Hansard - United Kingdom Parliament

69 Pensions Bill [Lords]
20 JUNE 2011
Pensions Bill [Lords]
70
policy is a minefield covered in all those booby traps. As
soon as one presses down on one thing, another pops
up, making it all very difficult.
It is the group of women who were born in 1953 and
1954 who are being expected, at very, very short notice—five
years’ notice—somehow to change their whole financial
planning for their retirement. As I pointed out to the
Secretary of State in an intervention, when the equalisation
came in the warning that people were given ranged from
15 to 25 years. The evidence that I received from Age
UK showed that 20% of women still have not realised
that they are not going to get the state pension at 60 but
will have to wait until they are 64 or 65.
That proves not that we have been lax in trying to
inform or educate women about what state pension they
can expect, but that it takes a long time for such things
to sink in and for people to make arrangements. In the
case of the current proposal, the women who will be
most affected have just over five years’ notice. That is
unfair and I hope the Government will look again.
Duncan Hames (Chippenham) (LD): In her intervention,
the Chair of the Select Committee made the excellent
point that some of the women we are talking about have
already left the labour market, having taken early retirement.
Does she agree that the Government have a special
responsibility to those former Government employees
who they persuaded to take early retirement instead of
a redundancy option and who now find that they will
not have access to a state pension as part of the plans
that they would have made when deciding to leave their
employment as civil servants?
Dame Anne Begg: I could not agree more. It is imperative
that we get that sorted out now. I am sure that other
local authorities will not be any different from my local
authority, which knows that cuts are coming. My local
authority managed to have a funding black hole of
£25 million. Before there was any economic disaster in
any other part of the world, it happened in Aberdeen. I
will not talk about that being a Liberal Democrat
council, but it was. That has resulted in large numbers
of local authority employees—not only women, but
predominantly women—being offered early retirement,
which councils have been encouraging their employees
to take because they do not want to go down the route
of compulsory redundancies.
People have been signing up and are still signing up
for early retirement without the full knowledge that
what they are signing up for is a lower pension that will
not be supplemented with the basic state pension when
they reach the age of 63 or 64, as they thought it would
be. In some cases, they may have to wait another two
years. Their entire financial planning was based on the
expectation that they would get whatever the basic state
pension would be at that time. It is £105 now, so it will
be more than that, and the flat rate pension may have
come in. They were expecting at least another £100 a
week in the income that they have worked out they will
need to survive.
The short notice is the injustice. The Government
must look at this again. They cannot leave out this
group of women, who did not have the chance to build
up their pension protection but who took on the burden
of care in the community, saving the Government billions
of pounds. The same group of women have had to fight
many of the equality battles, yet it is being hardest hit,
and it cannot be right that, because of the acceleration,
the Government are making them pay the price not of
deficit reduction—according to the coalition, the proposals
will not apply until after the deficit is meant to have
gone—but of the longevity of other groups.
I accept the Secretary of State’s point when he says
that the coalition Government discovered that their
proposed acceleration was illegal. It would probably be
illegal under European law because the Government
had already said that they would equalise the pension
age of men and women. That makes me wonder what
else in the coalition document might be illegal. Has
someone been through it with a fine-toothed comb? If
that was such a glaring error, have others sneaked into
the coalition agreement, or was it just this issue where
someone failed to notice that signing up for the equalisation
of the state pension age might not be fulfilled by the
words of the coalition document?
I will vote against the Bill because it fails on the basic
principle of fairness, and in pensions policy fairness is
all. When those now sitting on the Government Benches
were in opposition, fairness was all they talked about.
The previous Labour Government went a long way in
introducing fairness into the pensions system. Pension
credit was certainly a revolutionary policy that lifted
many pensioners out of poverty and transformed the
incomes of many pensioners, who saw their incomes
double when Labour was in power. Fairness must be at
the heart of pensions policy, but the Bill does not pass
the fairness criterion.
6.10 pm
Jenny Willott (Cardiff Central) (LD): The Bill has
been somewhat hijacked by the women’s pension age
issue, but as the hon. Member for Aberdeen South
(Dame Anne Begg) has said, there is much in it that is
very good and extremely uncontroversial. There are
other proposals that are good, but which some people
find controversial, such as those on judges’ pensions.
Funnily enough, a number of speakers in the other
place became extremely worked up about that. As the
Secretary of State said, judges currently make no
contributions to their pensions. The only thing they
contribute to is survivors’ benefit, for which they pay
the princely sum of 2.4% or 1.8% of their salary,
depending on the scheme, but they get an extremely
generous pension at the end of it. I understand that one
in six judges draws a pension of more than £67,000 a
year, which puts them in the top 0.01% of pensioners, as
the employer contribution is around one third of the
salaries. The hon. Lady has just said that fairness is all
in pensions, but clearly that does not seem fair to an
awful lot of people. At a time of great debate on public
sector pensions, there is no reason for judges to be
exempt from reform. There seems to be a clear consensus
in this place, if not in the other place, that that needs to
be tackled as soon as possible.
I also welcome much of the rest of the Bill. The
introduction and simplification of many of the opt-out
arrangements is really important. The hon. Member for
Aberdeen South and I were members of the Work and
Pensions Committee in the previous Parliament and did
a lot of work on the arrangements for the National
Employment Savings Trust and how to ensure that
people on low incomes are encouraged and supported
to save for retirement. Like her, I welcome many of the