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Pensions Bill [HL]

My Lords, I congratulate the noble Baroness, Lady Hollis of Heigham, on her ingenuity in inserting this into the delicate business of amendments at Third Reading, of which I have, with modesty, rather less experience than her. I also associate myself with the spirit of her intentions in this matter at least in two respects. First, many of us across the House felt some dissatisfaction or sadness that we were not able to resolve some of the issues of rough justice connected with the bunching of women's pensions. While I appreciate that we cannot reopen that in this House now, that area might repay further consideration. I have seen some correspondence subsequent to our debates on Report which would have suggested, for example, that a minor adjustment in the entitlement for the male pension above the age of 65 might be a way to finance a smoother progression for women without a net cost to the Treasury. I hope that Ministers have not shut their minds to this area, although I appreciate that it is difficult and that there will always be losers as well as gainers. However, it would be inappropriate to go further into that. Perhaps I would be on more confident and more positive ground in saying, secondly, that I share the noble Baroness's enthusiasm for the single state pension, which I believe would be a considerable social advance. It would help to make pensions and saving for them, including private pensions and NEST, worth while. That must be an objective for us all. It would also be an important advance in simplifying the system. We could not discuss this previously because of the timings of government proposals and I appreciate that pensions' evolution and development is an incremental business. However, I would like to share with the House some considerations which the Minister, even if he does not consent to a formal review—I know that those things are not easy for Ministers to do—may at least wish to ponder in moving through the consultation process on the state second pension and in looking at the interaction with NEST. With due respect to the noble Baroness, I will not confine my remarks specifically to women's issues because some wider issues are also appropriate to consider. First, it is in the nature of pensions, particularly where they are guaranteed or organised by the state, to reflect long-term commitments. Any mid-term corrective action, even if benignly intended—and this is so—may therefore inevitably subvert arrangements which have already been made. I cite as an example that when we reduced the qualifying years to 30, with a view to trying to do something about women's pensions in the past, it had the converse disadvantage of nullifying the benefits of some individuals who had made contributions above that period in order to safeguard their entitlement, on the rules as they stood and in good faith. At the same time, if we moved to a single state pension, I would find it personally important to retain an element of the contributory principle. Again, a post-Bill development, as it were, has been the issue of whether there should be some association either of administration or even of coverage between the tax and national insurance systems. Paying for something and getting something back is both morally and prudentially wise, although there is a huge amount of further work to do on that area. There are also potential differential impacts, as the noble Baroness has already touched on, from the change not just on women but for those with interrupted or overlapping working patterns. For example, there are people who have spent time abroad or who may have saved for a private second pension at different times. All that is complicated and requires a good deal of careful thinking through. At some stage—the Minister can help us by giving some indication of this—we need therefore to take a dispassionate and careful look at all aspects of the proposed changes as they now come out. This should be designed to minimise any retrospective unfairness and to look prospectively to minimise any moral hazard, where people may feel that they lose when they have acted in good faith; but remembering at all times as we do that—and pursue the hard cases, which we must—that there is a grand prize to follow in simplicity and in providing a good platform for additional, personal private saving. That must be our overriding objective.