My Lords, I apologise to the Committee that I want to raise another substantial issue. After this, I promise that the issues that I raise will get smaller, but other noble Lords’ amendments may be appropriately substantial.
This is about the married women’s dependency pension. This is the first of three amendments. The second amendment is intended to address the issue that widows may face and the third amendment addresses those that divorcées may face. They try to avoid the cliff edge for some vulnerable women—please forgive the political incorrectness. This also applies to men and civil partners, and later amendments apply to male divorcés and widowers.
The peak cost of some £200 million which was suggested by the Minister in the other place would fall in the 2030s for all three groups, including overseas spouses, I gather, which suggests a lower figure, perhaps £100 million a year, during the next 10 years or so. I am grateful to the Box for giving me some additional information on numbers, although I am still not clear about costs. If the Minister can clarify that, that would be helpful.
The Government have rightly helped 10,000 women—it is a diminishing number—who paid a reduced stamp and have put them effectively on to the equivalent of the former 60% dependant pension. At the same time, they are taking that same pension from about 5,000 married women who would otherwise qualify for it each year. This amendment calls for a transitional period of 15 years, as urged by the Select Committee on Work and Pensions on this part of the Bill, having taken a considerable amount of evidence, including some very effective evidence from Age Concern.
This amendment seeks to help women, not many of them, who have, for one reason or another, lived their lives among an older—shall we call it, although I do not mean this to be patronising at all, Daily Mail model—without any expectation that the Government were going to change the rules around them.
On the one hand, the Government are about to reward about 4 million non-working wives with a marriage tax allowance for their husband worth £3.85 a week, costing £700 million a year, and on the other hand they are taking away a £66 per week pension, also derived from marriage—bingo for marriage—at a fraction of the cost of the marriage tax allowance, from older women who have no time to rebuild. The Government are giving to married women with working husbands and taking away from married women who now face retirement with no pension of their own. Husbands—younger men—immediately benefit from a tax allowance transfer which has come as a windfall, while older women lose support that they have been promised all their lives. It is bizarre. Why not spend the first on the second? It will pay for itself several times over and will be far more useful and far more fair for, given their age and such short notice, older women can do little or nothing to build a pension of their own greater than the 60% that they would get as a derived right. That would take 16 years.
Women approaching retirement age had expected the 60% pension and planned their retirement around it. They had, and have, a legitimate expectation. The younger woman and her husband—they are not just cohabiting—receiving the £3.85 household income have not built their lifetime around it and planned for it, unlike the 60% pension. That is simply a windfall. It is unexpected and unplanned and, in my view, much less deserved than the pension that older women were entitled to expect. That younger woman is likely to have many years ahead both to work and gain income and to secure her own retirement with a full pension. I cannot think what mentality, frankly, has produced that juxtaposition and this disjuncture between those two groups, both of whom derive their rights through marriage.
In the other place, the Minister made much of the fact that a significant proportion—more than two-thirds—were male spouses or partners who were born or lived overseas. I now calculate, with the revised statistics that we have had, that huge number to be all of 2,000. However, I have tried to cover that with my,
“ordinarily resident in the United Kingdom”,
which has a good case behind it and which will not trouble the Government.
Indeed, the Minister may also argue, as Steve Webb did in the other place, that he finds it hard to conceive of women who might fall into this group given the wide array of credits—the up to 50 years of working life, which would mean that you start collecting credits at the age of 15 to bring you up to 65, and the 35 years’ NI record requirement. Let me help him, if I may, with two possible categories of women, both of which I am familiar with; I am sure my noble friends have other examples.
I am aware of at least two groups of women who continue to need transitional protection. To get the equivalent of 60% of the future pension equivalent, they would need cover on their own record of at least 16 years—less than that, and they are worse off. Younger women, I readily agree, have time to reshape their plans. They also have appropriate childcare credits, not HRP, which required you to earn actual NI years for it to come into play. Many may have undertaken part-time work above the LEL and may have signed on for JSA, all of this bringing entitlement to a pension of their own. That is as it should be. But women in their 50s do not have that, hence the 15-year transitional period.
Who are likely to lose? The first group is older women with patchy NI years. They got HRP and perhaps did not understand what happened when we replaced it with childcare credits. They did small jobs below the LEL for many years knowing that they would get the 60%. That is what women have told me. They did miscellaneous caring for elderly relatives, credit for which was introduced only in the past five years, which is too late to benefit most of them.
Perhaps their husband’s job took them around the country and they were unable to keep finding new jobs above the LEL for themselves while they moved house and supported his career. As we have discussed, service wives are an extreme case of this. They juggled untidy
lives; lives which did not conform to NI requirements. But they knew—or they thought they knew—that they could count on their husband's pension to give them a dependent’s fund. Virtually overnight, as there are no transitional arrangements, that has been taken away.
The Pensions Advisory Service, which I quoted on Monday, completed its survey of nearly 1,000 women and women often commented with additional views. I quote from one of them.
“Had to give up my part-time job when my grand-daughter was born to look after her full-time while her mother and father worked. I’m now desperately looking for work”,
because the NI years have risen to 35. She thought that with 30 years she was all right. She is now 58 and has tried hard to find work but without success. She continues:
“I am getting very worried about the future. I go to bed thinking about it and wake up to face it all again”.
She has a patchwork. She has missing years and we are told that she cannot buy them back before 2006 once universal credit comes into play. Even if she had voluntary NICs, she could not deploy them in circumstances such as hers.
The second group is women who have had poor health for most of their lives—depression, arthritis, angina or diabetes—and they either did not think about or know about incapacity benefits or perhaps believed that the condition was not so incapacitating that they would qualify, especially given the somewhat deliberate stigmatising in the past few years of benefit claimants. Frankly, there has been humiliating treatment of certain claimants by ATOS. I know that the Minister will not want me to recite some of the cases that I have experienced, but they are relevant to this. Their husbands earned enough and, given their poor health, keeping house and perhaps helping out neighbours or local charities was as much as they could manage. If this sounds improbable to the Minister, we are talking about women approaching pension age where the DWP’s own research on benefit take-up among entitled but not claiming pensioners shows how deeply ingrained is the reluctance to claim means-tested benefits.
Such women may have had a few years of NI work behind them but not enough to bring them over the 10-year threshold. If they had nine NI credits or years, they could at least have received £36 a week that they do not in the conventional way, which would normally not have needed to come into play because the 60% was more generous. That de minimis has been removed, although I hope and expect that some women affected will buy an extra year to get over the 10-year hurdle and enjoy £40 a week. However, they probably do not have the time, good health or employability, or in some cases the income, to bring it up to 16 years, or the 60% level that they reasonably expected.
Let me again quote from the TPAS survey. Asked about how they would cope, one woman wrote that she was,
“sick and disabled so unable to save or plan, though very worried as had break in NI due to illness but never claimed benefit”.
Some, but few, I suspect, of the 30,000 affected will be able to afford to buy back missing years. I am not sure whether they can buy them back previous to 2006—we
had confirmation on Monday that they could not—where the missing years may have occurred. That relaxation appears to expire in 2015 and the Minister is not continuing it from 2016 onwards.
The Minister at the other end several times argued that if the DWP introduced any transitional period, this would be found by the courts to be arbitrary and would presumably be overturned. He seemed very nervous about the courts; he introduced this argument at least twice when reading his speeches. I am surprised by this. In my experience, if Parliament’s policy intent is clear—see Roe v Wade—it would not fall to judicial review unless it could be shown that it was a decision that no reasonable person could have made. That is quite a high hurdle and clearly not the case here, so if the Minister is going to argue that, may we have proper information about the legal advice that the DWP has received on which the Minister at the other end so heavily relied?
We phased in the rise in people’s pension age over a decade. We are scrapping the pension that they might have drawn at pension age, effectively overnight. I do not think that is fair. If we feel the need to give adequate warning when raising the state pension age, as we did, we should provide adequate warning and therefore transitional arrangements for the most obvious group of real, not notional, losers. It is not difficult. We have the precedent of the reduced married women’s stamp, which we should follow. I beg to move.