Hansard - United Kingdom Parliament
Hansard - United Kingdom Parliament
Hansard - United Kingdom Parliament
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75 Pensions Bill [Lords]<br />
20 JUNE 2011<br />
Pensions Bill [Lords]<br />
76<br />
[Hywel Williams]<br />
I, too, have received a lot of correspondence, with<br />
constituents and others expressing lots of concern at<br />
what they see arising from the Bill as a sudden<br />
change, which, they also contend, does not have broad<br />
support across the parties or among people throughout<br />
the UK. Some see the change as a fundamental break in<br />
the social contract between government and people,<br />
while others accept that as life expectancy lengthens so<br />
too must the length of the working life, but all object to<br />
the change in the implementation time scale that the<br />
Bill proposes.<br />
Hon. Members have already said that an estimated<br />
5 million people born between 1953 and 1960 will have<br />
to wait longer to reach state pension age. Although<br />
the wait for the majority of people will increase by less<br />
than one year, about 500,000 women born between<br />
October 1953 and April 1955 will have to wait more<br />
than an additional year and 126,000 women born between<br />
December 1953 and October 1954 will have to wait up<br />
to two years, losing about £10,000 in pension. Those are<br />
the facts as we understand them.<br />
Men and women on low incomes who are reliant on<br />
pension credit and have no private pension savings will<br />
be most affected by the changes, and we have many such<br />
people in Wales. A great deal has been spoken about the<br />
gender effects of the potential changes, and women will<br />
be hit hardest, but there are also effects on disabled<br />
people and potential effects on ethnic groups.<br />
We have also heard about class effects. I, too, have<br />
looked at the Age UK briefing, and it states for example<br />
that a higher percentage of people in social classes D<br />
and E are unable to work on, with one third of such<br />
women, at least, being in ill-health. Age UK also points<br />
out that awareness of the changes among people in<br />
classes D and E is very much lower.<br />
There are also national and regional effects, which<br />
have had less attention. The changes will hit some<br />
sectors of society harder than others, and we in Wales,<br />
as in Scotland, have more people in those sectors than<br />
other parts of the UK. In Scotland, life expectancy is<br />
four years below the European average at 76 for men<br />
and 80 for women. Glasgow has the lowest life expectancy<br />
in the UK—71.1 years for men and 77.5 for women.<br />
These people will be severely hit.<br />
Jonathan Evans: The hon. Gentleman is right about<br />
life expectancy numbers. Somebody with a fund who<br />
has a poor health record will get a bigger annuity than<br />
somebody who has a healthy record. How would he<br />
resolve that in terms of the state pension situation? He<br />
seems to be saying that he would not change the current<br />
arrangements.<br />
Hywel Williams: A large number of people are unable<br />
to get an annuity in the first place because they do not<br />
have that sort of pension. Nobody is arguing against<br />
the fact that life expectancy is extending—of course,<br />
that should be welcomed. However, the fact that the<br />
change is being brought in quickly will particularly<br />
affect certain groups in relation to class, gender and<br />
where they come from.<br />
The effects in Wales will be much more pronounced.<br />
That is demonstrated by figures for July 2009-10 on the<br />
composition of the work force taken from the ONS<br />
publication “Regional Trends”. The average proportion<br />
of the population in the UK who are managers and<br />
senior officials is 15.6%, the figure for the south-east is<br />
18.3%, and the figure for Wales is 13%. Managers and<br />
senior officials will not be hit as hard by the changes,<br />
because they have other sources of pension income and<br />
live longer. In Wales, we have fewer such people who are<br />
able to depend on a decent pension and expect to live<br />
longer; unsurprisingly, the south-east has many more.<br />
Likewise, in the case of process, plant and machine<br />
operatives, the UK average is 6.7%, the figure for the<br />
south-east is 5%, and the figure for Wales is 7.3%. As<br />
regards people in elementary occupations, the UK average<br />
is 11.1%, the figure for the south-east is 9.7%, and the<br />
figure for Wales is 11.8%. Workers and future pensioners<br />
will be disadvantaged in Wales, as in the rest of the UK,<br />
but the effects there and in Scotland will be more<br />
pronounced.<br />
Plaid Cymru Members welcome the continuation of<br />
automatic enrolment in pension schemes. Given the<br />
increases in short-term employment, casualisation and<br />
multiple part-time jobs, we share Age UK’s concern<br />
about the earnings threshold, particularly the possible<br />
negative impact of the three-month waiting period and<br />
its effect on staff who might not stay in the job for long<br />
enough. We have the same concern about those who<br />
have multiple low-paid jobs and therefore may not<br />
reach the threshold and be excluded.<br />
In a speech I made some months ago, I expressed<br />
reservations about the indexation process, so I will not<br />
labour that aspect. My final point is about the Pension<br />
Protection Fund, which was raised by the hon. Member<br />
for Cardiff North (Jonathan Evans) and is referred to in<br />
part 3 of the Bill. The PPF came about partly as a result<br />
of pressure put on the former Labour Government by<br />
Members in all parts of the House arising out of the<br />
ASW steelworkers scandal: a very difficult situation in<br />
which the Government had to be persuaded—I use that<br />
word advisedly—to act. Unfortunately, the ASW campaign<br />
is still ongoing. I recently met some of the workers, and<br />
I have tabled early-day motions and attended meetings<br />
on the subject, as has the hon. Member for Cardiff<br />
North. In November 2010, the pensions specialist Dr Ros<br />
Altmann suggested possible ways in which the coalition<br />
Government could assist the ASW workers. Will the<br />
Minister tell us what progress is being made in that<br />
case? That would go a long way towards responding to<br />
the campaign by those workers.<br />
6.35 pm<br />
Ben Gummer (Ipswich) (Con): The salient fact of this<br />
debate is that by the time it finishes at 10 o’clock, the<br />
average age to which we and our constituents might<br />
expect to live will have increased by an hour and a half.<br />
If I were to speak for 10 minutes or a quarter of an<br />
hour, which I will not, then merely in the course of my<br />
speech average life expectancy would have increased by<br />
four minutes. I hope that that is compensation for what<br />
hon. Members are about to endure.<br />
The simple fact of demography that for every hour<br />
that passes 15 minutes is added to the age to which we,<br />
as a population, can expect to live forces us to revisit the<br />
state retirement age—the age at which people stop<br />
paying taxes and start depending largely on the fruits of<br />
others’ labours. It is a fact that is unlikely to change in<br />
the half century to come. In fact, if the experience of