Pensions Bill

I am grateful for the opportunity to speak because I have a special interest in the Bill. Although, as I am sure my speech will make clear, I am no expert on pensions, I am passionate about the subject. I speak for the Liberal Democrats on women’s and equality issues, and I can think of no area in which this country has treated its women more shamefully. One in four women pensioners in Britain today lives in poverty. The average income of women pensioners is only 57 per cent. of that of male pensioners, and only 30 per cent. of women retiring today qualify for the basic state pension. A good many statistics have been quoted, so I shall simply say that more than 2 million women are poor enough to receive the means-tested pension credit. That will raise their weekly income to £114.05, which is still £14 below the Government’s official poverty level income of £128 for a single person. Of those 2 million women, 20 per cent. will be in even worse poverty because, for whatever reason, they do not claim the means-tested benefit. It is not difficult to see why this state of affairs has arisen. For the most part, it is a self-perpetuating problem that will not be susceptible to resolution in the foreseeable future. As the hon. Member for Amber Valley (Judy Mallaber) observed, women earn less than men, so they accrue fewer pension contributions. Even if we compare the average full-time wages of the sexes, women earn 17 per cent. less than men—but many women work part-time so that they can care for growing families, elderly relatives and others, and part-time hourly earnings for women are only 88 per cent. of men’s. Given their lower earnings, women’s ability to pay any money into their pensions is diminished. Historically, as many Members have pointed out today, the pensions system was designed on the assumption that the husband would be the main breadwinner. Married women were led to believe that they would still receive pensions if they paid the so-called married woman’s stamp, instituted by Beveridge in 1948. Too many found out too late that that was a fallacy. Even today, there are women who are still paying the married woman’s stamp. But perhaps the greater contributor to poverty among the elderly, particularly women, has been the fall in the value of the basic state pension caused by the removal of the earnings link in 1980, on Mrs. Thatcher’s watch. The basic state pension constitutes about half the income of women pensioners, a far greater proportion than that of men. Its value has now shrunk to £52.50 a week less than it would have been if the earnings link had been maintained. For today’s 7 million women pensioners the picture is bleak, and for the fifth richest country in the world it is a national scandal. What are we going to do about it? In the Bill, the Government have gone quite a long way towards implementing the Turner recommendations, although if they had embraced the recommendations for a citizen’s pension—which has been Liberal Democrat policy for some time—much of the detail of the Bill, which leaves out some people who deserve a pension, would not have been necessary. However, we welcome the Bill as far as it goes, although I shall respectfully point out some areas in which I think it could be made better and fairer. As we have heard, the Bill will help by reducing the number of years contributions needed for someone to claim the basic state pension to 30, from the current 44 for men and 39 for women. That will help women because, as I have said, many will have taken time off to bring up children, care for elderly relatives and so on. The introduction of the 30-year rule will create a cliff edge for those who have failed to achieve the 30 years because they retired a day, a week, a month or a year or more too soon. The gap that they will face will be huge.