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Pensions

My Lords, I congratulate the noble Lord, Lord Fowler, on securing this debate. The timing seems a little strange, given that we are awaiting the publication of the pensions review. The noble Lord has a very long and distinguished record in this area, as have many others who will speak in this debate. I would not be able to comment on many of the major issues that the noble Lord has brought to our attention, but I am sure that many others will. However, looking around your Lordships’ House, it seems that any mandatory retirement age has very little relevance here. In the brief time available to me, I want to concentrate on an issue about which I feel passionate. It is important to many in our country and in this House and was important to the noble Lord when he was Secretary of State of State and I had the pleasure of working with him. I refer to carers, those 6 million people who look after someone who is ill or frail or disabled, and who save our nation—as I never miss the opportunity of reminding your Lordships, for which I make no apology—£57 billion each year. It is generally acknowledged that if you are a carer you are financially disadvantaged, not only because of the costs of caring itself but also because many carers give up paid work to care and thus build up poverty for themselves and their families in the future. I remind your Lordships that this is not just a women’s problem, as is often mistakenly assumed. Although childcare is overwhelmingly performed by women, adult care is more evenly split, with 18 per cent of women fulfilling this role compared with 14 per cent of men. I want to acknowledge the progress that has been made by this Government in recognising the needs of carers, who make such an extraordinary contribution to our society and who, for the most part, do it willingly and with love. Of course, many of the Government’s initiatives to help older people have had a positive impact on carers, too, since many of them are over retiring age and have had some share of the extra £11 billion that will be spent on pensioners in 2005–06, especially since about half of that goes to the poorest pensioners. The tax and benefits changes which have been introduced since 1997 mean that the average pensioner household is £1,400 a year better off than in 1997. I want particularly to mention the state second pension and how that is enabling almost 2 million carers, as well as 2.2 million long-term sick and disabled people, to build up entitlement to an additional state pension for the first time. In her absence, I pay tribute to the work that my noble friend Lady Hollis did on this issue when it was before your Lordships’ House. There are now three Acts of Parliament on the statute book for carers. The most recent came into operation only last year, and focused for the first time on enabling carers to have access to, as one described it, an ordinary life. It focused not just on helping them to care better but on enabling them to participate in leisure, education and cultural activities, as the rest of us expect to do. So a great deal of progress has been made, but much remains to be done if we are to stop carers in future being in the situation that Carers UK reports many of them are in today. One in five has to cut back on food, one in three has trouble paying utility bills, four out of 10 find the level of charges for services causes financial difficulties, and one in three has no savings at all. An increase in the carers’ allowance would help; it is currently paid at the lowest rate of all benefits. But the surest way to keep carers who are pensioners out of poverty is to enable them to stay in or return to paid employment for as long as possible. This not only helps them financially now and in the future but also helps them socially and psychologically by removing the isolation that many carers experience. In this regard, the work done by Action for Carers and Employment is much to be commended. I am delighted that the Prime Minister’s early commitment to carers in the carers strategy has now been fulfilled in the introduction of flexible working rights for carers in the Work and Families Bill. These rights were first introduced for parents with children under six and disabled children under 18. They have proved a great success, so it is very fitting that they should be extended to carers to bring about better opportunities for them to plan their working lives with their caring responsibilities. If employees are pressured because of caring responsibilities, clearly, that reflects on their performance. I know that the Government are also looking for other ways to support carers, including better pensions and packages developed with other departments. However, we must also bring about some changes in the benefits system, if such changes are to benefit carers’ pension position by enabling them to build up entitlements. When someone approaches retirement age it is usual to them to look forward to drawing their pension but for people on carer’s allowance the feelings are very different. Yes, they get their pension like anyone else, but overnight their carer’s allowance disappears. The problem for carers is the overlapping benefit rule, which states that you can get only one benefit to replace lost income. Even though you may meet the criteria for both carer’s allowance and other income replacement benefits, most income replacement benefits, including state retirement pension, are paid at a higher rate. You lose your carer’s allowance, so you are not much better off. In fact, many carers feel very strongly about the unfairness and injustice of the overlapping benefit rule. Carers UK is calling on the Government to rethink the status and purpose of the carer’s allowance given the many changes in society since it was introduced—and very welcome it was—in the 1970s. I hope that those of us who are continuing to press for changes to provide proper financial recognition for the thousands of carers who continue to provide hours of care into their retirements will be heard. These problems, like many of the others that we will hear about today, are unlikely to go away. It has been estimated that while 6 million carers are active today, in 30 years we shall need 9 million because of the welcome increase in longevity and of people who once would have died enjoying longer lives, but with a greater disability than hitherto. Some 1.5 million carers are aged 60 or over and one in three of those cares for 50 hours a week or more. I spoke to a carer last week who was 92 and said to me apropos his wife aged 86, ““Caring is tough, but she couldn’t cope without me and I couldn’t cope without her. She is my reason to carry on””. We would do well to ensure we do everything that we can to make sure that he carries on.