Pensions Bill [Lords]

Priti Patel Excerpts

Monday 20th June 2011 Commons Chamber

[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.