Transitional State Pension Arrangements for Women

Rachel Reeves Excerpts

Monday 1st February 2016 Westminster Hall

[Helen Jones]

The hon. Lady is absolutely right. Again, I will come on to that point a bit later.

Part of the problem in 2011 was that the Government did not seem to understand the implications of their own Bill. When the former Pensions Minister gave an interview to the Institute for Government after the 2015 election, he said, somewhat ungrammatically, I think, but fairly clearly:

“We made a choice, and the implications of what we were doing suddenly, about two or three months later, it became clear that they were very different from what we thought.”

I have known a few Ministers in my time who did not seem to understand the implications of their own Bills, but this was a former Pensions Minister—an acknowledged expert on social security—who did not understand what was going to happen. If he did not understand the position, how on earth could he expect the many thousands of affected women to understand it?

[Rachel Reeves (Leeds West) (Lab)]

I thank my hon. Friend for securing the debate. She quotes the former Pensions Minister, but the current Minister for Pensions said in 2011:

“The Government has not given women enough time to change their plans…I believe the Government’s decision is unfair and disproportionately hits women who are now around 56 years old.”

She said that then, so it is a shame that now she is in government, she is not trying to change the situation.

[Helen Jones]

I could not agree more with my hon. Friend.

Let us remember that during our consideration of the 2011 Bill, the then Pensions Minister promised to look at transitional arrangements for some of the women affected. Towards the end of the Bill’s passage, the Government made amendments that at least prevented people from having to wait longer than an extra 18 months for their state pension. That certainly helped some women born between January and September 1954, but there was still a whole load of anomalies that were not dealt with. One of the things that has made the situation worse, as has been said, is the lack of notice that women received about the changes.

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[Rachel Reeves (Leeds West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hanson. I congratulate my hon. Friend the Member for Warrington North (Helen Jones) on securing the debate and, of course, I pay tribute to the superb campaigners who are here and who are watching today’s proceedings.

The women who are being forced to wait longer for their pension, and who have been hit twice—by the changes in 1995 and then again in 2011—have been done an injustice. In 2011, as shadow Pensions Minister, I was proud to work with Age UK, USDAW––the Union of Shop, Distributive and Allied Workers—and many women, including my mother, in calling on the Government to think again. We were pleased then that we won a partial concession so that no woman would have to wait for more than an additional 18 months before they could claim their pension. However, I said then, and say again today, that that does not go far enough in righting this wrong. There are still 2.6 million women who have lost out as a result of the Government rewriting the rules, and 300,000 will have to wait an extra 18 months before they can retire.

Last week, I caught up with Barbara Bates, who lives in County Durham, with whom I campaigned in 2011. Even after the Government’s concession, Barbara still faces working an extra 78 weeks before she will see her state pension. The osteoarthritis that affected her wrists and thumbs when I first got to know her five years ago has now spread to her hands, knees, neck and right foot. She said:

“no government can change the way our bodies age, and in particular those of us who started work at 15 in the 70s, a lifetime of menial and heavy jobs that are vital but un-noticed”.

Like other Members, I have also been contacted by constituents. This morning, Margaret Cutty phoned me during her office tea break. She works mostly on her feet, doing lots of lifting as well, and she has had three operations in the past year. Her husband has just had a triple heart bypass. She wants to be able to spend more time caring for him as he grows older but, because of these changes, she will not be able to do so. The experiences of Barbara and Margaret are just two examples of what we know are hundreds of thousands of stories.

[Mrs Hodgson]

I was also recently contacted by two constituents: Lorraine Derret and Evelyn Winstanley, who have worked for 42 years and 45 years respectively. Like others, they have said that they were not told at all by any letter that this was going to happen to them. The DWP has been negligent, so there should be some transitional arrangements.

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[Rachel Reeves]

I absolutely agree. The reality is that the 300,000 women who are suffering the maximum 18-month delay have lost out on £12,000 of pension. Official statistics show that only six in 10 women aged 55 to 64 have any private pension at all. For those who do, the average size of their pension pot is only 57% of that of a man of the same age. Women such as Barbara, Margaret and others whom my hon. Friends have mentioned—women earning little more than the minimum wage who are often struggling to work full time because of their caring responsibilities, and who are desperately trying to conserve what savings they have to ensure at least a minimal standard of living during their retirement—are very worried. For those women, moving the goalposts for the second time, as the Government have done, can have a devastating impact on their finances, families and life plans. That is why I propose that, at the very least, the Government should offer some specific protection for those women.

My proposal would mean restoring the qualifying age for pension credit to the 2011 timetable for women’s state pension age, thus providing at least some buffer for those who are least able to cope financially with this unfair move. Previous Government costings suggest that that would be affordable, with the money being well targeted at those who have been hardest hit. Let me be clear that I would like the Government to go further, but at the very least they should provide that support to those who have the least. Given the wrong done to those women by the Government, that is the least we should ask for and the least we should expect.

I agree that the state pension age needs to be increased to keep it affordable, and I agree that men’s and women’s state pension ages must be equalised, but I also agree with the part of the 2010 coalition agreement that stated that women’s state pension age should not rise to 66 before 2020. I agree with the former Minister for Pensions—the former Member for Thornbury and Yate—who admitted last month that reneging on that commitment was a “bad decision”. That is an understatement, but at least he came late to the party. I also agree with the current Minister for Pensions who has said:

“Unfortunately, the Government has not given women enough time to change their plans. These women have already accepted an increase in their state pension age, but they were given time to adjust. Suddenly, these same women are being targeted again, but this time they are not being given enough notice as the changes start in just five years’ time. I believe the Government’s decision is unfair and disproportionately hits women who are now around 56 years old.”

How right she was, and I hope that she will now stand by those for whom she spoke up then, as I and other hon. Members will continue to do until we get justice.

[Several hon. Members rose—]

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[Mr Vara]

We have also abolished the default retirement age so that people can work for as long as they wish without fear of age discrimination. We have introduced the most fundamental reform to how people can access their pension in almost a century through pension freedom, which has abolished the effective requirement to buy an annuity.

No one can say that the changes have not been fully considered. The parliamentary process was fully followed. We held a full, public call for evidence alongside extensive debate in both Houses. Between January 2012 and November 2013, the Department for Work and Pensions wrote to all those affected.

[Rachel Reeves]

Will the Minister give way?

[Mr Vara]

I will not.

More than 5 million letters were sent to addresses then recorded by HMRC. Crucially, the Government also listened during the process. On Second Reading of the Pensions Bill in 2011, the Government said:

“we will consider transitional arrangements.”—[Official Report, 20 June 2011; Vol. 530, c. 52.]

On Report, after considering the matter, Ministers made a concession worth £1.1 billion, and the time period was reduced from two years to 18 months. For 81% of those affected, the increase in the time period will be no more than 12 months.

To reverse the Pensions Act 2011 would cost more than £30 billion, which simply is not sustainable, and nor is it sustainable to reverse the 1995 changes, which some wish to do, as that would cost many billions more. It is noteworthy that if we went back to the 1995 position, it would mean that women would be campaigning for a state pension age of 60—[Interruption.]

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[Rachel Reeves]

Will the Minister have some courtesy and give way?

[Mr Vara]

I will give way to the hon. Member for Warrington North, who moved the motion, but I will not give way to others as I have limited time.

[Mr Vara]

If the hon. Lady is a little patient, I will tell her about the issue concerning communications.

[Rachel Reeves]

Get on with it then.

[Mr David Hanson (in the Chair)]

Order.