House of Commons

Monday 20th June 2011 Commons Chamber

Monday 20 June 2011

The House met at half-past Two o’clock

Prayers

Monday 20th June 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 20th June 2011 Commons Chamber

The Secretary of State was asked—

[Mark Menzies (Fylde) (Con)]

1. What steps his Department is taking to encourage local authorities to provide weekly refuse collections.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

The public have a reasonable expectation that their household waste, in all its various forms, will be collected weekly. That is why we have already ditched the last Government’s policy of imposing fortnightly collections, and we are now going to work with local councils to increase the frequency and quality of rubbish collections. We want to make it easier to recycle.

[Mark Menzies]

Does my right hon. Friend agree that by stopping Labour’s planned bin taxes, we are saving hard-working pensioners and families a lot of money?

[Mr Pickles]

My hon. Friend is absolutely correct about abolishing Labour’s plans for bin taxes, which would have hammered hard-working families. They were also ridiculous because they would have led to an increase in fly-tipping. The Keep Britain Tidy group has remarked that people would simply have dumped their garbage illegally in a bid to avoid the taxes. It seemed to me to be utterly unreasonable to pit neighbour against neighbour.

[Alison McGovern (Wirral South) (Lab)]

Wirral council’s ability to manage refuse collection is severely hampered by the financial settlement it has received. Will the Secretary of State or Ministers meet a Wirral delegation to discuss funding for local services, including refuse collections, in Wirral?

[Mr Pickles]

It is always a delight to meet people from Wirral, and if the council there—or, indeed, the hon. Lady—would like to meet me or some of my hon. Friends, we would mark it eagerly in our calendars.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

What incentives and support—financial or otherwise—will the Secretary of State’s Department give to small councils such as Purbeck district council, which has moved to fortnightly waste collections but would be interested, if funds permitted, in moving to a weekly food collection?

[Mr Pickles]

My hon. Friend makes my point very well. As the Under-Secretary of State with responsibility for local government and planning announced, we are considering financial assessments. Often the kind of authority to which my hon. Friend referred could do with some help with procurement—we have seen a number of smaller districts get together—and we would certainly hope to deal with weekly collections in all their various forms.

[Mr Speaker]

Order. If the Secretary of State could face the Chamber, we will all benefit from hearing the full flow of his eloquence.

[Caroline Flint (Don Valley) (Lab)]

This money has been recycled many times over. At the Conservative party conference in October 2008, the Secretary of State promised:

“Under a Conservative Government, the weekly bin collection will be back.”

Since the election, eight Tory councils, including in the Prime Minister’s own constituency, have abandoned weekly bin collections, and the Secretary of State has been forced into a humiliating U-turn. Why can he not deliver on his promises?

[Bob Russell (Colchester) (LD)]

Rubbish!

[Mr Pickles]

My hon. Friend suggests, from a sedentary position, that that was rubbish, and I cannot disagree with him. We are looking at delivering weekly collections and a financial incentive for providing them, but we had to start from the basis of dealing with the legacy—we had first to remove the Audit Commission and the instructions in the waste and resources action programme suggesting that it was best to close these things down after local elections, and we had to ensure that the fortnightly collections, which the right hon. Lady advocated so strongly when she was Minister for Housing, were also stopped.

[Caroline Flint]

Of course, under Labour, recycling went up, and last week we heard that across our islands, Northern Ireland, Scotland and Wales have higher targets for recycling than England. I think that the record will show that most of the local authorities with fortnightly bin collections are Conservative-controlled. Is not the truth that this chaotic climbdown is a personal humiliation for the Secretary of State? He is making promises he cannot deliver, his own councils are not listening to him and he has been dumped on by his Cabinet colleagues.

[Mr Pickles]

I understand now why Polly Toynbee is so disappointed with the right hon. Lady’s opposition across the Dispatch Box. I apologise, Mr Speaker, for not directing my earlier remarks to you. She is concerned about the number of Conservative authorities, but their number is due to the fact that the majority of councils in this country are Conservative—she had a big chance in May to rectify that and failed singularly. However, we are removing the incentives for fortnightly collections, and looking at incentives for weekly collections.

[Mr James Gray (North Wiltshire) (Con)]

2. What plans he has to provide support through his Department’s housing policy to serving and former members of the armed forces. [Official Report, 13 July 2011, Vol. 531, c. 3-4MC.]

[Christopher Pincher (Tamworth) (Con)]

10. What plans he has to provide support through his Department’s housing policy to serving and former members of the armed forces.

[The Minister for Housing and Local Government (Grant Shapps)]

I am absolutely determined to ensure that serving and former serving personnel from the armed forces are treated properly when it comes to housing on their return.

[Mr Gray]

Serving men and women form a disproportionately large part of those who are homeless or rough sleepers. I therefore very much welcome the Government’s notification that they are a priority group under the Firstbuy scheme. However, many of them cannot afford to buy a house at all. Will the Minister now consider whether he can bring pressure to bear on local authorities, so that serving men and women are also designated as a priority for local authority housing?

[Grant Shapps]

I do not just want to remove the housing disadvantage for those who have served in the military; I want to put them at a positive advantage. That is why we have announced today that they will receive that priority in the Firstbuy scheme. I can also tell my hon. Friend that they will be a priority in the social housing allocation list. Also, if I may correct one point, the new figures for rough sleepers out today from CHAIN—the Combined Homeless and Information Network—show that just 2% of those who have served previously in the military are on the streets.

[Christopher Pincher]

I am grateful to my right hon. Friend for his answer. Will he join me in congratulating Tamworth borough council on the steps that it proposes to take in prioritising service people on its housing list? Professional organisations such as the Residential Landlords Association have also been encouraging their members to support service people with housing needs. Does that not demonstrate that the private sector can work with the public sector to deliver the housing element of our armed forces covenant?

[Grant Shapps]

I have no hesitation in congratulating Tamworth on its approach to the armed forces, or the Residential Landlords Association, which has done much to push this issue. I congratulate them, and I will go further when we draw up the social housing regulations after the Localism Bill has passed.

[Mr Andy Slaughter (Hammersmith) (Lab)]

4. What recent assessment he has made of the effects of reductions in central Government funding for local authorities on levels of local authority service provision.

[Mrs Mary Glindon (North Tyneside) (Lab)]

13. What recent assessment he has made of the effects of reductions in central Government funding for local authorities on levels of charges for local authority services.

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

I can tell the House that I have made a new assessment of the consequences for local authorities of paying down the deficit. Currently, the average reduction in spending power for councils this year is 4.4%. However, if VAT were reduced, as per a recent suggestion, the £13 billion a year needed to pay for it would require the average cut in council spending to be 29.1%. In my view, that would be to go too far and too fast.

[Mr Slaughter]

That is all very interesting, but from next month, nine Sure Start centres in Hammersmith and Fulham will lose more than 90% of their funding, and therefore will close. Parents at one of them—Cathnor Park—have got a judicial review going, but they are having to expedite it, because the council is going ahead with 50 redundancies and closing services, despite the fact that the courts have not yet considered these matters. Will the Minister at least go as far as advising that rogue council not to proceed with those closures until the courts and the parents have had their fair say?

[Greg Clark]

That is a superb council, and it certainly does not need any advice from me. In fact, I am astonished that the hon. Gentleman has not taken the opportunity to congratulate his council on saving every library in the borough, by merging the service with neighbouring boroughs, and on saving £1 million. When he was leader of the council, he doubled the council tax and his Labour administration was booted out at the election. The current, Conservative administration was returned with a healthy majority at the last council election.

[Mrs Glindon]

As a result of the Government’s decision to impose huge, front-loaded cuts on local authorities, many councils are increasing charges for social care, hitting the elderly and the vulnerable. Will the Minister join me in condemning Tory councils such as North Tyneside council, which has increased its home care charges by more than 50%, from £99 to a maximum of £150 a week?

[Greg Clark]

We still have not had an answer—perhaps we will shortly—to the question of how the extra black hole that has opened up will be funded, and whether that will come from local government, but I will answer the hon. Lady’s question. Three years ago, one of the predecessors of the right hon. Member for Don Valley (Caroline Flint) as Minister for local government, the right hon. Member for Wentworth and Dearne (John Healey), complained that only one in five councils was using charging to its full potential. Indeed, the last Government issued statutory guidance to force councils to charge more for parking, for example. Council charging doubled under Labour. Unlike the last Government, we will not force councils to increase their charging.

[Sir Paul Beresford (Mole Valley) (Con)]

Does my right hon. Friend agree that there is great cost variation in like-for-like authority provision? Therefore, it is inappropriate to judge the quality of services by the amount of other people’s money—that is, taxpayers’ money—spent on them.

[Greg Clark]

My hon. Friend is absolutely right. His record in leading Wandsworth, which was transformed under his leadership—I am pleased to say that that transformation has continued under the leadership of Sir Edward Lister, whom I am sure the House will congratulate on his knighthood—shows what can be done when there is a Conservative council that takes the economies seriously.

[Henry Smith (Crawley) (Con)]

Does my right hon. Friend agree that, now that the Government have introduced greater transparency in relation to any amounts over £500 that local authorities spend, our constituents will be far better informed about the politics involved in the reduced budgets for local authorities?

[Greg Clark]

My hon. Friend is another distinguished former leader of a local authority, and he is absolutely right. We still have not heard whether those on the Opposition Front Bench think that it is a good idea for councils to have full transparency. I think that Nottingham city council is still holding out, but perhaps we shall be enlightened on that matter soon.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Today’s report from the Equality and Human Rights Commission demonstrates that Britain’s pensioners are not receiving the care that they deserve. In Birmingham, the coalition council’s cutting of care to 4,100 of the most vulnerable has been branded unlawful by the High Court. Having imposed the biggest cuts in local government history, does the Secretary of State take any responsibility? Will he intervene in this matter, or does he share the view of the Prime Minister that the actions of Birmingham city council were “excellent”?

[Greg Clark]

The problem with Birmingham is that it has a legacy of mismanagement and waste from the days of Labour control, which lasted quite a long time. If the hon. Gentleman is interested in the economies, as I am, will he tell us his position and that of the right hon. Member for Don Valley (Caroline Flint)? He is the Rasputin of the Labour party, the power behind the throne of Edward Miliband. I have to warn the Leader of the Opposition, however, that the hon. Member for Derby North (Chris Williamson) is an acolyte of the shadow Chancellor. In Wimbledon fortnight, it would perhaps be appropriate to say that he is one of Balls’ boys. Is it the shadow Secretary of State’s policy to add an extra £13 billion of cuts? Yes or no? And would that come from borrowing, or would it yet again come from local government? Will she tell us what her policy is? In the week that—

[Mr Speaker]

Order. I am grateful to the Minister, but he must now resume his seat. In the name of utilising our time properly—I use the word “properly” advisedly—we must focus questions and answers on the policies of the Government.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

5. How much funding his Department has allocated from the new homes bonus scheme (a) to Lancaster and Fleetwood constituency and (b) in total since the scheme’s inception.

[The Minister for Housing and Local Government (Grant Shapps)]

The first new homes bonus allocations were made in April. Over six years, Lancaster will receive some £1.4 million and Wyre some £1.6 million. Across England, the allocations will total almost £1 billion during the spending review period. The next allocations will take place next April.

[Eric Ollerenshaw]

I thank my right hon. Friend for that reply on behalf of the two district councils. How long will it be before this policy and others of the new Government begin to address the failure over the past 13 years to get the right number of new houses that we need?

[Grant Shapps]

The policies are already having some impact. In the first year of this new Government, house building starts were up 22%. That compares rather favourably with the period during which the right hon. Member for Don Valley (Caroline Flint), who is now the shadow Secretary of State, was Housing Minister, when house building starts were a third lower than they are today.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Minister will be aware that some Labour Members are rather sceptical about whether the new homes bonus will deliver more homes than were being built before the recession. Given that no research is being done into the effectiveness of the scheme, and that there is no evidence about such schemes in other countries, does he agree that it would be appropriate to have an independent review of the scheme’s effectiveness? If so, what period of time should the review cover?

[Grant Shapps]

The Chairman of the Select Committee is wrong to say that no research has been done into the scheme. Indeed, the impact assessment stated that it would increase house building starts and, as I have just said, there has been a 22% increase in house building starts in the first year of the policy. Let us compare that with the year before the policy was put in place, when house building under Labour was at its lowest level since the 1920s. There is therefore growing evidence that the new homes bonus is working rather well.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I make my usual declaration of an indirect interest.

The new homes bonus is paying out taxpayers’ money but it is not delivering. Planning permissions fell by 17% on year for the first quarter. Let us not confuse that with starts, which took place as a result of investment by the previous Labour Government. The Town and Country Planning Association, the Campaign to Protect Rural England and the Royal Town Planning Institute are clear that the changes in the Localism Bill will enable developers to buy planning permissions. Are those professionals wrong?

[Grant Shapps]

The idea that one quarter can be judged against an entire year’s evidence is, of course, nonsense. The evidence for the entire year is that house starts are up by 22%. I would rather take a year’s figures than one quarter’s. We know that councils right across the country, including Labour councils, are welcoming the new homes bonus money, which is now starting to make a real difference. Yes, it is right for local authorities and local people to take fully into account the economic benefits of building more homes in their areas.

[Mr Dominic Raab (Esher and Walton) (Con)]

6. What steps he is taking to reduce the level of fraudulent claims for funding awarded by local authorities.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Last month, in conjunction with the National Fraud Authority, I published a 10-point plan outlining how councils can save £2 billion a year from tackling fraud. Whether it be through dealing with tenancy cheats or organised crimes, this is a key way to save taxpayers’ money and protect front-line services.

[Mr Raab]

I thank the Secretary of State for that answer. Will he join me in recognising the lead taken by Elmbridge borough council, which over the last year alone recovered £72,000 of overpaid benefit and is using data checks to crack down on the abuse of the single person council tax discount, cutting out waste and fraud and saving taxpayers’ money?

[Mr Pickles]

I will indeed join my hon. Friend in congratulating his council. As I said in my original answer, this is quite a big deal, amounting to £2 billion a year. I think it was Cheshire East council that managed to save £500,000 a year on the single person discount. We are not talking about trivial amounts here; we are talking about something that will make a big difference.

[Robert Halfon (Harlow) (Con)]

7. What steps his Department is taking to support home ownership.

[Nadine Dorries (Mid Bedfordshire) (Con)]

14. What steps his Department is taking to support home ownership.

[The Minister for Housing and Local Government (Grant Shapps)]

I can announce today that, subject to contracts, more than 100 developers will offer the equity loan product Firstbuy and I can also say that this will build more than 10,000-odd homes as we initially anticipated—something like 10,500 in England—and bring up to £500 million-worth of investment across the UK.

[Robert Halfon]

Is my hon. Friend aware that, under the last Government, the waiting list in Harlow quadrupled? Does he accept that one of the best ways to break the poverty trap is to help families into shared equity schemes to give them a foot on the property ladder?

[Grant Shapps]

My hon. Friend is absolutely right. The waiting list doubled across the country, but in Harlow it quadrupled during the period of the previous Government. That is not good enough; we must build more homes to get ourselves out of that trouble. In addition, we need innovative products that share equity. I know that my hon. Friend is a keen supporter of that and I am sure it will help in his area as indeed it will in the areas of all Members across the country.

[Nadine Dorries]

Many residents in Mid Bedfordshire who are living in social and council housing would love to have the opportunity to buy the home they live in. We know that such policies introduce aspiration and narrow the gap between rich and poor, enabling people to get on to that property ladder. Does the Minister have any plans to introduce schemes like right-to-buy again so that residents in Mid Bedfordshire can have some hope?

[Grant Shapps]

My hon. Friend is absolutely right to talk about right-to-buy, which helped millions of people achieve the aspiration of owning their own homes. This Government fully support that objective. I think it is right, however, to recycle that money into building more homes. Under the affordable rent scheme that I have recently introduced, that is precisely what will happen: if people end up buying their home, more homes will be built, which will help to lessen that record social housing waiting list that we were disgracefully left with after 13 years of Labour Government.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

Does not the Minister recognise that, far from promoting home ownership, his Government’s policies have led to a stagnant market in which housing starts are collapsing and public confidence has been shattered by a combination of the Minister’s incompetence and the Government’s economic management. Does he not recognise that the latest figures from the National House-Building Council—the most authoritative source—show that housing starts in April 2011, the latest for which figures are available, are 18% down on last year?

[Grant Shapps]

I am deeply shocked that the right hon. Gentleman, who is an acknowledged expert on housing, has chosen to judge what is going on in the housing market on the basis of a single month’s figure, rather than an entire year’s worth of data which shows a 22% increase in housing starts. Housing starts mean that homes get built, which is turn means that we are on the road to recovery in terms of starts and builds.

[Kelvin Hopkins (Luton North) (Lab)]

It has been reported recently that millions of people will never be able to afford to own their homes, and that only those who inherit equity from their families will be able to do so. However, equity will increasingly be used to pay for long-term care, and owner-occupation will diminish. Is that not the reality?

[Grant Shapps]

The hon. Gentleman is right to draw attention to a serious problem involving both long-term care and a reduction in people’s ability to buy homes. That has happened because house prices tripled over the 10 years following 1997. Eight out of 10 first-time buyers are buying their homes through the bank of mum and dad, but today those without that ability will be pleased to hear about our Firstbuy scheme, which will help more than 10,000 people in England to get a foot on the housing ladder for the first time.

[David Wright (Telford) (Lab)]

8. What recent discussions he has had with representatives of fire and rescue services on the effects of reductions in their budgets; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

I regularly meet representatives of fire and rescue authorities. My door is always open to their members if they wish to discuss their concerns. I have specified seven areas in which fire and rescue authorities might make efficiency savings, but the setting of fire authority budgets and service delivery are a local matter which is determined by individual fire and rescue authorities and not by central Government.

[David Wright]

Shropshire fire and rescue service

“has been hit by unprecedented cuts to its grant from Central Government, with a 12.6% reduction for years 2011-12 and 2012-13”.

Those are not my words, but the words of the chief fire officer in a letter sent to me the other day. Services and engine cover in Telford are to be reorganised. If response times fall away, will the Minister look again at the grant allocation for the Shropshire fire service?

[Robert Neill]

The local government grant accounts for only about 38% of the Shropshire fire and rescue authority’s total budget. Its spending power has therefore been reduced by only 2.1%, while its capital grant has been increased by 32%. The disposition of appliances and staff is, of course, a matter for the authority.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

As my hon. Friend knows, following the floods of 2007 and the tragedy in Hull the Pitt report placed an obligation on fire services to provide the right equipment in the event of future floods. Will he ensure not just that that obligation exists but that money will be provided, and will he insist that local authorities make that happen?

[Robert Neill]

Some of the most important equipment made available for such purposes is the “new dimension” equipment that is provided through a central Government grant. The Government have continued to fund the equipment directly, and I am glad to say that, with the exception of one item, all of it is duly being rolled out.

[Chris Williamson (Derby North) (Lab)]

In February, the Under-Secretary of State accused me of scaremongering about the impact of his cuts on the fire service. However, freedom of information requests have confirmed that he has already presided over more than 1,000 firefighter job losses, although the Prime Minister pledged to supply funds to the fire service front line. Can he tell us whether he expects further firefighter cuts in the next 12 months, and if so, how many?

[Robert Neill]

The disposition of firefighters is entirely a matter for local authorities, whose job is to ensure that they fulfil their statutory obligations and meet their integrated resource management plan. Provided that they do those two things, it is not for central Government to micro-manage them. I know that it is difficult for the hon. Gentleman to understand that.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

9. What plans he has to increase the powers of local authorities to tackle unauthorised development.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

16. What plans he has to increase the powers of local authorities to tackle unauthorised development.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

The Government take the problem of unauthorised development very seriously. There are already strong powers to enable local planning authorities to take action, and the Localism Bill, which begins its Committee stage in the House of Lords today, includes provisions in clauses 108 to 111 to strengthen authorities’ powers to tackle unauthorised developments, particularly when people have deliberately tried to conceal them.

[Mr Evennett]

I thank my right hon. Friend for his response and the work he and his Department are doing in this field. Does he believe the policies in the Localism Bill to which he has just referred will speed up the planning and enforcement process to help tackle the problems caused by unauthorised developments and business operations?

[Mr Pickles]

I do. A particular problem has been unscrupulous developers rather playing the game by both appealing against enforcement in respect of unauthorised developments and putting in fresh applications. In future, the applicant will have a choice of either appealing the enforcement or making a fresh application.

[Andrew Jones]

I thank my right hon. Friend for his answer. The 2006 planning enforcement review recommended that planning fees should not include a charge for enforcement. Will the Secretary of State confirm what the current position is, and is he considering changing it?

[Mr Pickles]

We will lay out changes with regard to enforcement and issue guidelines. For instance, we will increase the fine for enforcement from £1,000 to £2,500. It is important to send out the message that unscrupulous developers will no longer be able to play the system and get those vital months of freedom in which to continue with a development no one wants.

[Fiona Mactaggart (Slough) (Lab)]

One of the planning enforcement steps that the Secretary of State has made it harder for Slough local authority to take is dealing with what we call Slough sheds, which is people erecting garden sheds in their back gardens and letting them out for others to occupy. The Secretary of State has taken away the funds we had to be able to enforce against that abuse of garden sheds. What is he doing to ensure that local authorities have sufficient powers and resources to deal with the letting out of inappropriate buildings to needy people?

[Mr Pickles]

I regret to have to inform the House that, in all our deliberations, Slough sheds have not been at the forefront of the Department’s mind. If it is an important abuse, I frankly do not believe that the local authority cannot find the necessary resources to prioritise tackling it. However, we are looking at ways in which we can encourage small business and private enterprise to set up in private homes, and I hope the point the hon. Lady raises would not stand in the way of that.

[Chris Skidmore (Kingswood) (Con)]

11. What steps his Department is taking to reduce the number of empty homes.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

We have put in place powerful tools and incentives to support local communities to tackle empty homes. Through the new homes bonus, communities will receive a direct financial reward for bringing an empty home back into use, and we are investing £100 million to tackle empty homes directly.

[Chris Skidmore]

Under the previous Government, together with local residents I fought to prevent thousands of homes from being built on the Kingswood green belt, particularly since there are 2,260 empty homes in south Gloucestershire, an increase of more than 660 empty homes since 2004. What encouragement can the Minister give my constituents that we will do all we can to get these homes back into use?

[Andrew Stunell]

The new homes bonus will give local councils every incentive to bring empty homes back into use. They will get matching council tax receipts for six years for each home brought back into use, and that extra funding can be spent on things that benefit the local community, such as council tax discounts, boosting local services, renovating more empty properties or improving local facilities. The £100 million of investment is part of our affordable homes programme. Applications for that will be opened in the autumn, but I can tell my hon. Friend that 100 organisations have already expressed keen interest in it.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will the hon. Gentleman take a look at the issue of empty offices that might be appropriate for housing? I walk past 200 Aldersgate, a massive office complex in the centre of our city that has been empty for years. That is a disgrace. Why cannot we use that for people who have nowhere to live?

[Andrew Stunell]

I am happy to tell the hon. Gentleman that he is just in time. There is a consultation on precisely the issue he has raised. It closes on 30 June, and I look forward to receiving his submission.

[Steve Baker (Wycombe) (Con)]

12. What steps he is considering in relation to senior pay in local government.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

We have been clear that we expect councils to demonstrate much more restraint in the local decisions they make on senior pay. In addition, we have introduced measures in the Localism Bill and we are improving transparency arrangements to ensure greater local democratic accountability in determining senior pay.

[Steve Baker]

Many senior business men and their staff in my constituency have taken pay cuts as a result of part-time working through the downturn. Is local government sharing that pain?

[Mr Pickles]

I am delighted to tell my hon. Friend that a survey by one of the trade papers showed that chief executives’ salaries have dropped by 14%. In my view, that is certainly a very good start. We have asked chief executives who are earning more than £150,000 to take a 5% cut, and those earning more than £200,000 to take a cut too. They need to do that so they can look their front-line staff in the eye when taking these difficult decisions.

[John Cryer (Leyton and Wanstead) (Lab)]

Does the Secretary of State agree that the level of transparency being applied to the public sector should also apply to the private sector, and how can that be achieved?

[Mr Pickles]

That is a matter for companies and their shareholders. However, I am sure that somebody who has been a champion of the low-paid, such as the hon. Gentleman, will be very pleased that we are extending that transparency. It will apply not only to highly paid people but to low-paid people in the public sector, so that we can clearly see the level of remuneration that local authority workers receive.

[George Freeman (Mid Norfolk) (Con)]

15. What steps he is taking to enhance the role of neighbourhoods and town and parish councils in local planning.

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

The Localism Bill gives every community the right to have a neighbourhood plan, and town and parish councils will have a leading role in bringing the plans together. The National Association of Local Councils, which is the umbrella body for town and parish councils, is one of five organisations funded to provide assistance to neighbourhoods in drawing up their plans.

[George Freeman]

I thank the Minister for that answer, and on behalf of the 110 villages and four towns in Mid Norfolk I thank him for giving them the opportunity to take control of their own housing policy after a decade in which housing policy was something done to them by unelected Labour quangos. Can he reassure the town councils in my constituency that where a district council, for good reason, is seeking to complete a local development framework in an area with very high speculative pressure from developers, there will be some scope for town councils to put in place their own plan for their town, such that housing that has been provided for can be delivered in a way that will boost the identity of that town and its sense of itself?

[Greg Clark]

My hon. Friend is absolutely right. As he will know, the parish council in Attleborough, in his constituency, is already drawing up a neighbourhood plan, so that plan can have statutory force as soon as the provisions of the Localism Bill come into effect. I encourage other councils throughout the country to join the more than 90 parishes and neighbourhoods that are drawing up neighbourhood plans, even in advance of the Bill’s provisions coming into law.

[Heidi Alexander (Lewisham East) (Lab)]

The Minister will know that I do not share his optimism about the effectiveness of his planning process proposals in engaging people. How will relaxing the planning rules on converting offices into homes give more powers to neighbourhoods and communities?

[Greg Clark]

Having debated these matters with the hon. Lady in the Localism Bill Committee, I would have thought she would be the first to recognise the need to turn derelict buildings that are not being used into housing that can be used for people in city centres. I am surprised at her attitude. However, I can update her. I know that she expressed some scepticism about the idea that people would be enthusiastic about this, but I have to tell her that since the Bill Committee, we have been vastly oversubscribed by enthusiastic councils in all areas of the country that are eager to get on with neighbourhood planning. That has surpassed our expectations and bodes pretty well for the take-up of the rights.

[Duncan Hames (Chippenham) (LD)]

The Government’s natural environment White Paper proposes a new designation of green areas to be identified in neighbourhood plans. However, those plans must remain in line with the local authority’s strategic vision for its area. How does the Minister propose that neighbourhood plans could safeguard green areas of land identified for development in existing local development frameworks?

[Greg Clark]

I am grateful to my hon. Friend for his question. Our hon. Friend the Member for Cheltenham (Martin Horwood) proposed the designation in the first place. Hon. Members will see in the national planning policy framework that we will capture a definition that will allow the people who know green spaces best—those who live with them—to provide them with the protection for which they have been looking for some time.

[Jane Ellison (Battersea) (Con)]

17. What steps he is taking to improve the transparency of spending in local government; and if he will make a statement.

[The Minister for Housing and Local Government (Grant Shapps)]

All local authorities in England now publish details of their £500 spend online and our Department routinely publishes a wide range of statistics on local authority spend. I say all local authorities but there is one exception to that rule—Labour Nottingham.

[Jane Ellison]

Ministers have already referred to the sound stewardship of Wandsworth council, which not only publishes everything over £500 spending wise but publishes the salary and expenses of all its staff who earn over £58,200. Will the Minister urge all public bodies to follow that lead?

[Grant Shapps]

My hon. Friend is absolutely right about this. It is incredibly important that public bodies follow that lead. Transparency is at the very heart of allowing citizens to take part in local democracy and hold public bodies to account, and I cannot imagine for one moment why any public body would want to hold out against that. It is extraordinary that some do and even more extraordinary that one of them is a major city authority such as Nottingham.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Will the Minister be fully transparent about how much the people of Birmingham will have to pay for the establishment of the imposed office of a shadow executive mayor and what they will have to pay in reconversion costs if they happen to reject that back-to-front proposal when he finally consults them in a referendum?

[Grant Shapps]

I think we might be finally making progress. The good news for the hon. Gentleman is that when that kind of transparency is combined, everyone can hold local authorities to account—that is the whole point. When people try to cover things up and when huge amounts of expenditure go completely unchecked by armchair auditors, that cannot happen, but this way it can and will.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

18. What assessment he has made of the likely effects of retention of business rates on local authorities in areas with high levels of deprivation.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

The local government resource review is considering options to allow authorities to receive the repatriation of business rates. We will publish our proposals in July for consultation. We have been clear all along that the review will continue to support people where needed, to consider how to fund authorities where locally raised funding would be insufficient to meet budget requirements and to control council tax levels.

[Paul Goggins]

I am very grateful to the Secretary of State for his answer. I am sure he will agree that local authorities have a key role to play in promoting growth. There are very strong arguments in favour of allowing local authorities to keep their business rates, but given the great disparity that exists between local authorities across the country, can he give us a bit more detail about how he will make sure that local authorities in disadvantaged areas that do not have a strong business base will still be able to fund essential services?

[Mr Pickles]

I am grateful for the right hon. Gentleman’s question, because it allows me to make it absolutely clear that there is absolutely no intention whatever for councils to receive anything less than they currently receive with regard to the amount of grant. Manchester receives £714 per head and Trafford receives £325 per head. That kind of bridging is not easy to do, but I want him to understand that the system we are proposing will fully meet the aspirations of places such as Manchester, which has a very dynamic economy. We want to ensure that we no longer take from areas where growth exists, as happens under the existing provisions.

[Amber Rudd (Hastings and Rye) (Con)]

Hastings recently fell to 19th from the bottom on the index of multiple deprivation. Can the Secretary of State reassure me that in the new assessment, with business rates as a right incentive for councils, areas of deprivation will still get the support they need from central Government while growth comes back?

[Mr Pickles]

The short answer is yes. My hon. Friend is a doughty defender of her constituents, but there is irony in the fact that the worse an authority can present itself, the more grant it gets. When I was council leader I often wanted to state what the good reasons for coming to the area were, and I think we have found a system under which councils will be able to do that. Hon. Members should not be under any illusions—the existing system is bust; it is broken. It simply does not deliver and we want a system that will deliver for the richest and the poorest.

[Andrew Gwynne (Denton and Reddish) (Lab)]

But while the Stockport part of my constituency would broadly break even from localising business rates by raising almost the same amount as it gets in formula grant under the current arrangements, the Tameside part of my constituency would see a massive 35.7% drop—a shortfall of some £30 million funding. Does the Secretary of State understand that coming on top of his front-loaded cuts, such a massive reduction in funding for one of England’s poorest local authorities would be an unacceptable outcome?

[Mr Pickles]

My advice to the hon. Gentleman is to cancel the leaflet. If it has already gone, pull it back. There is no intention whatsoever, under any circumstances, that he should lose 34%—not in one lump, not in a series of lumps. He is going to have to trust me. We are producing a scheme that he will like. We are producing a scheme such that he might even consider crossing the Floor.

[Mr Speaker]

We are obliged to the Secretary of State, I am sure.

[Mr Douglas Carswell (Clacton) (Con)]

19. What steps he is taking to increase the fiscal autonomy of local authorities.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

The local resource review will enable local authorities to keep at least a proportion of the business rates that they raise. This will enable a number of local authorities to break free from dependency on central Government. The review will also bring forward proposals to free local authorities to raise tax increment financing to support infrastructure and related projects.

[Mr Carswell]

Does the Minister believe that we can achieve real localism without devolving revenue-raising powers from Whitehall to the town halls?

[Robert Neill]

The Government are anxious to ensure that local businesses are not subject to local increases in taxation which they cannot control, but on the other hand a real and powerful incentive is being created for local authorities to grow their tax base by attracting business to their area.

[Mark Pawsey (Rugby) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Since the last oral questions we have announced plans to build 100,000 homes and create 25,000 jobs by selling off surplus public sector land. We have unveiled a new planning protection to help communities to protect valuable green open spaces. We have opened up the books on the lavish spending of the previous Government via the Government procurement card—Whitehall’s flexible friend.

On a more sombre note, we are making a £2 million contribution to the Auschwitz-Birkenau Foundation to ensure the long-term preservation and restoration of its memorial site. It is our collective responsibility to educate future generations about the horrors of the holocaust and never to forget why we need to challenge and combat the forces of hate.

[Mark Pawsey]

The need for more new homes is accepted across the House. In addition to Firstbuy and the new homes bonus, one way of increasing the supply of new homes will be to relax the planning rules, including allowing the conversion of empty commercial space. The Government’s current consultation on that proposal will be welcomed by first-time buyers as well as the Opposition. Will the Minister tell the House when the legislation might be introduced and estimate the number of new homes that might be created in this way?

[Mr Pickles]

I think the proposal will be welcome in all parts of the House. We heard opposing views from the hon. Members for Huddersfield (Mr Sheerman) and for Lewisham East (Heidi Alexander), but my hon. Friend has until 30 June, when we will be closing the consultation. The proposal could produce 70,000 new homes over 10 years. I share his commitment to that aim.

[Caroline Flint (Don Valley) (Lab)]

We have already heard today about the concerns over the level of charges being raised on the old and vulnerable in our communities as a result of the cuts, but it is not only those people who are facing increases in charges. Tory-run Wandsworth and Bexley councils are planning to charge children to play on their swings. Will the Secretary of State join me in condemning this fun tax, or is pay to play now official Government policy?

[Mr Pickles]

Let us be clear: under the Labour Administration councils were harangued about not charging. Councils were instructed to charge more. We will look at the level of charging in the context of the reform of local government finance, but it ill becomes the Labour party to suggest what the right hon. Lady is now suggesting when under Labour charges went up and the council tax doubled.

[Jessica Lee (Erewash) (Con)]

T4. I would like to bring to the attention of my right hon. Friend the Housing Minister the good work being done by Erewash borough council and the private landlord sector across the borough to encourage landlords to consider housing benefit recipients on an equal footing with tenant on private lets, which has strengthened the process of moving families into appropriate accommodation more quickly. Will he welcome this cross-sector work?

[The Minister for Housing and Local Government (Grant Shapps)]

My hon. Friend is absolutely right that the relationship between local authorities and private landlords is critically important. We have seen how the total stock of social housing declined under the previous Administration. We are going to do something about that by ensuring that we build an additional 150,000 affordable homes, but the relationship with the private sector is absolutely key, and I encourage and wholeheartedly welcome it.

[Mr Chuka Umunna (Streatham) (Lab)]

T3. Following that answer, we were told that the Government’s changes to local housing allowance will bring down private sector rents. If that turns out not to be the case, what plans have the Government to ensure that private sector rents are affordable for the large section of my constituents who earn too much to qualify for social housing or local housing allowance, but not enough to buy a home of their own and, as a consequence, spend a huge proportion of their income on rent every month?

[Grant Shapps]

The hon. Gentleman is absolutely right, and this is a huge problem for a large number of his constituents and those of many Members across the House. The answer, of course, is that I hope he will give his full backing to the Localism Bill in the Division Lobby when it comes back to the House, as it contains provisions on affordable rent that are designed to get people out of the private-rented sector and into lower-cost rents of perhaps 50%, 60%, 70% or 80%. That will help his constituents and many of ours to afford that rental.

[John Glen (Salisbury) (Con)]

T7. Does the Minister agree that the Government’s recent statement of 13 April on Traveller sites provides excellent advice to Wiltshire council when it comes to consider contentious planning issues in Alderbury and Salisbury?

[Mr Pickles]

It is quite reasonable to see this as an emerging policy. We have put out a consultation document on Traveller sites, and there are a few more days before the consultation closes. It should be clear in the council’s mind that this is a policy that is changing and emerging.

[Graham Stringer (Blackley and Broughton) (Lab)]

T5. The Housing Minister is familiar with the blight caused by private landlords in old terraced houses in Manchester and Salford. The area-based registration of private landlords has had some success in dealing with the problem, but those schemes under the Housing Act 2004 are coming to an end. If local authorities can show that there has been some success, will he agree to the extension of those schemes?

[Grant Shapps]

The simple answer is yes. I have visited the hon. Gentleman’s constituency and seen some of the problems for myself. I am very much in favour of the discretionary local licensing schemes, which can play an important part. I pledge that when I come back to see his Collyhurst estate, which is about to have its decent homes funding get under way and have work done on that, I will be very happy to visit one of those licensing schemes.

[Mr Speaker]

I call Nigel Adams. Not here.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Will my right hon. Friend visit my constituency so that I can show him at first hand the greenfield land that is being developed, while thousands of units neighbouring my constituency, which have been approved by Leeds city council for building on, are being completely ignored by housing developers, thereby totally undermining any regeneration the city would like to achieve?

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

I would be delighted to go to Yorkshire to visit my hon. Friend’s constituency and advise the council that the best way it can control its destiny is by adopting a local plan forthwith.

[Yasmin Qureshi (Bolton South East) (Lab)]

T6. Despite receiving £20 million of cuts—£5 million more than Wandsworth borough council, and £15 million more than Bexley—Bolton’s labour-run council will not be charging children to play. Will the Secretary of State join me in congratulating Bolton council on protecting children from the Government’s huge cuts?

[Mr Pickles]

Of course, that is because Bolton receives an enormous grant from the Government.

[David Rutley (Macclesfield) (Con)]

T9. In the week of the anniversary of the emergency Budget, what additional steps is my right hon. Friend’s Department taking to help the Government to achieve their fiscal mandate?

[Mr Pickles]

We have delivered a good settlement for local government; we are looking to reduce our own Department, including reducing at the top and reducing numbers; and we are looking to extend that by offering help on growth, on enterprise zones and on local partnerships for growth. This Department has changed enormously over the past year by becoming pro-growth and helpful to local communities, offering power to local government and ensuring that ordinary people do not face a big increase in council tax.

[Mr Speaker]

I think the hon. Gentleman might want an Adjournment debate on the matter.

[Ms Karen Buck (Westminster North) (Lab)]

In the Westminster city council area, 3,000 elderly and disabled people are losing social care, children’s centres are being cut, street cleansing is being cut and the youth service is being cut. In the light of that, does the Secretary of State think it is a good use of public money to run a summer roadshow

“to counter the messages that people are hearing about council services being reduced or withdrawn”?

[Mr Pickles]

We have been most careful to ensure that priority has been given to the most vulnerable. That is why we made sure that £6.5 billion went into the Supporting People programme, and £400 million into homeless programmes. We expect that to be reflected by local authorities prioritising the most vulnerable.

[Greg Mulholland (Leeds North West) (LD)]

It is a national scandal that wanted and profitable pubs are being closed against the wishes of the communities they serve and simply to serve the interests of greedy developers and pub companies. I was delighted to welcome the Minister with responsibility for community pubs to the launch of the all-party save the pub group’s new planning charter. Will he welcome that charter and work with the group to ensure that the Government do all they can to protect pubs?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

I am delighted to work with the hon. Gentleman and to discuss his charter—I should be delighted to join him in a pub, if need be. The Government are determined, through our planning reforms and the Localism Bill, to give communities an opportunity to acquire those assets that genuinely can be viable.

[Graham Jones (Hyndburn) (Lab)]

Conservative-run Lancashire county council has increased day-care charges from £5 to £30 starting from this month. Does the Minister think that the residents and elderly of Lancashire will see a 600% improvement from that Conservative council?

[Mr Pickles]

I dare say that, if Labour had been in control, we would have seen even bigger increases. After all, this is the year that Labour was going to impose pretty big front-loaded cuts on local authorities, and it was urging local authorities to increase their charges. A Labour MP should therefore not castigate a local authority that increases charges after listening to a Labour Government; he should be encouraging it.

[Laura Sandys (South Thanet) (Con)]

I have a council that is keen to transfer assets to community groups, and community groups are, encouragingly, interested in taking them on. However, there seem to be some barriers in terms of not only VAT and the complexity of the VAT system but community insurance policies, so will the Department put in place a working group to look at the barriers that are stopping people transferring assets to community groups?

[Mr Pickles]

My hon. Friend makes some very important points, but such matters are way above my pay grade. With regard to charitable trusts and the like, however, it would be sensible for her to talk to members of my Department, and we will do our best to help her.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

I draw attention to my entry in the Register of Members’ Financial Interests.

On waste, will the Secretary of State confirm that his Department spent £1.3 million in the first four months of this year on legal advice and consultancy? How much of that was attributable to the consequences of his unlawful decision to try to abolish regional spatial strategies?

[Mr Pickles]

I am delighted to tell the right hon. Gentleman that the bill has come down from what it was under Labour, and that quite a lot of that money was actually expended on decisions taken by my Labour predecessor. We have been using that money to unravel the mess that he and his friends left behind.

[Mr Philip Hollobone (Kettering) (Con)]

The village of Braybrooke in my constituency is gradually being surrounded by unauthorised developments in open countryside as a result of applications from the Gypsy and Traveller community. What additional powers and guidance will the Secretary of State give to the local planning authority to ensure that the village is not completely encircled?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

The current consultation on the planning guidelines is open for a few more days, and we will be interested to hear my hon. Friend’s views if he has not already submitted them. We are determined to tackle this problem, and the Localism Bill and the changes to the guidelines are designed to achieve just that.

[David Wright (Telford) (Lab)]

The 1% increase in mortgage activity over the past 12 months is largely focused on remortgages. Why is that?

[Grant Shapps]

Because there was an enormous bank crash due to the fact that the debt in the British economy got out of all possible control, with Labour spending money that this country simply did not have. We are in the process of unravelling that mess. I am pleased to report to the hon. Gentleman that for the first time for a very long time average lending to first-time buyers has dropped below 6%.

[Bob Russell (Colchester) (LD)]

Further to Question 2, do Ministers accept that in towns where there is a major garrison there is a significant impact on the rented housing sector, both public and private? That being the case, will the coalition Government provide additional resources over and above what they would provide for a town without a garrison so that our current and former service personnel can be housed?

[Grant Shapps]

My hon. Friend is absolutely right about the additional pressures that arise when there is a garrison in a town. As I announced at the Dispatch Box an hour ago, this Government are determined not only to honour returning service personnel but to put them at an advantage by putting them right at the top of the list and for top consideration for such things as the Firstbuy scheme. We will send Firstbuy agents into the garrisons to ensure that they can help to get the right people into these new homes.

Petition

Monday 20th June 2011 Commons Chamber

Mr Charles Walker (Broxbourne) (Con)

- Hansard - - Excerpts

When coming here tonight, I received a text from Tony Siracusa, who said:

“Tonight, Charles, you’re our voice. Please continue to ensure we are heard in the House of Commons.”

I intend to do that this evening.

Before I present the petition I should like to thank Paul Mason, the leader of Broxbourne council, who organised an excellent march in support of the urgent care centre about which I am petitioning tonight. I also thank our campaigning newspaper, the Mercury, and in particular Gemma Gardner and the editor Gary Matthews.

The petition states:

The Petition of residents of Broxbourne Borough and surrounding areas,

Declares that the decision taken by Hertfordshire Primary Care Trust to close Cheshunt Urgent Care Centre (UCC) fails to recognise the importance and value of the UCC to the local community.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Health to use his offices to intervene in the matter to require the PCT to revisit its decision in regards to the UCC, and keep GP-led services operating at the site.

And the Petitioners remain, etc.

[P000930]

Eurozone (Contingency Plans)

Monday 20th June 2011 Commons Chamber

15:32

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

(Urgent Question): To ask the Minister what are Her Majesty’s Treasury’s contingency plans in case of a Greek default.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Hon. Members will be aware of the recent developments in Greece. There has been considerable media speculation about what this means for the Greek adjustment programme and potential market reactions. I am not going to engage in speculation on what might or might not happen but give the House an account of the facts as they currently stand.

Let me begin with some background on Greece and the financial assistance package. The international financial assistance package for Greece was agreed in May 2010. The package is composed of two elements: a loan of €30 billion from the International Monetary Fund and €80 billion of bilateral loans from euro area member states to the Greek Government. Although they were created at a similar time, neither the European financial stabilisation mechanism, which is backed by the EU budget, nor the euro area-only European financial stability facility contributed to the package for Greece.

The adjustment package requires Greece to undertake significant actions. There are some very difficult questions that Greece has to address now, because the package assumed that it would be able to access market funding again in 2012, but this now looks unlikely in current market conditions. The House will also be aware of political developments in Greece; a new cabinet has been appointed and the Government will soon be subject to a vote of confidence in the Greek Parliament. Later this month, the Greek Parliament will also be voting on a medium-term fiscal strategy, which is a key element of the conditions attached to the current adjustment programme.

Against this backdrop, the euro area member states have been discussing the next steps. The Eurogroup, which comprises euro area member states, today released a statement calling on

“all political parties in Greece to support the programme’s main objectives and key policy measures to ensure a rigorous and expeditious implementation”.

The statement also said that Ministers will

“define by early July the main parameters of a clear new financing strategy”.

This is a statement from the euro area member states only. Let me be clear: the UK has not been involved in these discussions. We did not participate directly in the May 2010 package of support for Greece, and there has been no formal suggestion of UK bilateral loans or use of the EFSM, which is backed by the EU budget. The UK participated in the May 2010 package for Greece only through its membership of the IMF. So the burden of providing finance to Greece is shared between the IMF and euro area member states, and we fully expect this to continue. Our position on that is well understood across the euro area.

The UK believes that the international community needs a strong IMF as an anchor of global economic stability and prosperity. Over the past few years, we have seen how important that role can be in times of crisis, as the IMF has taken swift and decisive action to support the global economy.

There is, of course, no room for complacency. The Treasury, the Bank of England and the Financial Services Authority are monitoring the financial system, including in the euro area, on an ongoing basis. Many scenarios are considered as part of the normal policy development process. Hon. Members will agree that it would not be appropriate for me to discuss the detail of those scenarios. I also remind hon. Members that UK banks have little direct exposure to Greece.

The continuing uncertainty in the euro area is a reminder of the benefits of taking early action to stabilise and recapitalise the banks, as the UK has done. The UK banking system has developed a strong capital position, which has made it more resilient and will insure it against future risks. UK banks have made good progress in sourcing funding, despite the difficult market conditions.

The difficulties faced by eurozone countries such as Greece and Portugal reinforce why it is right to pursue the course that we set last year to tackle the deficit. The House should reflect that our deficit is larger than that of Portugal, but that our market rates are similar to those of Germany. The action we have taken to strengthen the country’s finances stands us in good stead during this period of instability in the eurozone. No one on either side of this House should lose sight of the importance of these decisions in protecting the UK economy.

[Ms Stuart]

It is absolutely true that there is no room for complacency, but there is also no room for selective blindness and deafness, which there clearly is on the Front Benches. We have yet another question on a bail-out to which Ministers say, “Of course, we cannot be specific and we will not indulge in speculation on events that may or may not happen.”

The United Kingdom will not be isolated if Greece defaults. Economists across the world are increasingly saying that it is a question not of if, but of when and are arguing that, for all intents and purposes, it has already happened. Another bail-out package will not solve Greece’s problems because it is not regaining competitiveness and cannot do so while it is in the eurozone. Therefore, is it not time that Her Majesty’s Government woke up and prepared for the possibility and almost inevitability of Greece defaulting? The situation will lead either to a Greek default or to the break-up of the eurozone. Whichever way it goes, we will not be isolated.

I will therefore ask the Minister some questions that go to the heart of the resilience that needs to be built up. The first is about institutional resilience. If he is really telling the House that people at the Treasury and the Bank of England have not started to get together to make practical provisions about who will meet, hold discussions and take action in the case of a default that would be comparable to Lehman Brothers, he is guilty of not stepping up to the responsibilities of his office.

Secondly, the Minister’s economic plans are completely predicated on the rest of Europe and the world being economically successful. If Greece defaults, other economies will not grow and ours will be affected. Therefore, should he not reconsider his VAT increase, because that would give us greater resilience?

[Mr Hoban]

indicated dissent.

[Ms Stuart]

The Minister shakes his head; I ask him to take me seriously.

Thirdly, I ask the Minister to consider article 66 of the treaty on the functioning of the European Union, which states:

“Where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary union, the Council”,

after consultation, can impose

“for a period not exceeding six months”

measures to restrict capital flows between the EU and the rest of the world. The UK would be affected by such restrictions of capital flows. Has he discussed that with the Commission? Has he made provision for how the UK economy would deal with that if it was imposed?

[Mr Hoban]

The hon. Lady poses a series of very good questions, to which I will respond.

The hon. Lady asked whether the authorities are working together. I said in response to her initial question that the Treasury, the Bank of England and the FSA are working closely on this matter and monitoring the situation. We are keen to ensure that the UK banking system is resilient. The additional capital that the banks hold now, compared with at the start of the crisis, will help with that. As I said, UK banks have not had difficulty in sourcing funding in the market. There is a concern about liquidity risk, but UK banks are continuing to source funding.

I mentioned in my statement the exposure of UK banks to the Greek Government. It is $4 billion, which is less than our exposure to, for example, the Irish banks. The hon. Lady should bear it in mind that French banks’ exposure is about four times that amount and that German banks’ exposure is about five times that amount. We are taking the matter seriously and considering it carefully, and the Chancellor is currently at the ECOFIN meeting in Luxembourg, where I am sure it will be discussed.

The hon. Lady talked about reversing the VAT increase. The shadow Chancellor proposed last week a cut in VAT that would cost £51 billion, which would put at risk our credibility in international markets. We have taken the difficult decisions to ensure that UK market rates are in line with those of Germany. The proposal that she put forward, and which her right hon. Friend put forward last week, would mean interest rates rising for families and businesses across this country, putting the recovery at risk. I do not think that is a gamble that we can afford to take.

[Mr William Cash (Stone) (Con)]

Will the Minister concede that it is crystal clear that the Greek situation, like those of Ireland and Portugal, does affect us? Does he also accept that the idea that is being put forward in the European Union Bill of not having a referendum on treaties that relate to the eurozone would mean that, although we are affected by the situation, we would not be allowed to have a referendum on it? Will he ensure that when the Bill returns to the House of Commons, there are amendments to ensure that there is a referendum on this matter, which affects us, so that the British people can vote on it?

[Mr Hoban]

My hon. Friend makes a couple of points about our exposure to Greece and the Bill that is currently going through the House of Lords. As I said, the UK’s exposure to Greece is relatively small, with bank exposure at $4 billion. He will recognise that we have a big interest in ensuring the continued stability of the eurozone. That is why the treaty changes are being made—to put the European support mechanism for eurozone countries on a permanent footing and replace the EFSM, to which we have to contribute thanks to a decision taken by the previous Government, with a mechanism that is funded entirely by the euro area. We do not believe that there is a transfer of sovereignty from this Parliament to Brussels, so there is no need for a referendum on those treaty changes.

[Mr Jack Straw (Blackburn) (Lab)]

Will the Minister first check his figures? Figures in the Financial Times, citing Moody’s and Reuters, suggest that the exposure of British public and private sector banks to Greek debt is €13 billion, and that of Germany and France €34 billion and €53 billion. Those figures are much bigger than the ones that he gave.

Secondly, will the Minister not recognise that there is now a mood change in Europe? Der Spiegel, the German magazine, has had a cover story contemplating the end of the euro as we now know it, and Mr Charles Grant, the well known europhile, has done the same in The Times today. Instead of sheltering behind complacent language and weasel words that we should not speculate, the Government should recognise that this eurozone cannot last. It is the responsibility of the British Government to be open with the British people now about the alternative prospects. Since the euro in its current form is going to collapse, is it not better that that happens quickly rather than it dying a slow death?

[Mr Hoban]

May I just deal with the right hon. Gentleman’s factual questions? The figures about UK banks’ exposure to Greek sovereign debt were provided by the Bank of England, based on results at the end of quarter one this year.

On the right hon. Gentleman’s second question, I seem to remember that he was a member of a Government who seemed committed to taking this country into the euro. I do not know whether we have seen a damascene or deathbed conversion from the Labour party. I think it was right for this country to stay out of the euro, and that is the policy of this Government. We have a strong interest, though, in the continued stability of the eurozone, as it is our major trading partner. Continued instability in the eurozone could be a factor in holding back the recovery of the British economy.

[Mr John Redwood (Wokingham) (Con)]

Given that Greece needs a work-out rather than another bail-out, will the British Government go to the International Monetary Fund and the EU and say the following? First, a second bail-out would mean sending good money after bad and should not be done; secondly, we need an urgent conference of all the interested parties to reschedule and re-profile Greek debt in an orderly way to avoid huge systemic damage, while accepting that the problem has already occurred. Greece went bankrupt more than a year ago, but the Ministers of certain countries cannot believe it and are wasting taxpayers’ money on trying to pretend that it has not happened.

[Mr Hoban]

My right hon. Friend highlights the need for private sector involvement, and he will know that Chancellor Merkel and President Sarkozy agreed this weekend that there should be voluntary and private sector involvement in resolving the Greek debt. Some very strong accountability is attached to any future financial support for the Greek economy: a tough programme of privatisation, and structural reforms to improve its competitiveness. I emphasise to my right hon. Friend that although it is right that there should be private sector involvement, it is not in our interests for there to be huge turmoil in our largest trading partner, the European Union.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Clearly, it is vital and in all our interests that sustainable resolutions are agreed for Greek debt financing, but surely the Government must recognise that there needs to be a smarter approach than simply piling more and more austerity on Greece. What is the Financial Secretary’s response to those, including Boris Johnson, who said yesterday that

“austerity measures are making the economy worse”

in Greece?

Why does the Financial Secretary allow the EU to procrastinate continually and to kick a solution on the bail-out mechanism into the distance repeatedly? He says that the EFSM has not yet been used. The European Council meets at the end of this week. Will the Government ensure that they grasp the nettle this time, and make sure that a permanent eurozone-only bail-out mechanism comes into force as soon as possible rather than pushing it back again? Will he give assurances that the UK will attend any future meetings, which could involve the use of EFSM, even if they are eurozone Finance Minister meetings, because the UK’s empty-chair policy clearly is not working?

Given that the Financial Secretary tabled a little-noticed Commons motion last week to double the UK’s subscription to the IMF from £10.5 billion to £19.7 billion, was not the Foreign Secretary being disingenuous when he said on “Sky News” earlier that

“any such support for Greece is for the eurozone and for the IMF, not for the UK”?

Britain will end up paying more for the Greek bail-out via the IMF, so will the Financial Secretary come clean and say what he estimates our share of IMF bail-out costs will be for our taxpayers? Surely Ministers should pull their fingers out and ensure that the EU makes some final decisions on all that. Is not it about time that the Government showed some leadership?

[Mr Hoban]

The hon. Gentleman continues to amaze me with his remarks. He seems to forget the role that his Government played in setting up the EFSM. The Conservative party has delivered a commitment to ensure that it is replaced with a permanent mechanism—one matter that will be discussed at the European Council later this week.

It is clear that we do not want to be part of a bail-out of the Greek economy and that we do not want the EFSM to be used. The fact that we are outside the Eurogroup sends a clear signal that it does not expect us to participate in that bail-out. Of course, Madame Lagarde, the French Finance Minister, made it clear last month when she appeared on “Newsnight” that she thought that the resolution for Greece was a matter for the eurozone only.

The hon. Gentleman mentioned the increase in the IMF commitment. Of course, the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), committed to doubling the resources available for the IMF at the April 2009 G20 summit in this country. I am surprised that hon. Members have such short memories of those matters.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

As several EU members have said that the only long-term solution to the crisis in the eurozone is establishing a fiscal union, has the Chancellor made it clear to them that there is no possibility of Britain joining that? As a member of the IMF, we are already playing a role in trying to bail out the European Union from its folly with its single currency.

[Mr Hoban]

As ever, my hon. Friend, whom I congratulate on becoming a member of the Privy Council in the birthday honours list, speaks wise words. The Chancellor has been very clear that we do not wish to be part of a fiscal government for the European Union. That is why we have fought for the right package for economic governance, which safeguards the independence and sovereignty of this House when it comes to making fiscal decisions. My hon. Friend rightly reminds us why it was right never to join the euro.

[Kelvin Hopkins (Luton North) (Lab)]

Whatever happens in Greece this afternoon, and even if there is a fire sale of public assets to buy time, the fact is that the euro is moving inexorably towards its death throes. The realistic choice is between a controlled deconstruction of the euro and the restoration of national currencies, or a crash that would be catastrophic for everyone.

[Mr Hoban]

The hon. Gentleman once again reminds us how important stability in the eurozone is—the situation could have a significant impact on the UK economy, which is why it is important that the Greeks resolve their problems in conjunction with eurozone member states. However, let me make this quite clear again: we do not want to be part of that bail-out.

[Duncan Hames (Chippenham) (LD)]

How does the Government’s disposition on these matters differ between the case of Greece and that of other strained but larger or more closely integrated economies, such as, say, Spain?

[Mr Hoban]

My hon. Friend will of course recollect that one reason why we made a bilateral loan to Ireland was the particularly close relationship between the UK and Irish economies. That relationship did not exist with Portugal, and it does not exist with Greece, so there is a different approach. It is important to remember that Greece was bailed out by eurozone countries, and that the bail-out of Greece should continue to be done by them.

[Chris Bryant (Rhondda) (Lab)]

Is not the danger of the Government’s deliberate attempts to steer as far away from any involvement whatever that the indirect, knock-on effect for British businesses and banks, and in the end for British taxpayers, will be far more significant than he is letting on? That is why many Opposition Members feel that he is being deeply complacent.

[Mr Hoban]

I do not think anyone is in a position to accuse this Government of being complacent. We are the Government who have taken action to tackle the fiscal deficit that we inherited from the Labour party. That has enabled the spreads between UK gilts and German bunds to narrow, reflecting market confidence in the measures that we are taking to sort out the problems in the British economy. The Labour party is failing to take its responsibilities seriously or to acknowledge the mistakes that it made when it was in government. It also fails to recognise the strength of support for the actions that this Government have taken to resolve the economic crisis in this country. Had we not taken that action, we might well have been in the firing line with Greece.

[Mr Richard Shepherd (Aldridge-Brownhills) (Con)]

The eurozone was never an optimal currency zone. It is predicated on a treaty arrangement that calls it irrevocable and irreversible. We should never have accepted the hubris contained in those phrases, which brought about the passage of the Maastricht Bill and the current situation. This Government and this country should not be involved, and it would be helpful if we said what everyone in the press now says: this arrangement cannot survive in its current form. The hubris of those politicians who led the poor Greeks and all those who believed in this arrangement should be exposed as such.

[Mr Hoban]

My hon. Friend is absolutely right that we have seen during this crisis the strains within the eurozone mechanism. The actions that needed to be taken to resolve the consequences of those strains include the bail-outs of the Greek, Irish and Portuguese economies. It is absolutely right that we secured that opt-out to the Maastricht treaty, to ensure that this country did not have to be a member of the euro, a position that the previous Government seemed not to support.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Minister, the Government and the House want stability, but quite frankly, Greece is bankrupt, and cannot restore its economy while it remains in the euro. Is not the answer to introducing stability an orderly return to the drachma? Should not that be the burden of the Government’s policy?

[Mr Hoban]

The hon. Gentleman is absolutely right that we need stability in the eurozone, but I do not think that speculation here will help to deliver that stability to the Greek economy or the wider eurozone.

[Mr Douglas Carswell (Clacton) (Con)]

Most previous IMF rescue packages that I can think off have generally involved first a currency devaluation and secondly a debt default—or, should one prefer the term, a restructuring. Does the Minister agree that the IMF should be consistent with that approach in regard to Greece, and should not the IMF oversee a decoupling from the euro and a default on the debts, which would be consistent with its approach in other instances and rescue packages?

[Mr Hoban]

The IMF is the body best placed to decide the conditions to be attached to any rescue package that it puts forward. Strict conditionality is attached to the rescue package for Greece, including significant privatisations, tax collection reform and wider structural reforms. However, I think that this is a judgment for the IMF to make.

[Mr Dennis Skinner (Bolsover) (Lab)]

Does the Minister recall that when the Tories and Liberals were in opposition and sat over here on the Opposition Benches, the Tories wanted to see the collapse of the eurozone, but the Liberal Democrats thought the opposite and wanted to prop it up? Here we are today with a great opportunity to see the back-end of the euro, and I can only reach the conclusion, based upon his complacent answers, that the Lib Dems are running the coalition.

[Mr Hoban]

That was a flight of fancy by the hon. Gentleman. I would say to him and his hon. Friends that it was this Government who scrapped the euro preparation unit, which the previous Chancellor of the Exchequer set up in the Treasury.

[Mark Reckless (Rochester and Strood) (Con)]

It is only six weeks since £26 billion of European financial stabilisation mechanism funding was nodded through for Portugal. May I congratulate the Minister on the change we have seen in those six weeks, on his statement now that there is no question of any further EFSM funding, and in particular on what we read in the weekend press—that this is a red-line issue for the Treasury and that any further use of the EFSM is unacceptable? Long may it continue.

[Mr Hoban]

My right hon. Friend the Chancellor has made it very clear in his discussions with the Finance Ministers of EU member states that we do not want the EFSM to be used in this bail-out—a statement that Madame Lagarde confirmed on British television only a few weeks ago. I welcome my hon. Friend’s congratulations.

[Mr Denis MacShane (Rotherham) (Lab)]

The Minister is prudent not to join in the glee of the euro’s gravediggers, because if Greece defaults, it will not stop on the Acropolis—Portugal and Ireland will be next—and the nine out of 10 banks in the City that are European and foreign-owned will pay a terrible price. Rather than waiting for the eurozone to disintegrate into a set of competing currencies hiding behind capital-controlled walls—the notion that an open-trade Europe can exist in those conditions is nonsense—we should be very careful about where we are going. Boris Johnson said today that Greece was bankrupt. That is a signal to every Greek to get on his bike and seek work elsewhere. Is that really what we want—a new flood of economic migrants into Britain?

[Mr Hoban]

The right hon. Gentleman raises a series of points in his speech, but he makes a strong argument for why it is important that the eurozone is strong and stable. That has broad economic and social benefits. Clearly, if that is to happen, it is important for the Greek bail-out to work and be effective.

[Mrs Anne Main (St Albans) (Con)]

I am very concerned. The next debate is about trying to cut back on pensions and save taxpayers’ money, yet we are still planning to put through the IMF—a third party—taxpayers’ money that we are having to scrimp and save at home. My constituents will not stand for it. I am disappointed to hear the language of the Government at the moment, which seems to imply that Greece is an economy that is too big to fail. That is the same thing we had with the banks. We should put Greece out of its misery—it is flatlining—and no more of our public money should be sent abroad to Greece, even through the IMF. There are riots on its streets. Its people do not like the medicine being offered to it, and we cannot expect it to take any more. Let it depart peacefully from the euro. It cannot be sustained as it is; it is just good money after bad.

[Mr Hoban]

My hon. Friend will be aware that these are matters for the Greek Government, but I would say this. When money has been lent to the IMF, that does not reduce the amount of money available for public spending. We get interest on the balances that we lend to the IMF, and it has never defaulted on a programme yet. We need to recognise the importance of support provided through the IMF, although I do not really think that my hon. Friend is suggesting that we should withdraw from it. On fiscal consolidation, let me reiterate to my hon. Friends and to the Opposition, who have ignored this crucial fact, that if we had not taken the tough action that we took a year ago in our emergency Budget, it would be the UK, not Greece, in the firing line.

[Stewart Hosie (Dundee East) (SNP)]

Nobody wants to see Greece default, but that is most certainly possible. Were it to happen, there would be an immediate shock to the eurozone and, more widely, to the EU, our largest trading partner. That would have an impact on the UK. I am glad that the Minister said that the situation was being monitored, but the House and the public deserve more detailed information. If he has not already done so, will he ensure that the Treasury asks the Office for Budget Responsibility to assess the impact on UK growth of a potential Greek default, and publish that assessment quickly, so that we can understand precisely what the consequences might be?

[Mr Hoban]

The OBR will take into account the state of the eurozone economy in its normal forecasting. However, let me be clear to the House that the Treasury, the Bank of England and the Financial Services Authority work closely to monitor the strength of the financial system, and the exposure of UK banks to the Greek Government and the wider eurozone economy. The actions taken to date have ensured that our banks are well capitalised, have strong balance sheets and are less exposed to the Greek economy than, say, French or German banks. British banks can still access funding in international markets, which is a sign of the UK banking system’s strength.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I urge my hon. Friend to bear it in mind that the nearer we get to the inevitable break-up of the euro, the faster the denials will be made that it is not going to happen? Will he urge the European Union to design a policy that creates a legal framework for an orderly departure of Greece from the euro? Can he name a single reputable economist who believes that the Greek economy can recover without a devaluation?

[Mr Hoban]

We all recognise the challenges that the Greek economy faces as a consequence of high levels of debt. That is one reason why it has been proposed that the banks take part in a voluntary initiative to roll over their debt, to reduce some of the burden on the Greek economy.

[John Cryer (Leyton and Wanstead) (Lab)]

In answer to one of his Back Benchers, the Minister said that if we put money into the IMF or the EU, that does not affect the rest of public spending. However, the rest of the world would recognise that if we spend money on one thing, that gives us less to spend on other things. Is that right or is it wrong?

[Mr Hoban]

If that is the hon. Gentleman’s view, he should talk to those on his Front Bench, who seem happy to propose £51 billion of unfunded tax cuts. Money that we lend to the IMF is money that is sitting on the Government’s balance sheet; it does not affect the spending decisions that we make. We are paid interest on the amounts lent to the IMF, which do not affect the amount of money that we can spend on pensions, schools or health, and I made the same point about how the EU funds the European financial stabilisation mechanism.

[Sajid Javid (Bromsgrove) (Con)]

Like Greece, we, too, have an enormous national debt, which more than doubled over the last 13 years, to more than £1 trillion, with an interest bill of more than £40 billion this year. Does the Minister agree that had we not had a change in Government 13 months ago, we, too, could have been facing the same sad fate?

[Mr Hoban]

My hon. Friend is absolutely spot on. We can see from the reaction of the Labour party in opposition that it has not learnt at all from its mistakes in government. If we had not taken tough action, we would have seen high market rates of interest, which would have increased costs for families and businesses across the country. We are now seeing the benefits of the tough decisions that we took in last year’s emergency Budget.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Given that the tough, sado-monetarist programme imposed on the Greeks a year ago has not worked, how many more sado-monetarist programmes will work?

[Mr Hoban]

When the Greek Government agreed last year’s debt bail-out package, it was assumed that they would be able to re-enter the markets in the spring of next year. That is clearly not the case, given current market pressures, which is why the Greek Government had to seek a second round of refinancing. However, they still need to take action to improve Greece’s competitiveness, reduce the size of the state sector through further privatisation and improve taxation, to get the economy back on track.

[Mr Peter Bone (Wellingborough) (Con)]

I congratulate the hon. Member for Birmingham, Edgbaston (Ms Stuart) on securing this urgent question, and I say gently to the Minister that it is a shame that he did not volunteer to make a statement on this matter first. What is Her Majesty’s view on whether the euro can survive in its current format?

[Mr Hoban]

I cannot speak for Her Majesty on this occasion, but I would say to my hon. Friend that we did not come forward with a statement today because no decisions have been taken. A statement was put out by the Eurogroup last night which recognised that work was in progress, and my right hon. Friend the Chancellor has continually sought to keep the House informed of the outcome of such discussions. Once ECOFIN has met today, there will be an opportunity for him to lay a statement on the outcome of that meeting.

[Mr William Bain (Glasgow North East) (Lab)]

Despite the European lenders having cut their exposure to risk in Greece by 30% in the past year, the risk of contagion in the eurozone has become the paramount concern. Will the Minister acknowledge that, with about $2 trillion exposure to Portugal, Ireland, Italy and Spain by lenders in the eurozone, any Greek default would have the potential to devastate the European banking system and jeopardise the economic recovery in the eurozone?

[Mr Hoban]

The hon. Gentleman makes an important point. In the event of a default, there would be consequences for the strength of bank balance sheets across Europe. That is why we are going through a stress-testing process across Europe at the moment to determine the consequences of various scenarios on the strength of bank balance sheets. UK banks have strengthened their balance sheets significantly and they hold high levels of capital. That will give them some insulation against the impact of a default.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my hon. Friend’s commitments on the non-IMF involvement of British funds in another bail-out for Greece. Does he accept that a country running a large balance of payments deficit can pay off foreign debts only if it is able to reverse that balance, and that to do that, it has to devalue? The man from Brussels cannot make water run uphill.

[Mr Hoban]

My hon. Friend has pointed to one way in which a country can regain competitiveness—through devaluation. There are other ways, including reducing labour costs and increasing productivity, and all those actions should be taken to ensure that the Greek economy and those elsewhere in the eurozone reach a much stronger position.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The impact on the British economy of events in the eurozone, and in Greece in particular, is potentially very significant. May I press the Minister further on what contingency plans the Treasury is putting in place to protect the UK’s financial and economic interests in the event of a Greek default or, worse still, a domino effect across the eurozone?

[Mr Hoban]

I will say this again, so that no one leaves the Chamber unaware of what is happening: as ever, discussions are taking place between the Bank of England, the Treasury and the FSA, and we are considering a number of scenarios and potential market events. I can say to the hon. Gentleman that British banks are better capitalised than they were at the start of the crisis, and because of the strength of their balance sheets, they are able to access funding in what can be quite difficult market conditions. That is a good sign of market confidence in the strength of the UK banking sector.

[Harriett Baldwin (West Worcestershire) (Con)]

Madame Christine Lagarde is clearly an outstanding candidate to be head of the IMF, but is the Minister slightly concerned that she is French and, given that the French banks have a very large exposure to the Greek problems, that she might therefore be conflicted in her approach to the problem?

[Mr Hoban]

Madame Lagarde is a strong candidate for the role of director-general of the IMF. My hon. Friend is absolutely right to point out that she is French; that fact has not escaped us in ECOFIN meetings. Madame Lagarde said on “Newsnight” a couple of weeks ago that she recognised that the bail-out of Greece involved a series of agreements between eurozone countries, and that that should remain the case.

[Bill Esterson (Sefton Central) (Lab)]

The Minister has an extraordinary level of confidence—well, I think it is confidence—in the Greeks’ ability to repay the loans they are currently receiving. I just want to check with him: how much of the £19.7 billion UK contribution to the IMF forms part of the Greek bail-out and how long he is prepared to see us continue to make our contributions through the IMF?

[Mr Hoban]

I do not think the hon. Gentleman is suggesting that we should withdraw our membership of the IMF—[Interruption.] It is not clear from the question he is asking. Part of the condition of any bail-out of an economy by the IMF—whether it is a eurozone economy or another economy—is a debt sustainability plan, which is a rigorous part of the assessment process. As was clear in the Eurogroup statement last night, the IMF and the Eurogroup have signed off on Greece’s debt sustainability plan, so they expect that money to be paid back.

[Joseph Johnson (Orpington) (Con)]

The hon. Member for Birmingham, Edgbaston (Ms Stuart) questions the UK’s resilience in the event of a wave of eurozone defaults. Does the Minister agree that in the eyes of the markets, the UK has already become something of a safe haven, with UK 10-year borrowing rates and credit default swap rates falling last week while the comparable rates in other countries soared, precisely because the UK Government have a good deficit reduction plan, and a good plan for settling our banks and making them stronger—and they are sticking to it?

[Mr Hoban]

My hon. Friend is absolutely spot on in his analysis. I believe that the 10-year gilt rates fell to 3.2% at the end of last week, which reflects the markets’ vote of confidence in the UK economy and particularly the fact that we took the difficult decisions that the Labour party shied away from when they were in government. We took those decisions, which is why the market rates are similar to those in Germany, yet our deficit is more in line with that of Portugal.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Can the Minister give an assessment of what effect a Greek default will have on the German and French economies, which are more exposed to such a default, and in turn on UK manufacturing?

[Mr Hoban]

The hon. Gentleman is right to say that German and French banks have a greater exposure to the Greek sovereign debt than the UK banks do. The French exposure is, I think, four times that of the UK, while the German banking sector’s exposure is about five times ours. That is why it is important that, as we go through the process of stress testing European banks, we look very carefully at the level of capital that our banks hold to ensure that they are in a position to withstand shocks and thus to support and sustain the economy.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

The hon. Member for Birmingham, Edgbaston (Ms Stuart) attacks this Government’s VAT policy and, by implication, the deficit reduction policy. Does not what is happening in the eurozone absolutely serve as a timely reminder that we have to attack the deficit because that is how this country will maintain low interest rates?

[Mr Hoban]

My hon. Friend is absolutely right. It was clear in the reaction to last week’s statement by the shadow Chancellor that everyone thought his plan lacked sense and would have undermined the recovery in this country by putting interest rates at risk and forcing up the interest costs of businesses and families. We have taken the tough decisions to get the economy right; the markets have demonstrated through the rates at which firms and businesses can borrow that they have confidence in our plans.

[Several hon. Members]

rose—

[Mr Speaker]

Order. May I remind remaining contributors that this is not a general debate on the British Government’s domestic economic policy?

[Mr Philip Hollobone (Kettering) (Con)]

Does the Minister believe that the eurozone will remain intact with all its present members?

[Mr Hoban]

I am not going to comment on whether the eurozone will remain intact. Clearly, this crisis demonstrates the huge strain that the eurozone is under. That is why it was right for us to stay out of the eurozone.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Does the Minister agree that one of Greece’s biggest problems is that its people, backed up by the unions, have not accepted the austerity measures going through? Is that not a timely warning to unions in this country, which are complaining about how we are trying to get the deficit under control, of the consequences unless proper and sensible action is taken?

[Mr Hoban]

My hon. Friend has made an important point. It is clear that difficult decisions must be made if our economy is to be put back on the right track, and the Government are demonstrating their commitment to making them. Interest rates are lower than they would have been if we had not made those tough decisions, which is good for families and good for businesses.

Points of Order

Monday 20th June 2011 Commons Chamber

16:14

[Hilary Benn (Leeds Central) (Lab)]

On a point of order, Mr Speaker. The House is only too well aware of the mess that the Government have made of the handling of the Health and Social Care Bill, but today’s Order Paper reveals that they are now outrageously and desperately trying to deny the House the right to decide whether it wishes to recommit the whole Bill to a Committee. Can you confirm, Mr Speaker, that not only would the business motion tabled by the Leader of the House specifically prevent the tabling of any amendment on the form of recommittal to the motion tabled by the Secretary of State for Health, which will appear on tomorrow’s Order Paper—for example, an amendment proposing the recommittal of the whole Bill—but if tonight’s motion were objected to, there would be no debate on recommittal tomorrow?

Is it possible, Mr Speaker, for you to prevent that from happening, and protect the rights of Members, by establishing, under Standing Order 83B, a programming committee that could meet and pass a motion today which might enable us to have a proper debate tomorrow, with amendments, by invoking one of the exceptions in Standing Order 83A to the rule that programme motions should be taken forthwith?

Can you also tell us, Mr Speaker, whether, if the motion tabled by the Leader of the House is passed tonight, it will be in order for Members to argue in tomorrow’s debate that the whole Bill should be recommitted, especially as a motion in the name of the Leader of the Opposition calling for precisely that has been on the Order Paper since 24 May?

[Mr Speaker]

I am grateful to the shadow Leader of the House for his point of order and for giving me notice of it. The right hon. Gentleman has raised a series of very important matters, and I think that it is important to both him and the House for me to respond to them.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

rose—

[Mr Speaker]

Will the hon. Gentleman allow me to deal with the point of order from the shadow Leader of the House? If after I have done so he remains dissatisfied, I will of course deal with any ensuing point of order.

Let me say first that the shadow Leader of the House is correct in supposing that if the Business of the House motion were objected to tonight, the programme (No. 2) motion would be put without debate or opportunity for amendment tomorrow. That is, as a matter of procedure, factually correct. The programme (No. 2) motion would be put without debate, as are all such motions varying or supplementing a programme order, unless they fall into one of the four exceptions listed in Standing Order No. 83A. The motion to be moved tomorrow is not covered by any of those exceptions, and so would ordinarily be put forthwith.

Secondly, there will indeed be no opportunity to move amendments. If the Business of the House motion is agreed tonight, the programme (No. 2) motion will be debated for up to an hour tomorrow, but no amendments may be moved. The same would apply if the motion were taken forthwith in accordance with Standing Order No. 83A. It would still be open to Members to table such amendments today to appear on the Order Paper tomorrow, but either way, under our procedures they could not be moved.

The right hon. Gentleman asked a very important question, namely whether it would be in order in the debate on the programme (No. 2) motion tomorrow to argue that the whole Bill, not just the clauses specified, should be recommitted, to which the explicit answer is yes. It would be possible to argue that more or less of the Bill ought to be recommitted, or, of course, to argue against recommittal altogether.

I understand the right hon. Gentleman’s concern about the matter as a whole—and he referred specifically to the position set out by the Leader of the Opposition last month—but the House is not being asked to agree to anything that is out of order. It is for the House to decide on the motions before it. As for the particular question of a programming committee, I can tell the right hon. Gentleman and the House that the Standing Order relating to such committees would apply only to proceedings on the Floor of the House, and the initial programme Order of 31 January specifically excluded the operation of a programming committee on this Bill.

Whether my response is welcome or unwelcome to different Members in the various parts of the House, I hope that Members will accept that it has been fully thought through, and has been offered on the basis of the Standing Orders of the House.

[Hilary Benn]

rose—

[Mr Speaker]

Of course I will take a follow-up point of order from the shadow Leader of the House.

[Hilary Benn]

Further to that point of order, Mr Speaker. I am extremely grateful to you for your comprehensive response. The Health and Social Care Bill programme motion passed on 31 January disapplied Standing Order 83B, which relates to programming committees only in relation to consideration and Third Reading, and which does not apply to Committee stage. If that is the case, could not a programming committee bring the matter within scope by the device of now suggesting a Committee of the whole House, which would therefore ensure that, even if that Committee of the whole House were not to be agreed to tomorrow, first, there would be a debate and, secondly, we could consider amendments?

[Mr Speaker]

I hear what the right hon. Gentleman says, but it is my understanding that a programming committee relates to the proceedings on the Floor of the House, and I think he is in some difficulty if he is praying it in aid in support of the proposition he has just made. If I am mistaken, no doubt I will be advised, and if he does not think that I have fully seized the gravamen of his point, he is welcome to return to it because these are important matters, but that is the best initial response I can offer.

[Mr Peter Bone (Wellingborough) (Con)]

Further to that point of order, Mr Speaker. Thank you for your careful explanation of this issue, but am I right in thinking that if the Business of the House motion is objected to tonight, the Government would not necessarily have to introduce their substantive motion tomorrow and could, instead, have a rethink?

[Mr Speaker]

As so often, the hon. Gentleman is right. He is absolutely right that there is no obligation on the Government to introduce their motion. They are perfectly at liberty to test the will of the House, but the organisation of Government business is a matter entirely for the Government. If they want to take note of who votes which way, or decide to sleep on the matter and reconsider—I entertain no especial prospect of that happening, but it could if that is what is in Ministers’ minds—that is a matter for Ministers.

[Mr Denis MacShane (Rotherham) (Lab)]

A day at Wimbledon!

[Mr Speaker]

I note what the right hon. Gentleman says about a lawn tennis championship taking place not far from here, but how relevant that is to Ministers’ thinking on this matter is not entirely obvious to me. We are grateful to him, nevertheless.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Further to that point of order, Mr Speaker. Is it in order for the Government to seek to prevent Members from tabling amendments to a programme motion, and, indeed, in effect to prevent you from deciding whether you wish to select any particular amendment—and do you have any idea what the Government are so afraid of?

[Mr Speaker]

It is for the House to decide to what it agrees; that is a matter for the House. Whatever attempts may be made to persuade Members of the merits of one course of action or another, they are perfectly free to do whatever is legitimate within the procedures of the House—that is up to them—and ultimately that is then a matter for the House.

[Grahame M. Morris (Easington) (Lab)]

Further to that point of order, Mr Speaker. I rise to speak in support of the points that have been made, and to seek a little further clarification. I am certainly not suggesting that the Government are trying to stifle debate, but it is unclear to the House whether the Government have sought to prevent amendments to the committal motion on the Health and Social Care Bill by accident or design. Can you confirm that the Government can still change their mind today by moving the motion tonight without the last section, which prevents amendments from being taken?

[Mr Speaker]

The answer to the hon. Gentleman off the top of my head is that if the Government were moved by the power of his argument or the eloquence of its expression, they would be perfectly free to change their mind, and if they were so minded, they would probably do so through the conventional method in these circumstances, namely by not moving the motion on the Order Paper. If the Leader of the House, as a fair-minded man, happens to be swayed by the observations of the hon. Gentleman or others, it is perfectly open to him and his colleagues to decide not to move the Government’s motion. I hope I have made the position clear.

It might also be helpful if I say by way of clarification in response to the shadow Leader of the House that the terms of a programming committee do not apply to—do not embrace—the proceedings in a Public Bill Committee. As I am helpfully advised, the deliberations of a programming committee do not apply to that element of the proceedings. In so far as there is any different interpretation, it might relate to interpretation as to the competences of a programming sub-committee. I hope I have explained the factual position of what a programming committee is, and is not, responsible for.

[Stewart Hosie (Dundee East) (SNP)]

Further to that point of order, Mr Speaker. I am not sure where this matter will lead the Labour party or others in the debate tonight, or possibly tomorrow. I am concerned, however, that this uncertainty may lead to the time protected for the Scotland Bill being eroded or eaten into, and I am seeking clarification from you or others that that will remain protected.

[Mr Speaker]

Well, there is a lot to be said for seeing what transpires. I know that the hon. Gentleman is a keen student of political history. Perhaps he will agree with me in this context that it is a good idea to remember the wise words of the late Lord Whitelaw. He it was who said, “As a rule, I do not believe in crossing bridges until I come to them.”

[Mr Dennis Skinner (Bolsover) (Lab)]

Further to that point of order, Mr Speaker. This all started because the Government said they were going to listen. That is what it was all about. Have you stopped listening? Come on!

[Mr Speaker]

I fear that the hon. Gentleman, perhaps not for the first time and possibly not for the last, has taken matters a little outside my capacity to rule—

[The Leader of the House of Commons (Sir George Young)]

rose—

[Mr Speaker]

He has nevertheless spurred the Leader of the House, and the Leader must be heard.

[Sir George Young]

Further to that point of order, Mr Speaker. It is precisely because the Government have listened that we have tabled the motion tonight to enable a debate to take place tomorrow. Had we not tabled such a motion, under Standing Orders the recommittal motion would have been proceeded with forthwith.

[Mr Speaker]

I am grateful to the Leader of the House, who I think has clarified matters very satisfactorily.

[Mr Frank Field (Birkenhead) (Lab)]

rose—

[Mr Speaker]

I am sure it is an unrelated point that the right hon. Gentleman wants to raise.

[Mr Field]

Further to that point of order, Mr Speaker. Given that this motion is crucial to the survival of the coalition, if the House follows the advice you gave to the hon. Member for Wellingborough (Mr Bone), we would soon get another motion on the Order Paper, would we not?

[Mr Speaker]

I am very grateful to the right hon. Gentleman. My response is twofold. First, the question is hypothetical; secondly, the survival of the coalition, as the right hon. Gentleman, a Member of 32 years’ standing, can well testify, is thankfully not a matter for me one way or t’other.

If the point of order appetite has been exhausted, perhaps we can now proceed to the main business.

Pensions Bill [Lords]

Monday 20th June 2011 Commons Chamber

16:27

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I beg to move, That the Bill be now read a Second time.

May I first say something that might help the House? Hon. Members might not realise that there are a number of different things in the Bill, and I plan to go through those elements. I will obviously take interventions, and it would be helpful if interventions were made on those sections in due course; otherwise, it will take a long time, and I know colleagues want to speak.

The Bill is designed to secure this country’s retirement system, putting it on a stable and sustainable footing for the future. I remind the House that our first priority on coming into government was to secure the position of today’s pensioners. We acted immediately to introduce the triple guarantee, meaning that someone retiring today on a full basic state pension will receive £15,000 more over their retirement by way of the basic state pension than they would have under the old prices link. For 10 years, the previous Government talked about this, but we acted in our first year.

The backdrop to the Bill is that we have taken action, and we have committed to a permanent increase in the cold weather payments to £25—an increase the previous Government had planned to be temporary. The old rate, I remind colleagues, was £8.50. Last winter alone we paid out some £430 million to support vulnerable families. At the same time, winter fuel payments will remain exactly as budgeted for by the previous Government: at £200, and £300 for those over 80.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Will that be inflation-linked?

[Mr Duncan Smith]

With respect, it never was under the previous Government, and we are not going to change that policy. We have had plenty of discussions on this, and I remind the hon. Gentleman that, although the previous Government uprated it, the Red Book for that time shows that absolutely no money was allowed thereafter, so it was going to settle back. Let us be absolutely clear about that.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

Let me make a little more progress and then I will give way.

We have protected other key areas of support for pensioners, including free eye tests, free prescription charges and free TV licences for those aged over 75. Having quickly put incomes on a firmer footing, we have moved to secure older people’s right to work by taking decisive action to phase out the default retirement age, thereby sending a message that age discrimination has no place in modern British society and that older workers have a huge contribution to make.

Those were absolutely the right steps to take as a backdrop to the Bill, but they are just the beginning as we set about reforming our broken retirement system. At its heart, the Bill is about dealing with the challenge that faces the next generation, who will have to pay for their parents’ retirement while footing the bill for a crippling national debt, even before they start thinking about their own pension arrangements. I remind the House that 7 million people currently are not saving enough to have the income they want or expect in retirement. We need to look at the steps we can take to secure their future.

[Mr Dave Watts (St Helens North) (Lab)]

Is it not clear to the Secretary of State and the Government that although everyone accepts that there have to be changes, some of the proposals in the Bill are, for 500,000 women, unfair and unjustified? He should do a U-turn on those proposals as soon as he can.

[Mr Duncan Smith]

As I said at the outset, I will happily take an intervention on that part of the Bill when I come to it. Of course, that requires the hon. Gentleman’s staying for the whole debate, but that is up to him.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Many of us agree with the Secretary of State that it was about time that someone grappled with this particularly difficult issue of reforming our pension system, so I congratulate him on that, but we need to know very early in the debate whether that group of women will be fairly treated and whether the Government will think again, because those of us who feel positive about many of the reforms would find that a sticking point.

[Mr Duncan Smith]

I guarantee the hon. Gentleman that I will discuss the issue, and I hope he will still be here then—no doubt we can have an exchange on it.

The Bill addresses important issues, not just that of pension age. It is key that we get this generation saving and make sure that savings count and are not frittered away by the means test. We also have to find a way of sharing the cost of the retirement system between generations, ensuring a fair settlement for both young and old. I know that people think that retirement is all about just the group who are retiring, but as we look down the road ahead it is also very much about the generation who will have to pick up many of the bills. These are not easy decisions, but I want to make sure that the House recognises that we have to take decisions about the next generation; otherwise we will be guilty of falling into the same slot as the previous Government, who left us with the deficit.

Let me address auto-enrolment. The Bill takes forward the previous Government’s plans for automatic enrolment, which were debated and widely supported during the passing of the Pensions Act 2008 and to which we remain absolutely committed. The Bill refines some of the policy’s parameters to ensure that automatic enrolment works as effectively as possible, following the recommendations of the “Making automatic enrolment work” review that we initiated. First, we propose an increase in the earnings threshold at which automatic enrolment is triggered from an expected £5,800 under the previous Government’s plans—I say expected because the figure involves assumptions about changes as a result of inflation—to £7,475. That will protect those on the lowest incomes and will reduce the risk of the lowest earners saving for a pension when they do not earn enough to make it worth making all that effort and sacrifice. It will also simplify administration for employers by aligning the earnings trigger with the existing personal tax threshold.

[Jonathan Evans (Cardiff North) (Con)]

My right hon. Friend refers specifically to the linkage of the personal allowance but, as he knows, our Government are committed to increasing the allowance significantly. What impact is that likely to have on auto-enrolment?

[Mr Duncan Smith]

We are committed to reviewing that year by year, so I can assure my hon. Friend that we will constantly take it forward and not leave it static.

Introducing a waiting period of up to three months, which has been widely discussed and debated, will ease the regulatory burden on employers. We had many representations from employers. In view of the present circumstances and the difficulties that many of them face, it is important to recognise the key considerations that we had to take into account in framing the Bill.

Workers will retain the right to opt into the system if they consider it to be in their best interests to do so. That is important. Although we are allowing a let-out, if workers want to enter they will retain the right to do so. The Bill also amends legislation to enable employers with defined contribution schemes to self-certify their scheme. That is simple and straightforward. It makes it easier for employers with an existing scheme to try to align that. If it is aligned closely enough, the scheme can go ahead, saving employers the complication of having to change and engage in a new scheme. That is fairer and more reasonable.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Given that the vast majority of the 600,000 people who will be excluded from getting a pension under the raised threshold are women, is the Secretary of State at all worried that the Bill is beginning to look as if it discriminates against women?

[Mr Duncan Smith]

I recognise the hon. Gentleman’s concern. We are not blind to the issue, but we have decided to strike a balance between making the scheme work from the beginning and avoiding driving people on very low incomes into sacrificing too much and therefore not seeing the rewards. It is important to make the point that in the Green Paper, as the hon. Gentleman will have noticed, we talk about the single-tier pension, from which there will be very significant benefits to women. We hope that in due course that will achieve a balance.

I do not dismiss the hon. Gentleman’s considerations. We keep the issue constantly under review and will watch carefully to see what happens. It is important that we get auto-enrolment off the ground in a stable manner. I hope hon. Members on both sides of the House recognise that these are balanced decisions—sometimes nuanced decisions—that we have to take, but we will make sure that we review them.

[Mr Tom Watson (West Bromwich East) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

Indeed. How can I resist?

[Mr Watson]

The right hon. Gentleman knows that I have always admired his ambition, but is he familiar with the Burkean maxim that change always brings certain loss and only possible gain? What appears to sit within the proposals he is outlining today is certain loss for many thousands of women facing retirement. Will he sketch out a little more how he intends to give them security, given that many trade unions—the Public and Commercial Services Union, Unite, GMB and Unison—have just voted for strike action? I strongly contend that fear about insecurity in retirement is fuelling that.

[Mr Duncan Smith]

It is always nice to be accused of having ambition. I thought I was supposed to have given that up a few years ago, but I will be tempted by the hon. Gentleman. Workers can still opt in. They must be told that they can opt in, and if they feel it is the right thing to do, auto-enrolment will still be open to them. I will not be tempted just yet on the other subject to which the hon. Gentleman refers, which is the pensions age. I will take an intervention from him, if he wishes, when we get to that. For the moment I want to stay on auto-enrolment. As I said earlier, I recognise that these are not absolutes. In other words, to get the scheme going we have taken some of these decisions, but we will see where that goes. If there is a very big drive for more to go into it, we will take that into consideration.

Amendments made in the other place will ensure that the strength of the certification test is maintained by requiring that I and subsequent Secretaries of State ensure that at least 90% of jobholders receive at least the same level of contributions under the certification test as they would have received based on the relevant quality requirement for automatic enrolment. Employers told us in discussions that the certification test will significantly ease the process of automatic enrolment.

I believe that these changes, taken together, will allow us to present individuals and businesses with a credible set of reforms that will bring much of the next generation into saving for the first time, which was Labour’s intention when in government, and one that we will pursue, thus beginning to improve the poor level of saving. There has been some talk, not necessarily by hon. Members here, about the possibilities of mis-selling. We have retained the powers to prevent excessive charging in automatic enrolment schemes and will use them as necessary and keep them constantly under review.

Part 3 of the Bill covers occupational pension measures, including a few relatively minor changes to the legislation governing the uprating of occupational pensions. The Bill amends existing legislation to set the indexation and revaluation of occupational pensions at the general level of prices. These changes are consequential amendments that follow the Government’s decision to use the consumer prices index as the most appropriate measure of inflation for benefits and pensions.

I remind the House that the key legislation for setting the statutory minimums for the revaluation and indexation of occupational pensions is not in the Bill, as we have already considered the issue in previous debates on the Social Security Benefits Up-rating Order 2010. This is not the time to revisit those debates, but no doubt someone will want to. Hon. Members might wish to note that all the Government will do is set out the minimum increases; if schemes want to pay more than the statutory minimums, that is a matter for them. I think that the move to CPI is supported, by and large, by Members on both sides of the House. That is certainly the indication I was given by the right hon. Member for East Ham (Stephen Timms) and his previous leader, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown).

We must also consider judicial pensions, although I am not sure how long Members will want to spend on them. Part 4 introduces provisions to allow contributions to be taken from members of the salaried judiciary towards the cost of providing their personal pensions benefits. I know that the House will be very worried that this might be too tough on members of the judiciary, but I will resist any pressure to reduce this provision. Judges currently pay nothing towards the cost of their own pensions, while the taxpayer makes a contribution equivalent to about 32% of judges’ gross salaries, which we think is both unaffordable and unfair to the taxpayer. [Interruption.] I sense that the House is united at least on that.

[Nick Boles (Grantham and Stamford) (Con)]

Does my right hon. Friend agree that it is extraordinary that a party that professes a belief in equality failed to tackle this extraordinary unfairness in 13 years in office?

[Mr Duncan Smith]

I would like to be generous to Labour Members and say that they were thinking of the worst-off in society and hoped that they might be able to protect some members of the judiciary. We recognise that we cannot afford to do that, so we must make the system more responsible, fairer and more balanced for all, and these provisions will help us to do just that. It seems that the House is united at least on that.

That brings me to the area that I suspect most Members want to talk about—the state pension age. I believe that we will be able to secure a fairer and more balanced system only if we get to grips with the unprecedented demographic shifts of recent years. I will put the issue in context before moving on to some of the detail.

Back in 1926, when the state pension age was first set, there were nine people of working age for every pensioner. The ratio is now 3:1 and is set to fall closer to 2:1 by the latter half of the 21st century. Some of these changes can be put down to the retirement of the baby boomers, but it is also driven by consistent increases in life expectancy. The facts are stark: life expectancy at 65 has increased by more than 10 years since the 1920s, when the state pension age was first set. The first five of those years were added between 1920 and 1990. What is really interesting is that the next five were added in just 20 years, from 1990 to 2010.

[Joan Walley (Stoke-on-Trent North) (Lab)]

On mortality rates, life expectancy has risen, but is the Secretary of State not aware of the huge inequalities between different parts of the country? We have not yet been allowed to discuss the detail of the equalisation of pensions, the unfairness and injustice of which 55-year-old women in my constituency want to discuss. Surely we ought to be looking at the detail of that, which the Bill simply does not do.

[Mr Duncan Smith]

I recognise the hon. Lady’s concern, but life expectancy has risen among all groups. I recognise also that some groups in certain parts of the country have a lower life expectancy—in pockets of the country, definitely—given the type of work they have done. The point is that, in setting and looking at pensions as we have done historically, that is one thing; the other thing is to look at the people in those conditions and ask, “Why is that the case?”

Surely we need to deal with the issue through public health policy, through the way in which we educate people and through the work experience and training that they receive, rather than by trying to do so through differential pensions. Importantly, if we tried to deal with it through pensions, we would be in the invidious and almost terrible position of telling one group of people that they were retiring at a set age and another group, “You’re better than them, you retire at a later age.” That would be an inequality and would be unfair generally, so the hon. Lady is right that there is an issue, but it is not right to deal with it through the pensions age; it is right to deal with it through public health policy.

[Mr Frank Field (Birkenhead) (Lab)]

Given that the Secretary of State has told the House, and there is no reason to doubt him, that his proposals are based on fairness, it is reasonable to assume that before the Bill completes its passage we will see some changes to the way in which it treats women.

May I question the Secretary of State on a wider point, however? The Bill sets in motion measures not simply to equalise the state retirement pension age for men and women, but to increase it. Does he not accept, as my right hon. Friend the Member for Croydon North (Malcolm Wicks) has previously said, that people who enter the labour market early are usually those who live the shortest in retirement? Would it not be fairer for the Government to base eligibility for the state retirement pension not on a person’s age but on their contributory years?

[Mr Duncan Smith]

I know that the right hon. Gentleman and the right hon. Member for Croydon North (Malcolm Wicks) have raised the issue in the past. I recognise their background, great experience and genuine sense of a need to try to figure out a solution. I am always willing to listen to argument and debate that, but my concerns are twofold: first, I am not certain that we have the data going back far enough to be able to make the calculation, although I might be wrong; and, secondly, I return to the point that in the past we have not done things in that way, because it is very difficult to set out differential pension retirement ages for different groups. We are going to equalise provision for women and men, but now the debate is about breaking them apart, and that would lead us into all sorts of debates about unequal retirement ages.

[Malcolm Wicks (Croydon North) (Lab)]

rose—

[Mr Frank Field]

rose—

[Mr Duncan Smith]

With respect, I recognise the right hon. Gentleman’s point, and I will take an intervention from his right hon. Friend the Member for Croydon North, but this is a complicated and fraught area that we should not necessarily deal with in the Bill. Beyond it, I am willing to hear more.

[Mr Watts]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I give way to the right hon. Member for Croydon North.

[Malcolm Wicks]

I am encouraged by the Secretary of State’s thoughtfulness on the matter, to which I hope we will return in Committee. According to the Office for National Statistics, almost one fifth, or 19%, of men in routine occupations—manual workers, labourers and van drivers—die before they receive their state pension. As my right hon. Friend the Member for Birkenhead (Mr Field) has implied, those people have probably worked since they were 14, 15 or 16 years old—very different from those of us who did not start in the labour market until our early 20s. Some sensitivity about when people who have worked for 49 or so years can draw their pension is a matter well worth pursuing.

[Mr Duncan Smith]

As I said to the right hon. Member for Birkenhead (Mr Field) and repeat to the right hon. Member for Croydon North, I am always willing to look and to think carefully about what proposals there are—not for the purposes of this Bill, obviously, but in the future. I know that he has written—

[Mr Watts]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

May I just finish my answer to the right hon. Gentleman?

I am always happy to discuss the matter. There are complications, and there may be some issues about women, too, because contributions are an issue for many women at the moment, so we cannot take these things lightly. I recognise the work that the right hon. Gentleman has done, however, and I am very happy to discuss the issue beyond this Bill, as is the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). For the purposes of the Bill, however, the right hon. Gentleman will forgive me if I stay to the point that we are going to equalise the retirement ages for men and women. The only question is, at what point?

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

rose—

[Mr Duncan Smith]

I am going to make some progress, but I give way to the hon. Member for St Helens North (Mr Watts).

[Mr Watts]

The Secretary of State seems to indicate that there is a potential practical problem. Is it not the case that when someone nears retirement age the Department looks at how many stamps they have paid and how many contributions they have made, which must mean that it keeps track of how long people have been working? That would resolve the problem mentioned by my right hon. Friend the Member for Croydon North (Malcolm Wicks).

[Mr Duncan Smith]

As I understand it, the pre-1975 data are very patchy and messy. I do not want to get sucked into this debate now, tempting as it is, and never to get on to the rest of the Bill; I do not think the hon. Gentleman’s colleagues would thank me for that. I recognise the issue and I am happy to discuss it post the Bill, but he will forgive me if I do not go down the road that Labour Members want by adding that in all of a sudden. I am not going to do that; we are going to stay with what we have. I am happy to listen to their concerns and to see whether we can make changes in future, but I do not give any guarantees.

[Tom Blenkinsop]

rose—

[Mr Duncan Smith]

To be fair, I want to make a bit of progress, because a lot of people want to speak. If the hon. Gentleman wants to raise something else about the matter, I will give way to him later.

Pensions policy has not been updated accurately to reflect all the increases that I spoke about. I remind the House, however, that we are by no means alone in having to deal with this issue; others are making decisions about it. Ireland has already legislated for the pension age to be raised to 66 by 2014, and the Netherlands and Australia are increasing state pension age to 66 by 2020. The United States is already in that position, and Iceland and Norway are now at 67. Under existing legislation, the timetable for the increase to 66 in the UK was not due to be completed for another 15 years, yet the timetable was based on assumptions that are now out of date. The Pensions Act 2007 was based on ONS projections of average life expectancy from 2004. Those projections have subsequently increased by at least a year and a half for men and for women, so the situation is moving apace. That is why we are taking the necessary decision to look again at the timetable for increasing the state pension age. The Bill amends the current state pension age timetable to equalise men’s and women’s state pension ages at 65 in 2018 and then progressively to increase the state pension age to 66 by 2020. This new timetable will reduce pressures on public finances by about £30 billion between 2016-17 and 2025-26.

The impact of the changes on women has been debated enormously, focusing particularly on certain cohorts. All but 12% of those affected will see their state pension age increase by 18 months or less. I recognise that some 1% of those impacted will have a state pension age increase of two years, but it none the less remains the case that those reaching state pension age in 2020 will spend the same amount of time in retirement as expected when the 2007 Act timetable was being drawn up. That is an important factor. There will be no change to the amount of time that they will spend in retirement—some 24 years, on average. In fact, the women who are affected by the maximum increase will still, on average, receive their state pension for two and a half years longer than a man reaching state pension age in the same year.

[Fiona Mactaggart (Slough) (Lab)]

Which of the facts that the Secretary of State has cited was he unaware of 12 and a half months ago, when in the coalition agreement the Government signed up to not introducing these changes before 2020?

[Mr Duncan Smith]

As a coalition, we are, and continue to be, bound by the agreement. [Interruption.] The hon. Lady can shout at me in a second, but let me try to explain. There is a slight problem with that element of the coalition agreement. It was done in that way at the time, and that is fair enough, but we have since looked at it carefully and taken legal advice. The agreement talks about men’s pension age being accelerated to 66, which would breach our legal commitment to equalisation and then not to separating the ages again. There are reasons for needing to revisit that, and we have done so and made changes.

[Rachel Reeves (Leeds West) (Lab)]

The coalition agreement states that the parties agree to

“hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.'”

The Secretary of State’s provisions clearly breach the coalition agreement, so what has changed?

[Mr Duncan Smith]

With respect, I have just said that there are certain elements that would not be legal. That is all that I am saying. The hon. Lady can go on about this point as much as she likes, but I have answered her. She might not like my answer, but that is the one I have decided to give. The fact that the women who will be affected will remain on the same level of retirement but will be in retirement for two and a half years longer than men is an important feature. I stand by the need to equalise women’s state pension age in 2018.

[Joan Walley]

rose—

[Rachel Reeves]

rose—

[Mr Duncan Smith]

I give way to the hon. Member for Stoke-on-Trent North (Joan Walley).

[Joan Walley]

Will it not be 55-year-old women who pay the price? Will the Secretary of State give the House some indication that he will change his policy so as not to discriminate against that cohort of women?

[Mr Duncan Smith]

It will disappoint the hon. Lady, but I have no plans to do that.

[Mrs Eleanor Laing (Epping Forest) (Con)]

My right hon. Friend is absolutely right in all that he is doing. No one can object to the equalisation of pension ages for men and women when we are fighting so hard for other areas of equality. However, does he recognise that for a particular group of some 300,000 women born in 1954 the transition arrangements are rather more difficult than for any other group in society? Although he should not change his policy, will he look at other ways to help that particular group of women?

[Mr Duncan Smith]

As I have made clear and will make clear later, the parameters of the Bill are clear and it is my intention to stand by those parameters. The ages will therefore equalise in 2018 and rise together to 66 by 2020. Of course, I am always happy to discuss these issues with colleagues from either side of the House, including those in the coalition. However, I make it absolutely clear that our plan is to press ahead with the Bill as it stands. The ages will therefore rise together to 66 by 2020.

[Alok Sharma (Reading West) (Con)]

Does my right hon. Friend not think that the criticisms from the Opposition are rather rich? In September 2004, the then Secretary of State for Work and Pensions, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), told the TUC:

“This Government will not raise the state pension age”,

yet Labour’s Pensions Commission reported in 2005 that the pension age should go up, and in the Pensions Act 2007 the Labour party legislated to increase it for men and women.

[Mr Duncan Smith]

Indeed; I welcome that comment from my hon. Friend.

[Rachel Reeves]

Is the Secretary of State honestly saying that the policy has been changed because of legal advice? If that is the case, will he publish that legal advice today before the winding-up speeches and before we vote? Will he also confirm that this is a breach of the coalition agreement?

[Mr Duncan Smith]

I do not publish legal advice, but if the hon. Lady reads the coalition agreement, she will see the reasons. I ask her to study it carefully.

I know that the hon. Lady is sincere in what she is saying, but I say one thing to her. She made it clear on the media earlier that it is the Opposition’s policy to move the rise to 66 to 2022 and for it not to start before 2020. That would cost £10 billion. She will presumably have worked that out. Where does she intend to get that £10 billion? We have heard nothing from the Opposition about debt reduction or the financing of future pensions. She should know that her policy would cost £10 billion, and she should consider that important issue.

[Rachel Reeves]

The Secretary of State rightly acknowledges that we have put forward proposals that would save £20 billion. [Interruption.] Has he looked at whether the increase to 67 could be brought forward, which would take us up to a saving of £30 billion? Can we find a compromise on those proposals, which would not cost women aged 56 and 57 so much money?

[Mr Duncan Smith]

We agree, then, that the hon. Lady’s proposals would cost us £10 billion. We are on Second Reading, and if she wants to raise the same point or table amendments in Committee, she can do so by all means. The Bill as it stands is exactly as we set out, with equalisation of the age in 2018 and the rise to 66. I have no plans to make any changes to that.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I am going to make a little progress. We have more time, and I will give way to other Members later.

[Mr Frank Field]

Will the Secretary of State give way on this very point?

[Mr Duncan Smith]

I wish to make a few points, then I will give way to the right hon. Gentleman again. I think I have been reasonably generous, and I plan to continue to be.

As I said earlier, if we delayed the change as the hon. Member for Leeds West (Rachel Reeves) suggests, it would cost us something in the order of £10 billion. That would be an unfair financial burden, and it would be borne disproportionately by the next generation. In a country in which 11 million of us will live to be 100, we simply cannot go on paying the state pension at an age that was set early in the last century. We have to face up to that, and to the cost and affordability of state pensions, in all the changes that we make.

If the last Government had managed to get re-elected they would be facing much the same decisions. I recognise the need to implement the change fairly and manage the transition smoothly. I hear the specific concern about a relatively small number of women, and I have said that I will consider it. I say to my colleagues that I am willing to work to get the transition right, and we will. Some have called for us to delay the date of equalisation of the pension age, but I wish to be clear again that this matter is the challenge of our generation, and we must face it. That is why we are committed to the state pension age being equalised in 2018 and rising to 66 in 2020. That policy is enshrined in the Bill.

[Mr James Gray (North Wiltshire) (Con)]

My right hon. Friend is being fair and sensible in his approach, and we admire his determination in introducing the Bill. I accept the cost of widening the transition period for the 2.5 million women involved, but will he give particular consideration to the small group of 33,000 women born in March 1954, on whom the change will bear down disproportionately harshly? Surely there is a way of finding a transition method that takes account of that small group of women.

[Mr Duncan Smith]

I repeat that the Bill that we have presented on Second Reading will retain the dates that we announced, but as I said earlier, I will quite happily discuss transitional announcements with anyone who wants to do so. I do not rule out discussions, but we plan to press ahead with the dates that I set out at the beginning of the process.

[Mr Frank Field]

The Secretary of State keeps insisting that he wishes to be fair, but the country increasingly thinks that he is being unfair to a particular group of women. The Opposition are not saying that his Department should not deliver the savings set out, but we are suggesting that they could be delivered in a different way. If he wishes to treat men and women equally, so that they make an equal sacrifice for the contribution that he has to make to the Exchequer, would it not be fairer to raise the state retirement age for both and women more quickly rather than collect £2 billion from a particular group of women?

[Mr Duncan Smith]

I think I have already covered that ground. I recognise the right hon. Gentleman’s concern, but I will not repeat what I have already said, because I do not think the House would appreciate that.

[Nic Dakin (Scunthorpe) (Lab)]

I welcome the Secretary of State’s comments about his willingness to consider transitional arrangements. My constituents, the class that left Foxhills comprehensive school in 1970, who were all born in 1953-54, have written to me to ask why the pensions goalposts should be moved twice so close to their retirement. What would he say to those women?

[Mr Duncan Smith]

The only answer is that, so far, it is seven years away for women. I recognise the concerns, but I have had letters from the public stirred up by a number of people, and the facts have been simply incorrect. I am trying to set out the facts as we see them. The hon. Gentleman may disagree with us, but often people fear that something is going to happen overnight. There is some warning.

[Jo Swinson (East Dunbartonshire) (LD)]

I think there is general acceptance that with increased longevity the pension age needs to be considered, including the current unfair distinction between men and women. However, there is a particular group of women who will be badly affected. I welcome the Secretary of State’s saying that he will consider transitional arrangements. Is he willing to consider with an open mind amendments in Committee and on Report, or other solutions that might be brought forward, to help that particular group of women?

[Mr Duncan Smith]

My hon. Friend tempts me enormously, but she will forgive me if I do not give in to that temptation. Let me simply repeat what I said earlier—it is a bit like a recording, but I shall do it none the less: we have no plans to change equalisation in 2018, or the age of 66 for both men and women in 2020, but we will consider transitional arrangements.

[Dame Anne Begg (Aberdeen South) (Lab)]

Does the Secretary of State accept that some women in the group that we are discussing have already retired or signed early retirement arrangements in the belief that they would receive their state pension when they were 63 or 64? The original equalisation was announced 25 years in advance. For some women, the equalisation that we are considering is only five years ahead. Surely that cannot be right when we are asking people to plan long term for their retirement.

[Mr Duncan Smith]

I think that the hon. Lady refers to people who have retired early, at around 57, as far as I can tell from her calculations. Other than that, I do not think that there is a huge difference. I recognise what their due would have been, but the change is no different thereafter for all the others. I acknowledge her point—I am sure that we will deal with it when we get into Committee.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I have given way a lot and I am not sure that we are going anywhere new on this. I have repeated myself several times. I will give way once more and leave it at that.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I want to emphasise the point that the hon. Member for Aberdeen South (Dame Anne Begg) made about people who have already retired. The latest health statistics show that healthy life expectancy for women and men does not necessarily keep pace with actual life expectancy. Many women in their 60s are trying to wind down their working hours because they are in poor health. The key point is not equalisation, but that people have not had time to plan for it. It is a great burden on people in the latter stages of their career who suffer ill health.

[Mr Duncan Smith]

I fully recognise the hon. Lady’s point. It applies to the whole debate. One could argue that even an extra year’s planning does not allow people time if they are not well. People living longer but being more ill is an issue for the health service—it is already having an impact on the health service. It is a reality—and a good thing—that people are living longer and are able to enjoy their retirement properly. For the most part, they can do that in good health, but I recognise that there are problems for those in poor health.

[Mr Watson]

rose—

[Tom Blenkinsop]

rose—

[Mr Duncan Smith]

Hon. Members will forgive me if I make some progress. I gave way to the hon. Member for West Bromwich East (Mr Watson) earlier, and, although I did not give way to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), others want to speak, and I must conclude.

All the changes should be put in the context of our recent Green Paper, which set out plans for fundamental reform of the state pension. They include the option for a single-tier state pension, set above the level of the means test, which would provide a decent foundation income in retirement for many of the next generation, who might otherwise be forced to live in poverty. Importantly, that includes many women and self-employed people who have tended to suffer poorer pension outcomes in the past, particularly women with caring responsibilities. The changes will be very beneficial for them. The Bill is therefore only part of the process, but it is critical as we take the necessary steps for the next generation. I believe that those are responsible choices for Britain, but responsible government is not always easy government. It involves commitment, tough decisions and a willingness to stay the course. We will not change from that—we will stay the course. We must try to secure our children’s future. The tough decisions are enshrined in the Bill, which I commend to the House.

17:09

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The debate is extremely important and I am glad that the Secretary of State approached his remarks with such care. It is an important debate because our treatment of older people in our country is one of the most important ways in which we judge the health of a society. Those people have made our country what it is today, and, in their retirement, we respect and honour a lifetime’s work.

Frankly, when we came to power in 1997, too few of our older citizens enjoyed either that honour or that respect. Nearly 30% of our pensioners were forced to live in poverty. The state pension had declined from 20% to just 14% of average male earnings. That is why we set about changing that picture with such speed, passion and determination. That is why we lifted 1 million pensioners out of poverty; why we lifted gross income for our pensioners by more than 40%; why we ensured that no pensioner must live on less than £130 a week; why we introduced the winter fuel allowance, free off-peak travel on buses and free TV licences; and why we increased tax thresholds to ensure that 60% of pensioners now pay no tax. We are proud of our record. It is now set out in the Government’s own figures that pensioner poverty in this country is at its lowest level for 30 years.

In dealing with such long-term issues, the House could legitimately have hoped that the Government would have built on those changes in a careful and consensual way. Instead, they have built nothing but confusion. Last Monday, the Secretary of State had to slap down his colleague the noble Lord Freud on whether there should be a cap on benefits; on Wednesday, we had the spectacle of the Prime Minister not knowing the consequences of his own Welfare Reform Bill; and today the Secretary of State has come to the Dispatch Box when this morning’s newspapers are full of stories of how his Bill might be shredded, not in this House but in the very Treasury that pushed him out to walk this plank in the first place. It is U-turns, confusion and blunder, and the poor Secretary of State is forced to sit there in the middle as the House of Commons’s very own Captain Chaos.

[Nadine Dorries (Mid Bedfordshire) (Con)]

I thank the shadow Minister for giving way—I almost thanked “the Minister” in a throwback to another day.

Somebody—I am not sure who—left a note saying that all the money had been spent. Does the right hon. Gentleman agree therefore that some measures that we could not have predicted when the previous Administration were in power are now necessary, such as the ones proposed today?

[Mr Byrne]

Perhaps the hon. Lady would like to reflect on why, just over 12 months ago, the Government whom she is so proud to support set out a policy in direct contradiction to the one proposed in the Bill. I look forward to seeing which way she votes and how she justifies that to her constituents.

This afternoon, we must try to bring some order to that confusion, and establish which clauses we agree on, and which clauses the Government—and, I might say, the Treasury—need to rethink. The Secretary of State began with automatic entitlement, on which there is a measure of agreement—it is a rock that we should hang on to in that regard. The proposal for automatic enrolment of workers into workplace pensions is to be retained, which is important, because as a country, we under-save for pensions. In fact, 7 million could be under-saving for their retirements. Bringing those people into a pension system and creating a national pension scheme into which they might opt could lead to a step-change in savings in this country.

The previous Government were very careful to build that consensus, which we did patiently, beginning with the noble Lord Turner’s commission. I am grateful that the Government have not junked that proposal, but it is deeply regrettable that they are increasing the salary threshold to entitle an individual to auto-enrolment. It is also regrettable that they are introducing a three-month waiting period before people opt in.

I understand the trade-offs that the Secretary of State is trying to make, but frankly, he has made the wrong call. Why? The first reason is that the salary at which someone is automatically enrolled will be raised from £5,000 to nearly £7,500. The impact of that will hit 600,000 people—they will be much less likely to opt in to long-term savings. If the Government raise that threshold in line with the coalition’s ambition to increase the income tax threshold to £10,000, nearly 1 million people will be excluded, three quarters of whom will be women. Their loss, potentially, is £40 million of employer pension contributions.

The Government are proceeding in full knowledge of that. There is no defence of ignorance. Their review states:

“Many or most very low earners are women, who live in households with others with higher earnings and/or receive working tax credits. These may well be exactly the people who should be automatically enrolled.”

Yet the House has been presented today with proposals that could exclude more than 1 million people. We think, therefore, that the earnings threshold should be looked at again. And if that idea was not bad enough, the idea of a three-month waiting period makes it worse and in itself could mean 500,000 fewer people enrolling automatically in a pension scheme. The loss to them could be £150 million in employer pension contributions. Put those two things together and the average man or woman could lose nearly three years of pension saving—a 7% reduction in an individual’s fund. I am afraid that we simply cannot support that measure.

That takes me to the most audacious broken promise of the lot—the proposal to single out a group of 500,000 of our fellow citizens, all of them women, and say to them, “You know your plans for the future? Well, you can put them in the bin.” The Secretary of State might think it a relatively small and trivial number, but the Opposition do not.

[Ben Gummer (Ipswich) (Con)]

Will the hon. Gentleman give way?

[Mr Byrne]

I will in a moment.

This unfolding chaos has been impressive even for a Government who have presided over U-turns on forests, sentencing reform and the reorganisation of the NHS, because we thought we knew where we were. The coalition Government made a wise move in appointing the Pensions Minister to his brief—he is a man who knows a thing or two about pensions. Indeed, in one of his first major speeches, he told his audience:

“I have become known as something of a bore at pensions conferences.”

We have no problem with that. Then we had the coalition agreement. I do not know whether anyone remembers the coalition agreement—it was important once. Page 26 reads:

“We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”

For good measure, the Pensions Minister got to his feet a month or so later and said that the Government were committed to any change not being sooner than 2020 for women. Then, 118 days later, the Chancellor arrives on the scene. He stands at the Dispatch Box and says that

“the state pension age for men and women will reach 66 by 2020.”—[Official Report, 20 October 2010; Vol. 516, c. 956.]

Yet buried in the fine print, we learnt the truth—not the Pensions Minister, the Secretary of State or the Chancellor could bring themselves to that Dispatch Box and actually tell people straight that that policy set out in the coalition agreement was absolutely worthless. The truth was set out in the depths of the spending review, page 69 of which read:

“The State Pension Age will then increase to 66 for both men and women from December 2018 to April 2020.”

That is a promise well and truly broken. At least when the Lib Dems changed their minds about increasing tuition fees, they could pretend that they were just making things up to get elected, but this was a promise they made and broke in government. Just last summer, the Pensions Minister boasted of reforms in the system that he said included

“those who the system has always missed out such as women and the lower paid.”

In his own Department’s review, he said that he wanted to look at the “particular challenge” for

“women pensioners. A group I have long worked for, and who are so often the poor relations in regard to pensions.”

I will let the House draw its own conclusions. One moment the Pensions Minister is offering to protect women pensioners, the next he is presenting proposals that will punish half a million women with a bill for up to £16,000.

[Richard Fuller (Bedford) (Con)]

rose—

[Mr Byrne]

I will give way, and perhaps the hon. Gentleman can explain the Pension Minister’s change of face.

[Richard Fuller]

The right hon. Gentleman was giving a discourse on integrity in pensions provision under the previous Government, which I think is important, because many of my constituents will be worried about this issue, and will be looking for integrity. He is very good with numbers—it is when he has to add them up that he has trouble—so I am wondering, on the point of integrity, could he answer this question? The Labour party has recommendations for how best to treat the women he is highlighting who are being impacted by the Bill, and those recommendations are costed at £10 billion. In the interest of integrity, will he please advise me and other Members where he would find the money?

[Mr Byrne]

Can the hon. Gentleman confirm that he has seen the costings given in the parliamentary answer provided by the Pensions Minister on 9 March 2011?

[Richard Fuller]

I have not seen those costings, so the right hon. Gentleman can enlighten me further.

[Mr Byrne]

The Minister gave an interesting answer, because those costings say that if, for example, we increased the retirement age to 67 by 2035—that is, if we accelerated the reform by one year—that would save £6.9 billion. However, if the retirement age was increased to 67 by 2034, by accelerating the increase by two years, that would save £13.7 billion. Therefore, the question for us this afternoon is: how much will be saved by accelerating the reform for those women who are now having to retire later, and who therefore confront trying to find all that money magically, in the space of just four or five years? Has that been traded off against other options, such as introducing advances in the retirement age later on? That is the question that we have to get to the bottom of in this Second Reading debate.

[Richard Graham (Gloucester) (Con)]

rose—

[Ben Gummer]

rose—

[Richard Fuller]

rose—

[Mr Byrne]

I will give way in a moment.

Let us hear what the impact of the Government’s proposals will be, because the Secretary of State rather glided over this point. Some half a million women will receive their state pension at least 12 months later than they had previously been advised, with 300,000 women—those born between December 1953 and October 1954—experiencing a delay of one and a half years. For 33,000 women—those born between 6 March and 5 April 1954—that period increases to two years. For them, the loss in state pension will be around £10,000. For those on full pension credit, the loss will be closer to £15,000. Those women, with five years’ notice of the timetable change, have almost no time to prepare for their income loss.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the right hon. Gentleman give way?

[Mr Byrne]

In a moment.

We are talking about women in the age group that was asked by a Conservative Government in 1995 to set in train the equalisation of the state pension, a reform that we accepted, because it came with time to plan. However, that cannot be said of today’s proposal. This morning, Age UK warned that

“a sizeable minority are not even aware of the 1995 changes with nearly a fifth expecting to receive their State Pension at the age of 60.”

The Secretary of State’s proposals will now make that worse.

[Richard Graham]

rose—

[Harriett Baldwin]

rose—

[Fiona Mactaggart]

rose—

[Mr Byrne]

I will give way to my hon. Friend the Member for Slough (Fiona Mactaggart), then I will give way to Government Members.

[Fiona Mactaggart]

I heard the Secretary of State refer in his speech today to legal advice that said that the Government could not keep to their original proposals in the coalition agreement. He did not make the House aware of why the Government cannot legally do what they originally intended, so has he made my right hon. Friend aware of why that is?

[Mr Byrne]

My hon. Friend makes an extremely good point, because I think that that was news to the House. We would certainly expect that legal guidance to be published before we get to the Minister’s winding-up speech. That guidance is a material point in a debate that is important to many people, as well as many right hon. and hon. Members, because this Bill has such a poor effect on women in this country—the people we represent.

[Richard Graham]

rose—

[Harriett Baldwin]

rose—

[Mr Byrne]

In two minutes.

Michelle Mitchell, the charity director of Age UK, has said that

“it’s difficult to see how women can plan properly when the government keeps moving the state pension age goalposts”.

The director general of Saga has said that

“to make just one cohort of women bear all the brunt of this in the very short-term will undermine the concept of planning for retirement over the long-term and cause real distress to the responsible women who have made careful financial retirement plans.”

Can hon. Members tell me how this can possibly be justified?

[Harriett Baldwin]

I thank the right hon. Gentleman for finally giving way. I speak with a lot of interest in this matter, as a woman in her 50s—[Hon. Members: “Surely not!”]—I know, shocking isn’t it?—who has seen her pension age increase, first by five years and now by a further year. However, does he accept that there is an issue with rising longevity and that we therefore need to push forward the retirement age of women such as myself?

[Mr Byrne]

Of course. The hon. Lady makes an extremely fair point, and that is why, after the Turner commission met and the Pensions Act 2007 went through this House, a clear timetable was set for how the state pension age should increase. [Interruption.] The Secretary of State is muttering from a sedentary position about how the longevity assumptions have now been increased. That is perfectly fair, and we should have a national debate about how the state pension age should be brought forward; indeed, the Pensions Minister has issued a consultation. It is just a shame that it closes on Friday, after this debate is concluded.

[Richard Graham]

The right hon. Gentleman made two comments about how the Bill treats women. He estimated that the cost of the changes to some women would be £10,000. Does he not recognise, however, that the change in the value of the basic state pension as a result of this Government’s commitment to linking it back to earnings will be worth more than £15,000? Will he also acknowledge that, as a result of the new flat-rate basic state pension being applied, a lot of women who would previously have lost out because of their caring responsibilities will now benefit hugely? Does he not agree that women will benefit from the changes in the basic state pension in those two ways?

[Mr Byrne]

Let us take the hon. Gentleman’s second point first. I understand that the proposal for a flat-rate pension is included in a Green Paper. It is therefore an early statement of the direction of Government policy. Given what the Government have managed to do to commitments in their coalition agreement, I am not sure how much water that proposal holds. The hon. Gentleman’s first point was more interesting, because he was comparing the benefit for someone on a pension under the lock introduced by the Government with a pension that is linked to prices. Going into the election, no party proposed to keep the pension linked to prices, so his calculation is purely fanciful. Indeed, the Pensions Commission said that we should re-link pensions to earnings in 2012. That was in our manifesto, and that is what we would have done if and when we were returned to office. I am afraid that the hon. Gentleman cannot make up fantasy numbers comparing the reality—

[Richard Graham]

The right hon. Gentleman is generous to give way again but, with all due respect to him, I am comparing the fact of what was delivered by one Government over 13 years with the fact of what has been delivered by this new Government within one year. The Gloucestershire Pensioners Forum, which was created by members of his own party precisely to campaign against the de-linkage made by the late Mrs Thatcher when she was Prime Minister—[Hon. Members: “She is still alive.”] Indeed she is. I meant to say “the former Prime Minister”. The Gloucestershire Pensioners Forum has now fully recognised the value of re-linkage, which this Government will introduce. It is a shame that the right hon. Gentleman does not recognise these facts.

[Mr Byrne]

I am glad to hear that correction about Baroness Thatcher. I think that the hon. Gentleman would also accept his Government’s own figures, which show that pensioner poverty is now at its lowest level for 30 years. I am sure that he would accept that pensioner incomes increased faster than gross domestic product and faster than earnings over the past 13 years. That is why we are proud of our record of delivering on pensions.

[Ben Gummer]

In response to an intervention by the hon. Member for Slough (Fiona Mactaggart), the right hon. Gentleman said that the legal advice was news to him. It was not news to the House of Lords, however, as it was debated there on 15 February, at which point this matter was raised. Surely the real news appeared in the weekend’s newspapers, which have provided yet another bandwagon for the right hon. Member to jump on.

[Mr Byrne]

I do not know how much attention the hon. Gentleman has been paying to this debate, but we championed this issue before it came to the House of Lords and as it went through the other place. We will champion it through the House of Commons as well, until this bad Bill has been thrown out.

[Mr Alan Reid (Argyll and Bute) (LD)]

I agree that, for a small group of women, the Bill is unfair. However, I was pleased that the Secretary of State said that he would be happy to look at transitional arrangements. The right hon. Gentleman has been very good at criticising the Government, but will he please tell the House what the Labour party’s plans are?

[Mr Byrne]

I am grateful to the hon. Gentleman for decoding the Secretary of State’s remarks and putting on record that there will be transitional arrangements. I heard about that only by looking this morning at certain blogs written by Liberal Democrat Members, who also expressed great confidence that there would be a compromise on this. We look forward to hearing a lot more about what that compromise will be. It is a shame that it is not in the Bill in time for this Second Reading debate. We would all understand the logic of this if we heard a little more from the Secretary of State about why the Government are introducing this measure.

The truth is that the Secretary of State used as a justification for his argument the idea that women in this position will somehow be living that much longer to enjoy their new pension. Well, they will draw cold comfort from that. The point is that it is simply not realistic for women in their late 50s, who are truly fearful about being given no time to adjust to their loss of income. Surely that is the critical point for us this afternoon. Women in their later 50s will have earned less over their lifetime; they have lower state pension and private savings than men; many have been unable to join a workplace pension and have interrupted their careers to look after their family; many will have stood down from jobs on the understanding that they would get that state pension early.

These are not simply my assertions; they are the Government’s own facts. The Pensions Minister was forced to tell my hon. Friend the Member for Leeds West (Rachel Reeves) that 40% of women aged 56 have no private pension wealth:

“The proportion of women aged 56-years-old who have no private pension wealth”,

he told the House on 10 March,

“is estimated to be 40%.”—[Official Report, 10 March 2011; Vol. 524, c. 1266W.]

What on earth are those women supposed to do with the measures in the Bill? On 4 February he admitted that the median pension saving of a 56-year-old woman is six times lower than that of a man, yet he tells us not to worry because he has a plan. He has a word of reassurance—[Interruption.] The Secretary of State should listen to the plan of the Pensions Minister. I think he will be rather pleased with it, as we were offered words of reassurance and comfort. On 14 February, the Pensions Minister said:

“One reassurance I can offer is that those women…will be eligible to apply for jobseeker’s allowance”.—[Official Report, 14 February 2011; Vol. 523, c. 681-82.]

They might, I think, call that the final insult.

There is not much that unites the House these days, but concern about this Bill is fast becoming one of those causes. I understand that even the Department for Work and Pensions Whip, the hon. Member for Norwich North (Miss Smith), who is not in her place on the Treasury Bench has said:

“I’m pressing Ministers on this because a number of women have raised it with me, and it so happens that members of my own family are in this group. It’s certainly an issue I sympathise with greatly.”

Her concern is widespread. I believe that the hon. Member for Cardiff Central (Jenny Willott) has told no less than the Deputy Prime Minister:

“I agree with the Age UK protestors: these changes should be reconsidered.”

Nearly half the Liberal Democrat MPs have signed an early-day motion that says that the Government should

“rethink its retirement timetable in the Bill so that these women have a fairer chance to plan and save for their retirement.”

Tonight, there is a chance to put a vote behind those words.

Who will vote to support the Pensions Minister? Once, he never tired of telling the Tories about the error of their ways. He was the man who once said:

“Pension policy needs to be stable and predictable years ahead, not made up on the back of a cigarette packet.”

That was still there on his website, www.stevewebb.org, on 6 October 2009. Alongside it, I found another rather apposite quote:

“It is typical of Tory policy to hit the poorest the hardest.”

That is still there on his website. This is the Pensions Minister who said:

“As ever when it comes to pensions, it is as if women are an afterthought. That is clearly not the way in which to change state pension ages.”—[Official Report, 9 March 2010; Vol. 507, c. 33WH.]

That was not on his website. That is what he said in the House of Commons in March last year. Tonight, we have the chance to help the Pensions Minister stand by his words and his record. I think that we should help him with his honour.

This is a Second Reading debate. We are supposed to be debating the principles of the Bill and we are then asked to vote on those principles. We are being asked to do this when it is perfectly clear that the Government no longer believe in the Bill. We are privy to reports in the newspapers that the Government might be working on another U-turn. I am not sure whether it is Conservative or Liberal Democrat Members who are behind it, although I know who will claim the credit. The Secretary of State told the Financial Times today that there are “issues and concerns” that need sorting out, while senior Ministers, says the Daily Mail,

“are telling the Chancellor he must think again.”

The Secretary of State, it says, is “sympathetic”. I have to ask, then: why are we voting on a Bill that the Government do not believe in? The Chief Secretary does not believe in it; the Pensions Minister does not believe in it; half of the Liberal Democrat Members do not believe in it; the Tory Whips do not believe in it. What on earth are we doing going into the Division Lobbies to vote to punish half a million women through a Bill that no one believes in? Will the hon. Gentleman answer that question now?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

It is unclear whether the right hon. Gentleman is going to vote against Second Reading—he has not said so yet. On the assumption that he is, he would have to find not just the £10 billion that his hon. Friends want to raise, but the £30 billion that this Bill saves. Where will he find £30 billion when all the money is gone?

[Mr Byrne]

I am glad that the Minister has raised that point. His own consultation, which closes on Friday, is examining the question of how savings can be made through acceleration of the granting of the state pension age later in life. That is an issue that should have been brought to the House for debate before we were asked to debate egregious measures that will hit half a million women. We should re-examine the timetable for the raising of the retirement age to 67, but that must be done on the basis of equal treatment of the sexes, and the principle that people should be given time to prepare.

We are sick of this confusion. We are sick of this chaos. We say to the Government today, “No more: you need to get a grip. Take this Bill away, and bring us a plan that you have had the decency to half think through.”

“The critical factor in pension arrangements is certainty. People need to be able to plan with certainty”.—[Official Report, 11 January 2011; Vol. 342, c. 179.]

Those are not my words, but the words of the Pensions Minister who is responsible for the Bill. Tonight the House will be asked to vote on a broken promise. We urge the Government to think again. We shall vote to oppose the Bill, and I urge others to do the same.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As Members can see, this is a popular debate. Although I am not introducing a time limit at this point, if Members do not exercise restraint themselves, one will be introduced.

17:36

[Jonathan Evans (Cardiff North) (Con)]

Let me begin by drawing the House’s attention to the Register of Members’ Financial Interests, which shows my connections with the pensions industry over many years.

As you know, Mr Deputy Speaker, you and I entered the House on the same day back in 1992, but this is the first opportunity that I have had to observe the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) in full flow. I have often wondered how he managed to reach such an elevated position in Government in such a short time, and having listened to him today, I am still wondering.

I was staggered by the right hon. Gentleman’s opening remarks, in which he said how proud he was of his Government’s record on pensions. Is he utterly unaware of the destruction of the private pensions system in our country wrought by his former leader, and of the revelation that when the Labour Government were elected in 1997, the National Association of Pension Funds said that the end of dividend tax credit would mean the end of at least half the defined benefit schemes in our country? In fact, we have seen much more than that brought about as a direct result of the Labour Government’s policy. I believe that it was forecast to cost our private pensions system at least £50 billion. Is the right hon. Gentleman proud of the fact that under a Labour Government a record number of pension funds closed to new business? Is he proud of the record of a Labour Government who gave pensioners an increase of merely pence? I can tell him that people in my constituency remember that event.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Jonathan Evans]

I will in a moment—unlike the right hon. Member for Birmingham, Hodge Hill, who was not prepared to hear these remarks from me.

Two years ago, the state earnings-related pension scheme was not increased by even one penny by the Labour Government. That is an illustration of how much we can trust Labour on pensions.

[Sheila Gilmore]

Government Members constantly raise the subject of the 75p pension increase. It is not necessarily a choice that I would have made, but it is the choice that the Labour Government made at the time. The hon. Gentleman should bear in mind that that increase was introduced during the first couple of years of that Labour Government, when they were following Conservative financial rules.

[Jonathan Evans]

I am trying to get my head around the idea of Tony Blair standing at the Dispatch Box and taking his instructions from my right hon. Friend the Member for Richmond (Yorks) (Mr Hague). It is a little bit too difficult for me to accept.

I think it important for us to recognise real concerns that have been raised throughout the country. All Members of Parliament have received many letters, e-mails and other representations relating specifically to the proposals to increase the age at which the state pension kicks in and the impact that that will have on a number of people, not least women.

[Mrs Anne Main (St Albans) (Con)]

Before my hon. Friend moved on from his powerful previous argument, I wish he had remembered to add to his list the discreditable way Equitable Life victims were treated. Their pension shortfall dilemmas were kicked into the long grass for many years.

[Jonathan Evans]

I am grateful to my hon. Friend for making that observation, but I hope she will forgive me for not going down that road. If we were to do so there would be no time left for the debate in hand, because we would all be pointing out the many Labour shortcomings on pensions.

There has been a lot of misinformation about the proposals we are debating. I listened to a staggering example of that at 9.30 this morning on Sky News, when the otherwise excellent Charlotte Hawkins said that today we were going to vote on a proposal to make women work a further five years before receiving their pensions. It amazed me that that could be said; I am sure it must have been a slip of the tongue. Later, I opened my e-mails and came across a letter from a lady who will be required to wait a further two months as a result of these proposals, but who stated that she believed she will have to wait a further six years. That highlights the exaggerations, and in some cases the dishonesty, in the campaign that has been waged against the proposals.

[Harriett Baldwin]

Did my hon. Friend also see last week’s Age UK survey, which found that 20% of the women affected by the previous Government’s changes to equalise the pension ages of men and women had not realised what was going to happen to them?

[Jonathan Evans]

Indeed, and one of the difficulties in this regard is to do with the first change, to which almost all e-mails refer: that women were getting the pension at 60 and that that is now gradually being moved up to 65. The right hon. Member for Birmingham, Hodge Hill referred to his family being affected. Well, my wife is affected by these changes, but we in this House were aware of them because we legislated for them in 1995. [Interruption.] Yes, we have known about them, but we have known about them only here, because there has not been much dissemination of this information outside the Chamber to the rest of the public. [Interruption.] I am grateful to the hon. Member for Slough (Fiona Mactaggart) for indicating that that is so. The idea that the retirement age might then be moved up to 66 is not new. It was debated in this House back in 2007, and legislation was put on to the statute book. What we are doing now is moving the first of these dates forward, and in my view that is necessary. It is perfectly clear that a significant saving will be made.

The Secretary of State made a typically sensitive address, which was well received on both sides of the House, and not only because he said he was prepared to listen. I am staggered that any Minister who says they are prepared to listen to an argument is treated with contempt from the Opposition Benches. [Interruption.] Absolutely: it is an indication of what Labour Members were used to when their party was in government. I commend my right hon. Friend on his approach, however, and I am impressed by the sum of £30 billion.

The Opposition propose that we should not take these steps for a while, and that we should instead return to a 2020 or 2022 timetable. The argument that everything the Government do is being done too fast is a familiar Opposition refrain. It in effect suggests that we can somehow just pass the responsibility on to succeeding generations and not grasp it ourselves. I think we must grasp it ourselves, but that does not mean I am unsympathetic to the arguments about that specific cohort of women who are affected in a particularly negative way.

I know there were debates on these measures in the other place, but I am not persuaded that we must defer taking them to beyond 2020. I am not going to talk about the implications of the equality legislation so often supported by Opposition Members, even though that may have led to a situation whereby what was stated in the coalition agreement cannot now be put into effect. However, what I am certainly uncomfortable about is any woman having to wait more than an additional year. My right hon. Friend the Secretary of State will be aware that Sally Greengross—Baroness Greengross, a Cross Bencher widely respected in this area—put forward a compromise proposal that has much merit, based as it is on the idea that no woman waits for more than a year. The restriction was limited in that way, and the measure was exceptionally intelligently crafted.

I have read Lord Freud’s responses to this debate. He said that the proposal would cost not £10 billion, as the Opposition suggest, but only £2 billion. Given that I want to husband public resources—and that we apparently have the Opposition’s support for shifting retirement ages forward from 2034 and 2044 to dates that are significantly earlier, saving perhaps £2 billion—I am much more attracted to the idea of matching that saving and making far greater savings elsewhere.

Lord Freud responded to the debate by pointing out the gender equality legislation—the equality provisions of European law—that might make this a difficult proposition. However, I am not persuaded that my right hon. Friend the Secretary of State’s Department lacks minds sufficiently sharp to overcome this difficulty. [Interruption.] Yes, I am absolutely sure that the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), could draft the legislation required; but if not, he has all the necessary skill within his Department.

I am very happy to tell all of my constituents who have written to me on this issue that, because of what is happening with longevity, it is fair, if we are asking men to wait a further year, to ask women to wait another year. There are those who say it is a double whammy because we are also seeing equalisation from the age of 60, but that is already a part of the architecture and cannot be taken into account. I am certainly prepared to argue that case.

I want to make two final points that are connected not with this issue but with other aspects of the Bill. In it, adjustments are made to the financial assistance scheme. Many of my constituents have been affected by the collapse of Allied Steel and Wire. On the question of the general attitude of Labour toward pensioners, many of ASW’s pensioners know the “assistance” they got from Labour: none whatsoever. That is the reality. However, the truth is that, under the financial assistance scheme, many people are not even going to get the 90% that was flagged up as their likely reimbursement. I hope we get opportunities to address that issue. I am looking across at my hon. Friend the Member for Arfon (Hywel Williams)—I do not know whether I should call him my hon. Friend; he might be offended by that. My hon. colleague and I have discussed this issue, and it is important that we return to it to address some of the injustices in the operation of the financial assistance scheme as it affects ASW pensioners.

[Malcolm Wicks]

Will the hon. Gentleman give way?

[Jonathan Evans]

On that issue only, yes.

[Malcolm Wicks]

Will the hon. Gentleman at least acknowledge, in fairness, that it was the last Labour Government who set up both the financial assistance scheme and the pension protection fund, which, whatever the difficulties, have helped many tens of thousands of people who were going to lose their pensions?

[Jonathan Evans]

The right hon. Gentleman and I have known each other for many years and he knows I have the highest respect for him. I certainly accept that we eventually ended up with that legislation, but it took a long time to get there. However, he was material in trying to achieve that.

Let me also say a word about the effects of auto-enrolment. I was staggered to hear the right hon. Member for Birmingham, Hodge Hill tell us that he does not like the proposals on auto-enrolment. I have to say that I am concerned about the impact of our continually increasing the personal allowance—as I understand it, that is going to be part of our policy—if we are just going to link the personal allowance figure to the level at which auto-enrolment kicks in. I am reassured by what my right hon. Friend the Secretary of State says about keeping this under review, but the movement from £5,000 to £7,000 is not, as described by the right hon. Member for Birmingham, Hodge Hill, an attack on poorer workers. The reality, on the information that we have, is that those people would be worse off if they were within the scheme.

[Mr Duncan Smith]

May I tempt my hon. Friend with a thought about why the right hon. Member for Birmingham, Hodge Hill made such an issue of this? I wondered whether he was searching for a reason to vote against the very policy that his Government, when in power, wanted to bring in, because there is nothing else in it with which Labour disagree.

[Jonathan Evans]

I am aware that the Forum of Private Business does not like the fact that the Government have not made more adjustments in this area, and of course the Government would like to have a situation in which all parties were on board at the end of the review, but the proposal of the right hon. Member for Birmingham, Hodge Hill has virtually no supporters, save perhaps for those within the union movement—surprise, surprise. The reality is that the proposals we are taking forward are overdue, but there has been too much misinformation about this change. Ultimately, I want to see a situation in which no woman has to wait more than a year longer than she had expected to wait, but the linking of that issue with a 25-year lead-in to the equalisation of pensions at 65 by those engaged in this campaign has been deliberately misleading and has not served the interests of all the people who have written to us.

[Mr Deputy Speaker (Mr Nigel Evans)]

Thank you for your time constraint.

17:51

[Dame Anne Begg (Aberdeen South) (Lab)]

It is a pleasure to follow the hon. Member for Cardiff North (Jonathan Evans), but I will disagree with quite a bit of what he said.

I am disappointed about the change in the financial assistance scheme from the retail prices index to the consumer prices index, particularly in relation to Richards Textile factory in Aberdeen, which went bust with the collapse of its pension scheme. Although the very hard work of many Labour Back Benchers ensured that those pensioners did not lose all their money, they still feel aggrieved that they do not have the same cover as those who subsequently entered the pension protection fund and that they do not get quite as much as those covered by it.

Let me start by saying which parts of the Bill I agree with to show that not everything in it is bad, although quite a lot is. I agree wholeheartedly with the lifting of the default retirement age and I only wish that my Government had done that. I have a friend who has been told by his employer that he has to retire at 65 and he does not want to, but unfortunately his birthday falls on the wrong side of the divide.

I am also very glad that the Government are going ahead with the national employment savings trust. There was a bit of worry at the time of the election that some people in business who were not too keen on it, particularly on auto-enrolment, might put pressure on the coalition Government, who I am glad resisted. NEST is certainly the way forward for occupational pensions, to ensure that there is pension cover for everyone and that most people will not have to depend on the basic state pension as their sole income in retirement. That is very important.

I also agree with the proposal to bring auto-enrolment forward to July 2012 for large companies. If they are ready to go, the sooner the scheme gets up and running the better and the sooner it is tested the better, because part of the reason for rolling out auto-enrolment is to test how it works in practice.

So those things are all good, but that is as far as that goes and there are issues of concern. Like my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), I am concerned about the lifting of the auto-enrolment earnings threshold by £2,500. I tried to intervene about this early in the Secretary of State’s speech, but lots of other people were jumping up and down at the time. The problem is that low earners might not always be low earners. Auto-enrolment is important in getting people into the scheme as soon as possible and in ensuring that even low earners are enrolled in a pension scheme. If those people continue to earn similar amounts for the rest of their working life, the scheme might not have the returns that they would expect, but no one knows, at the start of their working life, what their eventual earnings will be and we should always err on the side of caution in ensuring that people enrol. The raising of the threshold could result in about 600,000 people not being enrolled who otherwise would have been. It has been said that those people could opt in, but it is highly unlikely that many people on such low incomes would do so. If the Government introduced a foundation pension or a pension for the state, which the Secretary of State put into context, the scheme would make a difference for people making such low contributions. Even someone earning just over £5,000 a year could make a valuable contribution to their eventual occupational pension.

I worry about that issue and I worry when I hear that the threshold might go up to £10,000 or more in future, because the whole point of auto-enrolment and of NEST was to make things easy, to make belonging to an occupational pension fund a no-brainer and to ensure that everyone who was in work would automatically pay into an occupational fund. People who are not auto-enrolled and who are not in the pension fund will lose out on the employers’ contributions as well, so they will lose out not only on their potential pension earnings towards the end of their life but on what we often think of as deferred wages in the employers’ contribution.

I am also concerned about the introduction of the three-month wait, for many of the same reasons I have just given. The shadow Secretary of State has already made the arguments, which are important to remember.

All those issues could probably have been swallowed if they had been the only things we were concerned about, but the big sticking point in the Bill, which I suspect most Members will be talking about this afternoon, is the acceleration of the state pension age, particularly the anomaly that hits the 500,000 women who at very short notice will have to wait more than a year for their pension. I wonder whether the Government have analysed exactly who will lose out as a result of the measures and which women will not be in work at the age of 66, when they get their state pension. The figure of £10 billion has been bandied around for how much it would cost not to go ahead with the proposal, but I suspect that is a gross figure. I do not know whether the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), has any idea how much the welfare bill will go up as a result of people’s falling out of work before they reach the age of 66.

I agree that it is right that the state pension age should rise and indeed inevitable that it will rise, and I accept that there are issues to do with longevity, but I am concerned that we are potentially creating not the pensioner poor but a group of people who become the new poor because they have fallen out of work in the last years of their working life and are struggling to get by on benefits. It is not good enough for the pensions Minister to say that for anyone who falls out of work before reaching the state pension age and who does not have a pension they can draw early, there is always jobseeker’s allowance or employment and support allowance. The contributory element of JSA lasts only six months and the Government propose that the contributory element of ESA will last only a year. Nowadays, women expect to have their own wages, but their qualifying for income-related JSA or ESA will depend on the household income and whether they have a working partner. For many women, that misses the point. Quite a few women in my constituency say, “I’ve only got a pension of £1 a week.” What they mean is that they have 60% of their husband’s pension and £1 a week on top of that, but they still see that £1 a week as their pension and they feel very aggrieved about that.

[Dr Whiteford]

Does the hon. Lady share my concern that the healthy life expectancy for men in Scotland is currently 60 years and for women is 62 years? In that context, a dramatic increase in the pension age for those people is simply displacing on to the benefit system the burden that will have to be met.

[Dame Anne Begg]

Indeed. The hon. Lady says more eloquently what I was trying to say about displacing people out of pension age into the working age poor. There is nothing to be gained for those people if all we are doing is delaying when they get their state pension. There will be the odd situation that when people retire, their income will go up, rather than people being able to work until they reach retirement age.

[Pamela Nash (Airdrie and Shotts) (Lab)]

Does my hon. Friend agree that, as we are coming out of carers week, the Government should remember the 37% of women affected by the state pension age increase who will not be in the work force in the last years of their working lives, as the Government call it, and who have responsibilities caring for an elderly or ill relative or for their own grandchildren? They will be among those who suffer most as a result of the increase.

[Dame Anne Begg]

There are much wider issues with raising the state pension age such as the fact that, towards the end of their working life, many people may start to take on less paid employment because they have taken on caring roles. My generation of women is often called the sandwich generation in as much as they are looking after elderly parents or other elderly relatives as well as looking after their own grandchildren, to allow their sons and daughters to go to work. That is the generation that is caught by the anomaly—a generation of women who, perhaps, were not able to work throughout their married life and have not necessarily built up the national insurance contributions that will give them a full state pension.

I am curious about the Government’s argument that the flat rate pension will miraculously mean that all women will get a state pension, when my understanding is that that pension will still be based on the number of years of national insurance contributions. That was brought down to 30 years in the Pensions Act 2007, so women can already qualify. That Act also made it easier for carers to qualify for credits. I see the pensions Minister is about to jump up. Perhaps he can clarify whether the qualification for the flat rate pension will not be 30 years of national insurance credits.

[Steve Webb]

The hon. Lady raises serious points. She is absolutely right—for the basic pension, those credits are already in place. The problem is that many of the women we are discussing will have done their child rearing before credits for the state second pension came in, so they will still retire with inadequate state pensions, which would be corrected under our proposals.

[Dame Anne Begg]

So those women will still have to have the 30 years of credits, but in respect of the SERPS element they will be the winners. But for every winner in all these changes, there will inevitably be losers, and there will be those who have paid their SERPS all their working life, including women who have paid the big stamp but not the small stamp. They are the ones who often feel aggrieved. As the Minister knows, pensions policy is a minefield covered in all those booby traps. As soon as one presses down on one thing, another pops up, making it all very difficult.

It is the group of women who were born in 1953 and 1954 who are being expected, at very, very short notice—five years’ notice—somehow to change their whole financial planning for their retirement. As I pointed out to the Secretary of State in an intervention, when the equalisation came in the warning that people were given ranged from 15 to 25 years. The evidence that I received from Age UK showed that 20% of women still have not realised that they are not going to get the state pension at 60 but will have to wait until they are 64 or 65.

That proves not that we have been lax in trying to inform or educate women about what state pension they can expect, but that it takes a long time for such things to sink in and for people to make arrangements. In the case of the current proposal, the women who will be most affected have just over five years’ notice. That is unfair and I hope the Government will look again.

[Duncan Hames (Chippenham) (LD)]

In her intervention, the Chair of the Select Committee made the excellent point that some of the women we are talking about have already left the labour market, having taken early retirement. Does she agree that the Government have a special responsibility to those former Government employees who they persuaded to take early retirement instead of a redundancy option and who now find that they will not have access to a state pension as part of the plans that they would have made when deciding to leave their employment as civil servants?

[Dame Anne Begg]

I could not agree more. It is imperative that we get that sorted out now. I am sure that other local authorities will not be any different from my local authority, which knows that cuts are coming. My local authority managed to have a funding black hole of £25 million. Before there was any economic disaster in any other part of the world, it happened in Aberdeen. I will not talk about that being a Liberal Democrat council, but it was. That has resulted in large numbers of local authority employees—not only women, but predominantly women—being offered early retirement, which councils have been encouraging their employees to take because they do not want to go down the route of compulsory redundancies.

People have been signing up and are still signing up for early retirement without the full knowledge that what they are signing up for is a lower pension that will not be supplemented with the basic state pension when they reach the age of 63 or 64, as they thought it would be. In some cases, they may have to wait another two years. Their entire financial planning was based on the expectation that they would get whatever the basic state pension would be at that time. It is £105 now, so it will be more than that, and the flat rate pension may have come in. They were expecting at least another £100 a week in the income that they have worked out they will need to survive.

The short notice is the injustice. The Government must look at this again. They cannot leave out this group of women, who did not have the chance to build up their pension protection but who took on the burden of care in the community, saving the Government billions of pounds. The same group of women have had to fight many of the equality battles, yet it is being hardest hit, and it cannot be right that, because of the acceleration, the Government are making them pay the price not of deficit reduction—according to the coalition, the proposals will not apply until after the deficit is meant to have gone—but of the longevity of other groups.

I accept the Secretary of State’s point that the coalition Government discovered that their proposed acceleration was illegal. It would probably be illegal under European law because the Government had already said that they would equalise the pension age of men and women. That makes me wonder what else in the coalition document might be illegal. Has someone been through it with a fine-toothed comb? If that was such a glaring error, have others sneaked into the coalition agreement, or was it just this issue where someone failed to notice that signing up for the equalisation of the state pension age might not be fulfilled by the words of the coalition document?

I will vote against the Bill because it fails on the basic principle of fairness, and in pensions policy fairness is all. When those now sitting on the Government Benches were in opposition, fairness was all they talked about. The previous Labour Government went a long way in introducing fairness into the pensions system. Pension credit was certainly a revolutionary policy that lifted many pensioners out of poverty and transformed the incomes of many pensioners, who saw their incomes double when Labour was in power. Fairness must be at the heart of pensions policy, but the Bill does not pass the fairness criterion.

18:10

[Jenny Willott (Cardiff Central) (LD)]

The Bill has been somewhat hijacked by the women’s pension age issue, but as the hon. Member for Aberdeen South (Dame Anne Begg) has said, there is much in it that is very good and extremely uncontroversial. There are other proposals that are good, but which some people find controversial, such as those on judges’ pensions. Funnily enough, a number of speakers in the other place became extremely worked up about that. As the Secretary of State said, judges currently make no contributions to their pensions. The only thing they contribute to is survivors’ benefit, for which they pay the princely sum of 2.4% or 1.8% of their salary, depending on the scheme, but they get an extremely generous pension at the end of it. I understand that one in six judges draws a pension of more than £67,000 a year, which puts them in the top 0.01% of pensioners, as the employer contribution is around one third of the salaries. The hon. Lady has just said that fairness is all in pensions, but clearly that does not seem fair to an awful lot of people. At a time of great debate on public sector pensions, there is no reason for judges to be exempt from reform. There seems to be a clear consensus in this place, if not in the other place, that that needs to be tackled as soon as possible.

I also welcome much of the rest of the Bill. The introduction and simplification of many of the opt-out arrangements is really important. The hon. Member for Aberdeen South and I were members of the Work and Pensions Committee in the previous Parliament and did a lot of work on the arrangements for the National Employment Savings Trust and how to ensure that people on low incomes are encouraged and supported to save for retirement. Like her, I welcome many of the Bill’s proposals and think that it is really important that the measures are being introduced. Hopefully, the tweaks will overcome some of the problems identified during the passage of the Pensions Act 2007, which most people supported. Many of the concerns that were raised related primarily to small businesses and those on the lowest incomes and are covered by the Bill.

I am also glad that the Bill will set up a system that will make it easier for people on low incomes to save, because that has been a problem for far too long in this country and needs to be tackled. Although the level of means-testing is still an issue and therefore for some of those on the very lowest incomes, as employers will also contribute to pensions, it will be more worth while under the system in the Bill and the previous Act for more people to save.

However, like the hon. Member for Aberdeen South, I am afraid that I will do what I am sure everyone in the debate will do and raise the concerns about the proposals on the women’s state pension age. I am sure that you, Madam Deputy Speaker, will be sick to the back teeth of people complaining about the women’s state pension age by the end of the debate, as I am sure will the Minister. [Interruption.] You are far too charitable, Madam Deputy Speaker.

I agree with the Government that the state pension age needs to rise. In 1970, someone retiring at age 60 could expect to live a further 18 years. Last year, the figure was 28 years. There has clearly been a significant change in demographics in this country, which has to be reflected in our pensions system. We cannot expect people to work until they drop, but the more time they spend in retirement, the more strain that puts on the public purse.

That issue goes hand in hand with pensioner poverty. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who is no longer in his place, talked about the progress he felt the previous Government had made on pensioner poverty. Progress was made, but last year there were still 2 million people of pension age living in poverty, which is unbelievably high for a rich country such as the UK and a disgrace. Unless we seriously overhaul the pensions system, pensioner poverty will continue to be a problem. The longer people live, the less an occupational pension is likely to pay out, for those who are lucky to have them, and the longer they will have to live in poverty after they retire.

We must invest in the state pension in order to tackle pensioner poverty, which is one reason that I welcome the steps that the Government have already taken to bring in the triple lock, which has been a Liberal Democrat policy for a number of years. By linking the basic state pension to earnings and instituting the triple lock, pensioners will hopefully take home £15,000 more over the course of their retirement than they would have done under the previous Government’s policies. That will start to make a difference to levels of pensioner poverty.

What I think will really make a difference is the Pensions Minister’s plan for a flat-rate pension, if and when he is able to introduce that and work it through the House. As has been announced, the plan is for all pensioners with contributions of more than 30 years to receive a flat-rate pension of around £140 a week, uprated by inflation, from 2016. For many people, particularly women in the cohort which has been referred to today, that would be a significantly higher basic state pension than they currently receive. There is particular concern about those women, many of whom do not have private savings and do not necessarily have a full contributions record, as we have discussed in relation to the state second pension. The people who are likely to be penalised by the rising state pension age will benefit significantly from the introduction of a flat-rate pension.

We should not be trying to tackle pensioner poverty simply by increasing the burden on those in society who are working. Wages are flat at the moment and prices are rising, and the Secretary of State has laid out the change in the ratio of pensioners to working people in the population. We need to do something more fundamental. We need to create a sustainable way of managing our ageing population, rather than continually increasing the demands on taxpayers. The Turner commission and the 2007 legislation accepted the premise that, as longevity increases, so the state pension age must rise, but we have now learned from the most recent figures that the situation has changed even more than was understood when the commission carried out its work. We need to take that into account if we are to have a sustainable pension scheme that people can trust for the long term. The Government are right to look at raising the state pension age, and if the flat-rate pension is introduced in 2016, although hundreds of thousands of women will have to work longer, they will get a better pension in the end, which is a trade-off that many will feel is worth it.

As many Members have mentioned today, it is the cohort of women born in 1953 and 1954 who will feel the greatest impact of the change, particularly the 33,000 born in March 1954, who will have to work two years longer. Like other Members, I do not believe that the plans currently laid out are fair for those women. People need time to plan for their retirement, as the hon. Lady for Aberdeen South said. A number of Members have said that those women will have five years’ notice, but my understanding is that it will be seven years before facing the situation, so I would be grateful if the Minister clarified that. Seven years is not a very long time in which to plan whether to work for another two years. In order to keep the public support that we need for such long-term plans, pensions must have full support across this House and among the public as a whole.

[Stephen Lloyd (Eastbourne) (LD)]

I concur with every single word that my hon. Friend says. Owing to the difficult decisions that the coalition Government are making on the economy, I am confident that, by 2018, 2019, 2020, the challenges will have been met and the Government will be able to listen to Back Benchers from all parts of the House and move the change back to 2020. The difficult decisions that will have been made by then will mean that the economy is ready and able to sustain such a move.

[Jenny Willott]

I thank my hon. Friend for his intervention, and it will be interesting to hear what the Minister says to that when he sums up the debate. I am sure that during the debate several suggestions will be made on how to tackle the issue, and that is one.

The changes have to feel fair, but the current proposals do not. The hon. Member for Aberdeen South said that fairness is extremely important, and as the Pensions Minister has said it is extremely important that the basic state pension, whatever its structure, has to feel fair, because it has to last a long time and be free from arbitrary political intervention. The current proposals, however, do not pass the fairness test.

[Mrs Main]

The hon. Lady, who is making a powerful speech, seems, like me, to agree with an awful lot of the very good that is in the Bill, and it would be a shame to ditch the baby with the bathwater, as Opposition Members plan to do tonight. My hon. Friend the Member for Cardiff North (Jonathan Evans) has come up with an interesting proposal, and her hon. Friend the Member for Eastbourne (Stephen Lloyd) has just come up with one as well. Does she agree that Second Reading is the time to do so and to take such ideas into Committee? Like me, the hon. Lady will, I hope, have been encouraged by the sympathetic noises from Government Front Benchers, who are listening to the sensitive arguments from Government Members.

[Jenny Willott]

I absolutely agree. As the hon. Lady says, the point of Second Reading is that we have the opportunity to air a whole load of different options and concerns about the Bill, and as she says also, there have already been a couple of proposals for tackling the issue. I am sure that we will hear more as the debate goes on.

I completely agree that the Bill contains a huge amount that is valuable and important, so I am concerned about the Opposition saying that they will vote against it as a whole. Our constituents, living in our local communities, will be disappointed that the Opposition have taken that approach to the legislation and are not prepared to give a Second Reading to its positive elements.

[Dame Anne Begg]

I am sure that the hon. Lady received a large number of e-mails and letters from her constituents who are affected by this particular anomaly. Did any one of them say that she should vote for the Bill, or did they all encourage her to vote against it?

[Jenny Willott]

To be honest, I cannot remember whether anybody asked me to vote against the Bill. Most writers of the letters and e-mails that I have received raised concerns about the particular proposal in the Bill, and I agree with them. As I have already said, I share their concerns and have issues with what is proposed, but the whole point of Second Reading is that we have the opportunity to raise our concerns and to send the Bill into Committee, where people will be able to go through it clause by clause, to debate what the alternative may be and to have a chance really to scrutinise it. Today’s debate is not the time just to chuck it away.

[Dame Anne Begg]

If there are no changes in Committee and the Bill returns to the Floor of the House in the same position as it is in today, will the hon. Lady vote against it?

[Jenny Willott]

I cannot possibly say what I will do at that stage, because we do not know what shape the Bill will be in. I put the Bill in the safe hands—I am sure—of the Pensions Minister and of colleagues from all parts of the House, who will be able to look at it, try to refine it and send it back to us in the best possible shape. At that point, like all hon. Members, I will be able to decide whether to support it in its entirety.

[Sheila Gilmore]

If the hon. Lady or other Members table an amendment in Committee on the issues that she says she is concerned about, will she vote for them, as she did not when the Welfare Reform Bill was in Committee?

[Jenny Willott]

We have no idea who will be on the Committee for the Bill before us, so I cannot possibly comment on what amendments might or might not be tabled or on who might or might not support them.

The Government should, however, think again about these plans and find a way to make them fairer for the worst affected women. We have already heard a number of proposals, and I was pleased that the Secretary of State made it clear that he is open-minded and willing to listen to what options there are. It was important for us to hear that this afternoon.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I concur with my hon. Friend. The importance of today is that the strength of feeling about this one aspect of the Bill is aired, that Ministers convey the feeling that there will be a response and, most importantly, that there is a response that makes this part of the Bill fair.

[Jenny Willott]

I agree. My hon. Friend has spoken in the House in recent weeks on the issue and on her concerns about its fairness, and I am sure that Ministers are listening and taking that message on board.

I appreciate that this is a difficult and costly area in which to make any changes. The figures are mind-boggling, and a few months here and there will make a significant difference to the cost, but it cannot be beyond the wit of man to find a way to smooth the process in order to ensure that that small group of women does not end up being so badly affected. I have every faith in the Government and, in particular, in the Pensions Minister, who is generally regarded as one of the UK’s foremost experts on pensions. He has done a huge amount of work in the past on women’s pensions, helping thousands of women to get the money to which they are entitled, so I put him on notice today that I trust him to resolve the issue. I am sure that, if he cannot do it, nobody can.

18:26

[Hywel Williams (Arfon) (PC)]

The upshot of the Bill is that many people will have to work longer than they expected, and at short notice. That is the point. People will have made their plans, but they will no doubt have to be changed if the Bill goes through.

I am sure the Minister knows better than I that pension planning is a long-term business, and that is why there is such value in cross-party consensus, in stability, in fairness and in any change being slow and clear. Those are, I think, the Pensions Minister’s own views, and that is one reason why there have been constant problems since a previous Conservative Government broke the consensus on pensions almost 30 years ago—a consensus that the Turner changes in the 2007 Act re-established to an extent.

I, too, have received a lot of correspondence, with constituents and others expressing lots of concern at what they see arising from the Bill as a sudden change, which, they also contend, does not have broad support across the parties or among people throughout the UK. Some see the change as a fundamental break in the social contract between government and people, while others accept that as life expectancy lengthens so too must the length of the working life, but all object to the change in the implementation time scale that the Bill proposes.

Hon. Members have already said that an estimated 5 million people born between 1953 and 1960 will have to wait longer to reach state pension age. Although the wait for the majority of people will increase by less than one year, about 500,000 women born between October 1953 and April 1955 will have to wait more than an additional year and 126,000 women born between December 1953 and October 1954 will have to wait up to two years, losing about £10,000 in pension. Those are the facts as we understand them.

Men and women on low incomes who are reliant on pension credit and have no private pension savings will be most affected by the changes, and we have many such people in Wales. A great deal has been spoken about the gender effects of the potential changes, and women will be hit hardest, but there are also effects on disabled people and potential effects on ethnic groups.

We have also heard about class effects. I, too, have looked at the Age UK briefing, and it states for example that a higher percentage of people in social classes D and E are unable to work on, with one third of such women, at least, being in ill-health. Age UK also points out that awareness of the changes among people in classes D and E is very much lower.

There are also national and regional effects, which have had less attention. The changes will hit some sectors of society harder than others, and we in Wales, as in Scotland, have more people in those sectors than other parts of the UK. In Scotland, life expectancy is four years below the European average at 76 for men and 80 for women. Glasgow has the lowest life expectancy in the UK—71.1 years for men and 77.5 for women. These people will be severely hit.

[Jonathan Evans]

The hon. Gentleman is right about life expectancy numbers. Somebody with a fund who has a poor health record will get a bigger annuity than somebody who has a healthy record. How would he resolve that in terms of the state pension situation? He seems to be saying that he would not change the current arrangements.

[Hywel Williams]

A large number of people are unable to get an annuity in the first place because they do not have that sort of pension. Nobody is arguing against the fact that life expectancy is extending—of course, that should be welcomed. However, the fact that the change is being brought in quickly will particularly affect certain groups in relation to class, gender and where they come from.

The effects in Wales will be much more pronounced. That is demonstrated by figures for July 2009-10 on the composition of the work force taken from the ONS publication “Regional Trends”. The average proportion of the population in the UK who are managers and senior officials is 15.6%, the figure for the south-east is 18.3%, and the figure for Wales is 13%. Managers and senior officials will not be hit as hard by the changes, because they have other sources of pension income and live longer. In Wales, we have fewer such people who are able to depend on a decent pension and expect to live longer; unsurprisingly, the south-east has many more. Likewise, in the case of process, plant and machine operatives, the UK average is 6.7%, the figure for the south-east is 5%, and the figure for Wales is 7.3%. As regards people in elementary occupations, the UK average is 11.1%, the figure for the south-east is 9.7%, and the figure for Wales is 11.8%. Workers and future pensioners will be disadvantaged in Wales, as in the rest of the UK, but the effects there and in Scotland will be more pronounced.

Plaid Cymru Members welcome the continuation of automatic enrolment in pension schemes. Given the increases in short-term employment, casualisation and multiple part-time jobs, we share Age UK’s concern about the earnings threshold, particularly the possible negative impact of the three-month waiting period and its effect on staff who might not stay in the job for long enough. We have the same concern about those who have multiple low-paid jobs and therefore may not reach the threshold and be excluded.

In a speech I made some months ago, I expressed reservations about the indexation process, so I will not labour that aspect. My final point is about the Pension Protection Fund, which was raised by the hon. Member for Cardiff North (Jonathan Evans) and is referred to in part 3 of the Bill. The PPF came about partly as a result of pressure put on the former Labour Government by Members in all parts of the House arising out of the ASW steelworkers scandal: a very difficult situation in which the Government had to be persuaded—I use that word advisedly—to act. Unfortunately, the ASW campaign is still ongoing. I recently met some of the workers, and I have tabled early-day motions and attended meetings on the subject, as has the hon. Member for Cardiff North. In November 2010, the pensions specialist Dr Ros Altmann suggested possible ways in which the coalition Government could assist the ASW workers. Will the Minister tell us what progress is being made in that case? That would go a long way towards responding to the campaign by those workers.

18:35

[Ben Gummer (Ipswich) (Con)]

The salient fact of this debate is that by the time it finishes at 10 o’clock, the average age to which we and our constituents might expect to live will have increased by an hour and a half. If I were to speak for 10 minutes or a quarter of an hour, which I will not, then merely in the course of my speech average life expectancy would have increased by four minutes. I hope that that is compensation for what hon. Members are about to endure.

The simple fact of demography that for every hour that passes 15 minutes is added to the age to which we, as a population, can expect to live forces us to revisit the state retirement age—the age at which people stop paying taxes and start depending largely on the fruits of others’ labours. It is a fact that is unlikely to change in the half century to come. In fact, if the experience of the past few years is anything to go by, the acceleration of our expected mortality rates will only increase, rendering irrelevant and insufficient all the predictions on which we currently rely. There is near consensus that maintaining the existing pension age is unaffordable and that we should correct that by ratcheting up the state pension age year by year to reflect increasing life expectancy.

However, I am worried by the idea that by the mid part of this century, asking people to retire at 70—incidentally, the age intended by Lloyd George in his great Act of 1908—will be seen as the way to fix this problem, because we may not correct everything that we hope to correct just by increasing the state pension age and doing everything contained in this excellent Bill. Although I support the intention of the Bill and the immediate steps that it takes, the Government need rapidly to revisit the conventions and means by which successive Governments address the central problem of increasing life expectancy and the effect of that on the Exchequer and those working to fund it. Otherwise, we will again end up in a situation that is unsatisfactory and inadequate. It is unsatisfactory because with every increase in the state pension age, we inflict another set of injustices and unfairnesses on those who are approaching that moment in their lives. The predicament of the relatively small group of women we have been debating is a sure indication of far greater problems to come for Governments in future years.

Because we are facing this cross-generational challenge, it is incumbent on us to try to forge a consensus between the parties about the rules by which we deal with pensions policy. One of those rules is suggested by the example of the women who are particularly affected by the Government’s proposed changes. When times are normal—these are not normal times—there might be a rule whereby people are given at least 10 years’ notice before we change their pension entitlements or the age at which they can claim them. Perhaps the case of the class of ’53, as they call themselves, is the test by which the Government will be measured in this respect.

Although I understand why the Government might fairly ask that people work an additional year to deal with the horrendous deficit and national debt we have been left, to ask a relatively small group of people to work an additional two years with six years’ notice is a very big ask, not least because it calls into question other excellent parts of the Bill that are designed to encourage saving. We cannot ask people to save and then give them no time in which to do so. I hope that in considering a way to smooth the edge of this part of the legislation, the Government will not only fashion a compromise for the women who are being asked to work an additional 13 to 24 months, but thereby establish the first set of conventions by which successive Governments can deal with this issue.

Another unfairness in the Bill, which was not intended by the Government, results from the change from RPI to CPI for uprating. Many of my constituents who are on occupational schemes, mostly from British Telecom, have found that their pensions have been changed only two years after they were renegotiated between the trustee and the pensioners. The trustee claims that it has been forced to do that by the rules of the scheme. My constituents and I would be interested to know the degree of consideration the Minister gave to the effect that his changes to the uprating regulations would have on the occupational schemes of previously nationalised industries, because they have had a very adverse effect on people who thought that they had funded schemes.

Those are the unfair and unsatisfactory parts of the Bill, which I consider to be largely good. I understand that the Opposition supported the change from RPI to CPI, but on a temporary basis. With characteristic innumeracy, they therefore miss the central challenge that confronts us, which is not just the deficit that we must deal with between now and 2016, but the period after that. There is an idea that in 2016 the deficit will somehow come to an end, we will be finished with our problems, and we can then extract the cheque book from our pocket and go on another splurge. That will sadden people, because if we did that, we would find ourselves with one of the highest debt to GDP ratios in the developed world—higher than most of our developed competitors and significantly larger than almost all of our developing competitors, just at the point at which they move up the value chain to meet us on high-end manufacturing, learning-based skills and value-added services.

At that point, we will be faced with a demographic scene that is not much altered from the one the Government look at now. We need only look at the support ratio to tell us that. It currently sits at about four workers per pensioner—the lowest in the history of the state pension. Under the Pensions Act 2007, it would decrease by 2023 to 3.11 workers per pensioner. That figure will improve under the Bill to 3.35—a difference of 6%. At that point we will still be slipping down, and none of this changes the central projection to 2058—150 years after the introduction of the state pension—when there will be 2.74 workers per pensioner. There will then be fewer than three workers for every pensioner they must support.

Pensions are a double-sided promise. On the one hand, we, as parties engaging in government or opposition, must give people the security to know what they will receive in their retirement. That is why I urge the Government to look carefully at the women who will be particularly affected by this change, and at those who are coming to the end of their working life in the public sector. As many of their accrued rights as possible must be respected, because that is what was promised to them, whether or not it was prudent to do so at the time.

In understanding that, we have to be far more brutal with the younger generation, which has many more years to work. Frankly, younger people will not be able to have a pension of the size that their parents and grandparents have come to expect, because of the horrendous deficit and the enormous debt that we have been left by the previous Government—larger than those of almost all our competitors around the world. As a result of that debt, we will have less to spend on education, training and infrastructure improvement. [Interruption.] The hon. Member for Glasgow North East (Mr Bain) smiles, but it is true that as a result of the actions of his Government, we have less to spend on things that will grow the economy and there will be fewer tax receipts to pay for the welfare state that we have come to expect as a nation.

[Jonathan Evans]

I wonder whether my hon. Friend picked up on the remark from the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), when challenged on the cost of his proposal, that money could be raised by bringing forward significantly the current programme for retirement at the ages of 67 and 68. Perhaps we should bank that promise from the Opposition before it evaporates like so many of their remarks.

[Ben Gummer]

What I found surprising about that comment from the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) was that it completely ignored the sensible intervention by his colleague the right hon. Member for Birkenhead (Mr Field), who made quite plain the difficulty of bringing forward the state pension age rise too quickly because of its manifest unfairness on manual labourers, who have a much lower life expectancy than others. That is a central problem that we have to deal with and a reason why the state pension age will become inadequate. At some point, we have to address that unfairness, whether by measuring the length of period worked or by doing far more than has been done so far to improve the occupational health of large numbers of people in this country.

We come back to the essential problem: there is not only no money now, but there will be no money for many decades to come if we are to have the money to invest in growing our economy. Frankly, we will have no welfare state to pay for if we do not address these big issues now. We will be lying to future generations and forcing upon them a generational theft if we are not straight with them now about the reality that confronts them. That is my generation, as much as it is that of the hon. Member for Leeds West (Rachel Reeves). We will be expected to save considerably more and receive considerably less from the state. [Interruption.] The hon. Member for West Ham (Lyn Brown)—she is a Whip and I will not criticise her—is huffing and puffing away, but the fact is that between 2002 and 2006, the structural deficit was run up, inflicting this problem on generations of people to come. The worst affected will be those on low incomes and the unemployed—the very people her party was founded to protect.

We must be honest with future generations and correct the small inadequacies in this Bill. I urge the Minister to look carefully at the long-term reforms that are needed in our pensions system if we are not to come back here year after year to let down pensioners on the promises that were given to them in ages past.

18:48

[Malcolm Wicks (Croydon North) (Lab)]

Back in the 1940s, Aneurin Bevan referred to the ageing of our population as the “peculiar problem” of the era. When one thinks of the controversies just of the last few weeks over the national health service, the quality or lack of it in our care homes, and now the pension age, one can see how prescient the Bevanite analysis was.

I will argue that pensions policy is at its best when it has an understanding of the pace and grain of people’s lives and of the society—an understanding of how people work, their employment patterns, care patterns and family patterns. Looking back, one can see examples of that. Lloyd George—a reminder that there were once great Liberal reformers—was urged to introduce the first old-age pension, albeit at a slightly measly 70 years old, because working people were, rather peculiarly and in a sense for the first time, outliving their working lives, so it was asked where their incomes would come from. Thus occurred the birth, more than 100 years ago in this Parliament, of the first old-age pension. Much more recently, around the 1970s, Barbara Castle and other Secretaries of State realised that the national insurance system was inadequate when it came to women’s caring responsibilities, and credits started to be built into it.

My question is whether, by introducing uniform state pension ages—I listened with great care to what the hon. Member for Ipswich (Ben Gummer) said on the matter—we are now fashioning a policy that makes sense given the different life cycles of people in this country depending on their occupation and social class.

I think about my own family’s experience. My dad and my mum left school at 14 to work, and my dad had jobs in the market in Islington long before that age. At that time, the vast majority of people left school at that type of age. If they worked through to 65 or so, they would have been working for half a century or more. I did not get my first proper job until I was 21. I remember my nan from Islington—Hansard must record “nan” not “nanny”, because I do not want to excite Conservative Members—saying to me when I was 16, “Malcolm, why haven’t you got a job yet?” She just could not understand why I was not yet working.

My own three children were fortunate enough to go to university and then do some postgraduate qualifications—one of them very ably taught, by the way, by a young lecturer at Bath university, whose name I temporarily forget. I often wonder what happened to him. I refer, of course, to the Minister of State, the hon. Member for Thornbury and Yate (Steve Webb). My children did not get their first proper jobs, rather than holiday jobs, until their early to mid-20s. That is a pattern among certain middle class and professional families.

Today, some people coming up to claiming their state pension will have left school at 15 or 16, but some will not have got their jobs until their late teens, early 20s or even mid-20s. Are we being sensible when we say that people who have worked in hard, tough manual jobs for a very long time should be able to claim their state pension only at the same time as those of us from cosier professional and middle-class backgrounds? That is the issue that I wish to explore today.

The proposals in the Bill are based on certain assumptions, and two in particular. One is that the generalisation about life expectancy is true for all social groups. Others have questioned that assumption. I had an opportunity to intervene on the Secretary of State about it earlier, and I want to question it in a little more detail. The Minister of State and the House have heard my argument before. Alongside the gender issue, which is hugely important, there is the social class dimension, which the data show mainly affects men. It needs some airing and some debate, and I would argue that it also needs some solution. There is the assumption about life expectancy, which is broadly true but with some important qualifications, and also the assumption that if we keep raising the state pension age—and occupational pension ages, by the way, although I know that is another debate—the market will respond and jobs will be available. I want to question that assumption, too.

[Mr Denis MacShane (Rotherham) (Lab)]

I was shocked when a constituent of mine, Mrs G. E. Smith, came in to see my at my last surgery. She will be 60 next month, and she was hoping to retire. She works in an exhausting cleaning job in a sawmill. I think Ministers have no idea what life in hard manual work is. She is shattered and wants to retire, but she has been told that she now has to go on another year, which will be injurious to her health. The Government have no idea of how what we used to call the working class suffer.

[Malcolm Wicks]

I imagine that that woman might have been categorised by the Office for National Statistics, rather inelegantly, as being part of the social class of “routine occupations”. That includes many women who are cleaners, and men who are manual labourers, van drivers or packers—heavily demanding work. Can they all look forward to living to 80 or, as the Minister likes to remind us periodically, to 100? Actually, they cannot.

The class differences are most pronounced for men, but they also exist for women. Here are the ONS statistics. Almost one fifth of men from the lowest social class—19%—die before reaching the existing pension age of 65. We talk about pension ages, but sadly a lot of these guys are already dead by that point. That 19% figure compares with just 7% from social class 1. For women, the respective figures are not so stark, but 10% in routine occupations die before the current pension age of 60—not like my right hon. Friend’s constituent, I hope, but with that type of job—while the figure is just 4% for those from the professional classes.

[Steve Webb]

Will the right hon. Gentleman give way?

[Malcolm Wicks]

I am pleased that the Minister wants to intervene, but may I add another statistic? I have given him a lot of notice of this point, and a wonderful briefing paper has been presented, so I hope there might be some solutions. An additional pension penalty is paid by the poorest groups. Whereas the great majority survive to get the state pension, they then draw it for fewer years than people from the top social classes, because of earlier mortality. Life expectancy at 65 is 18.3 years for men from social class 1, which is professionals, but it is only 14.1 years for those from social class 5. That four-year difference is the same for women. A double pension whammy affects people from the poorest social classes, and that should at least raise a question in the Minister’s mind about whether the general policy that he is pursuing—to be fair, it is the general policy that my party’s Government were pursuing—is on the right track.

[Steve Webb]

The right hon. Gentleman is making a characteristically fascinating contribution. He is citing different social groups, but does he accept that the sizes of those groups are changing? His idea would have been brilliant in 1975, but in designing a pensions system for the 21st century and beyond, is he not trying to solve a problem that is diminishing with every passing year?

[Malcolm Wicks]

I was solving many other problems in 1975—they were so numerous that I cannot think of an example. I believe that there are solutions to the problems. They might be complex, but if the Minister will bear with me I will come on to them.

I first wish to make my other contrarian point about the general assumption that it will be all right if we keep raising the state pension age—and indeed the occupational pension age. It is about employment patterns. At the moment it is not the case that 90%-odd of men and women are working until they are 65 and 60 respectively, and that if we keep increasing the pension age by a year or two there will be jobs available. That is not the situation at all. Labour force survey data show that almost a quarter of men aged 50 to 64, and more than a quarter of women aged 50 to 59, are classed as economically inactive. Many of them are not working at the moment. Why do we assume that there will be jobs for them if they have to work for a few more years? More specifically, 39% of men aged 62 are currently not working. By the age of 64, the figure is 52%. Among women aged 58, two years before their current state pension age, 36% are not working. The assumption that general life expectancy increases will benefit everyone and the at least implicit assumption that jobs are available are at least partly illusory.

I am not challenging the demographic logic, or the fact the state pension ages—and, may I say in a reasoned way, occupational pension ages—have to increase. Of course they do. That is the logic of demography, and it helps us safeguard our welfare state system. I ask, however, whether the situation is right for a man or woman who left school at 15 or 16. They may have had caring responsibilities or periods of unemployment, but they will have essentially worked for 49 or so years. They currently get their pension at 65, in the case of men. Is it right that they should be on the same playing field as the professional person who left university and did not do the type of job that my right hon. Friend the Member for Rotherham (Mr MacShane) described, as a packer, cleaner, steelworker or miner, but who is from the professional classes, rather like many of us who are currently in this room? Is it right that the same state pension age should apply to both groups? I do not think that that is a state pension system that is in line with, or goes with the grain of, people’s lives. It does not seem fair to many people.

I meet many people from professional classes—politicians, business people, think tankers and broadcasters—who dread retirement. They want to keep working. They are hale and hearty and often at the top of their game. They want to carry on working, and that is a good thing. [Interruption.] My right hon. Friend the Member for Rotherham gives an important example. In 10 years, he will constitute another important example.

That is right and proper, but people who have done physically demanding work are literally worn out in an old-fashioned sense. Some of the steelworkers I met when we set up the Pension Protection Fund were physically worn out. They do not want to keep working for another couple of years. They want to retire to have a well deserved rest.

What is the answer? I think that we should try to calculate the records of those who left school at 15 or 16. I know that it is a challenge for the civil service. I have not got the briefing paper—the Minister has it and I am sure that he has read it. Given national insurance records, employment records and perhaps income tax records, should not we be able to calculate that people who have worked for 49 years can retire at the age of 65—for men and women in due course—rather than assume that they can carry on working? It is a big issue for social administration and it needs a bright Minister to tackle it. The Minister should give it rather more attention than I think he has given it so far.

19:01

[Richard Graham (Gloucester) (Con)]

Today’s debate takes place more than 100 years after the Old Age Pensions Act 1908 was introduced by a slightly different coalition Government, led by Lloyd George, but including Churchill in his Liberal phase. The most important change since then is clearly in life expectancy. My hon. Friend the Member for Ipswich (Ben Gummer) and other speakers this evening have already tackled that in forensic detail.

I think it would be helpful if I detailed a couple of salient facts as an introduction to my views about Second Reading. A hundred years ago, life expectancy was slightly less than the pension age of 65. That would imply a pension age of about 87 today. To put it another way, 10 million people who are alive today will live to be 100. Clearly, something must be done, and I am afraid that it falls to this coalition Government to do it. The Labour party had its chance. In 2002, the Labour Green Paper fudged the issue and, two years later, the then Secretary of State for Work and Pensions clearly told the TUC that raising the pension age would not happen. The message today from the shadow Secretary of State and the shadow Minister, the hon. Member for Leeds West (Rachel Reeves), who is in her place, blithely recommending as an alternative to some aspects of the Bill a speeded-up increase in the pension age beyond 2020, can therefore be treated with a huge bucket of salt. Their paymasters, the trade unions, simply would not let it happen. As is so often the case, it falls to this Government to tackle the difficult questions and decide how to balance the interests of future pensioners with those who are earning, paying taxes and paying for those pensions.

The most critical issue of fairness that the Bill must tackle is intergenerational fairness. When my right hon. Friend the Secretary of State introduced the Bill, he highlighted several aspects that are worth mentioning. He referred to life expectancy, and I hope that I have covered that point. He also mentioned fairness between generations, which is the basis for the main provisions of the measure. He talked about the importance of savings and their not being frittered away through a means-tested system. I echo that strongly. Correspondence from my constituents in Gloucester constantly reflects the unfairness between people living next door to one another, some on means-tested pensions and others not, owing to their small amounts of hard-earned savings.

The other key aspect is auto-enrolment. I pay tribute to the Labour party for the previous Government’s work on auto-enrolment, but once again this Government will have to implement the scheme. We have examined the details of simplifying the administrative aspects, ensuring an opt-out, not an opt-in, getting the self-certification from defined contribution schemes and so on. I welcome those aspects of the Bill as well as the changes to occupational schemes, in which I should declare an interest as chairman of the all-party parliamentary group on occupational pensions.

It is notable that no Labour Members referred to judges’ pensions. An extraordinary silence has come upon my friends on the Opposition Benches. Several Government Members have pointed out that having zero contributions to the judges’ pension scheme is surely a massively unfair anomaly, which Work and Pensions Ministers are quite correct to change. That should have been done years ago.

That brings us to the one aspect of the Bill that causes hon. Members of all parties some concern: the effect on women born between December 1953 and October 1954. I have written to the Secretary of State and the Chancellor, inquiring whether it would be possible to introduce some flexibility to tackle the specific problems of women in that age group. I received a letter from the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), which tackles the question in some detail. He said that

“implementation of the increase to 66 between December 2018 and April 2020 is the option that best balances sustainability with fairness in the face of demographic change.”

I recognise that Ministers have a difficult task in trying to balance often conflicting aspects of dealing with pensions. I wondered—the Minister has agreed to consider the matter—whether the same argument could be made even more convincingly for stretching the period from December 2018 to the autumn of 2020 so that the increased period of waiting for their pension for those women would effectively be reduced from 24 to 18 months. I am confident, given everything that has been said today, that Ministers will consider that during the Bill’s later stages. I await what happens on Report.

It is important that our constituents understand that today we are considering and debating the principles of the Bill. The detail will be examined in Committee and again in the Chamber. I believe that the principles for tackling critical issues such as savings, auto-enrolment, occupational pensions, judges’ pensions and changes in life expectancy should occupy our time here today.

I was genuinely disappointed by the contribution of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who gave a speech that contained a series of stories, rumours and quotes from newspaper articles—admirable soundbites in the absence of any policy. One must conclude that the shadow Secretary of State has no more policy on pensions than he had money left in the Treasury coffers a year ago. Although he said that he was proud of Labour’s pensions record, and the right hon. Member for Croydon North (Malcolm Wicks) gave one or two examples, such as the creation of the PPF, which are to be commended, I wonder whether Labour Front Benchers’ pride extends to the 75p increase in the state pension that was offered to my constituents so very recently. It is difficult to be proud of policy, but if Government Members are to be allowed some pride, it is in restoring the earnings link to the basic state pension, added to the triple guarantee that ensures that the basic state pension will always rise by at least 2.5% every year. That is a huge contrast to 75p.

I therefore believe that the Bill has a lot in it to commend to Members on both sides of the House. This issue should be non-partisan and non-tribal. We all want a good, affordable, sustainable pension for our constituents. I shall therefore support the Bill, which will make a significant difference to the 7 million people of both sexes who are currently under-saving, resolve the scandal of judiciary pensions, and allow for sensible reflections on aspects for women born within a particular year.

19:10

[Julie Elliott (Sunderland Central) (Lab)]

This debate is incredibly important to Members on both sides of the House. Before I move on to what most concerns me about the Bill, which has been raised by most hon. Members today, I should like to comment on some of the things that my right hon. Friend the Member for Croydon North (Malcolm Wicks) mentioned. My constituency’s past is in heavy industry, and it still has a huge element of industry. Both men and women work very hard in difficult, not-wonderful conditions. Many simply do not reach pensionable age. It is important to bear that in mind in our discussions. Nobody can argue with the statistics on the rate of increase of life expectancy, but in some areas of the country, especially in pockets within those areas, life expectancy is increasing much more slowly. That needs to be borne in mind in our considerations.

In my office, there are folders containing letters from many of my constituents who feel strongly about changes to their state pension age. Many have felt compelled to write to their MP for the first time. I want to speak on behalf of those people, who are predominantly women. They have told me what they think of the Government’s plans, and I promised that I would represent their views to the Government. I shall take this opportunity to raise their objections on their behalf. Some have told me extraordinary things about their lives, the jobs they have done and how hard they have worked. It is my privilege to speak on their behalf. Likewise, I was pleased to take part in a debate on this issue in Westminster Hall recently.

What are my constituents so unhappy about? These women have worked hard their entire lives and done everything right. They have worked, saved and planned. Along the way, many have raised families, and many now have caring responsibilities for younger and older members of their families—I could add that, in that way, they are saving the taxpayer money. They have made their contribution to society. They paid their taxes and national insurance in the hope of a happy, relaxed, financially secure and worry-free retirement, yet the Government have moved the goalposts. My constituents feel angry and let down. Many are afraid and wonder how they will manage financially. Those who must continue to work are fearful of the long-term implications for their health.

Before I go any further, I should like to make something clear. My constituents do not disagree that the state pension age should increase. They recognise that average life expectancy in this country is increasing and they recognise the dangers that come with an ageing society, but the Turner commission recommended 15 years of preparation before implementation, as a swift alteration could cause financial hardship and unnecessary anxiety.

That is of great concern to my constituents, some of whom have already retired. Many who were seven or eight years from pensionable age calculated their savings, pension entitlements and income and retired so that they could take on caring responsibilities within their families. They simply cannot adjust their finances to cope with such sudden changes.

The issue that concerns them, and indeed me, is the sense of injustice, which has left them feeling betrayed. When they started work aged 15 or 16, they had an idea of what was expected of them and what they were signing up to—similar, perhaps, to signing a contract of employment—but that is being unjustly altered, retrospectively, leaving them with very little time to prepare. They thought they were contributing to one thing, but in fact they will get another. There is simply not enough time for them to plan and prepare financially for their retirement, which causes them a great deal of anxiety. Moving the goalposts at such short notice is not the correct way to go about this. My constituents feel penalised, despite, as I said earlier, doing everything right.

Retirement should be about choice. People should be able to assess the prevailing factors and decide when it is appropriate for them to retire. Some of my constituents affected by these changes have already made the decision to retire and are living off small private pensions. The Bill effectively removes that choice. Their carefully planned savings will not suffice for the two extra years they will be forced to wait before receiving their pension.

I worry about the wider implications of the plans. The Minister says that we need to encourage people to save for their pensions, but what message is the Government sending to the young women of today? Are they saying, “You may save and you may plan, but we’ll make the changes anyway”?

I said that I would speak on behalf of my constituents, and I shall now directly quote just a couple of the letters I have received in the past few weeks. One constituent wrote:

“I started work aged 16 with the expectation of receiving a full state pension at 60. 5 years was added. I am now outraged to find that this government has changed it again. Having paid full contributions I now find myself worse off compared to my colleagues and friends who are only a few years older”.

As a result of the arbitrary way in which the Government have decided their dates, I am sure that some of that woman’s better-off colleagues and friends are only a few months or days older than her.

Another constituent wrote:

“I am currently in full time employment and have had 2 knee replacements and am about to have surgery on my back. I am in constant pain and find full-time work very difficult. However I was looking forward to my retirement. I had hoped not to have to claim for any benefits before my retirement but I can no longer see this being possible. I feel very let down and wonder why I have pushed myself to work so hard all these years”.

Have the Government assessed the costs they will incur when people who physically cannot work extra years claim benefits? Has that been taken into account?

Finally, another constituent said:

“I find that the goal posts are being moved and if these proposals go through I shall have to work for a further 91 weeks and £9,295 will be taken from my State Pension. I have worked hard all my life from the age of 15 and I have also brought up a family. I am looking forward to my retirement as the toll of all these years of working is starting to show and feel. This Coalition government is letting thousands of women down.”

[Jonathan Evans]

Hon. Members on both sides of the House will have received similar letters. The Labour party’s policy, as far as I understand it, is to begin the process in 2020. Therefore, those people would write similar letters—would they not?—if the policy adopted by the hon. Lady were pursued.

[Julie Elliott]

That is absolutely right. The Labour party set out a similar policy of raising the pension age, but we would have done it by 2020, which would have allowed a considerable time for people to plan and to take that into account. The problem with the Government’s proposal is not raising the pensionable age, but doing so in such a short period. That is radically different from anything the Labour party proposed.

The coalition agreement said that the state pension age would not rise sooner than 2016 for men and 2020 for women. The Bill breaks that coalition commitment. My constituents feel very angry and misled about that. Like many of the coalition’s ill-conceived policies, this is too much, too fast.

19:19

[John Glen (Salisbury) (Con)]

I would like to open my remarks by reflecting on a tale of two 64-year-olds. My great-grandfather died in Salisbury in 1944. In the words of my grandmother, who is now 90, he was seen at the time as an old man. Next week, my father will turn 64. He will retire having done a manual job for 48 years, and with the expectation of perhaps living, as his father did, to 90 or 92. But we do not know, which goes to the heart of the problem faced by the Government: changing expectations of how long we will live and what to do about it versus the reality that decisions will have to be made with finite resources.

I think that the Government have made an excellent start with this Bill, which addresses three interlocking issues. The first is our ageing population. Only a few weeks ago a lady came to my constituency surgery, sat down in front of me and asked whether I could help her. I said I would do what I could. I really thought it would be about an issue of care for herself or her aged husband, but in fact she wanted to talk about her 99-year-old mother. We have a ticking time bomb that, over the past two generations, Governments of all colours and parties and at all times failed properly to grasp. We cannot go on like that.

[Sheila Gilmore]

Will the hon. Gentleman accept that it is a gross generalisation to say that this problem has been ignored? The Bill makes a relatively minor change compared with the major changes proposed in the Turner report and the last Pensions Bill. It is wrong to suggest that this has not been looked at.

[John Glen]

I thank the hon. Lady for her intervention. I think I will address the thrust of her comments in a few minutes.

The second issue is our active ageing population. Notwithstanding the remarks of the right hon. Member for Croydon North (Malcolm Wicks), who pointed out the differences in life expectancy between regions and socio-economic backgrounds, many people expect to lead an active retirement, which is why I welcome the proposal to remove the default retirement age. That will be important in allowing people to do more and to continue working if they wish.

The third problem that the Bill addresses is the lack of saving. It has been said that 7 million people are not saving enough for retirement. The problem is the general sentiment that things will be all right on the night—people expect to be able to sell a property or make some money to put in a pension pot. The Government are facing up to these tough issues, and have realised that that is not a realistic proposition.

I recognise that there is a gap between the long-term solution and the needs of those currently near the pensionable age, and many have acute concerns about what will happen—many Members have referred to the cohort of women who face a particularly tough time. All the indications are that the Government are prepared to acknowledge and address those concerns, and I am sure that my hon. Friend the Pensions Minister will have an ingenious solution. However, I would like briefly to draw the House’s attention to a few specific issues.

Despite the welcome introduction of the triple lock, it is clear that pensioners feel a great sense of vulnerability. They know that they have a reasonable expectation of living many years, and are anxious that at a time of low interest rates and little investment income their basic state pension should grow. I therefore welcome the Government’s proposal. I recognise that it will cost a lot of money and will take time to work out, but its general thrust is the right one.

It has to be acknowledged that we have seen massive changes as a result of the increase in life expectancy over the past 50 or 60 years. Life expectancy at 65 has grown upwards of 10 to 15 years over the past two generations, and it would be helpful if the Government set out what we are aiming for. Notionally, we will have parity between genders over the next 10 years, but what are we aiming for? Are we saying that everyone should have a right to expect a fixed number of pensionable years? Are we seeking to address the statistical evidence on demographics and regional differences, or should we recognise, building on the comments of the right hon. Member for Croydon North about the level of complexity and a complexity deficit, that we will not be able to make the pensions system sufficiently complex to address every one of those factors?

We have to recognise that we need to do something, particularly about the 33,000 women who face this two-year delay, but it would help if we set out some broader principles. My generation—those under 40—will have to bear a much greater responsibility. I expect to work much longer, although I might have a different job from my father, who worked on the land. We need to send the message so that the next generation and those after know to put more into their pension pots and expect to retire later. My hon. Friend the Member for Gloucester (Richard Graham) has already mentioned the fact that 10 million people now living will live to 100. That is beyond the realistic expectations or assessments of most people today, but it will impose strains on public finances, health care costs and end-of-life care, which are the issues that we must address. We must not fail to consider my generation and those that come after because they do not seem to matter today.

I welcome the changes to auto-enrolment, but I ask the Government to avoid unnecessary and bureaucratic changes for small business people, especially those in the tourism or retail sectors, where staff turnover is high. Too often justice is not done in the detail to the headlines of Government. We need to ensure that small employers do not bear a disproportionate cost.

The free eye tests, free prescriptions, free bus passes, free television licences for the over-75s and the free winter fuel payments, along with the Government’s commitment to solidify the £25 payment in bad weather, are welcomed by many. Certainly, they are welcomed by the poorest members of my constituency—in Bemerton Heath and the Friary, for example—who rely on the payments year in, year out. I hesitate to say it, however, but is it really fair for those earning more than, say, £50,000 a year in retirement to have that extra money? There is usually a snigger, a gasp and a “Well, we don’t really need it.” However, in the assessment of true fairness, what value accrues to the public purse from expenditure on those people?

I welcome the Bill, which establishes the right direction, but there is still work to be done in certain areas, which I hope I have set out. No Government, past or present, will get everything right. I applaud the work of my hon. Friend the Pensions Minister and wish him well as he unravels these complex issues and develops a pensions system fit, in all respects, for the nation we live in and the number of years we can expect to live.

19:29

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Like many Members, I have been inundated with e-mails and letters from women who will be affected by the acceleration in the state pension age. I declare an interest, in that I was born between 1953 and 1955, and will have to wait longer for my pension.

Last month I held a 90-minute Westminster Hall debate in which I outlined my opposition to the Government’s plans. The arguments that I put forward then still hold. The Government’s proposals are unfair, because they target a group of women based on when they were born and give them too little time to plan. These are women who have done the right thing—they have paid their national insurance contributions and planned for their retirement—and they should not be penalised by a Government who are moving the goalposts at the last minute. The Government are threatening to undermine confidence in the pensions system and some of the more positive proposals in the Pensions Bill, such as auto-enrolment, that are designed to improve pension coverage. However, people may think, “If the goalposts are moved at the last minute, why bother? We may make our contributions now, but who’s to say that the money will be there at the end, when we expect it?” That is the opposite of the Government’s intentions for pension reform, but it is a distinct possibility.

When I held my Adjournment debate, not a single Conservative MP spoke. I am encouraged that we have had such thoughtful and wide-ranging contributions from all parts of the House on this important issue today. I also hope that the opposition expressed in this debate will cause Ministers to pause and rethink their plans. My early-day motion on the issue has gathered 177 signatures from all political parties, so there is widespread support in the House for a rethink.

I would like to touch on the Secretary of State’s comments in today’s media. He said that it would cost in the region of £10 billion to drop the accelerated timetable, and that he would therefore stick to his plans. The Bill’s regulatory impact assessment says that the proposal will save no money before 2016, by which time the Chancellor says that he will have balanced the books. I am therefore unsure what the Secretary of State means. Is this about deficit reduction, or is it about fairness and equality?

I would like to touch on some issues that have already been covered and put some further questions to the Minister. What assessment has his Department made of the proposal’s effect on the number of unpaid carers and child minders in the UK? The accelerated timetable means that many people who would have taken up caring for relatives or provided child care when they retired, in order that the next generation could join the work force, will not be able to do so because they will be at work for another two years. That will have an important social policy impact. What assessment has the Department made of the proposal’s effect on volunteering and the Government’s big society agenda? People who have retired are not inactive; they volunteer at libraries, charity shops and lunch clubs. They also act as school governors and provide much needed care in our communities. If they are kept in the labour market for longer, they will be less able to volunteer in those ways.

I am also deeply concerned about unemployment among the over-50s. It is not easy for the women affected by the proposal to get another job or increase their hours to fill the two-year gap if they find themselves out of work, especially at such short notice. I receive many letters from constituents in their 50s who are willing to take any kind of work, but who are finding it impossible to get a job. It is not easy for people to return to the labour market once they have left. It is also becoming increasingly difficult to hang on to a job in later years. If women are expected to work longer, there needs to be work for them to do. That is particularly important given the current economic situation and the rise in unemployment. In looking for work, those women may well be competing against their own grandchildren in the labour market.

What projections and costings have the Government made for how many women affected by the proposal will have to claim employment-related benefits? Many women will not have enough savings to fall back on, particularly those who have been employed in low-paid work or who have taken time out to have children or act as carers. Will the Minister outline the measures that the Government plan to introduce to help them work longer? Will he comment on how women who are not in work are meant to balance their finances in the two-year gap, given that they will be eligible for jobseeker’s allowance for only six months if they have savings or will not be eligible at all—this is my understanding—if they have a small occupational pension?

I was going to mention some of the class issues affecting people’s life expectancy, but my right hon. Friend the Member for Croydon North (Malcolm Wicks), who is no longer in his place, went into that in great detail, and much better than I could. I would therefore like to end by asking the Minister about auto-enrolment and NEST—the national employment savings trust—which I broadly support. The three-month waiting period will mean that 500,000 fewer people will be automatically enrolled in a pension scheme. It is my understanding that workers will be able to opt in during that three-month period and receive the employer contribution, but people will do so only if they know that they have that right. Will the Minister assure the House that the regulations will require employers to explain that to jobholders from day one of their employment?

It is disappointing that NEST will not be allowed to deal with small transfers in and out, and sweep up small pensions from casual employment. Many people are employed dozens of times over their lives, many doing short-term jobs in, say, call centres. The reality is that we have a much more transient labour market. Provisions for transitions in and out of NEST should be included in the Bill, even if they cannot be implemented immediately. I very much look forward to the Minister’s response on those two issues.

19:35

[Julian Sturdy (York Outer) (Con)]

It is a privilege to have the opportunity to contribute to such an important debate, and to follow some extremely thoughtful speeches from all parts of the House. Ensuring that Britain has a fair and financially sustainable pensions system must rank as one of the most important priorities on the coalition’s ever growing “to do” list. After all, not only does this Bill shed light on a pensions system that is currently broken and unsustainable; it also touches on key issues of individual responsibility, a new savings culture and easing the administrative burdens on small businesses. All those factors make this Bill a significant piece of legislation. However, it is impossible to reflect fairly on the initiatives in the Bill without taking note of the current state of our pensions system.

Unfortunately, Britain’s pensions system is dangerously creaking, with real doubts about its financial sustainability. The challenges that it faces are frankly enormous. Official projections of average life expectancy were once again revised upwards in 2009, indicating that men and women are expected to live an extra one and a half years longer than was thought at the time of the Pensions Act 2007. Although we must welcome increasing life expectancy rates, their impact on our pensions system cannot be ignored—a point already covered by a number of Members, including my hon. Friend the Member for Ipswich (Ben Gummer), who did so very eloquently. The impact will be huge.

Meanwhile, it is a sad reality that too few people have been saving enough for their retirement in recent years. Indeed, according to the Office for National Statistics, fewer than 9 million people in Britain now participate in an occupational scheme, with around 7 million people not saving enough for their retirement. Combined with increasing life expectancy, our poor savings culture is a potent time bomb beneath the surface of our pensions system. In addition, the Pensions Commission recently described the UK pensions system as one of the most complex in the world. A 2009 survey by the Department for Work and Pensions highlighted the fact that 71% of people did not understand the workings of modern-day pensions. To my mind that is a worrying statistic.

With increasing life expectancy, a poor savings culture and a complicated system, our pensions systems is not fit for the 21st century. The status quo will no longer suffice. We cannot pass this ticking time bomb to the next generation. Change is absolutely necessary. This Bill paves the way for such timely reform. As in other policy areas, such as health, higher education and welfare, the Government are absolutely right to tackle pensions with a long-term focus on ensuring sustainability. As in other areas of Government, the coalition cannot be accused of currying favour ahead of the next general election. By tackling big, sensitive issues head-on, we will restore confidence and fairness in such vital areas. The Government are therefore right to commit to increasing the state pension age in the Bill. As I have said, we are experiencing significant increases in life expectancy.

I had hoped that that part of the Bill would be welcomed across the House—it was, after all, Labour which committed to increasing the state pension age in the Pensions Act 2007—but, sadly, that does not appear likely. In the light of new evidence about the rate of increasing life expectancy, I firmly believe that it is right to review the original time scales set by the previous Government and to speed up the process. I admit that that is not an easy decision to take, but it is vital that we grasp the nettle on this specific aspect of the Bill. If we are to pursue a policy to bring about long-term, sustainable change, we should do so courageously and without compromise to the Bill’s main principles.

I therefore urge the Government to resist calls from some to slow down their approach to increasing the state pension age, and I am pleased that the Secretary of State outlined his commitment in that regard earlier. Having said that, I acknowledge, as have many colleagues, that a sizeable group of individuals will now qualify for their state pension more than a year later than they would have qualified under the present arrangements, with more than 30,000 women qualifying more than two years later. Obviously, those affected will feel harshly treated, but it is encouraging to hear that the Secretary of State is willing to listen to the arguments put during the passage of the Bill. I very much welcome that; it is an important factor in the process. However, we must remember the previous Government’s regrettable mismanagement of Britain’s economy. Had we inherited a slightly more stable financial state of affairs, we might perhaps have been able to do more for those who now face a delay in their state pension entitlement.

The second part of the Bill deals with reforms relating to workplace pensions. I welcome the fact that the Government appear to be implementing the findings of “Making automatic enrolment work”, an independent review of automatic enrolment into workplace pensions. Independent reviews tend to be rather more balanced than those carried out by Whitehall Departments. I largely support the deregulatory nature of many of the workplace pension reforms. Reducing the cost of bureaucracy to small and medium-sized businesses should always be a cause for celebration. Indeed, I am led to believe that even the TUC supports this aspect of the Bill. Perhaps Labour Members can confirm that. Such support is wholly justified, as these reforms will ensure that, from 2012, millions of people will be saving for a pension for the first time. I have always believed in encouraging a new savings culture, and auto-enrolment is a really positive step in the right direction.

In summary, the challenges facing our pensions system can fairly be described as a ticking time bomb. The measures in the Bill alone will not be enough to turn the tide and reform pensions as widely as is necessary. Reforms of the state pension are currently being consulted on, and even at this stage I urge the Government to ensure a fair deal not just for future pensioners but for existing ones. Nevertheless, the Bill represents a good step forward in the attempt to tackle our out-of-date pensions system. The Government should again be congratulated on doing the right thing, even when it might not be the easiest of their duties. Good governance is about taking difficult decisions in the long-term interests of the country, which is what this coalition Government are doing. The Pensions Bill lays a solid foundation for a more sustainable and fairer pensions system, and I look forward to the Government building on it further in future.

19:44

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I welcome the opportunity to contribute to this important debate. Like many hon. Members on both sides of the House, I have been contacted by a huge number of constituents about the measures in the Bill. Indeed, I expect that the e-mails are continuing to flood in even as I speak.

The debate today has rightly focused on women’s pensions, but it is important that we also remember the wider context. The majority of people want to plan ahead for their retirement, and they are happy to make their contributions during their working lives in the knowledge that they will reap the benefit when they retire. I am pleased that today’s debate has not had more heat than light, and that we have heard thoughtful contributions. All too often, insulting comments are made to suggest that people who have a decent pension might be getting something for nothing, or getting more than they deserve. I am genuinely glad that we have not heard any of that today.

For many working people brought up to do the right thing, pensions are like deferred wages. They have carefully planned for their later years because they believe that it is right to avoid being a burden on the state or on their families. Unfortunately, however, it is those thrifty, careful planners who are being let down by this Government in the Bill. It is sad that the Government have broken their promise in the coalition agreement not to raise the women’s state pension age to 66 before 2020. As we heard at the beginning of the debate, the coalition agreement clearly stated that the state pension age would rise to 66 but that this would

“not be sooner than 2016 for men and 2020 for women.”

Ministers have performed dramatic U-turns on a whole range of issues, some of which have been welcome, but this one is most unwelcome. The legislation will now accelerate the equalisation for women to 2018, and then increase men’s and women’s state pension ages to 66 by 2020. Anyone reading the coalition agreement when it was published would not have expected that to happen.

Some 2.6 million women will be affected by the Government’s proposals. The state pension age for women born between 6 December 1953 and 5 October 1954 will increase by more than 18 months. I should say that I do not have an interest to declare in that regard; the increase will not affect me, but it will affect many women in my constituency. The Government’s own impact assessment estimates that the measure will affect about 330,000 women. In the most extreme cases, some 33,000 women born between 6 March and 5 April 1954 will see an increase of two years. Those are the points that constituents are contacting me about, because they are worried about the impact that the Bill will have on them.

To put this in context, a woman born in April 1953, as one of my good friends in my constituency was, will be able to get her pension at the age of 62 years 11 months. However, another friend who was born just a year later, in April 1954, will have to wait until she is 66 before she can draw her pension. It is completely understandable that people feel that the measures are unfair. We have heard that comment time and again this afternoon. They are certainly not fair to the 1,200 women in my constituency aged around 56 and 57 who are set to lose the most from these changes, and who will have very little time to prepare or to amend existing plans. Many of them have worked in a series of jobs, raised families and perhaps worked part-time over the years. It is difficult enough for those women on low pay to plan for their retirement without this additional burden being placed on them. I think the most significant part of the issue before us is allowing people time to plan adequately for retirement.

Age UK has highlighted a number of concerns, not simply about the plans, but about the fact that people are not necessarily aware of them. It estimated that about 32% of the women it polled said that, following the Government’s proposals, they did not know when the state pension age would reach 65 for both women and men. Just one in 10 correctly said 2018. Almost half expected equalisation to happen before the planned date, while 9% thought it would be later than planned. As we can see, there is confusion.

In the last few months, despite the public outrage and a campaign supported by different charities and organisations, Members of all parties and affected individuals, it appears that, although Ministers might have begun to listen, they have certainly not come forward with any clear proposals on what they intend to do.

We all understand the simple truth that our society is ageing. The previous Labour Government recognised it and, as we have heard, established the independent Turner commission and built a consensus for change around a number of key areas: linking the basic state pension to earnings, raising the retirement age to 68 by 2046, starting the rise from 2024 and making private pensions opt out instead of opt in, with employers also making a contribution. After trying to build that kind of consensus, it is simply wrong to penalise women who have worked hard for their whole lives and now have no time to plan for their retirement.

As I have said, many women of this generation are already at a disadvantage when it comes to pensions. They have perhaps been denied access to private pension schemes and have had to take career breaks to bring up children. Raising the state pension age for women so rapidly could result in some women currently in their 50s having to work for two years more than they had previously thought. That might not seem a great deal if people are not at the stage of life when they are thinking about planning for retirement, but for people working in an arduous job with long hours or working very early in the morning, as many in the cleaning or hospitality sector have to do, or late at night, that means a lot. The women affected are being made to accommodate the changes within fewer than seven years and it will not be possible for them to make up the time and earnings that they would have wanted. They are at a significant disadvantage. We have also heard that the median pension saving for a 56-year-old woman is just £9,100—almost six times lower than that of a man, which stands at £52,800.

During our debate, we have also heard about the number of people eligible to be auto-enrolled in a pension scheme. I have concerns about that. I was a bit disappointed to hear some of the attacks on the shadow Secretary of State when he raised these issues. We all need to hear the Minister respond to the issues raised. I am concerned that limiting the coverage of the scheme could exclude women disproportionately. It has been estimated that 7 million people are not saving enough to ensure an adequate income for their retirement. We have heard genuine concern about that from Members of all parties. That is why there was cross-party consensus to introduce auto-enrolment.

Combined with a minimum employer contribution and the creation of a pension scheme that could be used by any employer, the principles behind the legislation could be expected to lead to a step change in the level of participation in pension saving. Concerns have been expressed today, however, that the Government are proceeding with the introduction of auto-enrolment in a way that will limit its scope, including raising the salary level at which someone is automatically enrolled from about £5,000 to about £7,500. The Government predict that up to 600,000 fewer people will be automatically enrolled in a pension scheme as a result—as I have said, disproportionately affecting women.

My concerns about that could be summed up briefly. I am worried that this will rise in line with the income tax threshold, and therefore looks set to increase to £10,000 over the next few years—excluding a considerable number of people who will be earning less. Compared to Labour’s original plans, it will exclude in the region of 1.5 million to 2 million people, of whom 1 million to 1.5 million would be women. I hope that the Minister will respond to these points later. Having a three-month waiting period before auto-enrolment could mean 500,000 fewer people automatically enrolling in a pension scheme, which does not improve the position on encouraging people to save for the longer term.

As other Members have made clear, there are also concerns about people who work in call centres, and perhaps others in the retail and the hospitality sector, as they might work a relatively low number of hours at various points in their careers. Some people might have two or three different jobs to hold down, each of which might be under the threshold, but not when they are viewed cumulatively.

[Sheila Gilmore]

Has it occurred to my hon. Friend that there seems to be a mismatch here in respect of this Department’s policies? Just last week and all through the Committee stage of the Welfare Reform Bill, we heard great things about the importance of mini-jobs and the people who undertake them. Such people sometimes have more than one mini-job. At the same time, however, that does not seem to have been read across into this Bill.

[Cathy Jamieson]

My hon. Friend makes exactly the point that I was about to make. There does indeed seem to be a mismatch. I have to say that I am not a great fan of the term “mini-job”. Some people are getting up at 6 o’clock in the morning to work a shift as a cleaner, then have to take their kids to school and subsequently do perhaps four hours in a local retail establishment, after which they have to pick the kids up from school only to have to go out to another job in the evening. There is not much that is “mini” about that when all those jobs are put together. This is exactly the sort of issue that Ministers need to address if this Bill continues through its parliamentary stages.

I think the general public understand that as people live longer over the coming decades, the state pension age will need to rise to ensure that people who have longer retirements do not have them on much lower incomes leading to a lower quality of life.

I have heard many Members express concern this afternoon about the proposals in the Bill. We are being asked to vote on the Bill’s principles, but I have heard many Members express real reservations about them. I believe that if we are not happy with the principles, it is our duty to represent our constituents by voting against the Bill. My constituents—not just those directly affected, but many others who also have concerns—are asking me to vote against it. If the Secretary of State had given us a firm commitment today that something would change and problems would be addressed, my constituents would have understood if I went back and told them about those assurances. In all honesty, I have to say that when I heard the Secretary of State outline right at the beginning of the debate that the Bill will go ahead as drafted, that was not the assurance I was seeking. That is not what my constituents want, so I will vote against the Bill tonight.

19:58

[Richard Drax (South Dorset) (Con)]

It is a pleasure to follow the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson)—I hope I have pronounced that correctly—although I do not entirely agree with what she said.

I want to congratulate the Secretary of State and the Front-Bench team on this Bill. This is a time-bomb that has been waiting to go off for years. The Labour party looked at it, sniffed it and walked away because it stank. It does stink. It is going to require a huge effort by this Government, particularly from the Pensions Secretary, for whose diligence I have huge admiration.

It has been long apparent that something had to give. As has been mentioned many times in this debate, our longevity has increased nationally by an average of 10 years since the 1970s. Today’s pensioner numbers have doubled since the 1950s and the increase is accelerating. The Office for Budget Responsibility has estimated that pensions will cost a stunning £32 billion by 2015—up by a third from today’s figures in just four years.

The problem was not created by the coalition, and neither is it exclusively our responsibility. Having packed the public sector to the gunwales, the last Government were well aware of the oncoming crunch, and had legislated to raise the state pension age to 66. The old understanding that public sector employees could rely on secure jobs with more generous final salary pensions as compensation for low pay is outmoded now. The pay gap has not only narrowed but reversed.

Figures from Policy Exchange for the past year show that the average public sector worker is now paid 35% an hour more than the average private sector worker, and Office for National Statistics figures tell us that in the year before that, the average public sector worker earned £2,000 more per annum than his or her private sector equivalent. Today private sector workers are worse paid, have less security of tenure, and have more fragile pensions than their public sector equivalents, but under the current arrangements they are expected to subsidise the more generous final salary pensions in the bloated public sector. They are understandably embittered, as, paradoxically, are the public sector workers, many of whose jobs were created by the last Government. They now feel threatened.

But deal with the pensions time bomb we must. The private sector has absorbed many shocks. So that we can survive the economic downturn, pensions, along with salaries and bonuses, have been hit hard. Final salary pensions are fast becoming a distant memory, even in larger firms, and new employer rules on automatic pensions enrolment which are due to come into force next year are likely to have further detrimental effects.

The public sector, however, needs a culture change. The current arrangements are simply unsustainable and unaffordable. The bottom line is that we all need to pay more into our pensions for longer, which means that the age at which we retire will be higher: it will be 66 by April 2020. The last Government legislated for that, but their legislation will be accelerated by this Bill. We will also need to supplement what we already pay with increased contributions.

We are told by Treasury Ministers that if we make these changes now, there is a chance of a decent and relatively generous pension for all entitled public sector workers. We are also assured that 750,000 of the lowest-paid public sector workers will not be asked to pay more, and that the extra contributions of another 500,000 will be capped. I am relieved to hear that the pensions of those who risk their lives serving their country—members of the police, fire service and military—will be protected.

Raising the state pension age to 66 and upwards will take years to implement, even on the revised timetable, and I am anxious to ensure that some worthy recipients do not slip through the net. Like others who have spoken today, I have received many letters and e-mails from people who are very concerned about the proposals. Mainly they are from women. The equalisation of the pension age, causing theirs to rise from 60 to 65, and the subsequent acceleration causing it to rise to 66 by 2020, appear to have left some unintended victims by the wayside. I ask the Secretary of State and the Treasury to think again about those cases.

In particular, women in their late 50s who were told to prepare for retirement at 65 have now seen the goalposts moved again. Overall, 5.5 million women now aged between 51 and 57 are affected to a greater or lesser degree, and 330,000 of them— those given less than two years’ notice of the change—are particularly badly affected. There will not be enough time for the women caught up in the scheme to save enough to address their loss. Many are among the lower-paid, 40% have private pensions, and many part-timers were excluded from occupational pension schemes until the 1990s. Moreover, members of that age group are more likely to be economically inactive owing to caring responsibilities. Perhaps an interim measure can be introduced to ensure that they are paid what they have worked for, and that the longer gap before they reach the state pension age does not cause unnecessary hardship. After all, those women worked through the years of genuinely lower pay in the expectation of a comfortable retirement, only to see it evaporate.

What matters most in this debate is to find a way to make our pensions fairer, more affordable and as generous as possible, while taking into account the changes in life span and the sheer numbers involved. I know that that is the intention, but now, for all our sakes and those of our constituents, we must make it a reality.

20:05

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Like other Members, I am encouraged by the agreement across the Chamber, particularly on issues related to fairness that mostly affect women. We agree, for instance, that we are all living longer and therefore need to extend our working lives. Contrary to what the hon. Member for South Dorset (Richard Drax) said, the last Labour Government took that into account in the Pensions Act 2007, following the recommendations of the Turner commission.

My right hon. Friend the Member for Croydon North (Malcolm Wicks) made a relevant point about variations in life expectancy connected with socio-economic inequalities, and about the time for which people in a healthy condition can expect to live. I agree that more research should be done on that.

[Harriett Baldwin]

The hon. Lady mentioned the steps that the last Government took to deal with increasing longevity. Does she agree that the figures produced by the original Turner commission suggest that things are moving much faster than was anticipated even in 2004, and that since then longevity has increased by at least a year?

[Debbie Abrahams]

I think that the hon. Lady is referring to the average. It is important for us to consider not just the average, but how the figure is spread across different socio-economic groups. It does not explain or excuse the Government’s failure to protect the women who are being detrimentally affected by the acceleration of the equalisation of the pension age.

As many people have pointed out, this is about fairness. We must focus on what is right, and the Bill fails the fairness test. Many figures have been cited in relation to what the Bill means nationally. Half a million women will have to wait more than a year longer to receive their state pensions, 300,000 will have to wait an additional 18 months, and an unfortunate 33,000 will have to wait a further two years. Moreover, the Government will increase the state pension age for both men and women to 66 in 2018.

I asked the House of Commons Library to conduct an analysis of the impact in my constituency. I discovered that 4,300 women and 3,800 men would be affected, and that approximately 200 women would experience a notional loss of income from their state pensions of up to £10,700. I have been contacted by dozens of women in my constituency who have been working since the age of 14 or 15, including one called Linda Murray. She gave me permission to use her name. She was born in 1954, and left school at 16 to start work. She wrote:

“I have never had a job that provided a pension or had the means to provide one for myself. I have worked full-time apart from a few years when I worked part-time while helping to look after my mother who needed 24-hour care. For most of my working life I expected to receive my pension at the age of 60. However when the age started to rise I accepted this, as did everyone else. My retirement date was set at 64. I now work 47 hours a week in a dry cleaners and it is hard manual work. Due to my personal circumstances, full retirement is not an option for me, at least for a few years, but I was planning to greatly reduce my hours. I know that I won’t be able to continue working as I am now until I’m 66.”

Many Members have mentioned that that is hard to do because of the physical wearing out of the body.

Linda continues:

“But my take-home pay is £267 a week—how am I going to be able to save enough from this to be able to work part-time when I’m 64?...This proposal is ill thought-out and cruel. It’s unfair to move the goalposts for a second time. Women of my age have worked hard and honestly and don’t deserve to be discriminated against in this way. We accept the need to equalise the retirement ages but it should be done in a fair way. I feel that this Act will create an underclass of women unable to continue in their present employment, unable to find another job and denied the pension to which they are entitled. In an interview in The Daily Telegraph…David Cameron said that a sudden rise in women’s retirement age was out of the question.”

So that is another broken promise. There are hundreds of women with similar stories, and there is considerable cross-party agreement that we need to do something about this. I therefore hope that Ministers are listening.

Another fairness issue is the switch from the retail prices index to the consumer prices index. The Department for Work and Pensions impact assessment produced figures that again suggest that the burden will shift from the Government and employers to the individual. Some £500 million will be taken from the Pension Protection Fund.

My final point is about the increase in income thresholds for automatic enrolment into occupational pensions and the delay in that regard. The former Labour Government introduced that measure in the Pensions Act 2008, but the current Government are restricting access to it by both increasing the threshold from £5,000 to almost £7,500 and introducing a three-month waiting period. Again, women and people in low-income jobs will be particularly affected. Indeed, the impact assessment suggests that those who will be most detrimentally affected will be women, people on low incomes, ethnic minority groups and people with disabilities.

We must not allow our pension system to be reformed in a way that pushes pensioners deeper into poverty. Labour did a lot to reduce inequalities—although I would have liked us to have done a lot more—but these reforms will make them worse.

20:13

[Nick Boles (Grantham and Stamford) (Con)]

First, I should tell Members that I am absolutely not a pensions expert; I have never spoken on the subject before in my life. I have therefore found this debate particularly enlightening, and I want to single out the speech of the right hon. Member for Croydon North (Malcolm Wicks) as it was extraordinarily illuminating and provoking. I hope Ministers will look at the issue he raised for the long term—after this Bill has been passed and changes have been made—and address the disparity between people who start work in their teens and those of us who are lucky enough to start work in our early to mid-20s.

I want to focus not so much on the detail of pensions, but rather on the context in which the Government are taking this Bill and its measures through Parliament. It is important to address that context because it explains so many of the difficult, controversial and even painful decisions the Government are making. It also informs and defines the approach taken by Her Majesty’s Opposition, which can be summarised by the refrain we have heard so eloquently and passionately from so many Opposition Members’ mouths tonight: it just is not fair.

Let us first consider the context from the Government’s point of view. Our strategy is simple. It is based on our reluctantly coming to the understanding that everyone in this country will suffer more—will suffer most, indeed—if the Government do not quickly deal with our unsustainable public finances. I use the term “unsustainable public finances” rather than “deficit” because it is important to understand that this is not just about dealing with the current deficit; it is also about putting in place a long-term platform of sustainable public finances. It is not about what we need to do between now and 2015; rather, it is about what we need to put in place for our country for the next two, three and four decades. The insight that everything must serve this overall objective of putting our public finances on a sustainable footing—

[Nicky Morgan (Loughborough) (Con)]

Will my hon. Friend give way?

[Nick Boles]

Yes, I am happy to give way to my hon. Friend—even in mid-sentence.

[Nicky Morgan]

I thank my hon. Friend for giving way. He might address my point later in his speech, but does he agree that this issue is about not just public sector finances but a pension system that all our constituents can understand? Pensions is a very complex subject, as the Secretary of State said in opening, and many people do not understand the current system. Constituents who are in great need approach us when they finally receive their pension calculations and realise they might not have enough for the retirement they had planned.

[Nick Boles]

I entirely agree. Indeed, clarity, simplicity and dependability are what we seek to achieve in all areas of public policy, and when we do not have that we end up with the public finances we inherited from the last Government.

We should not be shy about admitting that the state of the public finances is leading us to make a whole series of decisions that unquestionably have rough edges. Nobody on the Government Benches wants to withdraw child benefit from people paying the higher rate of income tax. Nobody on the Government Benches wants to withdraw education maintenance allowance from people hoping to stay on in education after the age of 16. Nobody on the Government Benches wants to charge students of the future the full cost—up to £9,000 per annum—of studying at university. Nobody on the Government Benches wants to put up VAT, which is paid by everybody in this country regardless of their income. We do not want to do any of those things, and not a single one of those decisions has no rough edges, not a single one of those decisions has no victims and not a single one of those decisions treats everybody in the country equally.

We have never claimed that these decisions have no rough edges—that they do not have victims, and that they treat everyone equally—but we have claimed, and do claim, that each of the decisions is an essential part of the overall objective of putting our public finances on a sustainable basis. If these decisions are not made and implemented in full, all the people affected by them—the very same young people who will not be getting EMA, the very same students who will be paying tuition fees, the very same pensioners who will be receiving their pensions a bit later—will suffer far more.

The Opposition’s stance is very revealing. They could have decided to restrict their opposition over the past year and during the rest of this Parliament to those matters on which they have a profound ideological dispute with the Government. They could have decided to oppose the benefits cap, whereby in future nobody will get more than average income from benefits and which will make it clear to people that the only way to earn more than the average is to work for a living. They could have decided to oppose the universal credit, which demonstrates our view that we have to remove excessive means-testing from the benefits system in order to make work pay. They could have decided to oppose immigration controls, which illustrate our view that we need to restrict the entry of people into this country, so that it is British people who can go out and get the jobs that our recovery creates.

The Opposition could have decided to focus on and restrict their opposition to those matters, about which they have genuine ideological differences of opinion with us that I entirely respect. However, instead, they are choosing to oppose all the measures we are introducing—even those that are driven not by an ideological programme or by an attempt to reshape the way this country operates, but by a wish to rescue this country from a road to ruin.

[Jacob Rees-Mogg (North East Somerset) (Con)]

May I declare an interest as a trustee of the Conservative agents’ pension fund, and my other registered interests? Does my hon. Friend agree that Labour Members are opposing this because they are deeply embarrassed that they failed to increase the retirement age when they were in government? A much preferable approach is that followed by my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who gave very long notice of these programmes and really did fix the roof when the sun was shining.

[Nick Boles]

I thank my hon. Friend for his intervention and he is absolutely right: the contrast is stark and is not flattering to the Opposition. Indeed, I would go so far as to claim that the curious thing about the Labour Government is that they demonstrated the quality we would normally associate with Oppositions: total opportunism—the total failure to grapple with any difficult long-term issues, and instead doing just the easy things that win votes at the next election.

[Debbie Abrahams]

I refer the hon. Gentleman to the Pensions Acts 2007 and 2008.

[Nick Boles]

I thank the hon. Lady—and remind her that her Government had been in power for 10 and a half years by the time they introduced those Acts, even though it was clear long before they took office that such problems existed. However, I do not want to be too ungracious and I do accept that some things were done—but not enough and too late.

So why are the Opposition taking this approach of opposing everything under the general charge that it just is not fair? Is it really fair to tell people that a budget deficit on the scale that we face can be dealt with without pain; without some people being asked to sacrifice things that are important to them; and without everyone in the country experiencing a real material loss? Is it fair to tell young people that, actually, there is no reason to pull back on EMA; that there is no reason to restrict their income when they stay on in education; that there is no reason to change the basis of funding for universities?

[Alex Cunningham (Stockton North) (Lab)]

You have gone on a lot about ideological things, but is it ideologically bonkers to fight for a fair deal for women who have made the sacrifices that you are talking about? They have sacrificed for their country, for their families—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Unfortunately, I am not responsible, so it is not “you”. I am sure the hon. Gentleman did not mean that.

[Alex Cunningham]

I beg your pardon, Mr Deputy Speaker. Is it “ideological” for us to stick up for women who have had a raw deal through life looking after their families and doing a low-paid job, but who now find out they have to work even longer for a pittance of a pension?

[Nick Boles]

I thank the hon. Gentleman, but I fear he misunderstands me: I am not accusing him and his colleagues of being ideological, and that, in a sense, is my point. Actually, the Opposition are perpetrating a grand deceit on the British people, which is that there is anything fair about protecting all these things that we can no longer afford; that there is anything fair about arguing to the British people that we—

[Dr Whiteford]

Will the hon. Gentleman give way?

[Nick Boles]

No, I will not give way for the moment; I am in the middle of replying to the previous intervention. The Opposition are perpetrating the grand deceit that there is anything fair about pretending to the British people that this country is not poorer than it was; that it is not permanently poorer than we thought we would be in each of the next 20 years.

The point about what happened in the past three years is that the economy suffered a permanent drop. We can grow again from that drop—we can again achieve higher living standards—but we will never have back the growth that we lost in the past 10 years, and it is not fair to anyone to argue that this or any Government can proceed as if no sacrifices need to be made, no losses need to be felt and there can be an entirely victimless process of recovering from the terrible economic situation that the Government of the hon. Member for Stockton North (Alex Cunningham) helped to create.

[Sheila Gilmore]

Is the hon. Gentleman not perpetrating the debating technique of erecting a straw man in order to knock him down? Perhaps he would like to consider the terms of the Bill that we are discussing.

[Nick Boles]

I thank the hon. Lady, but I fear that this man is a lot more substantial than just straw—even if the Leader of the Opposition sometimes appears to be exactly the straw man she refers to. The entire membership of the Labour party is signed up to the deceitful argument that we can correct this budget deficit, restore sustainability to our public finances and rescue this country from decline without taking painful decisions that cause people loss. That very same argument has been made in every single one of these debates—in the debates about education maintenance allowance, about tuition fees and about all the other benefit changes. We are hearing that argument here again tonight. This is not really an argument about pensions, but one about the future of this country, and the argument used by the Opposition is always exactly the same.

[Dr Whiteford]

The hon. Gentleman has been using a lot of rhetorical questions in this debate. For me, the key question, if we accept the premise of his argument, is: why should women born in 1953 and 1954 take a disproportionate amount of the pain and take all that pressure for everyone else?

[Nick Boles]

The hon. Lady is eloquent, as so many people have been, on behalf of a particular group, and I would accept and understand that were they not equally eloquent on behalf of every single other group that is being affected by the process of getting our public finances on to a stable footing. I would have some respect if an Opposition Member said to me, “I voted for EMA, I voted for tuition fees and I am voting for the benefits cap, but this one I cannot bear because it is egregious, outrageous and singles out this group in a way that no other group is being treated.” But we do not hear that. All we hear is the same cry—“It isn’t fair”—applied every day, every week, to a different group of people. Opposition Members need to understand that it is not fair to pretend to people that we can do this without pain or loss. It is not fair to perpetrate on the British people the deceit that we can somehow grow our way out of this deficit without cutting off some things that everybody appreciates.

[Mr Watts]

I thank the hon. Gentleman for giving way. No one is saying that. People are saying that the reductions in public expenditure can be done slower to cause less pain. No one denies that the deficit has to be dealt with; the issue is how we go about doing that. It is about the difference between tax increases and cuts in public expenditure. Perhaps he will address those issues.

[Nick Boles]

The hon. Gentleman would have more credibility if we had heard, at any point in the past 13 months, a single specific proposal for a painful cut with unpopular consequences for a defined group of constituents who would write to all of us, but we have heard none, although we might be about to hear from the hon. Member for Leeds West (Rachel Reeves), who gesticulates at me.

[Rachel Reeves]

I do not know whether the hon. Gentleman was here for the speech of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), in which my right hon. Friend set out Labour’s proposals to increase the state pension age at a faster rate than in the previous Parliament while still giving people 10 years’ notice. Our proposal would mean that no one would have to wait for more than a year and would not disproportionately affect women of 56 or 57. So although the hon. Gentleman is making a very nice speech, it is not based on facts.

[Nick Boles]

The hon. Lady’s intervention betrays exactly what got her Government—or the Government whom she supported, because she was not in Parliament when they were in government—into such trouble. The only nettles that Labour is willing to grasp are those that will grow in 10 years’ time. There are no nettles now being grasped and there are no decisions that Labour, were they in government, might have to explain to the British people—there are only bills being deferred for later generations. I am afraid that the hon. Lady has revealed the shallowness and hollowness of Labour’s position by bringing forward one cut—one deprivation—that would come in only 10, 20 or 30 years’ hence, when all of us will be pushing up daisies or collecting a somewhat deferred pension.

Let me round up by saying that I hope that people, including even some of the women who will be affected so directly by some of the proposals in the Bill, will have respect for hon. Members on the Government Benches because when we reply to letters from constituents complaining about the unfairness of any of the Government’s individual proposals we are not going to take out the flannel and the soft soap—the first implements that Opposition Members reach for—but are going to explain the situation that the country faces. We are going to explain that, as before in our history, sacrifices are going to have to be made and everybody is going to suffer. Everybody will suffer some loss, but in doing so we will create a country and a public finance platform from which this country can grow again, from which we can make investments again and from which we can help those who need our help most. It is only with that honesty and that ability to admit the difficulty of our circumstances that we will earn the respect of the British people.

20:32

[Mr William Bain (Glasgow North East) (Lab)]

I would like to say that it is a pleasure to follow the hon. Member for Grantham and Stamford (Nick Boles), but that might be pushing it somewhat. He made a characteristically rumbustious and entertaining contribution and I would like to respond directly to some of the issues he raised. He spoke about rough edges, but the view that we have heard from Opposition Members and even from some Members on the Government Benches is not of rough edges but of rough justice for women aged 56 and 57. He spoke about the road to ruin, but we see other countries engaged on a different path, as President Obama said when he spoke to us in Westminster Hall. Those countries are engaged in growing their economies more. The hon. Gentleman spoke about fairness, but may I say to him that fairness and restoring trust in politics are not about making a commitment in a coalition agreement 13 months ago and cynically breaking it in the way that this Bill will if it receives a Second Reading tonight.

Reform of the pensions system is best conducted with the agreement of as many shades of political and other opinion as possible. It is far too important for short-termism, and the principles and as much of the detail as possible should be above partisan politics. That is why there are some aspects of the Bill that Opposition Members could support, but the glaring unfairness at the heart of the Bill in its treatment of half a million women in the acceleration and equalisation of the state pension age in 2018 means that I will be opposing it tonight.

Rising life expectancy and other demographic changes mean that there is agreement across the House that the state pension age should change to reflect the longer period of retirement that people in younger age groups are likely to enjoy. There are currently 10.5 million people aged 65 and over, compared with just 5.5 million in the same age group in 1951. It was the previous Government who established the Turner commission to examine in detail on a non-partisan basis the necessary changes in the state pension age in a way that was fair to future taxpayers, just for people approaching retirement, and long term in its scope, to allow people to save for their retirement in the full knowledge and with sufficient notice of changes in the state pension age.

The Bill, particularly in part 1, breaks those three basic principles by adjusting the settlement in a way that hurts 500,000 women across the country who were born between December 1953 and October 1954, including 900 in my constituency. It fails in the aim of delivering an improved basic state pension. It also breaches the terms of the coalition agreement, which ruled out any equalisation of the state pension for women before 2020.

[Nicky Morgan]

On that point—I speak as a former lawyer—my understanding of the explanation given earlier this afternoon was that there was a legal reason that the coalition agreement could not be fulfilled as it was drafted. Is the hon. Gentleman honestly saying that his Government would have proceeded with something that is deemed to be illegal, however desirable?

[Mr Bain]

I am grateful for that intervention. The way to get round all the problems, legal or otherwise, is to follow the excellent suggestion that my hon. Friend the Member for Leeds West (Rachel Reeves) has already made in the debate and will restate in her winding-up speech: prevent this unfair change from going ahead and instead look at some of the accelerations in pension age that can be made, particularly in respect of people retiring at 66 or 67, which can also save money for the Exchequer.

The Minister and the Secretary of State did not spell out to the House what the legal problems were. Some Members have speculated that they relate to matters of European law. I hope that when the Pensions Minister winds up the debate, he can outline the legal issues. They certainly were not outlined to the country when the coalition agreement was signed, or during the press conference—the love-in—in the rose garden thereafter.

The Bill also fails the test of fairness, because it places too great a burden for savings on one group of the population when the Government should be looking elsewhere, such as at equalising state pension eligibility at 67. As my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) pointed out, even before these deeply unjust proposals were announced by the Government, women had been disadvantaged in pension provision for some time. As she said, median pension saving of a 56-year-old woman is just £9,100, almost six times lower than that of a man which, on average, is £52,800. Research by Prudential establishes that the average woman retiring this year can expect an annual income in retirement of £12,900 per annum, compared with an expected income of £19,400 for the average retiring male. Further, the same study found that 28% of women planning to retire this year have no savings in private or company pension schemes, compared with just 10% of men.

The previous Government’s strategy of seeking to link the basic state pension to earnings and making private pensions opt out instead of opt in sought to redress the balance and would have been implemented if we were in government. More safeguards should have been established through the Bill, rather than entrenching inequity, as it appears to do. Following the Bill, women affected will have less than seven years to react to the changes, and may be less likely to be in a pension scheme at all, with less disposable income to supplement savings for retirement, and with greater care responsibilities. Women are also much more likely to wind down in later years of employment, be that to care for elderly relatives or for young grandchildren. Furthermore, it will be more difficult for women to move from part-time to full-time work, or indeed back into employment of any form, given current economic conditions. The Office for Budget Responsibility’s projection of 310,000 public sector job losses in the coming years will disproportionately impact women, who make up 65% of that work force.

The Prime Minister said on Radio 2 today that retirement should be

“a process rather than a cliff edge”

and that

“many people, when they get to retirement, would like to go on doing some work or part-time work”.

The reality is that the cliff edge imposed by the Bill is an unfair burden on 56 and 57-year-old women who have done the right thing and saved for retirement but are now being grievously abandoned by the Government.

Recent decades have seen a change in employment patterns among women. The dated notion that a woman’s role is to stay at home and look after the children has been well and truly dispelled, but for women in their late 50s who are due to be affected by the proposals, such changes in social attitudes may not have been reflected in the earlier parts of their working lives. The Government’s reckless haste in changing the state pension age for those women makes adapting to that change even more difficult.

As Carers UK indicated last month, these changes will have a disproportionate impact on other social groups. About 58% of carers—3.4 million people—are women, as are one in five carers aged between 54 and 60. Of the estimated 662,000 carers who combine part-time work with caring, 89% are female. For carers, there is little opportunity to make contributions to a private pension plan or savings, even if they are in part-time employment. For women who are carers, provisions in the Bill collude to put them at even greater disadvantage.

In responding to the comprehensive spending review last October, Joanne Segars, chief executive of the National Association of Pension Funds, noted that any changes must include an improved and secure basic state pension. Savings from the Bill’s proposals on the state pension age will not even exceed £l billion until 2018-19, which is well outwith the range of the Government’s fiscal consolidation plan. The Bill does not spell out how they plan to increase the basic state pension for all. Again, there is little in the way of incentive and assistance for people who will now have to work longer. As the Equality and Human Rights Commission notes:

“Rather than focusing on increasing men’s State Pension Age and perpetuating the gap between men and women, Government should focus on how to help women and men extend their working lives, if they wish to do so, and thus reduce the disadvantage that women face in the workplace by shortened working lives.”

Women will also be penalised by the design of the Bill’s provisions on auto-enrolment in pension schemes, which will reduce the number of people enrolled by almost 600,000.

This is a Bill of broken promises from a deeply dysfunctional Government. It changes the terms of the social contract between women, low-paid workers and the state, with insufficient notice and scant regard to the effects on rising inequality. They are unjust proposals that bear the imprint of the Chancellor, despite having nothing to contribute to his deficit reduction plan during this Parliament. They put the burden of further departmental savings on the shoulders of too few people, and those people have worked and saved for the pension contributions they have accrued. That is why the Bill deserves to be opposed in the Lobby tonight.

20:43

[Mike Crockart (Edinburgh West) (LD)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests, which details my paid employment in the pensions industry prior to my election last year.

I must admit to being a little confused by today’s debate. As a new Member, I had been under the impression that Second Reading was an opportunity for debate on the general principles of a Bill. I am also somewhat confused by the Labour party’s position. On the basis that some of the detail in the Bill is not yet right, it is prepared to throw the entire subject out and delay the reform that is necessary to move this country to a sustainable pensions system. It is worth spending some time looking at those general principles.

As has been noted, the present state pension age of 65 for men was set by the Widows’, Orphans’ and Old Age Contributory Pensions Act 1925, which was passed 86 years ago. That brought the pension age down from 70, which had been set in the excellent Old Age Pensions Act 1908. At that point, barely 40% of men lived long enough to claim it. The women’s pension age of 60 was set 71 years ago by the Old Age and Widows’ Pensions Act 1940, so change has not exactly been rushed into. As the hon. Member for Salisbury (John Glen) said earlier, this country’s demographics have meant that for decades we have faced a ticking pensions time bomb, but we have unfortunately been very slow to deal with it. We may well have started to do so in the past 10 years, but countries such as Sweden grasped the problem 20 years ago and introduced auto-enrolment back then.

Life expectancy is far from static, having gone up for those aged 65 by five years between 1920 and 1990 and, crucially, by a further five years between 1990 and now. Men can now expect to live until 77 and a half years old and women for four years longer than that, but not only are we paying state pensions longer; we can expect to pay them to far more people. As the baby-boomer generation of 1946-47 reaches retirement in 2012, 800,000 people will celebrate their 65th birthday—150,000 more than did so this year. It is now abundantly clear that our current state pensions system and its funding are entirely unsuitable and unsustainable. That is why I welcome the general thrust of this Bill and, indeed, much of its detail, but as we go forward it is clear that we have to sort out four elements to ensure a sustainable system.

First, we must be certain of what the state will provide. I welcome the current consultation, looking at the possibility of a single-tier universal pension, because, although it is not in the Bill, it is clearly part of the solution to the puzzle. With certainty about what they can expect from the Government, people will be able to decide whether the basic provision on offer is sufficient, although it is more likely to make it easier for them to decide to top up what is on offer.

Secondly, we must establish a level of state pension provision that is sustainable in the longer term and is regularly reviewed to ensure that it matches life expectancy. We simply cannot afford to find ourselves in this position again, having ignored the warning signs that our state pension offering has become unaffordable.

The current acceleration timetable for the state pension age will unfortunately, I fear, almost certainly fail to deal with the funding gap that I have outlined, but that does not mean that I support the Government’s current proposals, as it is quite clear that they will badly affect many women. It is simply wrong that those women, who are fast approaching their expected retirement age, will now be given as little as six years’ notice in order to plan how to cope with a delayed state pension. Some are already unemployed, caring for older relatives or working substantially reduced hours due to ill health.

The proposal hits especially hard those women who had already been told that their planned retirement would be delayed by four years. They are now being hit with a second delay. It will cause many to suffer unexpected financial pressures with insufficient notice, and it seems inequitable given the different outcomes for them and women of similar ages. An age difference of days could result in a pension two years later.

Unlike the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), however, I believe that there are signs that the Government may be prepared to move on the issue, and I urge them strongly to do so. The current acceleration timetable will not deliver sufficient progress, but, as Members have already said, a fairer way might be to accelerate the progression of the pension age to 67 and/or 68 years old and, by doing so, at least to give people 10 or more years in which to plan how they deal with it. That idea could find a great deal of support, given that Saga and Age UK have already proposed it, but I suspect that my support may well ensure that I am not a member of the Public Bill Committee.

On the third part of the pensions puzzle, we must make it as simple as possible for people to contribute to their own pensions provision and to take ownership of funding their own retirement. As we have heard, 7 million of us are not saving enough for our own retirement and 44% of working-age employees are not contributing at all towards a private pension.

That brings me to the fourth element of the solution—employers’ contributions. It is clear that to fill a funding gap of the size we are facing, we must strike a balance of responsibility between the state, the individual and employers. Mandatory auto-enrolment, as confirmed in the Bill, exemplifies that balance. The changes in the Bill will, I hope, do exactly what they aim to do in making automatic enrolment work, in the words of the title of the independent review. I hope that the provisions to raise the earnings threshold for auto-enrolment, to introduce the optional waiting period and to simplify the system of self-certification will increase employee and employer buy-in of the system.

Although raising the earnings threshold would certainly ease the financial difficulties of the lowest paid, it would effectively lock out of auto-enrolment those most in need of extra pension provision. Will the Minister reconsider that to see whether auto-enrolment could continue, merely delaying employment contributions until an earnings threshold is reached? Many examples of such graduated schemes already exist in the private sector. It is well known that even £1 invested earlier on for 40 years is likely to yield far greater returns than any amount invested 10 years later, once income has risen sufficiently to cross that threshold.

I agree with my hon. Friend the Member for Ipswich (Ben Gummer) that the proposals in the Bill are insufficient to deal with this immense problem. The auto-enrolment contribution level of 8% that is floated in the Bill is a start, especially from the low—indeed, at times non-existent—base that we have at present, but in many other countries the level is double that; in Sweden, for example, it stands at 18.5%. The proposed level is a good start, but only that.

More than five years ago, the Pensions Commission stated that

“there is…general acceptance that future policy needs to be based both on significant reforms to the state system and on a new approach to private pension saving which goes beyond a wholly voluntary approach.”

Having expressed my one concern about the Bill, I believe that it finally makes radical steps towards advancing that consensus, and I hope that the whole House will unite in supporting it.

20:52

[Alex Cunningham (Stockton North) (Lab)]

I am very keen to speak about this issue because it has resulted in my heaviest postbag for some time, with most of the correspondence coming from women. Some time ago, I was declared an honorary woman, which I took as a great compliment. I was in a discussion with half a dozen women who were talking about things of a feminine nature. One woman looked at another and said, “There’s a man here”, only to be told, “No, it’s okay—Alex is an honorary woman.”

I am very pleased that I am not a woman, because at my age I would be one of those losing out under the formula that the Government have put together. Only this afternoon, I received a phone call from one of my constituents, Fiona, who is a 56-year-old nurse. I wish that the Minister could have heard her voice and learned a little about the anguish and despair that was in it. She told me that she started work at the age of 17 and has worked in the health service for several decades, and that she now feels that the Government are slapping her in the face. She said that she had been aware for some time that her pension age would be going up from 60 to 65, and that she understood that and did not mind—she even thought it was fair—but that raising the age even further to 66 was going too far, too fast, and with very limited warning. In her own words—we have heard this cliché all day—“They keep moving the goalposts.”

Fiona pointed out that older nurses and other health professionals, particularly those in their sixties, would struggle to lift and assist the most frail and elderly patients. Similar issues exist for manual workers, many of them women, who simply cannot do the job that they were originally employed to do. Surely we should value people such as Fiona, not force them to replan their future with such limited notice. It was on behalf of Fiona and many other women in my constituency that I wanted to speak.

It is great that most people are living longer—of course, many others are not—but it brings challenges. It is important that as politicians we confront the difficult issues raised by the ageing population, not just for pensions, but in health care, the quality of life we provide for older people and how society treats the retired population. Those are all important issues.

My hon. Friend the Member for Sunderland Central (Julie Elliott) and my right hon. Friend the Member for Croydon North (Malcolm Wicks) outlined inequality in a different way today, with regard to manual workers who will be lucky to reach retirement age and even luckier if they get to 70, let alone the grand old age of 100 that some Government Members think they and their relatives will reach. Those manual workers are the people who have created wealth in our country, and yet they have never had the advantages of that wealth and they get very limited benefit from their pensions.

[Mr Watts]

Does my hon. Friend agree that it is also unfair that many of the women we are talking about started work at the age of 15 and so will have worked for 10 years longer than many other people by the time they retire?

[Alex Cunningham]

Indeed, that is the case. Some of the women in these difficult jobs may not have their health in later years, so they will lose in all ways.

All too often, the elderly are ignored and not treated with the respect that they deserve. The Government should play a big role in ensuring that society takes care of people when they have retired and are not as independent as they once were. Family, friends and community all play a big role, but the Government can and should lead by example. Pensions, among other things, are a big part of that.

I am proud of Labour’s record in this field. We lifted a million pensioners out of poverty, and free bus passes, free TV licences and the winter fuel allowance all play their part in helping pensioners. In common with other hon. Members, I want to home in on two things.

[Stephen Pound (Ealing North) (Lab)]

I apologise for interrupting my hon. Friend’s fluent and fluid flow. Does he agree that it is insane, barking and bonkers to the ultimate degree to expect someone who has worked in a hard, physical job for most of their life to have the same longevity as someone who has luxuriated in the soporific circumstances of a stockbrokers’ office? What will happen is that people will be signed off sick. It will cost the Government more money and treat women appallingly in the process. Does he agree?

[Alex Cunningham]

Could I disagree? I most certainly could not. People in my constituency used to build ships and it has one of the biggest chemical industries in the country. It has people who have worked in difficult circumstances in hard jobs. My hon. Friend is correct that such people cannot expect a longer life, so I think we should make it a little easier for them.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

My hon. Friend is making a fantastic speech and it is great to listen to him. Does he agree that the issue is not just health and longevity, but that even people who are in very good health and will live longer simply cannot rearrange their economic affairs in the time that they have—six years’ notice of two additional years in the case of some of our constituents—to cover the loss of pensionable income that they will sustain when this Bill goes through?

[Alex Cunningham]

That is very much the case. I suppose that there will be an additional few years of misery for some people because they will not have the income to enjoy the things that they see other people enjoying. It is therefore even more important that we raise these issues today.

It is the significant effect on women that worries me. The Bill makes it more likely that those on low incomes will not pay into a pension. Many women have contacted me, incensed that they are losing out thanks to the Government’s changes. It is completely unfair. The Government Members who have talked about fairness need to think about women a little more. A total of 177 MPs signed early-day motion 1402 on the state pension age for women. It is time that the Government backed down on this issue. All afternoon and evening, Government Members have teased us by saying that the Government will change their mind. When the Secretary of State was here, he was shaking his head, but I have seen no such indication from the Minister as the teasing has continued.

Age UK’s report “Not Enough Time” makes it clear that women are unhappy with the plans, and it is worth repeating some of the statistics that it gives. The 330,000 women born in Britain between December 1953 and October 1954 will have to wait 18 months or two years for their state pension, and 33,000 will see their state pension age increase by two years at a loss of £10,000.

I suppose I should declare an interest, because just as I would be caught out if I were a woman, my wife Evaline is one of the women affected. Like others, she has fewer than seven years to plan for the changes. People need sufficient time to plan for the increase in the state pension age, and the changes are happening too fast and causing a lot of worry and anger. It will be the poorest women who suffer the most as a result, those who do not have savings to fall back on and are in low-paid jobs.

Raising the state pension age is necessary, however, to reflect the fact that some people are living longer. We all recognise that, and we need cross-party consensus on it, but we simply cannot afford this unfair treatment of women. It is always worth repeating that the coalition agreement promised that the women’s state pension age would not be raised to 66 before 2020. I do not care about the legal arguments and so on—if the Government are going to do that, they need to explain why. The Bill proposes equalisation of the age by 2018, and then increases to 66 for both men and women by 2020. Moving the goalposts—that cliché again—so late in the day has implications for public trust in the pensions system at a time when it is vital that we encourage more people to save for their retirement.

It is estimated that 7 million people are not saving enough for their retirement, but the Bill would raise the salary level at which someone is automatically enrolled in a pension scheme from about £5,000 to £7,500. That means that 600,000 fewer people will be automatically enrolled in a pension scheme, and again, women will be disproportionately affected. What long-term provision is there in the Bill for that group?

As I said at the start of my speech, I am glad that we are debating these issues today, but I believe that the Government have got the key elements of the Bill wrong. I cannot endorse the way in which a small but significant group of women, including my wife, are being hit by the accelerated pension age rise, nor can I support the changes to auto-enrolment given the problems that I have described. That is why I, too, will vote against the Bill today.

21:02

[Sheila Gilmore (Edinburgh East) (Lab)]

We often hear in pensions debates about the UK having very poor pension provision, but I suggest that one reason for that is that there has been a lack of consensus and consistency over the years. We have heard a great deal about the failure to tackle problems, but I would like to take Members back to the state earnings-related pension scheme, introduced by Barbara Castle in 1978. It meant that everyone who was paying national insurance contributions and was not already in an occupational pension scheme would be in a compulsory earnings-related scheme. The pension reached maturity in 20 years, so it was particularly attractive to women and to anyone with an interrupted career pattern. The problem was known about as long ago as then, so people who think that they have discovered it recently are wrong.

By the late 1990s there should have been many more people benefiting from that pension provision. To my mind it was one of the best things done by the Callaghan Government. They have been much maligned, but not only did they introduce that pension provision, but income inequality was at its lowest in the whole post-war period during their years. Government Members who say that they are keen to reduce income inequalities might do well to take a history lesson from that Government.

What happened to SERPS? It was torn up by the Thatcher Government in the name of giving people choice. I appreciate that it is argued that SERPS would have proved increasingly expensive and that we would have had to amend it, but how much better to be in a position to amend something than to have to start again from scratch. That is what happened at the end of the previous Conservative Government’s time in office.

When the Thatcher Government decided to tear up SERPS, the possibility of its proving too expensive was not given as a reason. They advanced the ideological reason of giving people the choice to opt out of state provision and take up some form of personal pension. Anyone who took up one of those personal pensions knows that the level of provision was extremely poor. We have heard a great deal about the mis-selling of pensions, but even if they were not mis-sold, the quality of those personal pensions was not good. I speak as someone who knows, not because I chose to opt out but because, as a partner in a legal firm, I was treated as self-employed and therefore could no longer be part of SERPS—I wish I could have been. Consequently, I took out a couple of personal pensions, and I can tell hon. Members that the provision is poor—almost to the point where I might as well have put the money under the bed. Certainly, I might as well have put it into a savings account.

Giving people that freedom of choice had other disadvantages. I well remember that my secretary at the time the change was made was of an age when she could opt out, and she did. I know that she did not opt into a personal pension scheme. Her rationale was, “I don’t have a very high income. I’ve got two children in the early teenage years, who are becoming increasingly expensive. Extra money in my pocket now is valuable to me.” I can understand her making that choice, but I am sure that, 20 years on, she now regrets it. I am therefore extremely supportive of enabling people to be included in pension schemes. It may be directive, bossy and even what the previous Conservative Government called the nanny state, but it ensures that people make provision for their retirement.

I am particularly disappointed that the Government have decided to change the income level at which auto-enrolment comes into force. They have increased it from the amount that was agreed through consensus to the level at which people begin to pay income tax. Ministers seemed to say during the debate that it is not inevitable that the level will continue to rise in line with whatever happens to income tax and income tax allowances. However, if that is the case, why tie it to income tax in the first place? It creates a suspicion that that will continue to happen. If that is not the case, we need to be clear about it.

We have heard a great deal in the debate about the long term. I started by talking about consensus and what went wrong when it was previously torn up. It is regrettable that the Bill risks tearing up another consensus—on the previous Government’s work on the back of the Turner report and the pensions legislation that was then introduced—by including an extremely contentious provision, which did not need to be in the measure were it not for a desire to make savings as part of the comprehensive spending review. Government Members have asked us not to oppose Second Reading because we are dealing with generalities. If the provision on women’s pension age had not been in the Bill, we would not have debated the measure for so long.

Despite what some Members have suggested, the Bill does not completely recast the pension system and provide for a solid and sustainable future. In many ways, it is a relatively minor amending measure, which alters some provisions from previous pensions legislation. Without the specific provision about women, we would largely be in agreement. I have already said why I am not entirely happy about the provisions on auto-enrolment, which change previous legislation, but nevertheless the particular provision on women’s pension age has caused the difficulties about which we have heard. The Bill is objectionable not just because the pension age is increasing, but because a double change over a short period affects the same cohort of women.

The proposals have been under discussion and the subject of campaigning over at least the past six months—we are not debating recent proposals. Ministers have hinted today that they might be prepared to make changes in due course to take account of people’s concerns, but those concerns have been raised ever since the proposals were made. The Bill has been through the House of Lords, when there was an opportunity to make the adjustments that Ministers have appeared to suggest today. Did that happen? No, it did not. There was no suggestion at that stage that the Government were willing to make any such changes.

We could have held today’s debate knowing what changes the Government are considering. Perhaps in his closing speech the Minister will say what changes he is prepared to make to the part of the Bill dealing with pension age. He should show not just that the Government are making another attempt to ensure that the coalition partners go through the Division Lobby together, but that he has been listening, not only to his coalition partners and the Opposition, but more importantly to the many women who have campaigned and given clear reasons why they want the Government to change their mind. If the Minister is thinking of changing the proposals, he owes it to those women to tell them how. He has the opportunity to do so in his closing speech.

21:12

[Priti Patel (Witham) (Con)]

I am intrigued by the debate thus far. A range of hon. Members have followed a number of themes. The hon. Member for Edinburgh East (Sheila Gilmore) and others argued that the poorest will be affected by the changes that the Government are making, but they are already affected by the lack of good, sustainable state pension provision, which is one of the major issues that the Bill addresses.

I welcome the Bill and congratulate the Government on it. In my view, it will transform the pensions landscape. As we have heard, in recent years, there have been significant increases in longevity and changes in how we lead our lives. Things are changing at a dramatic pace. That will not stop, and nor should it; frankly, we should celebrate it. Not only are we living longer, but our expectations of quality of life in retirement are changing beyond all recognition compared with those of previous generations, as is how people spend their retirement. With increasing life expectancy, it is vital that our state pension age increases.

[Susan Elan Jones (Clwyd South) (Lab)]

The hon. Lady rightly makes the point that we are living longer, which is of course something to celebrate. However, we are not living that much longer than we were when the coalition agreement was formed.

[Priti Patel]

I thank the hon. Lady for her remark. It is a fact of life that we are living longer. At the end of the day, there are serious pressures on public finances and on funding for our state pensions. The Government are seeking to address that serious issue. Ultimately, this is about the future of a sustainable state pension. The Bill is not about today or tomorrow, but about future generations. It is right that the Government tackle this fundamental, serious issue in the way that they are. Furthermore, we have all seen from Department for Work and Pensions figures that more than 10 million people in the UK can expect to live to see their 100th birthday. This reform is therefore clearly long overdue.

People are living longer and healthier lives, but we simply cannot ignore the pressure that this puts on the state pension system. In my view, increasing the state pension age is the only fair and sustainable option. We have heard a range of quotes in the Chamber today from various organisations. There are experts in our society who understand how our pensions are funded, and it is worth noting that the chief executive of the National Association of Pension Funds said:

“Our ageing population means increases in the State Pension Age are unavoidable. This rise in the State Pension Age to 66 from 2018 to 2020, as implemented in the…Bill, is a sensible move.”

[Mr Watts]

We keep hearing the same arguments, as though Opposition Members have not taken on board the need for changes. Our issue is with the speed, and with the unfairness to a specific group. If the Government address this issue, we can have consensus, which surely is what we all want.

[Priti Patel]

The previous Labour Government had the perfect opportunity to address this issue. Opposition Members say that their issue is with the speed, but this is now about having a sustainable pensions system, as we simply cannot carry on as we are, so I do not think that the hon. Gentleman’s remarks are plausible. The status quo is not an option.

[Sheila Gilmore]

Will the hon. Lady give way?

[Priti Patel]

I am going to close my remarks shortly, so I hope that the hon. Lady will forgive me if I do not take her intervention.

I want to touch briefly on auto-enrolment. We know that millions of people are not putting aside anywhere near enough money for their retirement. I was previously an employer, including of young graduates. On starting their working lives, they do not think about retirement, saving for their pensions or anything of that nature. Although auto-enrolment was started by the previous Government, it is a good thing, and we really have to get on with it. This is about a culture change to people’s understanding of the need to save, and of how much they need to save, for their retirement. It is not about one lump sum. It is about what they expect to get out of retirement and their potential quality of life.

To conclude, I think that these reforms are welcome and long overdue. The changes to the state pension age and auto-enrolment will lead almost to a cultural revolution and a transformation of the pensions and savings culture in our society. That is a welcome step forward.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I remind the next speaker that she must finish by 9.30 pm.

21:18

[Yasmin Qureshi (Bolton South East) (Lab)]

I have been a little bemused by suggestions from Government Members that the previous Labour Government did nothing on pensions. When Labour came to power in 1997, one of the biggest challenges it faced was tackling pensioner poverty and improving the quality of life for older people. We must bear it in mind that the Tories had been in power for 18 years. Between 1979 and 1997, 29% of pensioners were living in poverty. Between 1997 and 2010, Labour made huge achievements, as a result of which average gross pensioner incomes increased by more than 40% in real terms, and more than 1 million pensioners were lifted out of poverty. No pensioner need now live on less than £130 per week, compared with £69 per week in 1997. The winter fuel allowance, free off-peak travel on local buses, free television licences and other benefits have helped to take 1 million pensioners out of poverty.

Government Members seem to suffer from collective amnesia. The previous Labour Government established the independent Turner commission because they recognised, as we all now do, that there was an ageing population and that the retirement age had to be changed. However as a result of the Turner commission a consensus was built on three things: linking the basic state pension to earnings; raising the retirement age to 68 by 2046, starting in 2024; and making private pensions opt-out instead of opt-in pensions, with employers also making a contribution. However, the Government’s proposal goes back on that consensus, raising the state pension age for women so rapidly that some women in their 50s will have to work an extra two years that they have not planned for, and raising the pension credit age so rapidly that the poorest pensioners would lose around 10% of their lifetime retirement income. Reducing the number of people eligible for automatic enrolment in a pension scheme has also had an effect. Let me deal with each of those separately.

Labour’s Pensions Act 2007, in which we accepted some of the things carried out by the Conservative Government in 1995, set out the timetable for equalising the state pension age for men and women, legislating to increase it to 65 for men by 2020, and then to 66 by 2027, 67 by 2036 and 68 by 2046. The coalition agreement stated that the parties had agreed to

“hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”

However, the Bill proposes to accelerate equalisation for women by 2018, and then to increase the state pension age for both men and women to 66 by 2020. As so many Members have mentioned today, this is a U-turn that hits women aged around 56 to 57 particularly hard. It means that 4.9 million people are affected, 2.6 million being women and 2.3 million men. Some 500,000 women born between 6 October 1953 and 5 March 1955 will have their state pension delayed by more than a year, with the 300,000 born between 6 December 1953 and 5 October 1954 waiting an extra 18 months or more. The 33,000 women facing a two-year delay will suffer a loss in income of £10,000, while for those in receipt of pension credit, the figure is closer to £15,000. Those women are being made to accommodate the changes within less than seven years.

Women are already at a significant disadvantage in pension provision. The median pension savings of a 56-year-old woman amount to just £9,100, which is almost a sixth of the same figure for a man, which stands at £52,800. That is why this is such an important issue and why so many Members have concentrated on it. It is not fair to speed up the equalisation timetable. We oppose any change before 2020. The Government must stick to their coalition agreement promise. However, we support an acceleration of the timetable for both men and women from 65 to 66 between 2020 and 2022. That would achieve the aim of reaching a state pension age of 66 more quickly, but would affect 1.2 million fewer people than under the current plans, and affect an equal number of men and women.

The reason given for the changes is that we cannot afford not to make them because of the budget deficit. With respect, that is just incorrect. When the coalition Government made their promise, they knew what the deficit was. This is another example of the coalition saying one thing to get into power and another thing in power. For example, during the election the Tories said that there would be no VAT rise. They knew the deficit then, so why did they promise no VAT rise? They also said that there would be no top-to-bottom review of the health service, which would cost £3 billion. The Lib Dems knew about the deficit, yet they still said that there would be no rise in tuition fees. The Tories said that Equitable Life people would get a fair share of remuneration, yet they have backtracked on that, too, even though, as some of us have suggested, if the deficit is the issue, those people can receive some payments now and some later—that is, after 2015. Further, we are told that the Government’s measures will cut the deficit by 2015, yet the provisions in the Bill will come into play after 2015.

The Bill also deals with automatic enrolment. The Labour Government were legislating to introduce auto-enrolment into workplace pensions, which is a good thing because we estimated that 7 million people were not saving enough for their retirement. To ensure an adequate retirement income, we built cross-party consensus to introduce auto-enrolment. That meant that people would opt out of pension savings, rather than opting in. Combining a minimum employer contribution and the creation of a pension scheme that could be used by any employer, the measure was expected to lead to a change in the level of participation in pension savings.

The Government are proceeding with the introduction of auto-enrolment, which we welcome, but they are limiting its scope. They are raising the salary level at which someone will automatically be enrolled from £5,000 to £7,475, which will result in 600,000 fewer people being auto-enrolled in a pension scheme, a disproportionate number of whom will be women. The Government are also introducing a three-month waiting period before auto-enrolment, which they predict will mean that 500,000 fewer people will be automatically enrolled. Most people have an average of 11 different employers over their working lives, so this provision could lead to a loss of almost three years’ pension for many people. I know that the Secretary of State has said that he will listen, and I ask the Government to reconsider these issues, which have been raised by Member after Member, certainly on this side of the House, today.

21:26

[Rachel Reeves (Leeds West) (Lab)]

Today’s debate has shown the concern and anger that exists at the rapid rise in the state pension age. Members on both sides of the House have had the chance to show that they are listening to their constituents, and they now have the chance to assure the women who will be affected that they understand their plight and are willing to vote down these changes.

We have heard from 20 Back Benchers today, but only two—the hon. Members for Grantham and Stamford (Nick Boles) and for Witham (Priti Patel)—have spoken in defence of the policies as they stand. That was a brave decision to take, but I believe that it was ultimately the wrong one. The reasons for the concerns being expressed across the House are clear. As many hon. Members have said, under the proposals, 500,000 women will have to wait more than a year longer for their state pension, with 33,000 having to wait two years longer.

We all know that life expectancy is increasing, so the state pension age needs to rise. My hon. Friend the Member for Sunderland Central (Julie Elliott) pointed out that the women writing to her understand that, too. However, it cannot be right for a particular group of women to have their state pension age increased at a faster rate than anyone else’s with such little notice. All hon. Members have emphasised that point today. My hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) said that there was no evidence that life expectancy was increasing for 57-year-old women at a faster rate than for anyone else, so why are those women being asked to shoulder so much of the burden? My hon. Friend the Member for Aberdeen South (Dame Anne Begg) and my right hon. Friend the Member for Croydon North (Malcolm Wicks) said that the changes will start to kick in in just five years from now, in 2016, giving much less notice than the 10 years that Age UK, the Turner report and the Pensions Policy Institute recommend.

Let us think about the women who will be affected, as my hon. Friends the Members for Erith and Thamesmead, for Oldham East and Saddleworth (Debbie Abrahams) and for Sunderland Central did in their eloquent speeches. The women hit by these changes are the backbone of our families. They are the mums who took time off work to bring up their children, the daughters who are helping their parents as they get older, and the grans who are providing child care for their children’s children, to help their children to balance work and family life. They are the women who have done the right thing. They have looked after their families, they have worked hard and they have played by the rules. They want to look forward to their retirement, not worry about how to make ends meet as they see the pension age being changed again. Moving the goalposts so near to retirement is unfair and unjust. A year ago, the Government seemed to get it. The coalition agreement said that women’s state pension age would not start to rise to 66 before 2020. However, that promise has been breached, and women are being hit hard.

The last few weeks have been filled with speculation that the Government were about to perform a U-turn. We have heard rumours of numerous proposals and options. However, the Secretary of State told us this afternoon that he was going to stand by the proposed timetable, although only this morning the Financial Times reported him saying:

“I understand there are issues and problems and I’ll constantly look at ways to see whether there’s a way of doing”

something about that. What is the truth? Hon. Members who spoke today seemed to think that concessions will be forthcoming for the women most affected by the Bill, but what assurances can the Pensions Minister give to that effect, as we are none the wiser after today’s debate?

Given the double-speak, it is no wonder that utter confusion reigns. The women affected and everyone else planning for retirement need time and they deserve certainty. Even the hon. Members for Grantham and Stamford and for Loughborough (Nicky Morgan) say they want certainty in policy, but these proposals are inducing the exact opposite—huge uncertainty. What the Government are offering is utter chaos. It is another example of the shambles at the heart of this Government and symptomatic of what is fundamentally wrong with their approach. Ministers should listen, consult, assess the impact and only then make policy. At the moment, things are happening the wrong way round. That is why the Government are in this mess.

Hon. Members have picked up on many clauses this afternoon—including my hon. Friend the Member for Aberdeen South and the hon. Member for Edinburgh West (Mike Crockart), who spoke thoughtfully about the benefits of automatic enrolment of workers into occupational pensions. Automatic enrolment was introduced by the last Labour Government and is set to mean an extra 7 million people saving towards their retirement. As my hon. Friends the Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Edinburgh East (Sheila Gilmore) have said, we regret the watering down of auto-enrolment, as well as the waiting period and the increased threshold before people become enrolled automatically.

Of course, the issue we have heard most about today, on which I shall focus the rest of my comments, are the changes to the state pension age. I will build on the thoughtful speeches made by so many Members of all parties, including my hon. Friend the Member for Aberdeen South and my right hon. Friend the Member for Croydon North, but also the hon. Members for Arfon (Hywel Williams) and for Cardiff Central (Jenny Willott).

The plans we have debated today simply do not meet the test of fairness. These changes mean that half a million people will have to wait more than a year longer for their state pension. The hon. Member for Grantham and Stamford called these women “rough edges”; I call them 500,000 women and their families who have had their plans blown out of the water so close to their retirement date.

[Nick Boles]

Will the hon. Lady give way? This is outrageous—

[Rachel Reeves]

Yes, I look forward to hearing whether the hon. Gentleman really believes that 500,000 women are rough edges.

[Nick Boles]

I apologise, Mr Speaker, that in the heat of the moment I did not wait for the hon. Lady to give way. I thank her for that at least, but she has made the outrageous assertion that I referred to the women as “rough edges” when I was saying that the policies had some rough edges. I think she should withdraw that outrageous implication.

[Rachel Reeves]

I am sure the hon. Gentleman’s constituents in Grantham and Stamford will feel very reassured that he does not regard them as rough edges, but speaks of the rough edges that have resulted from this Government’s policies.

These changes mean a loss of income of up to £10,000 for these women. For those in receipt of pension credit, the loss is closer to £15,000. There is something particularly perverse about targeting this specific group of women. As my hon. Friends the Member for Kilmarnock and Loudoun and for Glasgow East (Margaret Curran) have said, the average 57-year-old woman has just £9,100-worth of pension savings compared to £52,800 for a man of the same age—a sixfold difference. About 40% of 57-year-old women have no private savings to fall back on, so how can these changes be fair?

As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) and my hon. Friends the Members for Aberdeen South, for Slough (Fiona Mactaggart) and for Kilmarnock and Loudoun have said, all this goes against the coalition agreement that stated that the changes would not start to kick in before 2020. The Secretary of State says that the breach reflects legal advice, but when I asked him to place it in the Library, he did not guarantee to do so. I do not think there is anything illegal about sticking to a commitment and I urge Ministers to publish that legal advice and explain the breach. No one in the country voted for these policies. It is not what coalition MPs signed up to, and there is absolutely no obligation on Government Members to support the breach when we vote this evening.

During this afternoon’s debate, we have heard very few attempts to defend the proposals that we are now being asked to vote on—and I am not surprised. Time after time, Government Members have called for a rethink. Having heard the depth of anger up and down the country, the Government’s excuse that women are living longer simply does not hold water. The hon. Member for Ipswich (Ben Gummer) raised the issue of increasing longevity, but he still concedes that these changes are unfair. After all, he will have to explain to the 1,000 women aged 56 and 57 in Ipswich why they will have to bear the brunt of increasing life expectancy for everybody. The same is true of the hon. Member for Cardiff North (Jonathan Evans), who pointed to increasing longevity but ultimately concluded that the Government’s proposed changes are unfair on the 1,000 women aged 56 and 57 in his constituency. This applies to the hon. Member for Gloucester (Richard Graham), who has 1,100 such women in his constituency to answer to.

The hon. Member for Salisbury (John Glen) referred to the Government’s introduction of a triple lock guarantee, but he too has serious problems with the Government’s plans. After all, he will need to explain himself to the 1,200 women aged 56 and 57 in his constituency. The hon. Member for South Dorset (Richard Drax) referred to unintended victims of the proposals. There are 1,300 unintended victims in his constituency. The hon. Member for York Outer (Julian Sturdy) defended the broad direction of Government policy, but referred to the unfair treatment of the 1,200 women aged 56 and 57 in his constituency. The hon. Member for Cardiff Central spoke in support of pension reform, but was nevertheless vocal in her opposition to these particular proposals. Given that her constituency contains 700 women aged 56 and 57, no wonder she wrote on her website this morning that the Government needed to

“think again about these plans and find a way to make them fairer”.

The hon. Member for Edinburgh West, whose constituency contains 1,100 women aged 56 and 57, thinks that the changes are too severe. The hon. Member for Grantham and Stamford talked of the 1,300 women aged 56 and 57 in his constituency. I wonder what he will say in reply to the letters from his constituents that I am sure are building up in his office. Will he say that the proposals are just the side effects of the rough edges of this policy? The hon. Member for Witham talked of people living longer, but expressed no understanding of the 1,000 women aged 56 and 57 in her constituency. I hope that they were listening to her remarks.

[Nick Boles]

Will the hon. Lady give way?

[Rachel Reeves]

I have already given way to the hon. Gentleman once, and I will not do so again.

All the Members who have spoken today—indeed, all Government Members—should think carefully about how they can consistently defend those women and vote for the Bill. In the absence of any concessions from the Minister, I urge Members who think that the changes are unfair and disproportionate to send a message to the Government and vote them down.

I have talked about the way in which the Bill will affect a great number of women and what that entails for them, but what we are really talking about are real lives. We have heard some powerful and moving stories in the Chamber today, particularly from my hon. Friends the Members for Houghton and Sunderland South (Bridget Phillipson) and for Stockton North (Alex Cunningham). However, I want to touch on the story that was shared with us by my hon. Friend the Member for Oldham East and Saddleworth, the story of her constituent Linda Murray. Linda started work at the age of 16. Although she has worked throughout her life, she has never had the benefit of a workplace pension, or had the means to provide one for herself. She works 47 hours a week for a dry cleaner, and it is hard manual work: the sort of work that was described by my right hon. Friend the Member for Croydon North. Linda is no longer with her husband, and full retirement is not an option for her, at least for a few years. Her take-home pay is £267 a week, and she faces the impossible task of having to save £1,200 just to be able to work part-time from the age of 64. She is extremely worried about her future. That is just one story from one woman, but each and every one of us in the Chamber will have heard countless more from women in our constituencies who are approaching retirement with fear and trepidation.

At the heart of the issue is fairness. It is not about increasing longevity: we know that people are living longer, and that is a good thing. It is not about the restoration of the earnings link. That is something for which we legislated, and it is a good thing that people will be better off. [Interruption.] We legislated for it, and we welcome it. It is not about the flat-rate pension that is at some point down the track, and may or may not benefit the women about whom we are talking today. No; today’s debate is about half a million women who are being treated without fairness or justice by a Government who act first and think later.

We celebrate increasing longevity, we support the earnings link, and we welcome simplification of the pension system. We would work with the Government on all those things, but any changes in the state pension age must meet two tests. First, people must be given adequate notice and, secondly, there must not be a disproportionate impact on one group. We have set out an alternative that would equalise men’s and women’s state pension ages by 2020 and increase the state pension age for men and women to 66 by 2022.

We would work with the Government on proposals of their own as long as they met the two tests that we have set out. I think that that is what many Government Members seek from the Government. In that way we could save money, make pensions sustainable, show fairness, and treat people with dignity and respect. Right now, the policy is in a state of chaos. Ministers need to get a grip. We have heard many pleas for concessions, but none has been forthcoming. The mood in the House today has made it clear to the Minister that he must think again. I urge him, and his Government, to do so, and I urge hon. Members to vote down the Bill this evening.

21:40

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We have spent a worthwhile six hours, and I enjoy nothing more than debating pension reform. There were 24 contributions, and I want to respond to as many of the points raised as possible in the time available to me. Not all Members will have been present at the start of the debate, so it might be worth reminding them that this Bill is about more than clause 1, although clause 1 does two important things: it treats men and women equally sooner, and it responds to rising longevity by 2020.

The Bill contains two further major measures, however, which Opposition Members who vote against it would take away from us. The first is reforming auto-enrolment to make it work. That was the subject of an independent review that we set up last summer, which was conducted by highly respected advisers who want to make auto-enrolment work and get it in place next year. We have heard that many women in their late 50s have no private pension savings. Well, why is that? Who was in charge for the past 13 years? We want to make auto-enrolment work, and to get on with that. Voting down this Bill would stop us in our tracks.

[Dr Whiteford]

Will the Minister give way?

[Steve Webb]

In a little while; I want to make some progress first.

The Bill’s third key element—which, again, voting it down would stop—is making judges put some money into their pensions. I think that Members were rather shocked when they discovered that the taxpayer put 32% of a judge’s salary into a judge’s pension, and that the judge in respect of their own pension entitlements puts a big fat juicy zero. This Bill will correct that. If the Opposition succeed in voting it down, they will stop us doing so. We need to make progress with the Bill, therefore. Second Reading is about the principles, and we stand firmly behind them.

In the debate, the shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—who has rejoined us now—glossed over the auto-enrolment provisions and said the Labour party will vote against the Bill. That would leave £30 billion to be found, as that is what the Bill would put into the Exchequer. When asked where the money would come from, he replied, “Well, we’d move a bit faster on age 67” and then added, in brackets as it were, “in the 2030s.” For a former Chief Secretary to the Treasury to tell us that the way to find money for a problem in the next Parliament is to look to somewhere in the 2030s sounds vaguely familiar. The answer is always, “Tomorrow, and tomorrow, and tomorrow”—

[Mr Byrne]

Will the hon. Gentleman give way?

[Steve Webb]

In a second. [Hon. Members: “Give way.”] I will give way. The reason there is no money, as the right hon. Gentleman said, is because difficult decisions were always deferred to tomorrow.

[Mr Byrne]

I am grateful to the Minister for giving way. He is making his remarks with his customary eloquence. As the following figure has not been presented this afternoon, will he remind the House precisely how much the acceleration of the state pension age for women before 2018 will save? Is the sum about £1.2 billion—yes or no?

[Steve Webb]

Interestingly, the right hon. Gentleman and his colleague the shadow Minister are saying two different things. The right hon. Gentleman knows that the sum for the changes up to 2020 is £10 billion. His shadow Minister, the hon. Member for Leeds West (Rachel Reeves), says we should delay to 2020 and find £10 billion while he wants to vote against the Bill and find £30 billion at some time in the 2030s. I think the House knows where we stand on that.

I am grateful to those Members who took the trouble to address auto-enrolment, but the shadow Secretary of State glossed over that issue. He said we ought to enrol at £5,000, which is not the right figure, but let us accept it for the sake of argument. He then said we should not put up the threshold. Therefore, under his scheme with the threshold at £5,000, someone who earned £5,100 would be auto-enrolled on that £100, and as we start at 1%, they would have to put in £1—not £1 a week, but £1 a year, or 2p a week. That is what will happen if we do not let this Bill make progress. We will be requiring employers and employees to put 2p per week into the employee’s pension. Does the right hon. Gentleman think that might in any sense undermine the credibility of our proposals?

[Dr Whiteford]

I agree with the Minister that this issue has been glossed over in today’s debate, but in our debate on welfare reform last week great store was set by so-called mini-jobs. It seems to me that those are exactly the jobs that will not be included in auto-enrolment. Can the Minister understand why that fuels concern that a mini-job is simply a euphemism for a low-paid, low-skilled job that keeps women trapped in poverty?

[Steve Webb]

The hon. Lady will be aware of the national insurance floor of roughly £100 a week. Many of these mini-jobs, as she describes them, will be below that and would not be covered by auto-enrolment anyway, but once such people are above the threshold for national insurance, they will be able to opt in should they want to. Moreover, if a mini-job occurs later in life and they have some track record of a connection with pensions, they might well have a conversation with their employer about opting in and triggering the employer contribution.

[Several hon. Members]

rose—

[Steve Webb]

As there were 25 contributions to the debate, I want to try to respond to some of the points that were made, and then I will certainly give way some more.

My hon. Friend the Member for Cardiff North (Jonathan Evans)—indeed, Cardiff was well represented in the debate: by my hon. Friend the Member for Cardiff Central (Jenny Willott) and by the hon. Member for Arfon (Hywel Williams), who raised issues relating to Allied Steel and Wire—pointed out Labour’s track record on pensions. He was right to do so, because although one or two Opposition Members glossed over history, he reminded us of the 75p pension increase—something that can never happen again under our triple lock. He reminded us of the failure of the previous Government to get to grips with Equitable Life and of the tax grab by the previous Chancellor and Prime Minister on company pensions. That is not a proud record.

The hon. Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, made a characteristically thoughtful contribution and I am grateful for her support for our abolition of the default retirement age. The link to that issue has not often been made in today’s debate. The previous Government were planning to raise the state pension age to 66, 67 or 68—but to leave it legal to sack people for turning 65. There is a logical flaw there, and I am sure the House is ahead of me on that. It is therefore right that we have taken away employers’ ability to sack people for the “sin” of turning 65.

I am also grateful for the hon. Lady’s support for our going ahead with the National Employment Savings Trust and the flexibility around auto-enrolment in 2012. She asked whether our £10 billion estimate of the cost of delay to 2020 was a gross or net figure. It is a net figure, taking account of benefit offsets. However, a lot of the points that she and a number of other Members made would apply whenever we raised state pension ages. For example, it was the hon. Member for Erith and Thamesmead (Teresa Pearce), I think, who asked, “What will happen to volunteers? What will happen to carers?” Those are important questions, but they would of course arise whenever state pension ages are raised—and she supports a party that legislated to raise the pension age to 68. She is right that these issues need to be addressed, but they exist not specifically because of this Bill but because of legislation that is already in place.

[Mr Watts]

Is it not a fact that, if the Minister accepted the Opposition’s proposals, they would deal with the short-term problem, the long-term problem and the unfairness, and he would probably get more support from his own party?

[Steve Webb]

I am grateful to the hon. Gentleman for recognising that there is a long-term problem, which not all his colleagues have done.

My hon. Friend the Member for Grantham and Stamford (Nick Boles) made the point that this is not about the deficit. That is quite true—these measures do not save us money in the current comprehensive spending review period. However, I have a figure to present to the House: £1.3 trillion. That is the national debt at the end of this Parliament, even after our austerity measures. That is the legacy; that is the reason we need to get a grip on these matters.

As well as the 25 Members who spoke today, there were two almost silent voices—especially silent in the Opposition’s contributions. The first silent voice was tomorrow’s taxpayer. Labour wants to put the Bill into the 2030s. If we delay the changes, all these things will have to be paid for by someone else. As long as it is not the people who write to us—somebody else will pay, and they do not write to us, so that is fine. That voice needs to be heard.

The second voice that was not really heard much in the debate—although a few coalition Members did raise it—was that of employers. Of course, many of the Bill’s measures on auto-enrolment are about easing the burden it imposes, particularly on smaller firms, which are crucial to our recovery and the fundamental improvement of the economy. These measures strike a balance. The waiting period gives employers time to get people on the payroll. The threshold enables employers to take on people on a lower wage, with less bureaucratic burden. The voice of the employer and the costs and burdens on business were issues that the Opposition almost did not raise at all.

My hon. Friend the Member for Cardiff Central (Jenny Willott) was very generous in her remarks, supporting the measures on judges and on auto-enrolment. She quite properly raised concerns about the state pension age, but she made an important point about our state pension reform agenda generally. There are two sides to the state pension deal—when people get it and what they get. One Opposition Member this evening described the state pension as a pittance, but who oversaw it at that level for 13 years? We have brought forward, in our Green Paper, proposals for a single tier of state pensions set above the level of the means test. That is one of our reform options and that is the pension, if those proposals go ahead, that every one of the women we have been talking about today would get, so there is an issue about when they get the pension, but there is also, crucially, an issue about what they get. We are actively looking into that and I am grateful to my hon. Friend for raising it.

The hon. Member for Arfon asked about Allied Steel and Wire workers and the financial assistance scheme. I can confirm that I met them along with the Secretary of State for Wales and Dr Ros Altmann, who has done a huge amount of good work in this area, back in November and that I wrote to update the Secretary of State last week. We are aiming to provide forecasts for financial assistance scheme members once the wind-up process for schemes is completed. In the case of ASW, the scheme is still winding up, so the financial assistance scheme is not yet in a position to provide forecasts, but we hope to make progress later this year. The hon. Gentleman also asked about Dr Altmann’s ideas for getting money into the scheme and we have looked at trying to release value from annuities. That is not looking as hopeful as we had hoped but we are working hard to see if that can be done and I am grateful to the hon. Gentleman for making the point.

My hon. Friend the Member for Ipswich (Ben Gummer) gets the prize for making the sharpest intervention. He pointed out to the shadow Secretary of State the legal advice and comments made by my noble Friend Lord Freud in the House of Lords on 30 March. I know that my hon. Friend reads little else and I am grateful to him for drawing those comments to our attention. [Interruption.] As the right hon. Member for Birmingham, Hodge Hill has asked the question, let me tell him the answer before he asks again. My noble Friend was responding to an amendment that would have slowed the process at which we equalise the men’s and women’s state pension age. The right hon. Gentleman will know that we are on a process of equalisation, and the legal issue is that we deviate from equalisation if at any point we widen the gap. The coalition reference to moving men in 2016 and women in 2020 would widen that gap. The issue is directive 79/7, which

“deals with the progressive implementation of the principle of equal treatment for men and women in matters of social security…Any change we now wish to make needs to be considered in relation to the position left by the 1995 Act.”—[Official Report, House of Lords, 30 March 2011; Vol. 726, c. 1279.]

That is on the record and has been for several months.

[Mr Byrne]

I am grateful to the Minister for finally setting out that legal advice to the House, but he must answer this question: why was the commitment in the coalition agreement if there was a law that made it impossible?

[Steve Webb]

If it had been self-evidently not possible, I think that the right hon. Gentleman would have pointed it out in the past 12 months, but I have not heard him do so.

The right hon. Member for Croydon North (Malcolm Wicks) made a characteristically thoughtful speech and I hope that he is on the Public Bill Committee. That would lengthen our proceedings, but in a very nice way. He raised the important issue of the entitlement of people with long years of national insurance payments to a national insurance pension. He generously referred to the fact that I taught his daughter at university; I hope that I contributed in some way to her social mobility as a result. He raised the serious issue of using long periods of national insurance records. As my right hon. Friend the Secretary of State pointed out, the records before 1975 are a mess, which the right hon. Gentleman will know as he is one of my many predecessors. Our ability to use those records is very limited and one of my concerns about his proposal, which I am happy to discuss with him in a genuinely open way, is the position of women, because they would have to be credited for times when they were not in paid work. Some of that paid work will have been before home responsibilities protection was introduced and so we simply would not know who to credit. That is only one of the issues, but as I have said, we are happy to engage with him in the spirit of openness.

[Malcolm Wicks]

I am grateful for that. My point was that those who have been working since the age of 15 or 16 in manual occupations are often physically worn out and need to retire earlier than Governments have proposed. If the objections or concerns are technical, that suggests that if there is a technical way forward, we could arrive at it—could we not?

[Steve Webb]

As I have said, I am happy to engage with the right hon. Gentleman in an open and constructive way. I suspect that wishing away the technical problems might be more difficult than he imagines, but I am happy to have that dialogue with him.

My hon. Friend the Member for Gloucester (Richard Graham) who chairs the all-party group on occupational pensions—

[Sheila Gilmore]

Will the Minister give way?

[Steve Webb]

As I have five minutes to respond, I had better not.

My hon. Friend the Member for Gloucester made a characteristically thoughtful contribution. I am grateful to him for that. He raised the issue of intergenerational fairness, which goes to the heart of the Bill. It is why we need to progress with it and debate it through the House. A number of our constituents who have written to us about the Bill imagine that this is the only chance we get to debate it. We will be in Committee right up to the final day before the summer recess, I am delighted to say, and we will return to it on Report, so there is ample opportunity to debate and discuss the Bill.

The hon. Member for Sunderland Central (Julie Elliott) raised the issue of manual labourers. I accept that that is an important point, which needs to be addressed. My hon. Friend the Member for Salisbury (John Glen) quite properly raised the issue of long-term principles. I hope he will respond to our Green Paper consultation, which looks specifically at age 67 and 68, mechanisms and processes. Those are the principal issues that we are trying to raise.

The hon. Member for Erith and Thamesmead, who tabled the relevant early-day motion, asked about transfers into NEST and so on. As she knows, the idea of NEST was to get the thing going and to cater particularly for people who might not otherwise have access to a pension. Once that roll-out is complete in 2017, the whole system will be reviewed and the issue of transfers-in will be looked at as part of that review, so I can give her that assurance.

My hon. Friend the Member for York Outer (Julian Sturdy) supported the Bill and said that good governance is about taking decisions in the long-term interests of our country, which is what the Bill does. I thank him for that. The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) raised issues about auto-enrolment. I have already pointed out why we are doing it and the balance that we are trying to strike. My hon. Friend the Member for South Dorset (Richard Drax) spoke about the fragility of private sector pensions. I agree with him. That is why it is vital that we move ahead with the Bill and make auto-enrolment work, rather than delaying it, as the Opposition want.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) asked whether people will be able to work in their later years. I can tell her that women are already, on average, leaving the labour market after state pension age. In 2004 women on average left the labour market at 61.6 years. In the past six years that has gone up by more than a year, so there are already trends of longer working lives. We need to build on them.

The hon. Member for Glasgow North East (Mr Bain) said that other countries are following a different path. I can tell him that they are not. Other countries are raising their state pension ages and in some cases raising them faster than we are. My hon. Friend the Member for Edinburgh West (Mike Crockart) supported many aspects of the reforms. I congratulate him on a very well researched contribution. I am grateful to him for the principles that he set out—simplicity and making auto-enrolment work—and I note his comments about the state pension age changes.

On that issue, which has clearly been the focal point of the debate, let me sum up the position. We heard a number of hon. Members raise their concerns about the state pension age. The Government’s position is clear. We are not simply living longer; we are living longer at a faster rate. The improvement of five years in life expectancy at pension age took 70 years between 1920 and 1990. The next similar improvement happened in 20 years. The improvement in longevity is like a runaway train. We must address that. Those who vote against Second Reading are not just deficit deniers, but longevity deniers. They need to recognise the real changes.

My right hon. Friend the Secretary of State, in his characteristically resolute way, confirmed that the Government believe that we need to equalise more rapidly and reach age 66 as the retirement age more rapidly, but he also said that he recognised that we need to implement that fairly and manage the transition smoothly. He went on to say that he heard the specific concerns about a relatively small number of women and that he was willing to work to get the transition right. I am committed to doing the same, together with him.

If the House were to reject the Bill tonight, those who vote against must tell us where £30 billion will come from, how they will make auto-enrolment work and why judges should not have to pay for their pensions. I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

21:59

Division 299

Ayes: 302

---

Conservative: 258
Liberal Democrat: 42

Noes: 232

---

Labour: 219
Scottish National Party: 6
Plaid Cymru: 2
Democratic Unionist Party: 2
Social Democratic & Labour Party: 1
Green Party: 1
Independent: 1

Bill read a Second time.

PENSIONS BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Pensions Bill [Lords]:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 19 July 2011.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Steve Webb.)

Question agreed to.

PENSIONS BILL [LORDS] (MONEY)

Queen’s Recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Pensions Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—

(1) any expenditure incurred in consequence of the Act by the Secretary of State, and

(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Steve Webb.)

Question agreed to.

PENSIONS BILL [LORDS] (WAYS AND MEANS)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Pensions Bill [Lords], it is expedient to authorise—

(1) the levying of charges under the Pension Schemes Act 1993 for the purpose of meeting expenditure of the Secretary of State in making grants under that Act, and

(2) the payment of sums into the Consolidated Fund.—(Steve Webb.)

Question agreed to.

Business without Debate

Monday 20th June 2011 Commons Chamber

delegated legislation

[Mr Speaker]

With the agreement of the House, we shall take motions 5 to 9 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Taxes

That the draft International Tax Enforcement (Belize) Order 2011, which was laid before this House on 4 April, be approved.

That the draft International Tax Enforcement (Dominica) Order 2011, which was laid before this House on 4 April, be approved.

That the draft International Tax Enforcement (Grenada) Order 2011, which was laid before this House on 4 April, be approved.

That the draft Double Taxation Relief (Qatar) Order 2011, which was laid before this House on 4 April, be approved.

That the draft International Tax Enforcement (San Marino) Order 2011, which was laid before this House on 4 April, be approved.—(Stephen Crabb.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Contracting Out

That the draft Contracting Out (Local Authorities Social Services Functions) (England) Order 2011, which was laid before this House on 10 May, be approved.—(Stephen Crabb.)

Question agreed to.

Business of the House

Ordered,

That, at the sitting on Tuesday 21 June, notwithstanding the provisions of paragraph (7) of Standing Order No. 83A (Programme motions), proceedings on the Motion in the name of Mr Secretary Lansley relating to Health and Social Care Bill (Programme) (No. 2) shall be brought to a conclusion not later than one hour after the commencement of proceedings on the Motion, at which time the Speaker shall put the Question; and no amendments to the Motion shall be moved.—(Sir George Young.)

[Mr Speaker]

Before I invite the hon. Member for Broxbourne (Mr Walker) to present his petition, which I know Members will be eagerly anticipating, I appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and quietly, extending the same courtesy to the hon. Gentleman that they would want to be extended to them in such circumstances.

Cheshunt Urgent Care Centre (Hertfordshire)

Monday 20th June 2011 Commons Chamber

22:19

[Mr Charles Walker (Broxbourne) (Con)]

When coming here tonight, I received a text from Tony Siracusa, who said:

“Tonight, Charles, you’re our voice. Please continue to ensure we are heard in the House of Commons.”

I intend to do that this evening.

Before I present the petition I should like to thank Paul Mason, the leader of Broxbourne council, who organised an excellent march in support of the urgent care centre about which I am petitioning tonight. I also thank our campaigning newspaper, the Mercury, and in particular Gemma Gardner and the editor Gary Matthews.

The petition states:

The Petition of residents of Broxbourne Borough and surrounding areas,

Declares that the decision taken by Hertfordshire Primary Care Trust to close Cheshunt Urgent Care Centre (UCC) fails to recognise the importance and value of the UCC to the local community.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Health to use his offices to intervene in the matter to require the PCT to revisit its decision in regards to the UCC, and keep GP-led services operating at the site.

And the Petitioners remain, etc.

[P000930]

Private Gary Barlow

Monday 20th June 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

22:21

[Helen Jones (Warrington North) (Lab)]

I am grateful for this opportunity to raise the case of Private Gary Barlow, who served with the Queen’s Lancashire Regiment, was shot in Northern Ireland on 4 March 1973 and died early the next morning. He was 19 years old.

There may be those who wonder why a case that is now nearly 40 years old should be debated on the Floor of the House. My answer is simple: it is about justice for Gary, for his family and for the people who tried to save him. Not only was Gary Barlow tragically killed, but his bravery was never properly recognised and his family suffered, and continue to suffer, both because of his death and because of what happened to them after it. It is in the hope that we can at least provide some recognition of Gary’s bravery tonight, and at least some modicum of comfort to his family, that I have asked for this debate.

Gary’s death was investigated by the Historical Enquiries Team set up by the Police Service of Northern Ireland in 2005 to investigate any deaths that were attributable to what we still call the troubles, and to try to bring some resolution to the families involved. It is, of course, very difficult to bring things to a conclusion after so much time has elapsed. Some witnesses are no longer available and some documents are no longer there. However, the inquiry team did a very thorough job, and the basic facts of what happened to Gary on that day are now clear. I want to summarise them, if I may—and it will be a summary, not a full account, because of the time available.

On 4 March Gary was part of a patrol that was sent to the Divis flats to carry out a search operation. A soldier had been shot and wounded there earlier in the day. The soldiers searched some premises, and then joined others in a Saracen armoured personnel carrier. At that point they heard a shot, and the men got out to deploy in defensive positions. Those at the Army observation post on the top of the Divis flats pinpointed where they thought the gunman was, and the soldiers were ordered to carry out a search. They encountered some difficulties in doing so, but they used the Saracen to ram the doors of the garage opposite, and Gary and another soldier were ordered to search that building.

Not surprisingly in the context of the time, a hostile crowd gathered. As the situation deteriorated and the light was fading, the lieutenant in charge ordered his men to withdraw. They all got back into the Saracen, except Gary. No roll-call was taken at the time. It appears from witness statements that the lieutenant asked the two corporals to account for all their men. Gary’s corporal shouted to ask whether they were all back, and someone said yes. It was only when the patrol got back to base that Gary’s room-mate realised that he was missing. At the same time, two young girls arrived, sent by a woman in the Divis flats, at some considerable risk to herself and to them, to tell the Army that a soldier had been left behind.

A patrol later found Gary, face down on the floor of that garage, shot and bleeding profusely from a head wound. He was given medical care by the Royal Army Medical Corps and taken to hospital, but tragically he died early the next morning. The Provisional IRA claimed responsibility for Gary’s death, but no one was ever charged with his murder, although several people were investigated and a number of searches were carried out. Again, in the context of the time, when it was difficult to get people to co-operate with the police, that is entirely understandable.

However, in one raid, Gary’s rifle was found. It had not been fired. When the inquiry team investigated the case, as well as looking at the facts, they considered concerns raised by Gary’s family that his hearing had been damaged in an earlier incident. The team found in his service record a note of an incident on 5 February that year. They thought that that may have related to an earlier incident in the Divis flats, when soldiers were attacked by a blast bomb. They acknowledged that Gary’s family received a call shortly afterwards from one of his friends who said that he could not speak on the phone because his hearing had been damaged. The inquiry team therefore concluded that it was likely that Gary did not hear the order to withdraw, either because of where he was in the building, or because his hearing had been damaged earlier.

The facts of Gary’s death are tragic enough. However, I also believe that he and his family were let down by what happened on that day and by their treatment later. The first question of course is whether Gary was fit for duty that day. The inquiry team was not able to resolve that satisfactorily because his Army medical records were not available. However, I think that his family and others would want to know that lessons have been learnt and that no soldier will again be put in such a position when their hearing might be impaired.

There were also failures on the part of the lieutenant and the corporal in command of Gary’s section that day. Even when due allowances are made for the stress that they were under at that time, and for the extremely difficult situation in which they found themselves, they should have made sure that all their men were accounted for. The British Army expects very high standards of its officers and non-commissioned officers. Those standards are generally met and even exceeded. However, on this occasion, they fell short and that mistake led to Gary’s death.

The Ministry of Defence later wrote Gary’s parents a very detailed letter. It put the failure down to the very difficult operational circumstances that prevailed at the time. However, the inquiry team pointed out that those circumstances prevailed throughout Northern Ireland and that they would nevertheless have expected what they called military discipline and training to kick in to ensure that a proper roll-call was taken.

It was not, and it appears from the evidence that Gary, left alone, was attacked by a group of youths. Some women in the area urged him to leave. He refused to leave his post. Remember that it seems that this young man was not aware that he had been ordered to withdraw. He stood his ground and fought back. He did not discharge his rifle. His family believes—and it seems reasonable—that he did not do so to avoid the possibility of injury to civilians. Eventually, he was shot in the head and neck. The inquiry team said that, in not firing his rifle and in standing his ground, he displayed courage and strength of character. I believe he did more than that: he acted in the finest tradition of the British Army, both in refusing to leave his post and trying to stand his ground, and in trying to avoid injury to civilians. We should remember that this was a young man of only 19. Many who are older and more experienced would have done less, but he held out until the end.

Gary’s bravery, however—this is the sad thing—was never properly recognised. His family have fought for a long time to find out the true circumstances of his death, and to ensure that he is recognised. I pay tribute to them this evening, especially to his parents and his sister, Tina. They did so even though they themselves suffered after his death. They were not notified of the inquest, for instance, even though his father had expressed a wish to attend. In fact, they read the inquest verdict in the Daily Mirror. I ask the House to try to comprehend how it must be to lose a son in such circumstances, and then for the family to read about an inquest that they did not know had taken place.

Gary’s things were returned to his family in a slovenly way—in boxes, without even a note or covering letter—thus increasing their grief. Most of all, as well as letters of condolence, they received death threats. As a result, they were advised by the police to leave their home. They have only just returned to the Warrington area.

Nevertheless, they have sought recognition for the bravery of their son and brother. That bravery has been recognised elsewhere. The inquiry team discovered one of the young girls who was sent to the Army post on that day—of course, she is now a grown woman. She said that her mother was too frail to be interviewed by the team, but that she nevertheless prayed for Gary every day. She also said that once a year, the women in the area organised a mass for the repose of his soul. We should remember that those women were in a staunchly republican area of Belfast, yet they recognised the bravery of that young man.

We should do no less. I know that it is too late for Gary to receive a gallantry award. His mother received the Elizabeth cross last year—I am proud that Labour introduced that—but as the Minister and hon. Members will know, the Elizabeth cross recognises the sacrifice of the families of those who are killed on operations, and is not in itself a gallantry award for the person killed. However, that young man behaved admirably, and I hope that we can tonight finally put on the record our appreciation of his bravery.

Gary’s family gave him to the Army and to his country. Let us be honest, even after all these years: he was let down, and they were let down. People who join the forces expect to put their lives on the line if necessary, but they also expect proper care to be taken of their welfare and, if they are killed, proper care to be taken of the welfare of their families. In that way, we failed, yet I have never once heard Gary’s family complain. Their only concern is for him.

I once said to Gary’s mother, “You must be very proud of him, Mrs Barlow.” She replied, very simply, “Yes, I am.” This young man was a fine British soldier and a very brave young man indeed. It is time that we recognised that. His mother is proud of him; we should be proud of him too. I hope the Minister can put on the record tonight how much we as a country appreciate the sacrifice that Gary made, and ensure that the lessons have been learned, so that never again will a family be put in this situation.

22:34

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

I pay tribute to the hon. Member for Warrington North (Helen Jones) for securing this debate on the very tragic death of Private Gary Barlow slightly over 38 years ago. As it happens, I know the Divis flats and the observation tower. I have served and seen the difficulties of operating there, as did the Queen’s Lancashire Regiment in 1973.

Private Barlow joined the Army in 1970 and went into the Queen’s Lancashire Regiment, and he deployed to Northern Ireland with his regiment in the early years of Operation Banner, at the end of 1972, when the violence in Northern Ireland was at its height. Tragically he was killed in Belfast on 5 March 1973 aged just 19. There was absolutely no doubt who killed him: responsibility for his death was admitted by the IRA and the murderous thugs who supported it in the Divis flats. He was part of a four-man patrol that had deployed to search an area following a series of shooting incidents. The patrol was forced to withdraw rapidly as a hostile crowd had gathered, and Private Barlow was in the process of searching a garage at the time and did not withdraw with the rest of his unit, as we have heard.

Unfortunately it was not until later that Private Barlow’s patrol realised that he was missing—the hon. Lady brought out one or two very good points about that—and returned to retrieve him, by which time he had been shot and injured by the IRA. Tragically, he succumbed to his injuries in hospital later that night. Had he lived, Private Barlow would have seen his 58th birthday this week. He was one of more than 250,000 service personnel who saw service in Northern Ireland during the 38 years of Operation Banner, which was the longest single operation ever mounted by the British Army. The Army demonstrated a resolute, disciplined and flexible attitude towards adapting to a unique deployment of military forces on UK territory—it was never a happy occasion. The resilience that our soldiers displayed over such a long period and under extremely difficult circumstances greatly contributed to the peace that now exists. They and the community at large have suffered death and injury, and we should again take this opportunity to remember their commitment, bravery and sacrifice, and that of Private Barlow.

In recognition of the ultimate sacrifice paid by Private Barlow, his mother, Mrs Rona Barlow, has already been presented with the Elizabeth cross and the memorial scroll. The Elizabeth cross is awarded as a symbol of national recognition of the sacrifice and loss of those UK armed forces personnel who have died on operations or owing to acts of terrorism. It is a reminder of the contribution made by those who have paid the ultimate price for our freedom and our security, and of how highly their service is valued. Regrettably, however, it is not for me to recommend that Private Barlow be given a further award. Our honours and awards system relies on the bestowal of gallantry awards soon after the event for which it is believed an individual’s actions should be recognised.

The convention adhered to is that no award can be made for an event that took place more than five years previously. To rely on incomplete and sometimes contradictory or anecdotal evidence so long after the event can be regarded as a slight to those commanders at all levels whose task it was to reward the most deserving as they judged at the time. This system has been developed over many years, and is designed to ensure that the process by which awards are made is fair and consistent, and it has stood the test of time. Neither the present Government nor any previous Administration have departed from the strict rule that British gallantry awards are not granted retrospectively.

Recommendations for gallantry awards are generated by commanders in the field and scrutinised at a number of levels by military committees, the last of which is the Armed Forces Operational Awards Committee, which comprises five senior officers representing all three services, and which ultimately recommends to Her Majesty the Queen who should receive awards. This process is completely independent of political influence, and it would not be possible—nor would it be right—for me to seek to influence this process. On a personal note, however, I would like to take this opportunity to pass on my condolences to Mrs Barlow for the loss of her son, and to express my deep gratitude for his service to this country and her dignity in grief. I would also like to take this opportunity to put it on the record that we are fortunate to have individuals such as Gary Barlow, both then and now, who are willing to demonstrate their bravery by serving with our armed forces. In the words of his commanding officer while expressing his and his regiment’s sadness and horror at Private Barlow’s death:

“He was a fine boy and a good and brave soldier”.

I am told—the hon. Lady mentioned this too—that the family were subjected to intense and often unwelcome media and public scrutiny, and to threats. I am sincerely sorry for the additional distress that this must have caused them. In the 1970s, when Private Barlow was killed, very little support was offered to bereaved families by the military, so I would also like to take this opportunity to reassure his family and the House that measures now exist to prevent other families from suffering the same experience.

Each death of a member of our armed forces is a tragedy—for their comrades and the country, but most especially for their family, such as Private Barlow’s family. As the years have progressed, I believe that we have got better at learning the lessons from each death, both in the field and in how we help and support the families left behind. Gone now are the days when the first that a family heard about the death of their loved one was a tersely worded official telegram. Despite the challenges of 24-hour media, we are largely successful at ensuring that families hear from us before impromptu and unofficial sources when a tragedy occurs. Sadly, with the increasing operational tempo since 9/11, we have learned a lot about loss and grief, and so have steadily improved the support and help available to families who lose a loved one. Every effort is made to ensure that the next of kin are informed as soon as possible by those who are appropriately trained, and a period of grace is given before the official announcement is made. It grieves me to say that this is going on even this week, as we know.

Since 2005 we have appointed and trained both casualty notification officers and visiting officers, so that the support that we offer families is not provided by those associated with the delivery of the worst news. Our dedicated visiting officers are able to guide, support and assist families through the difficult times of the repatriation ceremony, funeral arrangements and the return of their loved one’s effects. The hon. Lady was quite right to draw attention to the way in which this could sometimes be done in an arbitrary manner, with the arrival of some boxes containing a loved one’s effects. Visiting officers can be assigned to a bereaved family for six to nine months, but support remains available through the Army’s inquiries and aftercare support cell, right up to an inquest and beyond, unlike in 1973.

All families show different reactions to the loss of a loved one. Our visiting officers are trained to understand the differences and react accordingly, so that the level of support received is determined by the need of the family. The support is therefore enduring in nature and co-ordinated in provision. In addition to giving emotional support, the visiting officer can act as a conduit to practical support regarding pensions, counselling and financial matters. This includes access to public funds that are available to help families attend the significant events associated with their bereavement, helping with funeral expenses, travel to the repatriation, funeral and inquest, and accommodation. Public funds are also available to help families after their initial period of grief and mourning to move on with their lives, through the continuity of education allowance, the maintenance of the living overseas allowance, the ability to remain in service accommodation for up to two years and the transfer of the resettlement allowance. These are changes that have happened since 1973.

I referred earlier to the lessons that are now learned in the field. The Army keeps all its procedures under continuous review to ensure the safety of its personnel. Additionally, systems exist at various levels to identify lessons from incidents and make recommendations to take action to prevent similar circumstances from arising in future, including, where necessary, a statutory service inquiry and, when there is a death during operations, a service police investigation. We are not complacent. Despite the strides that have been made in recent years, we recognise that more can always be done. The armed forces covenant, which was published on 16 May, sets out what service personnel and their families can expect from the Government and the nation in recognition of what we ask them to do to keep us safe. The Government are determined to remove disadvantages encountered as a result of service, as well as ensuring that the armed forces community receives the recognition to which it is entitled. By publishing the covenant we have a clear sense of what we are trying to achieve and have established the right direction of travel that will allow us to do so.

As a nation, we have an obligation to our servicemen and women who, like Gary Barlow, commit themselves to the service of this country and risk paying the ultimate price to keep us safe, as well as to the families who support their loved ones in the armed forces through good times and bad. Our commitment to them should be just as enduring, and with the publication of the covenant, we believe that we have established a way of ensuring that this commitment does not waver. The nation will hold us to account.

I reiterate what I said to the hon. Lady earlier. This was an awful tragedy. As it happens, I also joined the Army in 1970, and to think of a young man of 19 being killed in that way in Northern Ireland must bring us all grief. I hope that raising this matter in the House of Commons will lead the Barlow family, and Mrs Rona Barlow and the sister whom the hon. Lady mentioned in particular, to appreciate that Private Barlow’s death is recognised and truly appreciated by the nation.

Question put and agreed to.

22:45

House adjourned.

Petition

Monday 20th June 2011 Petitions

Monday 20 June 2011

Dolphins (Japan)

Monday 20th June 2011 Petitions

The Petition of residents of Workington,

Declares that the petitioners believe that there is a need to raise awareness both nationally and internationally about the slaughter of thousands of dolphins each year in the waters around Japan; notes that it is estimated that some 23,000 dolphins are slaughtered each year in the area of Taijii; further declares that the petitioners believe that there is a need to raise awareness for the majority of Japanese citizens, who are unaware that this is going on in their country; and notes that the petitioners believe that the dolphin meat which is highly contaminated is being distributed to an unaware Japanese public protected by a Government that knows the dangers of this practice and the risks to health it poses.

The Petitioners therefore request that the House of Commons urges the Government to take steps to raise awareness of the slaughter of dolphins and urges the Foreign Secretary to call on the Japanese Government to prevent the distribution of contaminated dolphin meat.

And the Petitioners remain, etc.—[Presented by Tony Cunningham, Official Report, 15 September 2010; Vol. 515, c. 970.]

[P000860]

Observations from the Secretary of State for Environment, Food and Rural Affairs:

The UK Government strongly oppose the hunting of all whales, dolphins and porpoises other than some limited whaling by indigenous people to meet defined subsistence need. The UK regularly raises its concern at both European and International level over the dolphin hunts in Japan. We continue to call on Japan to halt its needless and unsustainable slaughter of these animals and are deeply disappointed that Japan continues to carry out these large-scale hunts, despite widespread international opposition.

The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon) who is responsible for marine and natural environment, wrote to his Japanese counterpart in July 2010 to express the UK public’s concern and Government officials have met with the Japanese Government to highlight the UK’s opposition to the hunting of dolphins.

Dolphin meat has been reported to be highly contaminated with toxic chemicals such as mercury, methyl mercury and PCBs. At the annual meeting of the International Whaling Commission, we urged whaling nations to take note of the consequences of contamination for the animals themselves and also for the consumers. We called for more nations to inform consumers about the associated health risks of contaminated meat.

The UK remains fundamentally opposed to the killing of dolphins in Japan and will continue to make it known at every appropriate opportunity, including at this year’s meeting of the International Whaling Commission in July.

Written Ministerial Statements

Monday 20th June 2011 Written Statements

Monday 20 June 2011

Burdens on Local Government

Monday 20th June 2011 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

Between 1997 and 2010, council tax bills doubled. One of the reasons for this was central Government imposed unfunded or under-funded burdens on local authorities.

The coalition Government are committed to ensuring that the net additional costs of all such new burdens from central Government policy or initiatives are fully funded to help keep council tax down.

The new burdens doctrine sets out the factors that Departments should take into account when considering the costs and savings to local authorities arising from changes to policies and programmes. It applies to all Departments and covers all local authorities, including police authorities, fire and rescue authorities and local precepting authorities.

As part of the Government’s commitment to this principle, and in the spirit of greater transparency in Government, today I am publishing a copy of the Whitehall internal guidance on this issue: “The New Burdens Doctrine, Guidance for Government Departments”. A copy has been placed in the Library of the House and it is also available on the Communities and Local Government website at: http://www.communities.gov.uk/publications/localgovernment/newburdens2011.

Government Response to NHS Future Forum

Monday 20th June 2011 Written Statements

[The Secretary of State for Health (Mr Andrew Lansley)]

As I informed the House on 14 June 2011, the Government have accepted the core recommendations of the NHS Future Forum’s report. A list of the key changes the Government intend to make as a result has already been placed in the Library.

I have today laid before Parliament “Government Response to the NHS Future Forum”, Cm 8113, a detailed explanation of how the Government plan to implement improvements to their plans for NHS modernisation. Some, but not all, of these changes require amendments to the Health and Social Care Bill.

On 16 June the Government tabled a motion to recommit the relevant parts of the Health and Social Care Bill to a Public Bill Committee. The House will debate this motion tomorrow.

I am also laying before Parliament later today “Government Response to the House of Commons Health Select Committee Fifth Report of Session 2010-11: Commissioning”, Cm 8100.

“Government Response to the NHS Future Forum”, Cm 8113 is in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. Copies of “Government Response to the House of Commons Health Select Committee Fifth Report of Session 2010-11: Commissioning”, Cm 8100, will be available later today.

Appointment of National Employment Savings Trust Corporation Trustee Members

Monday 20th June 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I am pleased to announce the appointment of the following trustee members of NEST Corporation:

Mr Iraj Amiri

Mrs Sharon Darcy

Mr Nigel Stanley

These appointments will take effect from 20 June.

The appointments will bring a wide breadth of knowledge and skills to NEST Corporation, particularly in the areas of representing the interests of consumers and financial management.

The new trustee members will join the current chair and six trustee members who were appointed last year. Together, they are the trustee of NEST and as such they have a fiduciary duty to act in the best interests of scheme beneficiaries. Trustee members are also responsible for setting the strategic direction and objectives for NEST.

NEST Corporation is the trustee body responsible for running the NEST scheme. It was set up under the Pensions Act 2008 as a non-departmental public body (NDPB) that operates at arm’s length from Government and is accountable to Parliament through the Department for Work and Pensions (DWP).