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103 Pensions Bill [Lords] 20 JUNE 2011 Pensions Bill [Lords] 104 [Nick Boles] can proceed as if no sacrifices need to be made, no losses need to be felt and there can be an entirely victimless process of recovering from the terrible economic situation that the Government of the hon. Member for Stockton North (Alex Cunningham) helped to create. Sheila Gilmore: Is the hon. Gentleman not perpetrating the debating technique of erecting a straw man in order to knock him down? Perhaps he would like to consider the terms of the Bill that we are discussing. Nick Boles: I thank the hon. Lady, but I fear that this man is a lot more substantial than just straw—even if the Leader of the Opposition sometimes appears to be exactly the straw man she refers to. The entire membership of the Labour party is signed up to the deceitful argument that we can correct this budget deficit, restore sustainability to our public finances and rescue this country from decline without taking painful decisions that cause people loss. That very same argument has been made in every single one of these debates—in the debates about education maintenance allowance, about tuition fees and about all the other benefit changes. We are hearing that argument here again tonight. This is not really an argument about pensions, but one about the future of this country, and the argument used by the Opposition is always exactly the same. Dr Whiteford: The hon. Gentleman has been using a lot of rhetorical questions in this debate. For me, the key question, if we accept the premise of his argument, is: why should women born in 1953 and 1954 take a disproportionate amount of the pain and take all that pressure for everyone else? Nick Boles: The hon. Lady is eloquent, as so many people have been, on behalf of a particular group, and I would accept and understand that were they not equally eloquent on behalf of every single other group that is being affected by the process of getting our public finances on to a stable footing. I would have some respect if an Opposition Member said to me, “I voted for EMA, I voted for tuition fees and I am voting for the benefits cap, but this one I cannot bear because it is egregious, outrageous and singles out this group in a way that no other group is being treated.” But we do not hear that. All we hear is the same cry—“It isn’t fair”— applied every day, every week, to a different group of people. Opposition Members need to understand that it is not fair to pretend to people that we can do this without pain or loss. It is not fair to perpetrate on the British people the deceit that we can somehow grow our way out of this deficit without cutting off some things that everybody appreciates. Mr Watts: I thank the hon. Gentleman for giving way. No one is saying that. People are saying that the reductions in public expenditure can be done slower to cause less pain. No one denies that the deficit has to be dealt with; the issue is how we go about doing that. It is about the difference between tax increases and cuts in public expenditure. Perhaps he will address those issues. Nick Boles: The hon. Gentleman would have more credibility if we had heard, at any point in the past 13 months, a single specific proposal for a painful cut with unpopular consequences for a defined group of constituents who would write to all of us, but we have heard none, although we might be about to hear from the hon. Member for Leeds West (Rachel Reeves), who gesticulates at me. Rachel Reeves: I do not know whether the hon. Gentleman was here for the speech of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), in which my right hon. Friend set out Labour’s proposals to increase the state pension age at a faster rate than in the previous <strong>Parliament</strong> while still giving people 10 years’ notice. Our proposal would mean that no one would have to wait for more than a year and would not disproportionately affect women of 56 or 57. So although the hon. Gentleman is making a very nice speech, it is not based on facts. Nick Boles: The hon. Lady’s intervention betrays exactly what got her Government—or the Government whom she supported, because she was not in <strong>Parliament</strong> when they were in government—into such trouble. The only nettles that Labour is willing to grasp are those that will grow in 10 years’ time. There are no nettles now being grasped and there are no decisions that Labour, were they in government, might have to explain to the British people—there are only bills being deferred for later generations. I am afraid that the hon. Lady has revealed the shallowness and hollowness of Labour’s position by bringing forward one cut—one deprivation— that would come in only 10, 20 or 30 years’ hence, when all of us will be pushing up daisies or collecting a somewhat deferred pension. Let me round up by saying that I hope that people, including even some of the women who will be affected so directly by some of the proposals in the Bill, will have respect for hon. Members on the Government Benches because when we reply to letters from constituents complaining about the unfairness of any of the Government’s individual proposals we are not going to take out the flannel and the soft soap—the first implements that Opposition Members reach for—but are going to explain the situation that the country faces. We are going to explain that, as before in our history, sacrifices are going to have to be made and everybody is going to suffer. Everybody will suffer some loss, but in doing so we will create a country and a public finance platform from which this country can grow again, from which we can make investments again and from which we can help those who need our help most. It is only with that honesty and that ability to admit the difficulty of our circumstances that we will earn the respect of the British people. 8.32 pm Mr William Bain (Glasgow North East) (Lab): I would like to say that it is a pleasure to follow the hon. Member for Grantham and Stamford (Nick Boles), but that might be pushing it somewhat. He made a characteristically rumbustious and entertaining contribution and I would like to respond directly to some of the issues he raised. He spoke about rough edges, but the view that we have heard from Opposition Members and even from some Members on the Government Benches is not of rough edges but of rough justice for women aged 56 and 57. He spoke about the road to ruin, but we
105 Pensions Bill [Lords] 20 JUNE 2011 Pensions Bill [Lords] 106 see other countries engaged on a different path, as President Obama said when he spoke to us in Westminster Hall. Those countries are engaged in growing their economies more. The hon. Gentleman spoke about fairness, but may I say to him that fairness and restoring trust in politics are not about making a commitment in a coalition agreement 13 months ago and cynically breaking it in the way that this Bill will if it receives a Second Reading tonight. Reform of the pensions system is best conducted with the agreement of as many shades of political and other opinion as possible. It is far too important for short-termism, and the principles and as much of the detail as possible should be above partisan politics. That is why there are some aspects of the Bill that Opposition Members could support, but the glaring unfairness at the heart of the Bill in its treatment of half a million women in the acceleration and equalisation of the state pension age in 2018 means that I will be opposing it tonight. Rising life expectancy and other demographic changes mean that there is agreement across the House that the state pension age should change to reflect the longer period of retirement that people in younger age groups are likely to enjoy. There are currently 10.5 million people aged 65 and over, compared with just 5.5 million in the same age group in 1951. It was the previous Government who established the Turner commission to examine in detail on a non-partisan basis the necessary changes in the state pension age in a way that was fair to future taxpayers, just for people approaching retirement, and long term in its scope, to allow people to save for their retirement in the full knowledge and with sufficient notice of changes in the state pension age. The Bill, particularly in part 1, breaks those three basic principles by adjusting the settlement in a way that hurts 500,000 women across the country who were born between December 1953 and October 1954, including 900 in my constituency. It fails in the aim of delivering an improved basic state pension. It also breaches the terms of the coalition agreement, which ruled out any equalisation of the state pension for women before 2020. Nicky Morgan: On that point—I speak as a former lawyer—my understanding of the explanation given earlier this afternoon was that there was a legal reason that the coalition agreement could not be fulfilled as it was drafted. Is the hon. Gentleman honestly saying that his Government would have proceeded with something that is deemed to be illegal, however desirable? Mr Bain: I am grateful for that intervention. The way to get round all the problems, legal or otherwise, is to follow the excellent suggestion that my hon. Friend the Member for Leeds West (Rachel Reeves) has already made in the debate and will restate in her winding-up speech: prevent this unfair change from going ahead and instead look at some of the accelerations in pension age that can be made, particularly in respect of people retiring at 66 or 67, which can also save money for the Exchequer. The Minister and the Secretary of State did not spell out to the House what the legal problems were. Some Members have speculated that they relate to matters of European law. I hope that when the Pensions Minister winds up the debate, he can outline the legal issues. They certainly were not outlined to the country when the coalition agreement was signed, or during the press conference—the love-in—in the rose garden thereafter. The Bill also fails the test of fairness, because it places too great a burden for savings on one group of the population when the Government should be looking elsewhere, such as at equalising state pension eligibility at 67. As my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) pointed out, even before these deeply unjust proposals were announced by the Government, women had been disadvantaged in pension provision for some time. As she said, median pension saving of a 56-year-old woman is just £9,100, almost six times lower than that of a man which, on average, is £52,800. Research by Prudential establishes that the average woman retiring this year can expect an annual income in retirement of £12,900 per annum, compared with an expected income of £19,400 for the average retiring male. Further, the same study found that 28% of women planning to retire this year have no savings in private or company pension schemes, compared with just 10% of men. The previous Government’s strategy of seeking to link the basic state pension to earnings and making private pensions opt out instead of opt in sought to redress the balance and would have been implemented if we were in government. More safeguards should have been established through the Bill, rather than entrenching inequity, as it appears to do. Following the Bill, women affected will have less than seven years to react to the changes, and may be less likely to be in a pension scheme at all, with less disposable income to supplement savings for retirement, and with greater care responsibilities. Women are also much more likely to wind down in later years of employment, be that to care for elderly relatives or for young grandchildren. Furthermore, it will be more difficult for women to move from part-time to full-time work, or indeed back into employment of any form, given current economic conditions. The Office for Budget Responsibility’s projection of 310,000 public sector job losses in the coming years will disproportionately impact women, who make up 65% of that work force. The Prime Minister said on Radio 2 today that retirement should be “a process rather than a cliff edge” and that “many people, when they get to retirement, would like to go on doing some work or part-time work”. The reality is that the cliff edge imposed by the Bill is an unfair burden on 56 and 57-year-old women who have done the right thing and saved for retirement but are now being grievously abandoned by the Government. Recent decades have seen a change in employment patterns among women. The dated notion that a woman’s role is to stay at home and look after the children has been well and truly dispelled, but for women in their late 50s who are due to be affected by the proposals, such changes in social attitudes may not have been reflected in the earlier parts of their working lives. The Government’s reckless haste in changing the state pension age for those women makes adapting to that change even more difficult. As Carers UK indicated last month, these changes will have a disproportionate impact on other social groups. About 58% of carers—3.4 million people—are
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HER MAJESTY’S GOVERNMENT MEMBERS
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HER MAJESTY’S GOVERNMENT—cont.
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