Hansard - United Kingdom Parliament

117 Pensions Bill [Lords]
20 JUNE 2011
Pensions Bill [Lords]
118
However, the Bill proposes to accelerate equalisation
for women by 2018, and then to increase the state
pension age for both men and women to 66 by 2020. As
so many Members have mentioned today, this is a
U-turn that hits women aged around 56 to 57 particularly
hard. It means that 4.9 million people are affected,
2.6 million being women and 2.3 million men. Some
500,000 women born between 6 October 1953 and
5 March 1955 will have their state pension delayed by
more than a year, with the 300,000 born between
6 December 1953 and 5 October 1954 waiting an extra
18 months or more. The 33,000 women facing a two-year
delay will suffer a loss in income of £10,000, while for
those in receipt of pension credit, the figure is closer to
£15,000. Those women are being made to accommodate
the changes within less than seven years.
Women are already at a significant disadvantage in
pension provision. The median pension savings of a
56-year-old woman amount to just £9,100, which is
almost a sixth of the same figure for a man, which
stands at £52,800. That is why this is such an important
issue and why so many Members have concentrated on
it. It is not fair to speed up the equalisation timetable.
We oppose any change before 2020. The Government
must stick to their coalition agreement promise. However,
we support an acceleration of the timetable for both
men and women from 65 to 66 between 2020 and 2022.
That would achieve the aim of reaching a state pension
age of 66 more quickly, but would affect 1.2 million
fewer people than under the current plans, and affect an
equal number of men and women.
The reason given for the changes is that we cannot
afford not to make them because of the budget deficit.
With respect, that is just incorrect. When the coalition
Government made their promise, they knew what the
deficit was. This is another example of the coalition
saying one thing to get into power and another thing in
power. For example, during the election the Tories said
that there would be no VAT rise. They knew the deficit
then, so why did they promise no VAT rise? They also
said that there would be no top-to-bottom review of the
health service, which would cost £3 billion. The Lib
Dems knew about the deficit, yet they still said that
there would be no rise in tuition fees. The Tories said
that Equitable Life people would get a fair share of
remuneration, yet they have backtracked on that, too,
even though, as some of us have suggested, if the deficit
is the issue, those people can receive some payments
now and some later—that is, after 2015. Further, we are
told that the Government’s measures will cut the deficit
by 2015, yet the provisions in the Bill will come into
play after 2015.
The Bill also deals with automatic enrolment. The
Labour Government were legislating to introduce autoenrolment
into workplace pensions, which is a good
thing because we estimated that 7 million people were
not saving enough for their retirement. To ensure an
adequate retirement income, we built cross-party consensus
to introduce auto-enrolment. That meant that people
would opt out of pension savings, rather than opting in.
Combining a minimum employer contribution and the
creation of a pension scheme that could be used by any
employer, the measure was expected to lead to a change
in the level of participation in pension savings.
The Government are proceeding with the introduction
of auto-enrolment, which we welcome, but they are
limiting its scope. They are raising the salary level at
which someone will automatically be enrolled from
£5,000 to £7,475, which will result in 600,000 fewer
people being auto-enrolled in a pension scheme, a
disproportionate number of whom will be women. The
Government are also introducing a three-month waiting
period before auto-enrolment, which they predict will
mean that 500,000 fewer people will be automatically
enrolled. Most people have an average of 11 different
employers over their working lives, so this provision
could lead to a loss of almost three years’ pension for
many people. I know that the Secretary of State has
said that he will listen, and I ask the Government to
reconsider these issues, which have been raised by Member
after Member, certainly on this side of the House,
today.
9.26 pm
Rachel Reeves (Leeds West) (Lab): Today’s debate has
shown the concern and anger that exists at the rapid rise
in the state pension age. Members on both sides of the
House have had the chance to show that they are
listening to their constituents, and they now have the
chance to assure the women who will be affected that
they understand their plight and are willing to vote
down these changes.
We have heard from 20 Back Benchers today, but
only two—the hon. Members for Grantham and Stamford
(Nick Boles) and for Witham (Priti Patel)—have spoken
in defence of the policies as they stand. That was a
brave decision to take, but I believe that it was ultimately
the wrong one. The reasons for the concerns being
expressed across the House are clear. As many hon.
Members have said, under the proposals, 500,000 women
will have to wait more than a year longer for their state
pension, with 33,000 having to wait two years longer.
We all know that life expectancy is increasing, so the
state pension age needs to rise. My hon. Friend the
Member for Sunderland Central (Julie Elliott) pointed
out that the women writing to her understand that, too.
However, it cannot be right for a particular group of
women to have their state pension age increased at a
faster rate than anyone else’s with such little notice. All
hon. Members have emphasised that point today. My
hon. Friend the Member for Erith and Thamesmead
(Teresa Pearce) said that there was no evidence that life
expectancy was increasing for 57-year-old women at a
faster rate than for anyone else, so why are those women
being asked to shoulder so much of the burden? My
hon. Friend the Member for Aberdeen South (Dame
Anne Begg) and my right hon. Friend the Member for
Croydon North (Malcolm Wicks) said that the changes
will start to kick in just five years from now, in 2016,
giving much less notice than the 10 years that Age UK,
the Turner report and the Pensions Policy Institute
recommend.
Let us think about the women who will be affected, as
my hon. Friends the Members for Erith and Thamesmead,
for Oldham East and Saddleworth (Debbie Abrahams)
and for Sunderland Central did in their eloquent speeches.
The women hit by these changes are the backbone of
our families. They are the mums who took time off
work to bring up their children, the daughters who are
helping their parents as they get older, and the grans
who are providing child care for their children’s children,
to help their children to balance work and family life.
They are the women who have done the right thing.
They have looked after their families, they have worked