Pension Equality for Women

James Cartlidge Excerpts
Thursday 14th December 2017

(2 years, 9 months ago)

Commons Chamber
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Department for Work and Pensions
Jo Churchill Portrait Jo Churchill - Hansard
14 Dec 2017, 1:09 p.m.

I thank my hon. Friend for raising that point. She works unstintingly for carers up and down the country, and we could have a broader discussion about how we value carers, who are predominantly women.

The hon. Member for Swansea West (Geraint Davies) highlighted the specific issues facing a lot of the affected women, but I say gently that those are issues that women—whether they are in their 50s, 40s, 30s or 20s—are dealing with across the piece. Women tend to bear the brunt of these things. As my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan) said, there are challenges in rural areas, and my hon. Friend the Member for Waveney brought up the issue of financial service organisations and banks not playing their part by also being a conduit of information for women. A series of events led to the current situation, and we have all found ourselves learning that communication should be better.

At the nub of this is the fact that we have a problem. In 1917, 24 letters were sent from the Monarch to women who were turning 100; last year, the Queen sent 24,000. By 2050, some 56,000 people will celebrate their 100th birthday.

James Cartlidge Portrait James Cartlidge (South Suffolk) (Con) - Hansard
14 Dec 2017, 1:16 p.m.

My hon. Friend makes an excellent point. We have already heard about Suffolk, and the prediction is that by 2039 the majority of people in the county will be over 65. This is an extraordinary change in our society, and we will have to accept the costs that come with that.

Jo Churchill Portrait Jo Churchill - Hansard
14 Dec 2017, 1:09 p.m.

Indeed we will. The nub of my point is that many of us come to this place as women and as carers. My husband and I still have four living parents, which is great. It is a sign of improved medical care and so on. Nevertheless, we have four children who arguably will bear the brunt of paying for these costs.

In one of my surgeries recently, I spoke to a woman who is affected by the changes to the state pension age—she is a WASPI woman. She said:

“I was born in 1956 and have been fortunate to work all my life”—

I take on board the point made by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy)—

“in a variety of careers that I have enjoyed.”

She explained that some of those careers were due to necessity of circumstance. She was warned in two letters that her state pension age would be changing. She will receive her state pension at 66.

She went on:

“I will be 62 next birthday and even if I was in receipt of a pension, I would struggle to stop working as I thoroughly enjoy my current job.”

That is what I mean about the need to consider this issue on a more individual basis. The woman continued:

“I appreciate that I am very fortunate as I am blessed with good health”—

there have been several allusions to that in the debate. She said that she had a supportive husband

“and 3 lovely children. I expect to live longer than my parents but my perception is that my children struggle more financially than I did at their age. I realise that my taxes contributed to my parents’ pensions and my children’s taxes will fund mine. I cannot expect my already financially challenged children to contribute to my pension, for many, many more years. That would seem very unfair.”

If we do not see through these changes to the state pension, the burden on our children will be astronomical. This is not fair, but it is where we find ourselves. We must ensure that our response is proportionate.

It is about choices. I say gently to the hon. Member for Paisley and Renfrewshire South (Mhairi Black) that the Scottish National party has the ability to make a unilateral decision if it wants to.

Break in Debate

Liz Twist Portrait Liz Twist - Hansard

Yes, I most certainly do agree. I am asking the Government to meet the WASPI campaigners, explore solutions, look at transitional state pension arrangements, and make resolving this issue a priority for the 3.8 million women affected. This is a campaign powered by women with determination and courage, and I commend all who are determined that this cause will be addressed.

James Cartlidge Portrait James Cartlidge (South Suffolk) (Con) - Parliament Live - Hansard
14 Dec 2017, 1:24 p.m.

It is a great pleasure to speak in this debate and I congratulate the hon. Member for Easington (Grahame Morris) on bringing it forward.

I have received a considerable amount of correspondence about this matter from the ladies in South Suffolk who are affected by the change, although I do not know whether they are in the Public Gallery today. As everyone else, quite rightly, is focusing on the specific issue faced by that cohort of women, I want to consider its long-term implications for the state pension system. We need to ask ourselves whether the system is really fit for purpose. Do we have a state pension system that actually delivers any longer?

The key thing is that we have a pay-as-you-go system. The most common argument that we hear from ladies who have been affected by these changes is, “I have paid in contributions all my life; it is my pension pot.” They believe that as they have paid in their money, they have a contract for what they should receive in return. The problem is that there is no such pot. None of us in the state pension system has a pot with our name on it. We have a pay-as-you-go system. This month’s national insurance contributions from the working population pay for this month’s pension liabilities in the state system. I am afraid that that system is extremely vulnerable in the face of demographic change.

Mhairi Black Portrait Mhairi Black - Hansard
14 Dec 2017, 1:25 p.m.

Will the hon. Gentleman give way?

James Cartlidge Portrait James Cartlidge - Hansard
14 Dec 2017, 1:25 p.m.

I always give way to the hon. Lady.

Mhairi Black Portrait Mhairi Black - Hansard
14 Dec 2017, 1:25 p.m.

I am very grateful to my former Committee colleague for giving way. I would just like to ask whether the same pay-as-you-go system applies for the Democratic Unionist party and remaining in power.

James Cartlidge Portrait James Cartlidge - Hansard
14 Dec 2017, 1:26 p.m.

That is not a function of the state pension system. I will resist the bait to which the hon. Lady tries to get me to rise.

It is important that we remember the costs involved. The DWP spends £264 billion a year, of which the largest part is for the state pension. At £111 billion, it is by far the biggest single piece of public expenditure. That sum gives out a state pension of on average just under £160 a week—not exactly a king’s ransom. Of course pensioner poverty would be far higher in the current age were it not for the fact that many of this generation of pensioners are fortunate enough to have occupational pensions—and good luck to them. My parents are in that generation, many of whom own property. Savills estimates that the housing equity of people over 65 is about £1.5 trillion, so that generation has been cushioned to a certain degree. It has also been cushioned by the Government’s actions to protect pensioner benefits and introduce the triple lock, all of which have protected state pension expenditure from the necessary savings made in other Departments.

Christine Jardine Portrait Christine Jardine - Hansard
14 Dec 2017, 1:27 p.m.

Does the hon. Gentleman not agree that, regardless of the figure that he quoted, the people who are paying the price for this are women born in the 1950s?

James Cartlidge Portrait James Cartlidge - Hansard
14 Dec 2017, 1:27 p.m.

Actually my point was going to be that everyone will end up paying the price. Of course this debate is about a specific cohort that has been hit quite directly and over a specific period, and there is also the whole issue of notification. However, although young people going into the workforce know about the change in the retirement age and have had notification, that does not mean they will be able to save adequately for a pension. It also does not mean that they will be able to afford one, or to get a foot on the housing ladder, and they probably will not have an occupational pension. We cannot look at this issue in isolation; we need to look at the whole system.

Patricia Gibson Portrait Patricia Gibson (North Ayrshire and Arran) (SNP) - Hansard
14 Dec 2017, 1:27 p.m.

Does the hon. Gentleman agree that we must get away from talking about women born in the 1950s as though they are some kind of burden on society? These women are asking only for what they were promised and what they themselves have paid for. They are not a burden; they are people looking for justice.

James Cartlidge Portrait James Cartlidge - Hansard
14 Dec 2017, 1:28 p.m.

No one is saying that. My whole point is this: when the women say they have paid in, that does not exist. That is just a mathematical fact; it is not a nefarious thing. The system was not designed for this ageing population and the demographic changes that we are seeing. The duty on us in government and in this place is to be open and honest about that, and to try to come up with reforms that address it.

In my view—and this is a big deal—we should try to move to a funded pension system. Let us be honest: that is not a minor detail. If my hon. Friend the Minister asked his officials what they would think of that, they would say, “Sit down, put a cool, wet flannel on your head, have a cup of tea, and move on to the next issue.” What I suggest is not a minor deal. As I understand it, the only Government who ever moved from a pay-as-you-go system to a funded one was Pinochet’s in Chile—and he did not have to worry about Back-Bench rebellions and so on.

A funded pension would be extremely difficult to achieve because, of course, a generation would have to pay twice, but I believe that it could be done. We have had two proposals on this. During the April 1997 general election campaign, our party proposed basic pension plus. Peter Lilley came up with a system that would move us from the current state pension to a funded one. It would have been fully in place by 2040, so just 23 years from now, the liability for the state pension would have started to fall very dramatically. Instead, according to the Office for Budget Responsibility, the forecast for public spending 50 years from today, at current prices, is an extra £156 billion. That is mainly due to demographic change, higher costs of health care, more complex health needs and so on. That is an extraordinary position to be in and, as the OBR says, it is not remotely sustainable.

My hon. Friend the Member for Weston-super-Mare (John Penrose) has said that the other option is a sovereign wealth fund. Any funded state pension is effectively a sovereign wealth fund. It is a way of taking all the money that we pay into an unproductive, pay-as-you-go state pension system and investing it to meet our country’s needs, thereby boosting productivity and investment, and giving a greater return and greater ownership to people in an age when ownership in the capitalist system is under threat. There are huge benefits to be had. At the moment, the savings ratio is extremely low—that is one of the most worrying things in the Budget Red Book—but if the system forces people to save from a young age, it can be very effective. That is what we have with the new system.

There are specific issues, and we should look at the ladies who have been affected by this change, but if we really want to resolve it, we have to learn the long-term lessons. We owe it to those affected to ask how we can stop future generations being affected. If people own their pension—if it is theirs—the state cannot arbitrarily put in place this sort of change. It will take many years to establish a fully funded system, but there would be immediate short-term benefits as we moved to an economy on a more long-term keel. There would be more confidence in investment and we would move away from a more boom-and-bust, higher consumer debt model, which is why I think my hon. Friend has it spot on with a sovereign wealth fund. Either way, we need to start looking at the problem. We will need cross-party consensus, to be radical, and to look to the future rather than focusing on the short term.

Madam Deputy Speaker (Mrs Eleanor Laing) - Hansard
14 Dec 2017, 1:31 p.m.

Order. I have to reduce the time limit to four minutes.

Break in Debate

Mhairi Black Portrait Mhairi Black (Paisley and Renfrewshire South) (SNP) - Parliament Live - Hansard
14 Dec 2017, 2:50 p.m.

I too woke up this morning and thought, “What the hang am I going to say?” I have said everything multiple times, and there are only so many ways you can state the same facts.

I had an email from a lady called Hazel. She said that, just out of curiosity, she wanted to look at the old TV adverts for the multi-million-pound campaign that the Government had apparently launched. Given that we have focused so much on communication today, I think this is a very valid point. Hazel showed me various adverts; having searched the whole archive, we could find three. The first was presumably aimed at women. It is very patronising, as is the one that is aimed at guys.

Two dogs are talking to each other in a field. One says that it is very confused by pensions because there are so many different types. The other dog says, “Well, the Government have this great new handbook that you can request to be sent to you.” The punchline is “Is that you a guide dog now?” Oh, the banter. That is very good, right? But it was not adequate in the slightest when it came to getting across to people the grave changes that were being made.

My favourite is the third advert. It is only 10 seconds long, and half of it shows a dog chasing its own tail. There is no dialogue whatsoever. That summed up, for me, the Government’s reactions to this entire saga. They are just spinning in the one circle, refusing to acknowledge the facts that people are pointing out to them.

I raised that for two reasons. First, it is the only new thing that I have to add, and secondly, the onus is still on the women to request the information. The onus is still on them to go and find out what the Government might or might not be up to with their pensions.

It is incredible that we are still having to have this debate. As far as I am aware, this is the 13th in which I have taken part since I was elected, and I know that there were others before that. The key issue is that at no point have these changes been explicitly mentioned, and at no point have they been communicated to the women affected.

Until the speech made by my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), I thought that everyone here agreed that there was poor communication for many years. I think that that still stands. It is a historical fact that both Labour and Conservative Governments totally ignored the problem and, to an extent, there is still a huge communication problem that we have to look at.

From the admission that there is a communication problem, we can safely draw two conclusions. The first, which is the more important, is that the women are utterly blameless. The second is that it is actually an admission of guilt on the Government’s part. It is a recognition that the institution of government has failed those same women again and again.

The hon. Member for North Cornwall (Scott Mann) said earlier that the 2011 Act had been rushed, and I agree with him. It was shoved in at the last minute. Then, all of a sudden, people said, “Wait a second: there is a 1995 Act. Oh my God, this has kicked off.” Instead of doing the sensible thing and saying, “Let us step back and see what we can do to soften the blow,” the Government decided to vamp ahead with it anyway. Can we deal with the fact that the job of current Governments is to fix the mistakes made by previous Governments? That is what we are all here for. We are trying to move society forward, and it is not going to get anywhere if the response is always, “We looked at that; it is rubbish, but let us move on.” However, that is all that we are getting from the Government. We can shout about whose fault this is until we are a Tory shade of blue in the face, but it will not fix a damn thing. I recognise that the Government have made slight concessions to the 2011 Act. That gave some women an extra few months, but it was a wholly inadequate response because it totally neglected the chaos that started back in 1995, and the huge leap that nobody knew about. Can we focus on how to fix the issue now, rather than getting drawn into the blame game of whose fault it is or is not?

As has been mentioned, the SNP produced a report that did the Government’s job for them. It stated that with £8 billion spent across five years—one whole Parliament—things could effectively revert back to the original timetable of the 1995 Act. That would allow a lot of breathing space for a lot of women, especially those worse affected. The national insurance fund has a surplus of £23 billion. People can disagree with that all they want—I am happy to talk to them afterwards.

James Cartlidge Portrait James Cartlidge - Hansard
14 Dec 2017, 2:55 p.m.


Mhairi Black Portrait Mhairi Black - Hansard
14 Dec 2017, 2:56 p.m.

I am about to come specifically to the hon. Gentleman. He mentioned the problems faced by the pensions system, and I completely agreed with the spirit of his speech. I understand that Gordon Brown had a field day with the pensions pot and made things a hell of a lot more complicated for everybody. I accept that as reality and a historical fact. However, the fact that I agree with the hon. Gentleman about those grave concerns shows why we need to fix this problem. We always hear the argument about it being unfair to put costs on to the younger generations because they are the ones who will be footing the bill—the pay-as-you-go system that the hon. Gentleman referred to. I am from that generation, and I am looking at this problem and thinking: these women have done nothing wrong, yet the Government are still able to afford all these things that I really do not think are that important. Are the Government really not going to act because of me? Wait a second—why should I be paying national insurance, if at the last hurdle the Government can change the rules and move the goalposts? Why should my generation take anything that the Government say seriously? We must be grown up about this—I can’t believe I have to say that in here—and we need to address and fix this problem. This is above party politics, so let us be practical.

Where the hon. Member for South Suffolk (James Cartlidge) and I will disagree is when I say that this comes down to tough political choices. The Government have a deal with the DUP to maintain power, and billions of pounds are being spent on Trident. There is the refurbishment for this place, and we have heard about some ridiculous campaigns for boats and royal yachts and so on. I am sorry, but those things are not the priority right now. These women entered a contract—national insurance is a contract; it is a basic fundamental of our welfare state as it functions. We cannot undermine that, yet that is all the Government are serving to do. If this were a private company it would, rightly, be getting dragged through the courts right now, and the Government should reflect on that.

The hon. Member for Bury St Edmunds (Jo Churchill) said that section 28 of the Scotland Act 2016 gives the Scottish Parliament the power to mitigate these changes. I have a problem with that argument because section 28 of that Act states that we cannot give pension assistance or assistance by “reason of old age”. We are not allowed to do that—pensions are completely reserved, and when we campaigned for the devolution of pensions we were told no.