My Lords, as the noble Baroness, Lady Sherlock, said previously, there is great confusion among the public about the consequences of the Bill. I have to confess that that includes me. I, too, am feeling my way here rather than making authoritative statements.
The noble Baroness, Lady Hollis of Heigham, spoke about the men between 60 and 65 who are treated as pensioners because they are unemployed. I presume that that is a small proportion of men in that cohort and that the overwhelming majority have to wait until 65 to receive their pension, as opposed to those men who are unemployed during that period. Therefore, the statement that all men are treated the same as women applies only if they become unemployed, if I understand the situation correctly.
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Of course, there are a lot of unanswered questions, but they work both ways. How can the Government say with any authority how much it will cost if we bring those women with a 1951 to 1953 date of birth into the system? In the same way, how can we say that those women will be disadvantaged? It is so difficult to say because lots of things potentially work in their favour as well as working against them by remaining on the existing system compared with the single-tier system.
For example, there is no minimum qualifying period under the old system, whereas between seven and 10 years’ national insurance contributions are required under the new single-tier system. The existing pension system allows additional payments under savings credit; that will no longer be available for those on the single tier. Those on the existing pension scheme are allowed derived and inherited state pension entitlement from partners, from spouses. That is not available under the new system, although one must accept that there will be a proportion of women in that cohort who have no partner and have never been partnered, so that would not apply to them.
As I said on Second Reading, this is a case of swings and roundabouts, although those women in that cohort do not see the advantages: they see only the disadvantages because that supports their case. For those reasons, what on the face of it appears to be a disadvantage for those women born between April 1951 and April 1953 compared with men of the same age is not necessarily the case.
Secondly, the reason why women born between April 1951 and April 1953 will not be in receipt of single-tier pension is because they will already be eligible for pension under the old system—the argument that the noble Baroness, Lady Hollis, put forward. Women will be able to claim pension under the old system for between two and four years longer than
men of equivalent age who are not unemployed. For those men, that could amount to between £13,000 and £26,000 in basic pension payments that the women, under the old system, will receive but that men, under the new system, will not be entitled to.
Thirdly, the previous Labour Government reduced the qualifying period for a full state pension from 40 years to 30 years to help women qualify, but to ensure that the new single-tier pension is affordable it will take 35 years of national insurance contributions to qualify for the full single-tier pension. Those women born between April 1951 and April 1953 will have to have only 30 years’ national insurance contributions to qualify for a full state pension under the existing scheme.
Again, that does not help those women in that cohort who have 35 years’ or more national insurance contributions. As has been said in the other place, yes, there is the ability to buy additional national insurance contributions for those who fall short of the 30-year requirement or for people to defer receipt of their state pension until after 2016, in which case they will qualify for the single-tier pension, but again, there will be women in that cohort who cannot afford to do either of those things.
Taking everything into account, the DWP estimates that 90% of the women born between April 1951 and April 1953 would be better off under the existing system of pension and other benefits but, because of the complexity, it is difficult to understand how that figure has been arrived at and it would be good to receive some clarification from the Minister as to where those numbers come from, to reassure us that that is actually the case.
That still leaves some women in that cohort who will be worse off than men on the single-tier pension, the median difference being £6 a week—again, according to the figures from the DWP. It has to be said that, even for those women, whatever they will receive under the existing system, as a result of the Liberal Democrats in the coalition Government and the triple lock, will be more in basic state pension than they would have planned for under the previous Labour Government. Although they may not be in the 10%, according to the DWP figures, who will be disadvantaged, they will still be receiving more in basic state pension as a result of the triple lock than they would have anticipated receiving previously. We are not talking about taking money away from people; we are talking about people not receiving more than men born at a similar time.
Therefore, there will still be inequalities in the existing system because of the historic situation with women in the workplace taking time off as primary carers or for childcare and not receiving credits until the previous Government brought in changes to provide credits for that sort of situation. However, even under the changes brought about by the previous Labour Government, it would have taken until 2020 for women to receive outcomes from the full basic state pension equivalent to those for men. As far as the state second pension is concerned, it would have taken until 2050. When you bring about these sorts of changes, it is always difficult to decide at what stage they should be brought in, but
it seems reasonable to do so at the date that the pension changes for those people who are not currently in receipt of the existing state pension.