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Pensions Bill [HL]

My Lords, perhaps I may respond to the very helpful introduction by the noble Lord, Lord McKenzie of Luton, and apologise to the Committee pre-emptively, as this is my first occasion in Committee, at least at this end of the Palace. I thank him for raising matters of substantial public concern in a moderate way, and shall try to talk around them and to explain matters connected with my own amendment. It will be obvious to the more perceptive Members of the Committee that, despite the heroic efforts of the Clerks with occasional interventions from myself, in this case it probably was the printer who was responsible for certain infelicities, one of which appears in Amendment 3A, which refers to 2010. This should of course be 2020. In Amendment 4A, there are two references to 2010 which should be 2020. Though I may take the Conservative Whip, not even I would claim to wish to legislate for the past. Those will be self-evident as slips of the pen. If we unpack the principle of this, we always begin with a troubling element to do with disturbing the contributory principle, or disturbing people’s settled expectations. In a pure world, which ours is not, we would probably wish not to disturb anything from the moment when somebody entered the scheme as a young person and was paying on a certain assumption, in the hope that 40 years later they would receive their due pension. That was perhaps the philosophy of 1948. I do not think it is the practice of 2011. It is clear that, for a whole variety of reasons, successive Governments have changed that, particularly in relation to the inexorable march of longevity and the pressures on the public finances. I was very grateful to hear the noble Lord, Lord McKenzie, making that point specifically, and of course we all make it. As he rightly intuited, my effort is in a field which is certainly somewhat exploratory, and I am exploring it in parallel with a number of Parliamentary Questions. We do not quite know the distribution, but we do know, on the Government’s proposals, that half a million women—of course it is only women—are affected by phase 1 of this change, and then men and women are affected by the move in the overall pension entitlement thereafter. There is an inhibition because it is felt, perhaps for reasons of concern about European sensitivities, that we are dealing with all the women in one go, and then moving forward together. The Minister may wish to comment further on that in a moment. As the noble Lord spotted, my attempt was to find a median position on this, and in particular to deal with the situation so that no woman should expect in effect to have to work more than an additional year. That then retards the timetable, not to the level of the Opposition's proposal, but it means that one has to make consequential changes in the adjustment for men unless—I rehearsed this on Second Reading—it were decided that one way to finance a softening of the impact on women was to start the male timetable earlier. For a reason that I will give to the Minister in a moment, I think that the equity of that is not wholly improper and a case could be made to the European Court that we were not seeking to widen the margin of discrimination if we started on the business of moving men first. The immediate concern is with the comparatively small number—perhaps 30,000—of women who seem to be in the one to two-year category, and there are a number of ways of dealing with that. The scheduled basis, which both the noble Lord in introducing his amendment and I in my alternative schema have sought to address, respects the contributory principle and the national insurance concept, and seeks to provide some basis under which, according to date, if contributions have been paid you get to claim your pension on that date. I should perhaps mention for the record that my wife and I have both claimed, so we are through the gap—we are safe from those depredations—but there are alternative approaches, which we shall rehearse later, which might be by means of specific intervention in relation to illness or pension credit support for people whose overall pension was inadequate, and we look forward to a time when it may be possible to increase the basic state pension as a better platform. I appreciate that that is not for the Committee now. Having, I hope, explained why I want to try to limit the provision to a year—it is an arbitrary choice; we can all argue about it—I cite one letter I have received from among a number, which is moderately put, precise and describes the two elements of the situation. The first is what one might term an intersororial tension—I am sure that it is not substantive. The writer deals with the perceived unfairness: "““My sister was 60 on 27th December 2010. She will receive her state pension on 6th September 2011, when she is 60 and 8 months old””." That of course reflects the first moves started in the 1995 Act. "““I will be 60 on 20th July 2014””." That is three and one half years younger than her sister, to gloss the letter. "““Under the new proposals I will receive my state pension on 20th July 2020, when I am 66. That is 5 years and 4 months later””." So there is, as it were, an escalation of the gap between the two sisters of nearly 100 per cent. The lady goes on to write: "““I would also like to note that with the new proposals, my husband who is 1 year and 1 month older than me will receive his state pension on 6th March 2019, which is 1 year and 4 months before me””." So there is a strange but not unique game of leapfrog going on between the genders in that case. That is one reason why I say to the Minister that it may not all be as blatant in terms of European jurisprudence as he may fear. It clearly looks odd that that is happening, and I am sure that she is not the only case. I single that out as a well prepared example of the sort of difficulty that arises. We all know, and the opposition spokesman has generously conceded, that we need to make progress because of longevity and the economic constraints. We are anxious—I think I used this phrase—to take the rough edges of these proposals and produce something which is not unmanageable or demonstrably unfair. We can do it either by the timetable approach set out in the thinking behind these amendments or by more specific intervention, as discussed in later amendments. There is a perceived inequity that needs some attention and on which I am sure that my noble friend will wish to respond.