Pensions Bill

My Lords, I, too, welcome the Bill, which is the subject of enormous consensus in both Houses and in today’s debate. It addresses many, but not all of the issues. Of course, I regard it as a partner Bill to the one that we will get next year on occupational pensions, because it is about overall income in retirement. What has become known as the Turner report is, in my view, an important element in the discussion that we are having today. Pensions, as we all know, are long-term issues. We cannot pass a Bill this year and think that if we get it wrong we can do something about it in three years’ time. We are planning for the long-term future income of our citizens, so it is important that we get it right and that we address the Bill’s shortcomings. That said, I want to say to my noble friend the Minister that this is an enormous step forward and one that we would like to have seen before now, but all due credit to this Government for bringing it forward. We welcome the return to increases related to earnings or prices, whichever is the higher. Although she is not with us today, I look at the Bench next to me and almost see the late Lady Castle from Blackburn, who continually hectored her own government over this very issue. She is certainly blessing the Government from wherever she is. The more I read about the Bill and prepared myself for today’s debate, and the more I read the many briefings that we all received, the more I came to the view—and this may be an unparliamentary thingto say—that, if the cards were reversed and the discrimination was against the male members of our population, we would not be discussing this today. The issue would have been dealt with at leasttwo decades ago. Therefore, there is no excuse for passing the buck on this occasion. We have to deal with some of the shortcomings in the Bill, because it will decide for many years ahead of us, the income level and standard of retirement of our women citizens. Our actions should not be regarded as destructive; it is important that we make some changes to the Bill. The reduction to qualify for the basic state pension from 44 years to 30 years for men and from 39 to34 for women is a marvellous step forward and should be welcomed without any caveat. That said, the measure is predicated on a male lifestyle and working life. Generally, men do not have a life of part-time or broken employment—some do, but most do not. That is why the Bill falls down in this area. It presents a platform for the future, but because pensions are long term, we have a transitional period of not one or two years, but a substantial number of years in some cases. In that transitional period, many women in this country will still be living in poverty. We need to look at a number of areas in this Bill. One is the backdating of national insurance contributions—the ability to buy added years of NICs. Women's lives are variable through work, having a family, or breaking off work to be a carer—sometimes a multi-carer. We should extend the period that a woman can buy added years. What is wrong with that? It is a progressive measure. On the issue of women and multiple employment, we have a problem today involving women who work part time—four out of five part-timers are women. The income on each individual job does not reach the lower earnings level, so they do not qualify for basic state pension. Because of their multiple employment income levels, approximately 15,000 women today actually earn more cumulatively each week, each month, each year than the lower earnings level. If all their earnings were taken together, they would qualify. Some of those 15,000 women actually earn more than their male colleagues who qualify for basic state pension, yet the woman does not. I have read the debates in another place and I cannot find any principled objection to adding the incomes together. I do find the argument that it is too difficult. That is not an argument: it is an excuse. Somehow, we must address this issue, because it is discriminatory. Over a year, 15,000 women earn sufficient to qualify for the basic state pension, but because the earnings are from different employers they are excluded completely. The noble Baroness, Lady Hollis, talked about an amendment on this issue and it seems from the Benches opposite that the question is, ““Have you the stomach for it?”” Well we have the stomach for an amendment with regard to multiple employment and we will push it, because it is long needed. The carer’s credit is welcome. It is an enormous step forward to go from 35 hours to 20 hours, linked with the fact that you do not have to be reliant on the claimant—the benefits of the person you are looking after—but can get signed off by the social worker. I am not an expert in this field, so when my noble friend sums up, will he please repeat the undertaking in this area? It is a key area and I want to make sure that I understand it, because I might want to amend the Bill if the understanding is wrong. Like many Members of this House, I have received numerous letters from people who were hoping for support from the financial assistance scheme who feel that they have been let down, for two reasons. First, the scheme seems to be dragging its feet on payments. I do not know why, but it seems to be slow in making payments. Secondly, we return to the complication of pensions. People think that they will get 80 per cent of their pension, but they will not. They will get 80 per cent of their core pension, which in some instances will mean a substantially reduced pension. That cannot be right. Although, strictly speaking, the issue is not related to this Bill, I am sure that we will discuss it in our debates. I look forward to that. I welcome the personal accounts that have been provided for, but they will be no use without good advice. That good advice must be freely accessible and independently given. Women would certainly welcome that, not because women are any less able than men, but because women have different lifestyles and do not have the same kind of access to advice as many men. The noble Lord, Lord Turner, mentioned commutation levels and a number of us nodded in agreement. I certainly did, because the present level is below £15,000, which is a very small amount. It would help if we could do something there. There are many areas where something could be done to help with the transitional period, which particularly affects women. My last point in his contribution is one that a number of Members will have heard me address before—the issue of annuities. We really are behind the game here. There is no proper competition in the annuity field. The age level for it is wrong and it is outdated. Some people have tried to project the tale that annuities are only for the wealthy, they are not. I certainly look forward to discussing annuities with the noble Lord, Lord Fowler, and others in our deliberations on the Bill. I sometimes wonder what the Minister sitting on the Front Bench must think. He brings forward a Bill of which he is very proud, and rightly so, because it is an enormous step forward. But nothing is perfect and it is our job to try and knock the rough edges off it. I assure my noble friend that we will certainly be trying to do that in this Bill.