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14 Sept 2004 : Column 1191

Older Women

Mr. Deputy Speaker (Sir Alan Haselhurst): We now come to the debate on the impact of Government policy on older women. Mr. Speaker has selected the amendment in the name of the Prime Minister.

4.28 pm

Mr. Steve Webb (Northavon): I beg to move,

The Government's amendment on such occasions is always a good giggle. It is always a good laugh to see why the problem that we have all found in our constituencies and heard about from the people to whom we speak is actually not only not a problem, but a triumph for the Government. Today's Government amendment is no exception to that.

We have sought to bring before the House the failures of the Government to deal with the needs of older women, in particular, and our motion highlights pensions, but also issues relating to the health service. I hope that my hon. Friend the Member for Romsey (Sandra Gidley) will catch your eye later in the debate, Mr. Deputy Speaker, so that she can focus her remarks on those issues.

I shall concentrate especially on the position of women and pensions.

I start by agreeing with the Government. I shall not do that too often in the rest of my contribution, but let me start with a note of consensus, because we know that our electors want consensus on pensions. At the start of the amendment, the Government ask us to congratulate them on the fact that their pensions Green Paper was the first ever to include a chapter on the needs of women pensioners. It is good news that they finally included such a chapter in response to years of campaigning by the Liberal Democrats. The chapter was a list of problems facing women pensioners. The Government are good at listing problems—so good, in fact, that they produced quite a long chapter detailing the problems. One might reasonably assume that after listing the problems they might have felt the need to do something about them, but that aspect of the equation has not happened, because precious little of what came forward from the Green Paper was of benefit to older women.
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The Government's amendment goes on to call for further praise for the Government because they are committed

As those who follow the minutiae of such matters will know, the hon. and learned Member for Redcar (Vera Baird) moved an amendment in the Committee that considered the Pensions Bill to get such a report, to which the Government graciously acceded. The Government now want praise for the fact that they will report on the pensions position of women, but they had no intention of doing so until a Labour Member made such a suggestion. The argument in the rest of the amendment must be pretty thin if its strongest claims are that there was a chapter about problems and that there will be a report.

The essence of the problem that we are trying to address is that women are the poor relations on pensions. If pensioners feel like second-class citizens, women pensioners are often third-class citizens. As the Equal Opportunities Commission puts it, given that women form two thirds of the pensioner population, if we do not get pensions right, women are the ones who will suffer disproportionately. It is true that there has been a historical problem and that the old-fashioned system, which was based on the assumption that men worked and women stayed at home to bring up children, meant that women got a poor deal from pensions, but it is a myth that that is all ancient history. I want to dispel that myth today, because far from being over, the ancient history is with us today, and it is set to remain with us for generations to come unless the Government get serious on the issue.

I have figures about women who retire today, rather than extreme cases of women who have been retired for decades and lived their lives in a different era. A typical woman who retires today will receive a combined income from state pensions of £65 a week. A typical man retiring today will receive an income from state pensions of £105 a week, so there is a gap of £40. I do not want to be harsh on the Government because I am in a consensual mood today, so I praise them because the figures that I cited are better than those for the year before. The gap between men and women closed by 40p a week between 2002 and 2003, so that represents progress. At that rate of progress, I calculate that it will take a century before the gap of £40 closes. Liberal Democrat Members are patient and realise that progress takes time, but we think that 100 years is a little too long to wait to close the gap between men and women, especially for today's pensioners.

What is the origin of the problem and what can we do about it? A typical newly retired woman in 2003 drew a basic pension of £53.90 a week, but the full basic pension was in the high £70s. How did that situation arise? One would assume that, by the start at the 21st century, women who worked would have protected their pension rights and those who looked after children would have protected their pension rights. Why did they not receive full basic pensions? One problem is that women who retire now base their pensions on a working and caring life that typically goes back to the 1960s. They carry the baggage of a system that was generated in the post-war era on the assumption that they did not work and that that did not matter because they just depended on their husbands.
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So although in the 1980s we had a system whereby when a woman was bringing up children, her pension rights were protected, many women retiring today do not benefit from that system and retire on a pathetically inadequate pension.

One reason the Liberal Democrats have taken the view that we need to act quickly on pensions is that this injustice has gone on for too long. We cannot wait for decades for all those historical anomalies to work their way through the system because, frankly, many of the women that we are talking about will not be around to see the benefit. That is why our priority, as reflected in the motion, is a pension increase, particularly for the oldest pensioners. They simply cannot wait.

That contrasts with the approach taken by the Conservatives, who have said that there should be limited, across-the-board increases for all pensioners proportionate to the pension that they draw, which means that women, once again, will get a raw deal. If a woman draws a smaller pension, an increase proportionate to that amount will be smaller than for a man. How can we put up with that discrimination any longer? We have a wholly inadequate basic pension, the value of which has been eroding for a quarter of a century relative to earnings, and we have to take urgent steps to deal with it because it is women who lose out.

In their amendment to the motion the Government are saying, "You don't need to worry about that because there is the state second pension"—what used to be called SERPS—"and that is good news for women." In fact, Ministers have been known to say that 20 million people will benefit from that pension. The state second pension is their response to the question, "What have you done for women?" Looking at the figures, I found that the typical woman retiring in September 2003 draws a SERPS or state second pension of a grand total of £9.73 a week; the typical man draws £22 from that source. That pension, which is meant to be the answer to the problem of women, is worth less than a tenner to the typical woman.

Why is it that, as ever, there is a huge gap between the Government's rhetoric on pensions and the reality for women pensioners? First, the Government say that women should have their pension rights protected while they are bringing up children, but only until their children are five. After that, the Government expect them to go out to work and earn above the earnings limit, and if they do not, or if they do part-time work, their pension rights are not protected. The new second pension, which is supposed to be the answer to all the problems, does not help women in that position, even starting from now. That seems wrong to us.

Secondly, the Government say that for the first time they are protecting the pension rights of carers, and anyone drawing the carer's allowance receives credits towards the second-tier pension. However, there are hundreds of thousands of women out there, doing caring work, who do not satisfy the 35-hours-a-week rule or the test that the Government set them. If a woman spends 20 hours a week caring for an elderly relative, and another 10 hours a week doing a rather pathetically paid part-time job in which she does not pay national insurance, the Government's response is that none of that matters. None of that has value in their eyes because none of it earns a woman a penny in pension rights.
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This is the critical point: the history of pensions has been that the only thing that the state values is paid work above a certain level, and we are saying that that injustice has to stop. We as a society must surely value people who bring up children and care for elderly relatives, and we must surely value those who do a couple of part-time jobs, neither of which qualifies them to pay national insurance, leaving them without any pension rights.

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