Pensions Bill

The last time the House debated pensions we ended on a note of consensus about consensus, which is a good place to start, on which I agree with the hon. Member for Runnymede and Weybridge (Mr. Hammond). I want to dispute with the hon. Gentleman a little, however, and travel a little way down memory lane in respect of his point about the link with earnings. He is right to have given that some analysis, but it needs a little bit more. I think that the previous Government’s decision to break the link with earnings was rational and they did it for good reasons. That point bears thinking about this afternoon, as we are deciding whether to restore the link. We have to do so for good reasons. Those reasons, and the link’s affordability and sustainability, must be considered in the context of why it was rationally broken, which was because the economic circumstances of the time were entirely different. I remember that time very well indeed. I was a parent, recently divorced and buying a house by myself for the first time. When I went out shopping in the morning, I did not know whether interest rates would have changed by the time I got home in the evening. Those were different times. It was reasonable and rational in those circumstances to take that decision when pensioners did not know whether their pensions would change or whether they could afford things any more. I believe that the Government were right to say at that time that prices were rising fast and getting out of control. It was reasonable and rational to decide that carrying on was not the right way for pensioners to move forward. There was a big debate in the House and both sides divided on what was the best thing to do at that time. Now, however, the circumstances are completely different and there are completely different controls on the economy, so it is possible to look at affordability. Now is the time to move forward. I want to concentrate most of my remarks on another issue—that of unfairness, which I believe has been built into the pensions system for many years because it was part of our social history and part of what we thought of as normal for family life. It was always regarded as normal for mum to stay at home and for dad to go out to work. That was just the ordinary way of things, but the world has changed and everything has to change with it. It is now right to look ahead at a number of issues. We were looking at a demographic time bomb in the 1980s, particularly in respect of how many people would be in work. We did not properly look forward to its impact on pensions, but now it is coming home to roost. It could be said that the demographic time bomb is about to explode. Now is the right time—looking back 30 years and looking forward another 30 years—to take decisions. If we do not take them today, we will be making a very big mistake indeed. We have to view the issues in that context. The hon. Member for Runnymede and Weybridge is entirely right in his analysis of demographic change, so now is the right time for the Bill. The Bill is also right in its social context, as we are seeing changes in family life and changes to work patterns. It is also right to think about young people and what we expect of them. I do not think that it would be right to tell young people that we expect them to pay for the needs of older people tomorrow so that the elderly can enjoy a luxurious retirement at their expense. It would not right be right to shift the burden of responsibility on to them. We need to draw some logical conclusions from that. I am left looking at a particular group of people—those who have traditionally been left out of the pension market almost altogether. I refer to working women, 30 per cent. of whom draw full state pensions, but the majority of whom do not. That is because, despite huge changes in social life, women are still the main carers. Women are still the main people who look after young children and who, at the end of their working lives, remain the main carers of elderly parents or others in the family who are in need. We have to recognise that. It is not just a family responsibility, but the responsibility of us all, because the economic impact is huge. We are talking about a contribution to the nation of billions of pounds. It is not just thousands of pounds of investment for the family, but billions of pounds of investment for the whole country. We owe these people—not only but mainly women—a huge debt of thanks. The Bill goes a great deal of the necessary distance. It is not just a matter of saying thank you, as thanks are worth nothing if they are not backed up with something positive. There are a number of ways of dealing with that problem. The debate that has led to the consensus considered a whole range of ways of opening up the whole Pandora’s box by starting from scratch and devising a new pensions system. We could have started again and looked at how citizens could be rewarded for their contributions to society. That would have been one rational way of proceeding, but it would have been extraordinarily expensive and might have thrown away another factor that our society has grown to value. There was already an in-built consensus about it and everyone understands it. I am talking about the national insurance system. The national insurance system is a misnamed system. It is not really an insurance system by anybody else’s standards. It is not an insurance system in the sense that means that someone gets rewarded if their house burns down. It is not that kind of insurance. It is not the sort of savings scheme that anybody else would recognise as a savings scheme. It is the kind of British system that only the British really understand. We know and love it, and we know what it means to us. There is a definite consensus about it. Everybody who pays it knows what it means to them. It was right not to scrap it, but to say, ““Let’s see what we can do with what we already have, and what will bring the benefits that throwing that out and bringing in a new citizen’s pension scheme would have brought?”” That was the right way to go. It has addressed all the concerns about people who work, but miss out some valuable years of their adult working lives because they are making important contributions to family life by bringing up children and looking after elderly or disabled people in their family. Recognising that was crucial. Reducing the qualification period to 30 years was a simple, but crucial, mechanism. At a stroke, it achieves what an otherwise much more complex way of achieving the same end would have done. I congratulate the Government not just on listening carefully to what women were asking them to achieve and achieving that end, but on doing so in a rational way. I am grateful for that. I ask the Government to think again, however. I made this point in an intervention, but for the benefit of the House I will explain it more carefully. There is a group of people—it may be a small group—who I fear may get left out of all this. A person could take on a number of part-time jobs, all of which added together as though they were one job could result in an amount of money that would qualify that person to pay national insurance. At the moment, none of those jobs, on their own, would qualify for national insurance. A person might do one job before their children go to school, another after the last child has been dropped off at school, another after they have picked the child up from school, and another after the child has gone to bed. People fit those jobs around their family life. All the jobs are for just a couple of hours and are low paid. They are all proper jobs and they are all a valuable contribution to our economy. Added together, they do not come to a whole day’s work that any one employer would recognise, but all of us would recognise them as a full day’s work. However, those people pay no national insurance contributions and so do not qualify for a state pension. That has the feeling of unfairness about it. I recognise what the Minister has explained to me about administrative burdens. However, I hope that we can find a way around the problem.