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55 Pensions Bill [Lords] 20 JUNE 2011 Pensions Bill [Lords] 56 [Mr Byrne] and in itself could mean 500,000 fewer people enrolling automatically in a pension scheme. The loss to them could be £150 million in employer pension contributions. Put those two things together and the average man or woman could lose nearly three years of pension saving—a 7% reduction in an individual’s fund. I am afraid that we simply cannot support that measure. That takes me to the most audacious broken promise of the lot—the proposal to single out a group of 500,000 of our fellow citizens, all of them women, and say to them, “You know your plans for the future? Well, you can put them in the bin.” The Secretary of State might think it a relatively small and trivial number, but the Opposition do not. Ben Gummer (Ipswich) (Con): Will the hon. Gentleman give way? Mr Byrne: I will in a moment. This unfolding chaos has been impressive even for a Government who have presided over U-turns on forests, sentencing reform and the reorganisation of the NHS, because we thought we knew where we were. The coalition Government made a wise move in appointing the Pensions Minister to his brief—he is a man who knows a thing or two about pensions. Indeed, in one of his first major speeches, he told his audience: “I have become known as something of a bore at pensions conferences.” We have no problem with that. Then we had the coalition agreement. I do not know whether anyone remembers the coalition agreement—it was important once. Page 26 reads: “We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.” For good measure, the Pensions Minister got to his feet a month or so later and said that the Government were committed to any change not being sooner than 2020 for women. Then, 118 days later, the Chancellor arrives on the scene. He stands at the Dispatch Box and says that “the state pension age for men and women will reach 66 by 2020.”—[Official Report, 20 October 2010; Vol. 516, c. 956.] Yet buried in the fine print, we learnt the truth—not the Pensions Minister, the Secretary of State or the Chancellor could bring themselves to that Dispatch Box and actually tell people straight that that policy set out in the coalition agreement was absolutely worthless. The truth was set out in the depths of the spending review, page 69 of which read: “The State Pension Age will then increase to 66 for both men and women from December 2018 to April 2020.” That is a promise well and truly broken. At least when the Lib Dems changed their minds about increasing tuition fees, they could pretend that they were just making things up to get elected, but this was a promise they made and broke in government. Just last summer, the Pensions Minister boasted of reforms in the system that he said included “those who the system has always missed out such as women and the lower paid.” In his own Department’s review, he said that he wanted to look at the “particular challenge” for “women pensioners. A group I have long worked for, and who are so often the poor relations in regard to pensions.” I will let the House draw its own conclusions. One moment the Pensions Minister is offering to protect women pensioners, the next he is presenting proposals that will punish half a million women with a bill for up to £16,000. Richard Fuller (Bedford) (Con) rose— Mr Byrne: I will give way, and perhaps the hon. Gentleman can explain the Pension Minister’s change of face. Richard Fuller: The right hon. Gentleman was giving a discourse on integrity in pensions provision under the previous Government, which I think is important, because many of my constituents will be worried about this issue, and will be looking for integrity. He is very good with numbers—it is when he has to add them up that he has trouble—so I am wondering, on the point of integrity, could he answer this question? The Labour party has recommendations for how best to treat the women he is highlighting who are being impacted by the Bill, and those recommendations are costed at £10 billion. In the interest of integrity, will he please advise me and other Members where he would find the money? Mr Byrne: Can the hon. Gentleman confirm that he has seen the costings given in the parliamentary answer provided by the Pensions Minister on 9 March 2011? Richard Fuller: I have not seen those costings, so the right hon. Gentleman can enlighten me further. Mr Byrne: The Minister gave an interesting answer, because those costings say that if, for example, we increased the retirement age to 67 by 2035—that is, if we accelerated the reform by one year—that would save £6.9 billion. However, if the retirement age was increased to 67 by 2034, by accelerating the increase by two years, that would save £13.7 billion. Therefore, the question for us this afternoon is: how much will be saved by accelerating the reform for those women who are now having to retire later, and who therefore confront trying to find all that money magically, in the space of just four or five years? Has that been traded off against other options, such as introducing advances in the retirement age later on? That is the question that we have to get to the bottom of in this Second Reading debate. Richard Graham (Gloucester) (Con) rose— Ben Gummer rose— Richard Fuller rose— Mr Byrne: I will give way in a moment. Let us hear what the impact of the Government’s proposals will be, because the Secretary of State rather glided over this point. Some half a million women will receive their state pension at least 12 months later than they had previously been advised, with 300,000 women— those born between December 1953 and October 1954— experiencing a delay of one and a half years. For 33,000 women—those born between 6 March and 5 April 1954—that period increases to two years. For them,
57 Pensions Bill [Lords] 20 JUNE 2011 Pensions Bill [Lords] 58 the loss in state pension will be around £10,000. For those on full pension credit, the loss will be closer to £15,000. Those women, with five years’ notice of the timetable change, have almost no time to prepare for their income loss. Harriett Baldwin (West Worcestershire) (Con): Will the right hon. Gentleman give way? Mr Byrne: In a moment. We are talking about women in the age group that was asked by a Conservative Government in 1995 to set in train the equalisation of the state pension, a reform that we accepted, because it came with time to plan. However, that cannot be said of today’s proposal. This morning, Age UK warned that “a sizeable minority are not even aware of the 1995 changes with nearly a fifth expecting to receive their State Pension at the age of 60.” The Secretary of State’s proposals will now make that worse. Richard Graham rose— Harriett Baldwin rose— Fiona Mactaggart rose— Mr Byrne: I will give way to my hon. Friend the Member for Slough (Fiona Mactaggart), then I will give way to Government Members. Fiona Mactaggart: I heard the Secretary of State refer in his speech today to legal advice that said that the Government could not keep to their original proposals in the coalition agreement. He did not make the House aware of why the Government cannot legally do what they originally intended, so has he made my right hon. Friend aware of why that is? Mr Byrne: My hon. Friend makes an extremely good point, because I think that that was news to the House. We would certainly expect that legal guidance to be published before we get to the Minister’s winding-up speech. That guidance is a material point in a debate that is important to many people, as well as many right hon. and hon. Members, because this Bill has such a poor effect on women in this country—the people we represent. Richard Graham rose— Harriett Baldwin rose— Mr Byrne: In two minutes. Michelle Mitchell, the charity director of Age UK, has said that “it’s difficult to see how women can plan properly when the government keeps moving the state pension age goalposts”. The director general of Saga has said that “to make just one cohort of women bear all the brunt of this in the very short-term will undermine the concept of planning for retirement over the long-term and cause real distress to the responsible women who have made careful financial retirement plans.” Can hon. Members tell me how this can possibly be justified? Harriett Baldwin: I thank the right hon. Gentleman for finally giving way. I speak with a lot of interest in this matter, as a woman in her 50s—[HON. MEMBERS: “Surely not!”]—I know, shocking isn’t it?—who has seen her pension age increase, first by five years and now by a further year. However, does he accept that there is an issue with rising longevity and that we therefore need to push forward the retirement age of women such as myself? Mr Byrne: Of course. The hon. Lady makes an extremely fair point, and that is why, after the Turner commission met and the Pensions Act 2007 went through this House, a clear timetable was set for how the state pension age should increase. [Interruption.] The Secretary of State is muttering from a sedentary position about how the longevity assumptions have now been increased. That is perfectly fair, and we should have a national debate about how the state pension age should be brought forward; indeed, the Pensions Minister has issued a consultation. It is just a shame that it closes on Friday, after this debate is concluded. Richard Graham: The right hon. Gentleman made two comments about how the Bill treats women. He estimated that the cost of the changes to some women would be £10,000. Does he not recognise, however, that the change in the value of the basic state pension as a result of this Government’s commitment to linking it back to earnings will be worth more than £15,000? Will he also acknowledge that, as a result of the new flat-rate basic state pension being applied, a lot of women who would previously have lost out because of their caring responsibilities will now benefit hugely? Does he not agree that women will benefit from the changes in the basic state pension in those two ways? Mr Byrne: Let us take the hon. Gentleman’s second point first. I understand that the proposal for a flat-rate pension is included in a Green Paper. It is therefore an early statement of the direction of Government policy. Given what the Government have managed to do to commitments in their coalition agreement, I am not sure how much water that proposal holds. The hon. Gentleman’s first point was more interesting, because he was comparing the benefit for someone on a pension under the lock introduced by the Government with a pension that is linked to prices. Going into the election, no party proposed to keep the pension linked to prices, so his calculation is purely fanciful. Indeed, the Pensions Commission said that we should re-link pensions to earnings in 2012. That was in our manifesto, and that is what we would have done if and when we were returned to office. I am afraid that the hon. Gentleman cannot make up fantasy numbers comparing the reality— Richard Graham: The right hon. Gentleman is generous to give way again but, with all due respect to him, I am comparing the fact of what was delivered by one Government over 13 years with the fact of what has been delivered by this new Government within one year. The Gloucestershire Pensioners Forum, which was created by members of his own party precisely to campaign against the de-linkage made by the late Mrs Thatcher when she was Prime Minister—[HON.MEMBERS: “She is still alive.”] Indeed she is. I meant to say “the former Prime Minister”. The Gloucestershire Pensioners Forum has now fully recognised the value of re-linkage, which this Government will introduce. It is a shame that the right hon. Gentleman does not recognise these facts.
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