Pensions Bill

For too long, women have had a raw deal from the pensions system, which may explain why women have been out in force on the Government side during the debate. Only a third of women retire with a full state pension. One in five single women pensioners risk being in poverty in retirement. Yesterday, when I went to the relaunch of the British Heart Foundation shop in Alfreton in my constituency, there was a murmur of great approval from the older women volunteers when I said that I intended to speak about women and pensions in the House today. It resonates with women that the issue must be sorted out. Women must be at the heart of pensions review and reform. If we get it right for women, we will get it right for everyone else as well. I make no apology for going on about women again, or for repeating my request to those on the Front Bench to reconsider the proposals to re-examine the position of part-time women workers and the definition of carers. I repeat the pleas of my colleagues on those matters. I am proud to support the Bill. My right hon. Friend the Secretary of State pointed out that it is the biggest reform of our pensions since Clement Attlee’s post-war Labour Government implemented the Beveridge report. It has not been spelled out, but it is obvious that those reforms were based on a traditional model of a one-earner family, in which the man was the breadwinner, with a steady job for life, who financially supported his wife, who carried out her family responsibilities without any financial recognition for her contribution to society. After the second world war, women were sent back into the home from the workplace and the nurseries were all closed down. The model of work and family life on which the old pensions system was based is very long gone. Women’s and men’s working and family lives are increasingly complex, with fragmented working patterns, a complex system of caring for children, parents and other dependants, and trying to combine that with making financial provision. The world has changed since the days of Attlee and Beveridge. Now we seek to legislate for the model of the family, working lives and the care of dependants. That is why I say that basing the new system around women and what is right for them will make it right overall, because it will focus our minds on what is different today from what was done when Beveridge and Attlee set up the original system. We know the position in which the old system has left women. I do not have time to go through the entire range of statistics, but listing them one after another shows how women have been disadvantaged. For example, 2.2 million women do not accrue rights even to the basic state pension. Retired men on average have between £50 to £100 per week more private pension than women of the same age. Almost two thirds of divorced and separated older women have no private pension income at all, and by 2020 there will be as many divorced women aged 65 to 75 as widows. I have about 10 other statistics, but if I go through them all, there will be no time for anyone else to speak. It is a uniform picture of women being disadvantaged and of inequality in the system, which does not reflect the reality of modern life. Again, if we get it right for the modern system of the family, working life and women, we should get it right overall. The Bill starts to do that, with the reduction in the qualifying years to build up a full pension entitlement and the reduction in the number of qualifying hours, and by positively crediting the time spent caring, so that for the first time we properly treat social contribution on an equal footing with cash contributions. Under the previous system, the cash contributions were credited but the social contributions were not, because it was not necessary. The woman would be looked after by the man. That is the way it worked. Personal accounts will give everyone the chance to save in a low cost environment, and restoring the link to earnings and embedding it in legislation will make it far more difficult than it was last time for a future Mrs. Thatcher to break the link again. We have the figures showing how those changes will bring far more women and far more carers into entitlement to pensions, and make it possible for those women to accumulate a decent pension in future. Instead of 30 per cent. being entitled to a full basic state pension, the Secretary of State explained that 75 per cent. of women will be entitled to that by 2010 and over 90 per cent. by 2025. The Bill is excellent and provides a good basis for adjusting to modern times and a modern world, not just for the next 40 years but hopefully beyond that, although I would not like to predict how the world will have changed over that period, given the present speed of change. As my hon. Friend the Member for Colne Valley (Kali Mountford) acknowledged, the set of proposals in the Bill has been carefully crafted and costed, but like other colleagues, I shall suggest some areas where I ask Ministers to look again to see whether we can stretch it a little further. I know that there was some dismissal of the way in which the tax relief disproportionately benefits the better off, but perhaps it is possible to do a little more stretching within that equation to deal with some of the issues that have been raised. Before I move on to that, I shall deal with a topic that has not been mentioned. Unless we sort out the gender pay gap, we will never achieve equality in retirement. Women who work full time earn 13 per cent. less in median hourly earnings and 17 per cent. less based on mean hourly earnings than men. Women are at greater risk of falling below the poverty line. If people are in poverty while they are in work, they take that poverty with them into retirement. That is why the statutory minimum wage was so important. It made a crack in that gap, but the gap is still there. It is important to place the debate in the context of the Women and Work Commission report. The commission was given the task of seeking to close the pay and opportunities gap for women within a generation. That ties in closely with the changes to the pension system. The Trade and Industry Committee, of which I am a member, is studying the Women and Work Commission report and how and if it is to be implemented. I do not have time to discuss the excellent research findings in the report produced by the Equal Opportunities Commission with Scottish Widows, which looked at the psychology of choices made by men and women, which is clearly influenced by the financial resources that they have. It examines the proportions of men and women who say that they are able to save more money, and how much money they feel able to put into provision for their retirement. Women tend to use any money that they have to give to their children and to look after them, rather than making personal provision for their own retirement. That research is interesting. On the Bill and points that were raised by colleagues and others earlier, four out of five part-time workers are women. In spite of the provisions in the Bill, many will still find it difficult to build up their entitlement to a basic state pension. I, like others, can cite people who work, for example, as a dinner lady at lunchtime and in a corner shop in the evening, but who do not manage to get above the lower earnings limit, pay their national insurance contributions and gain eligibility in any of the jobs that they are doing. Will the Minister look into the possibility of amalgamating the hours and the work that they do, so that those people can be given a credit? It was pointed out to me by my hon. Friend the Member for Colne Valley after she had spoken that women who do not build up eligibility for credit and for pension will have to be paid something anyway. At the end of the day they will be given a credit of some kind, such as a minimum pension guarantee, so why not find a way to credit the work that they are doing and to amalgamate their various jobs? If they are doing a number of part-time jobs, none of which gets them into a position where they are paying NI contributions and therefore building up their entitlement, we should find a way for them to do that. I ask the Minister to consider that point, with which the Secretary of State expressed some sympathy. Carers UK applauds the introduction of the new carers credit and has highlighted the tens of thousands of extra carers who will become eligible because of the changes that are being made. However, the qualifying conditions mean that 40,000 people caring for 20-plus hours a week will still not get entitlement to basic state pension and that 60,000 people will still not get entitlement to the state second pension. My hon. Friend the Member for Northampton, North (Ms Keeble) gave some good examples of the sorts of people who are not covered and why that is. The Carers UK document sets out six categories of people who would clearly seem to be caring for people but will not be able to build up the qualifications they need to become eligible for getting the credits that would feed into their pensions. For example, there is the person who cares for someone but does not wish to claim disability benefits. There is the person who is looking after someone with fluctuating conditions, so they claim their benefit or credit one week, and then the next week they have to go back and say that the situation has changed. There is the person caring for someone who goes into hospital for long enough to lose their benefit. The Carers UK document sets out a whole range of situations in which people who are caring for others for more than 20 hours are week are unable to get the entitlement that enables them ultimately to get their pensions. In relation to the big debate that took place earlier about who might be able to certify that someone is a carer for 20 hours a week, Carers UK proposes that that could be done by a health or social care professional—a GP, a social worker or a health visitor. A GP may well know that a person with whom they are dealing has someone who is caring for them for that length of time, even if they are unable to say whether they need it. I ask Ministers to look again at that proposal, or at least to allow eligibility to rest not only with those with high-level disability or incapacity benefit. The EOC research found that if conditions were right, including the option of working flexibly, up to 1 million older workers said that they would re-enter the work force. The Minister might like to consider extending the right to request flexible working to all, which might partly sweeten the pill of raising the retirement age. It could be a slightly less daunting prospect if we say to people, ““You might carry on working for longer, but this flexibility means that you do not necessarily have to work bang up to that retirement age.”” I congratulate the Government on carrying out a gender impact assessment. From April this year, all Government Departments will have to undertake that in relation to significant pieces of legislation under the new gender duty on public bodies. Perhaps the Minister could point out to his colleagues in other Departments that they will have that task in future. I look forward to some extremely interesting reports. My hon. Friend the Member for Northampton, North talked about the importance of information and publicity and had an interesting debate with my hon. Friend the Member for Aberdeen, South (Miss Begg) showing that whether or not the Government put out the right information it is crucial to think carefully about how to explain systems that remain complicated no matter how much we try to simplify them. We seem to be moving towards a consensus. I am pleased that that consensus reflects more accurately the world as it is now and moves us on from the world of 50 years ago. I hope that we can get this right in a way that is fair to women, to part-time workers, to their dependants, to carers and to men. If we move along those lines, we should end up with a pensions system for the future that is fair and reflects life as it is lived now, in all its complexity and with all its difficulties, and gives people a decent deal in retirement instead of leaving them in an appallingly unjust situation. I commend the Bill and hope that we will consider amendments to improve it further as it makes its way through the House.