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Pensions Bill

My Lords, I join the Minister and start by sending best wishes to Evelyn Arnold. We worked together, on and off, on pensions for at least a couple of years through some very interesting and challenging times. I thoroughly respect the expertise that she brought to that process and I wish her well in retirement. The amendment gives us an opportunity, as the Minister identified, to revisit the changes to the state pension age, which we debated when considering the Bill. We can do this is the light of the Government’s amendments, which made some modest changes to what they originally proposed. Modest they may be, but it would be churlish not to give them at least a modest welcome and in doing so to pay tribute to all those who campaigned to press for changes to the original measures. The position is as follows. Prior to the Bill, the state pension age for women was due to rise from 60 to 65 over the decade to 2020, so that it equalised with the state pension age for men. This was provided for by legislation in 1995 under the previous Government. The Pensions Act 2007 increased the state pension age for both men and women to 66 between 2024-26, to 67 between 2034-36, and to 68 between 2044-2046. There was political consensus around these measures. The Bill changed all this by equalising the state pension age earlier, in November 2018, and by completing the increase to age 66 for men and women by March 2020. As we discussed previously, these changes will have caused some 500,000 women to have their state pension age increased by more than one year, with approximately 300,000 experiencing an increase of 18 months or over. As the government fact-sheet provided to us shows, the government amendment reduces the increase in the state pension age for women to 18 months for all those for whom it was more than that. For men, it reduces the transition to the state pension age so that none has to wait as much as 12 months, with varying changes so that the maximum additional time is 11 months—although for some, it is reduced to four months. This still means that 500,000 women would have their state pension age increased by more than one year and for up to 18 months. We hold fast to the view that it would be wrong to disturb the timescale to equalisation of the state pension age, of which women have had some 15 years’ notice and time to plan. However, we consider that accelerating the move to 66 for men and women by four years is justified, given the changes to longevity that the Minister referred to, although commencing this move now is in our view on the cusp of what would seem a reasonable period of notice. Our proposals would affect 1.2 million fewer people and equal numbers of men and women, with no one having to wait more than 12 months extra for their state pension. There is of course a difference in the level of savings that the proposals reduce; we accept that. Our position generates just two-thirds of the £31 billion savings that the Government’s proposals generate, although those savings would begin to accrue in 2016-17, after the end of the current spending review and the deficit reduction plan. The greater increased savings from the Government’s announcements would accrue over a five-year period, and then align with our proposal. Of course we are not dealing with small sums of money, although there is a multiplicity of policy decisions that have yet to be made for that far out, well into the next Parliament. Bearing in mind that GDP at that time would be some £1.5-plus trillion, with total managed government expenditure heading for £800 billion and spending on pensions and benefits at £100 billion a year, these sums have to be seen in that context. However, the other side of the issue is: why is it fair for those additional savings to be disproportionately visited on some 500,000 women, who will still have to wait for longer than a year—and 300,000 up to 18 months longer—to receive their state pension? Why should they shoulder the burden? It is of course right that we share the extra costs of rising longevity fairly, but this is not fair. A balance must be struck between dealing with rising longevity by having a plan to increase the state pension age over time, including revisiting the increases to age 67 and 68, and offering short-term security to women who need to be able to plan their personal finances. There must be due notice of changes. We know that 40 per cent of women have no private pension savings. Those who do invariably have smaller pension pots, since many work part-time and were excluded from occupational pension schemes until the 1990s. A delay in reaching the state pension age also means missing out on pension credit and could mean missing out on passported benefits as well. This is not just a timing matter; it represents a real cash loss to those individuals. The responsibility for caring falls disproportionately on women. Some will have organised a move away from the labour market, perhaps taking part-time work with the prospect of receiving a state pension at a known date. Putting all this in reverse simply may not be possible. All the matters are made more difficult by rising unemployment and the growing scarcity of part-time jobs, with women again bearing the brunt. If individuals are to be able to respond to changes in their economic circumstances caused by a deferral of their pension, they need to know before they make irrevocable decisions about their employment. Sadly, these measures sit alongside a raft of other policies that have particularly adverse effects on women. For example, we have seen the abolition of the health in pregnancy grant, a three-year freeze on child benefit, cuts in childcare costs supported through tax credits, caps on housing benefit—which are likely to act disproportionately adversely on women—and the closure of Sure Start centres. We know that women are likely to be the biggest losers from public sector pay freezes and job cuts, and we know that women are more reliant than men on the services that the public sector provides. We know that rising longevity must be addressed, but it must be addressed fairly. The Government are in the wrong place on this. I beg to move.