She seemed to suggest that if we nudge up the pension We welcome the fact that Labour Back Benchers are age a bit, and have the Work programme and so on, that coming up with constructive ideas about transition, and would fix it. To give a perspective over the long run, in we welcome the chance to discuss the amendment. 2008 there were four people of working age—16 to However, I hope that the hon. Member for Erith and 64—to every one over 65. In 2058 it will be 2¼. That is Thamesmead will accept that it is fatally flawed in a the kind of dramatic shift that we are beginning to try number of respects that I am sure she did not intend, to grasp. The marginal changes we are talking about and so will seek to withdraw the amendment. If she here do not begin to reverse those massive trends, which does not, I encourage my hon. Friends not to support it. is why we need to act. With regard to the hon. Member for Erith and Lilian Greenwood: Will the Minister give way? Thamesmead’s amendment as a whole, we estimate it would cost around £5 billion. In a sense, the hon. Member for Leeds West is right to say that it is a Steve Webb: I have finished. halfway house between her amendments with the figure of £10—or £12.5—billion, and zero, the effect of not The Chair: I call Teresa Pearce, and remind her that changing the Bill. It again represents a constructive she should indicate whether she wishes to press her contribution to the debate and would cap increases at amendment to the vote. 12 months. With regard to the overall experience of these women, the hon. Member for Leeds West said Teresa Pearce: I thank the Minister for his comments. that many—her favourite phrase of the day—have left I have been trying to probe to discover his thinking. He the labour market, when 70% are still in work, and that clearly has plenty of ideas and I would like to hear many take up caring responsibilities, when 3% are on them; perhaps at some point during the debate we will. I carer’s allowance. also understand his point that some people’s financial circumstances would be the same whatever the retirement Lilian Greenwood: The Minister said earlier that only age. I asked a specific question about jobseeker’s allowance 3% were in receipt of carer’s allowance. Does he not and those women who would not be eligible for more accept that many of the women undertaking caring than six months. responsibilities do not qualify for carer’s allowance? He should acknowledge that. Steve Webb: I apologise for not responding to that point. The way that it works is that contributory jobseeker’s Steve Webb: Indeed. The threshold for carer’s allowance allowance, as the hon. Lady knows, is time-limited to is in the order of 35 hours a week. These will be people six months. After that period, the person might still be with full-time essentially caring responsibilities. The eligible for income-based JSA, subject to the two points hon. Lady is right that there will be many women in that that she made. If they have significant occupational group who are combining paid work with caring pension income to live off instead of JSA, they will live responsibilities. That is the way that they are making off that. If they have savings, their savings will decrease, ends meet now. A change in pension age does not but as soon as they go below the savings threshold, they change that; that is part of their lives. It is an important will immediately be entitled again. They will not have to role that they fulfil; I am not belittling that at all. My spend all their savings, merely to go below the threshold. point is that they are combining those demanding caring Then they will become entitled again. roles with paid work now, and that will not change because the state pension age changes. Teresa Pearce: My concern about the pension income Rachel Reeves: Will the hon. Gentleman accept that for that group of women is that, in my understanding, if many of these women are drawing on their savings they have any occupational pension they are not eligible during the time they have gone on to reduced hours to for jobseeker’s allowance. Is the Minister saying that it make ends meet? They have done that on the basis of must be above a certain level? when their state pension age will kick in. When the Minister says that I use words such as “many”, he will Steve Webb: The point that I was making is that what remember that I said earlier that of women aged between is time-limited for six months is contributory JSA, 55 and 59, 31.5% are inactive; 43.5% are sick, injured or which has a threshold for an occupational pension. disabled; and 24.2% are looking after family and home. After the six months, when contributory JSA stops—I I do not accept that I am using huge generalisations; I think that is what the hon. Lady is mainly worried am relying on facts and figures. about—there is income-based JSA, in which case the occupational pension is simply one item of income Steve Webb: Well, I think the hon. Lady said many counted against the threshold for entitlement. Having had left the labour market, when two-thirds were still an occupational pension per se does not prevent a working. A listener without the figures in front of them person from getting income-based JSA. 87 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 88

Teresa Pearce: I thank the Minister for that clarification. Steve Webb: Cheap at twice the price. My local jobcentre has given different advice, which is interesting. I will go back to it on that point. Teresa Pearce: It is even more acceptable—even more As I said, my amendment is a halfway house, but any of a halfway house. So, once again, I ask the Minister to amendment that we pass will have a cost. I asked what clarify whether his objection to my amendment is in cost would be acceptable. Is any cost acceptable, or will principle or because it is defective. whatever amendment we propose be unacceptable because this is about money and not fairness? That is my concern. 6.30 pm As has been said, the retirement age for the women that Rachel Reeves: I think this point is particularly pertinent, we are discussing has already been adjusted, with hardly because further down the amendment paper we will be a murmur at the time due to the length of time that they debating new clause 3, which looks at pension credit for had to plan. Because the age is now quite soon—they the poorest women and whether they can keep pension can see it and touch it—that cohort of women feel that credit at the old timetable for women. It is an instructive it is an injustice against them in particular. In view of amendment, which helps with the transition process. It what has been said, I will not press the amendment to a does not change the timetable for the state pension age, vote, but— but it does look at how we can help the poorest women. Going back to the point made earlier by the hon. Lilian Greenwood: Does my hon. Friend share my Member for Grantham and Stamford, it is perhaps a concern? I am not clear whether the Minister is rejecting more official way of helping the people who most need the amendment on technical grounds or in principle. It the support. When we come on to that, we will need would be helpful if he clarified that, so that we can some indication of what sort of costings are appropriate better discuss transitional arrangements and how to for the transitional arrangements. deal with the problems and concerns raised by Members across the House. As my hon. Friend the Member for Erith and Thamesmead said, any transition support will have a Teresa Pearce: I agree. The Minister made it clear at cost attached. We expect the Government to introduce the beginning that there was a flaw in my amendment proposals, because only the Government can know and that he would be asking Government Members to what transition proposals and what sort of cost is vote against it for that reason. Is that the only reason? acceptable to them. Opposition Members are second- Does he disagree with the whole amendment, or just the guessing, so clarification from the Minister would be fact that it is defective? I would be interested to hear his useful as we look at transition amendments and try to reply. In view of the fact that it is defective, we will not find something that we can all support. press it to a vote, but I would like to know whether it would have been an acceptable halfway house for the Teresa Pearce: I thank my hon. Friend for her Minister and those on the Government Benches. intervention. I want to draw the Minister’s attention to a reply that he gave to the Work and Pensions Committee Cathy Jamieson: Does my hon. Friend share my when asked about the extra £10 billion to be found. He concerns that in the absence of any response from the said: Minister, we will have to assume that he does not “I know in the world of pensions that it is easy to say, ‘It is only support the principle of the amendment, and that we £10 billion,’ but that really is very serious money, and so it really are therefore no further forward in agreeing transitional was a trade-off or a judgement call between reflecting rising life arrangements? expectancies and the Exchequer position.” As now it is only £5 billion, does he think that that is Teresa Pearce: That is exactly my point. As I said actually a different judgment call? earlier, the Minister is very knowledgeable on pensions. I beg to ask leave to withdraw the amendment. I am not as knowledgeable, which is why I made an Amendment, by leave, withdrawn. error in the amendment. He said that he would ask his hon. Friends to vote against it for that reason. I ask again: is that the only reason why, or does he reject the Malcolm Wicks: I beg to move amendment 23, in proposal altogether? clause 1, page 2, line 19, at end add— ‘(8) The Secretary of State shall review the options for linking Rachel Reeves: I do not know whether my hon. pensionable age to the number of years in employment so as to Friend knew before she came to this debate whether the ensure that pensionable age is reached no later than 49 years after amendment that she tabled would save £25 billion, entry into employment. The Secretary of State shall report the findings of his review to both Houses of Parliament within six compared with £13 billion. If it had been a difference of months of the passing of this Act.’. £1 billion or £2 billion, does she think that the Government would have supported it? She is proposing new ideas It is good news that the Pensions Minister has now that the Government say they are willing to consider. I seen “Fame”, not least because the equivalent of the wonder whether the Minister has given her the chance Fame Academy, the BRIT school, is based in my that he has not given me to discuss transitional constituency. I am responsible for very many stars, arrangements with him, given that she has been so including Adele. I suspect that in a few weeks’ time, or helpful in proposing them. even now, many of us must be feeling that we have been in this Committee for ever. It has been a long day and a Teresa Pearce: I thank my hon. Friend for allowing very tough-minded Government Whip is keeping us my intervention and for what she just said. My at it. understanding was that the reduction in saving would My amendment basically asks the Secretary of State, be about £7 billion, so the fact that it is £5 billion is even although it could be his talented Pensions Minister—I more of a bargain. am not fussy—to review the option for linking pension 89 Public Bill CommitteeHOUSE OF COMMONS Pensions Bill [Lords] 90

[Malcolm Wicks] of society, people’s aspirations and how they lived. I was citing several examples, including the raising of the age to the number of years in employment, to ensure state pension age and the move towards gender equality. that pensionable age is reached no later than 49 years My final example is the legislation with which I was after entry into employment. I further ask the Secretary involved, when we tried to give pensioners more choice of State to report the findings of his review to both and flexibility in how they took their pension. At state Houses within six months of the passing of the Act. pension age, people could either take their state pension—as The Minister may feel that this sounds a little like a most choose to do—or defer it so that they received a probing amendment. When he and his able civil servants higher pension when they claimed it or, under the have gone to work on this, they may find six or seven measures we introduced, people could take that deferred things—probably more—that are problematic. I understand element as a cash sum. I always thought that that was that. However, I want the Minister to approach this in an important advance for those people who, unlike the spirit that I intend. I am asking him whether he others in white-collar work who have a big cash sum thinks social class is an issue here. If so, could we work when they retire, would never see £5,000 or £10,000. together in Committee or elsewhere to see whether there It is in the spirit of trying to understand where we are might be a solution roughly along the lines that I am with such issues because of demography and so on that suggesting? I want to re-present my proposal. However, before I do As I said on Second Reading, it seems that pension so, I wish to quote a constituent who wrote to me. I will policy at its best—I am talking over 100 years now—is call her Jill Brown, although that is not her real name. policy that has some understanding of the way in which What she has written illustrates the sort of citizen who lives, society and economies are changing, which seeks is having quite a tough life and of whom we need to to adjust pension arrangements to them. In saying that take account. She writes: I am not suggesting some great golden age, because “I am almost 57 years old, a single mum and earn a feeble there have been many problems with our state pension £7,000 a year, propped up by working tax credit as I work system, not least in relation to women and carers until 24 hours cleaning courtesy of three part-time jobs. I get up at recently. But we introduced old-age pensions back in 6 am, work two jobs before noon and then walk another mile to 1909 at the time of Lloyd George because working men, my third job from 4 pm to 6.15 pm. I am exhausted when I finish for the day, and I have little quality of life. I know other women in particular, were beginning to outlive their working who are in a similar situation to myself, ie working both ends of lives. The state had to do something—hence the birth of the day to make up their hours to a poverty wage because one state pensions. Liberals were as generous as they are full-time job is hard to come by these days. Also, many manual being today. The pension was 5 shillings and people had workers did not receive higher education that qualified them for to be at least 70 years old and there were all sorts of any other type of work. We always believed that we could hang up other catches. At least it started the thing off. our heavy equipment when we reached 60 years old.” In between the wars there was the birth of national She also wrote about the ill health from which she insurance and the Beveridge report by another great suffers, and says: Liberal, William Beveridge, and then there was the “My joints simply ache 24/7, but the Con-Lib Government National Insurance Act under the Clem Attlee Government. says I have nine more working years to make matters worse”. They recognised how society was changing and the That letter reminds us of the fact that many of our need for national insurance and in particular for pensions. constituents, both men and women, work tough lives Later on, there was certainly the beginning of an and—this is my argument—have probably been working understanding that all this looked more like a man’s tough lives since they left school at 15 or 16. I cited world than a woman’s world, and what about mothers earlier some data on mortality rates, and I focused on who had to leave the employment market to care for women. Let me now focus on men, and consider the children and later the carers and so on? We began to group of workers in what are called—according to the adjust it, although not always adequately. We do not ONS—the routine occupations. For men, we are talking need to make party points on this, but we began to mainly about labourers, van drivers and packers, while adjust all of that. Yes, in our discussion today we for women it will probably be some of those occupations recognise that there was a gender inequality in favour of plus cleaning—people rather like my constituent whom women and we needed to standardise the pension age. I call Jill Brown. Yes, indeed, as we are discussing now, we need to Let us consider the proportion of those people who increase the state pension age for both men and women. never see a pension because they die. I have sent my paper round, so the Minister will have seen the sources 6.36 pm for my information. As ever, thanks to the Library. Of Sitting suspended for Divisions in the House. men in the higher managerial and professional class I, 7% die before the age of 65 while it is 10% for lower 7.2 pm managerial and professional class people. However, when we examine the so-called routine occupations, it is estimated On resuming— that 19% of those men die before the age of 65. Almost one fifth never see their state pension. Colleagues will Malcolm Wicks: I seem to recall making some fascinating reflect on that and accept that it is a significant proportion. point, and then the bells starting ringing in my head. I For any Government—Labour, Conservative or Liberal— was rather relieved to find out during the break that talking about raising state pension age, which I repeat other colleagues had heard the bells as well. That is we must do, provokes interesting issues, which is why I always a good sign. appeal to the Minister to reflect on the matter, as I am I was presenting an analysis and stating that, while sure he has done. Even if he can find fault with my pension history has hardly been perfect, at crucial points proposed piece of social engineering, which I can myself, pension policy has tried to reflect the changing nature I hope that he will respond to me. 91 Public Bill Committee5 JULY 2011 Pensions Bill [Lords] 92

In addition, there is a double whammy, because although school at 16 and, depending on the cohort, some of most folk in poorer occupations live to claim their them will have left at 15—they will be working for most pension—of course they do—there is a differential. of their life. From the information that the Minister has presented, I say at once that I can see some of the difficulties in life expectancy may have increased. However, for argument’s the complexity of my policy proposals. The Minister sake, from the table, professional men at age 65 have a will be primed to say that some people with holiday jobs life expectancy of 18.3 years, but people in the social will start paying their national insurance—let us tick class V unskilled category have an expectancy of only that one off—when they are 16 or 17, or 18 if they are 14 years. There is a class differential, from top to doing their holiday job, so we could simply link their bottom, in how many pension years both men and pensionable age to when they start paying national women receive. Some people will die never having got insurance. I understand that—civil servants are brilliant; their pension, which is based largely on social class; they will have picked that up, but the Minister will have most people get it, but those in heavy occupations, from picked it up sooner. the tougher end of society, have fewer pension years Are we relaxed? Are we content with pension than those from professional classes. arrangements? On the one hand, the privileged people, of whom there are growing numbers, start work at 21 or 22 and get their pensions at 65, 66 or whatever the age Harriett Baldwin: I thank the right hon. Gentleman will be; but those from the least privileged backgrounds, for giving way. He makes an extremely valid point about who are working harder in terms of physical labour what has been a feature of the state pension since it was than most of us do, get their pension after having introduced in 1926. Did he consider the proposal in his worked five or six years more than those from the most amendment when he was Pensions Minister? privileged backgrounds. Essentially, that is my thesis. Such people have a higher chance of death before reaching state pension age, and they receive their state Malcolm Wicks: No, I did not. I am not going to pension for four fewer years than the most privileged, rehearse my record, good or bad. There are things of yet they have worked hard all their life. which I am proud, such as the Pension Protection Fund, which we will touch on later. One of the beauties I propose to the Committee, and particularly to the of being on the Back Benches and having more time to Minister, that it is surely possible to explore drawing on reflect is that one can do a bit of research and think national insurance records. I think the Minister indicated again. If that is a criticism of my stance as Pensions once that those records are not complete, but we all get Minister it is a perfectly justifiable one. My concern pension forecasts, so can we believe them? I had better now is for none of us to level the same criticism at the not say that the Minister is shaking his head, because Hansard current Pensions Minister and I am trying to be helpful that would be unfair, so for , the Minister is not to him. shaking his head, but he looks terribly interested at this point. What are the policy implications of the measure? Surely, from a combination of income tax, employment When I reflected on that I quickly concluded that they and national insurance records, it would be possible to were not immediate or clear. It would be easy to say, determine the group that I am talking about. Such “Well, this is mainly an issue about health and social people might have started work at 15 or 16, and have class, and we should tackle it through nutrition and so reached pensionable age after 49 years—or whatever on.” Of course we must do that, but I want to press the the arithmetic is. They might have been in work, become point that, nevertheless, there might be some implications mums or carers, or experienced periods of unemployment. for pensions. Essentially, however, they will have been out of education I started off by saying that from time to time we since the age of 15 or 16. Should we not be able to reflect on how our pension arrangements relate and devise some sort of trigger so that they can draw their react to how people live their lives. One could say that it state pension—I am still looking to the future—at, say, has probably always been the case, but it is glaring that 65? They have worked damned hard; they are physically many people now, including us in Committee, did not worn out; their joints are creaking; their backs are get our first proper jobs until we were 21, 22 or 23. I aching and they have served this country well. To simply said on Second Reading that although my own three treat them as we treat the postgraduate class seems an children had holiday jobs, on average they were probably act of great folly and injustice. If previous Pensions 23 when they first got into the proper labour market Ministers failed to spot this one and act on it, that is a with proper careers. That is very different from the shame, but I look to future Pensions Ministers to find world in which most of our grandparents or great- some way of remedying an injustice. grandparents lived. They would have left school at 12, Ordered, That the debate be now adjourned.— 13 or 14 and worked all their life. We now have a great (Miss Smith.) differential, with increasing numbers of people not getting their first proper jobs until almost a quarter of a 7.14 pm century has gone by. Yet many people are still leaving Adjourned till Thursday 7 July at Nine o’clock.