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63 Pensions Bill [Lords] 20 JUNE 2011 Pensions Bill [Lords] 64 [Jonathan Evans] would be no time left for the debate in hand, because we would all be pointing out the many Labour shortcomings on pensions. There has been a lot of misinformation about the proposals we are debating. I listened to a staggering example of that at 9.30 this morning on Sky News, when the otherwise excellent Charlotte Hawkins said that today we were going to vote on a proposal to make women work a further five years before receiving their pensions. It amazed me that that could be said; I am sure it must have been a slip of the tongue. Later, I opened my e-mails and came across a letter from a lady who will be required to wait a further two months as a result of these proposals, but who stated that she believed she will have to wait a further six years. That highlights the exaggerations, and in some cases the dishonesty, in the campaign that has been waged against the proposals. Harriett Baldwin: Did my hon. Friend also see last week’s Age UK survey, which found that 20% of the women affected by the previous Government’s changes to equalise the pension ages of men and women had not realised what was going to happen to them? Jonathan Evans: Indeed, and one of the difficulties in this regard is to do with the first change, to which almost all e-mails refer: that women were getting the pension at 60 and that that is now gradually being moved up to 65. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) referred to his family being affected. Well, my wife is affected by these changes, but we in this House were aware of them because we legislated for them in 1995. [Interruption.] Yes, we have known about them, but we have known about them only here, because there has not been much dissemination of this information outside the Chamber to the rest of the public. [Interruption.] I am grateful to the hon. Member for Slough (Fiona Mactaggart) for indicating that that is so. The idea that the retirement age might then be moved up to 66 is not new. It was debated in this House back in 2007, and legislation was put on to the statute book. What we are doing now is moving the first of these dates forward, and in my view that is necessary. It is perfectly clear that a significant saving will be made. The Secretary of State made a typically sensitive address, which was well received on both sides of the House, and not only because he said he was prepared to listen. I am staggered that any Minister who says they are prepared to listen to an argument is treated with contempt from the Opposition Benches. [Interruption.] Absolutely: it is an indication of what Labour Members were used to when their party was in government. I commend my right hon. Friend on his approach, however, and I am impressed by the sum of £30 billion. The Opposition propose that we should not take these steps for a while, and that we should instead return to a 2020 or 2022 timetable. The argument that everything the Government do is being done too fast is a familiar Opposition refrain. It in effect suggests that we can somehow just pass the responsibility on to succeeding generations and not grasp it ourselves. I think we must grasp it ourselves, but that does not mean I am unsympathetic to the arguments about that specific cohort of women who are affected in a particularly negative way. I know there were debates on these measures in the other place, but I am not persuaded that we must defer taking them to beyond 2020. I am not going to talk about the implications of the equality legislation so often supported by Opposition Members, even though that may have led to a situation whereby what was stated in the coalition agreement cannot now be put into effect. However, what I am certainly uncomfortable about is any woman having to wait more than an additional year. My right hon. Friend the Secretary of State will be aware that Sally Greengross—Baroness Greengross, a Cross Bencher widely respected in this area—put forward a compromise proposal that has much merit, based as it is on the idea that no woman waits for more than a year. The restriction was limited in that way, and the measure was exceptionally intelligently crafted. I have read Lord Freud’s responses to this debate. He said that the proposal would cost not £10 billion, as the Opposition suggest, but only £2 billion. Given that I want to husband public resources—and that we apparently have the Opposition’s support for shifting retirement ages forward from 2034 and 2044 to dates that are significantly earlier, saving perhaps £2 billion—I am much more attracted to the idea of matching that saving and making far greater savings elsewhere. Lord Freud responded to the debate by pointing out the gender equality legislation—the equality provisions of European law—that might make this a difficult proposition. However, I am not persuaded that my right hon. Friend the Secretary of State’s Department lacks minds sufficiently sharp to overcome this difficulty. [Interruption.] Yes, I am absolutely sure that the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), could draft the legislation required; but if not, he has all the necessary skill within his Department. I am very happy to tell all of my constituents who have written to me on this issue that, because of what is happening with longevity, it is fair, if we are asking men to wait a further year, to ask women to wait another year. There are those who say it is a double whammy because we are also seeing equalisation from the age of 60, but that is already a part of the architecture and cannot be taken into account. I am certainly prepared to argue that case. I want to make two final points that are connected not with this issue but with other aspects of the Bill. In it, adjustments are made to the financial assistance scheme. Many of my constituents have been affected by the collapse of Allied Steel and Wire. On the question of the general attitude of Labour toward pensioners, many of ASW’s pensioners know the “assistance” they got from Labour: none whatsoever. That is the reality. However, the truth is that, under the financial assistance scheme, many people are not even going to get the 90% that was flagged up as their likely reimbursement. I hope we get opportunities to address that issue. I am looking across at my hon. Friend the Member for Arfon (Hywel Williams)—I do not know whether I should call him my hon. Friend; he might be offended by that. My hon. colleague and I have discussed this issue, and it is
65 Pensions Bill [Lords] 20 JUNE 2011 Pensions Bill [Lords] 66 important that we return to it to address some of the injustices in the operation of the financial assistance scheme as it affects ASW pensioners. Malcolm Wicks: Will the hon. Gentleman give way? Jonathan Evans: On that issue only, yes. Malcolm Wicks: Will the hon. Gentleman at least acknowledge, in fairness, that it was the last Labour Government who set up both the financial assistance scheme and the pension protection fund, which, whatever the difficulties, have helped many tens of thousands of people who were going to lose their pensions? Jonathan Evans: The right hon. Gentleman and I have known each other for many years and he knows I have the highest respect for him. I certainly accept that we eventually ended up with that legislation, but it took a long time to get there. However, he was material in trying to achieve that. Let me also say a word about the effects of autoenrolment. I was staggered to hear the right hon. Member for Birmingham, Hodge Hill tell us that he does not like the proposals on auto-enrolment. I have to say that I am concerned about the impact of our continually increasing the personal allowance—as I understand it, that is going to be part of our policy—if we are just going to link the personal allowance figure to the level at which auto-enrolment kicks in. I am reassured by what my right hon. Friend the Secretary of State says about keeping this under review, but the movement from £5,000 to £7,000 is not, as described by the right hon. Member for Birmingham, Hodge Hill, an attack on poorer workers. The reality, on the information that we have, is that those people would be worse off if they were within the scheme. Mr Duncan Smith: May I tempt my hon. Friend with a thought about why the right hon. Member for Birmingham, Hodge Hill made such an issue of this? I wondered whether he was searching for a reason to vote against the very policy that his Government, when in power, wanted to bring in, because there is nothing else in it with which Labour disagree. Jonathan Evans: I am aware that the Forum of Private Business does not like the fact that the Government have not made more adjustments in this area, and of course the Government would like to have a situation in which all parties were on board at the end of the review, but the proposal of the right hon. Member for Birmingham, Hodge Hill has virtually no supporters, save perhaps for those within the union movement—surprise, surprise. The reality is that the proposals we are taking forward are overdue, but there has been too much misinformation about this change. Ultimately, I want to see a situation in which no woman has to wait more than a year longer than she had expected to wait, but the linking of that issue with a 25-year lead-in to the equalisation of pensions at 65 by those engaged in this campaign has been deliberately misleading and has not served the interests of all the people who have written to us. Mr Deputy Speaker (Mr Nigel Evans): Thank you for your time constraint. 5.51 pm Dame Anne Begg (Aberdeen South) (Lab): It is a pleasure to follow the hon. Member for Cardiff North (Jonathan Evans), but I will disagree with quite a bit of what he said. I am disappointed about the change in the financial assistance scheme from the retail prices index to the consumer prices index, particularly in relation to Richards Textile factory in Aberdeen, which went bust with the collapse of its pension scheme. Although the very hard work of many Labour Back Benchers ensured that those pensioners did not lose all their money, they still feel aggrieved that they do not have the same cover as those who subsequently entered the pension protection fund and that they do not get quite as much as those covered by it. Let me start by saying which parts of the Bill I agree with to show that not everything in it is bad, although quite a lot is. I agree wholeheartedly with the lifting of the default retirement age and I only wish that my Government had done that. I have a friend who has been told by his employer that he has to retire at 65 and he does not want to, but unfortunately his birthday falls on the wrong side of the divide. I am also very glad that the Government are going ahead with the national employment savings trust. There was a bit of worry at the time of the election that some people in business who were not too keen on it, particularly on auto-enrolment, might put pressure on the coalition Government, who I am glad resisted. NEST is certainly the way forward for occupational pensions, to ensure that there is pension cover for everyone and that most people will not have to depend on the basic state pension as their sole income in retirement. That is very important. I also agree with the proposal to bring auto-enrolment forward to July 2012 for large companies. If they are ready to go, the sooner the scheme gets up and running the better and the sooner it is tested the better, because part of the reason for rolling out auto-enrolment is to test how it works in practice. So those things are all good, but that is as far as that goes and there are issues of concern. Like my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), I am concerned about the lifting of the auto-enrolment earnings threshold by £2,500. I tried to intervene about this early in the Secretary of State’s speech, but lots of other people were jumping up and down at the time. The problem is that low earners might not always be low earners. Auto-enrolment is important in getting people into the scheme as soon as possible and in ensuring that even low earners are enrolled in a pension scheme. If those people continue to earn similar amounts for the rest of their working life, the scheme might not have the returns that they would expect, but no one knows, at the start of their working life, what their eventual earnings will be and we should always err on the side of caution in ensuring that people enrol. The raising of the threshold could result in about 600,000 people not being enrolled who otherwise would have been. It has been said that those people could opt in, but it is highly unlikely that many people on such low incomes would do so. If the Government introduced a foundation pension or a pension for the state, which the Secretary of State put into context, the scheme would make a difference for people making such low contributions.
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