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Mr. Michael Weir (Angus) (SNP): Several themes have run through this debate. One was the need for consensus, although I have seen very little in what has been said so far. Another was the serious problem of pension provision, particularly for older women. That is largely a result of current pension provision being based on labour market provision, which discriminates against those with an interrupted employment history—particularly women and carers. Because of that link, many such groups find that poverty during their working lives translates into poverty in old age.
Although much of what we have discussed today has concerned state pension provision, it is also relevant to occupational pensions. Fewer women than men belong to such pension schemes: 52 per cent. of men, compared with 39 per cent. of women. The interrupted occupational histories of many women mean that they have had less time to build up pension rights.
Also, significantly for women who are getting near retirement age now, it is only in recent years that women gained pension rights through divorce. I have to say that Scotland was well ahead of England in this regard. Until recently, pensions were not treated as an asset on divorce, although they were a significant family asset. That is now changing. Many women now reaching retirement age have not had the benefit of that, and therefore face greater poverty in retirement.
We have discussed the destruction of the link between earnings and pensions, but perhaps the link between labour market provision and pensions should have been the one that was broken. That is the main attraction of the citizens pension, because it would do that. It would provide a basic pension for all citizens, notwithstanding the difficulties in ascertaining what citizenship involves in certain instances. When the Minister talked about means-testing, he suggested that the difficulty with a citizens pension as opposed to a means-tested one was that someone with a large occupational pension would get the same benefit from a citizens pension as someone on a low income. That is not true, because in the example that he cited, the person getting a £50,000 occupational pension would pay tax on that pension.
The citizens pension would ensure a basic living pension for everyone. That is important, because we know that one in five of our pensioners still live in
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poverty. The Government have gone down the road of means-testing, through the pension credit, even though they derided the Tories for doing so when they were in opposition. Means-testing is an inefficient way of dealing with a problem that is rooted in the fact that pension entitlement is attached to the labour market. The fact is that, under the present provision, more than half the over-65s in the United Kingdom were eligible for the means-tested pension credit on its introduction, and that proportion is rising. It will reach nearly three quarters by 2025.
I pointed out in an intervention on the Minister, to which he did not really respond, that many pensioners—particularly the older ones—are not taking up the pension credit, despite our best efforts to get them to claim whatever they are entitled to under the present system, whether we agree with it or not. Even the Government's own take-up target involves less than three quarters of pensioners by 2006. That will leave a considerable number of pensioners being missed out, and continuing to live in poverty.
The oldest pensioners are at greatest risk of poverty and in greatest need of pension credit, but are least likely to claim. That may be the reason for the Liberal Democrat idea of targeting more on older pensioners, but it seems to me that the proper role of a citizens pension is to provide for everyone at a reasonable level, and to allow a foundation on which to make additional savings.
The question of savings is important. One of the problems with mean-testing—which the Government should not brush aside—is that many who have saved something towards their retirement feel that they are being discriminated against because of the effort that they have made. That should be taken into account. Again, the citizens pension idea will get round that to some extent.
I am conscious of the lack of time and that other Members want to speak in the debate. Although it may be outside the strict confines of the debate, we must consider the question of savings and how people save towards their retirement. Governments, both Labour and Conservative, have tried to get people to save more towards their retirement, to lessen the burden on the state pension. Private and company pensions are the subject of a considerable amount of distrust following the Maxwell case and recent cases such as Allied Steel and Wire, and those problems must also be dealt with.
The motion refers to more than pensions. I notice that it says a lot about hospitals, which are a devolved matter in Scotland, and I will not comment much on it, other than to note that the Liberals are in coalition with the Labour party in the Scottish Executive, and are therefore partly responsible for hospitals in Scotland, which are the cause of some concern. The Scottish Health Minister has even been summoned to London to appear before Labour MPs today for a grilling.
The motion also mentions the issue of the pension book. The hon. Member for Upminster (Angela Watkinson) spoke at length about that, and I agree with much of what she said. I gave the example of a constituent whom I helped to apply for a Post Office card account. She went through all the forms, complicated though they were, and went back and forward. Eventually, she was told that she was getting
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the card. She went down to the post office, which said that it had no record of her and gave her another pension book. Two weeks later, of course, the Post Office announced that it was going to close that post office, although I am happy to say that a campaign that I organised was successful in stopping that closure. Therefore there is some hope that closures can be stopped. It is a small matter, but it is very important to pensioners, and the Labour party fails to take that on board at its peril.
6.33 pm
Paul Holmes (Chesterfield) (LD): I shall try to be as concise as possible in the few minutes that are left. The background to this debate is that the pension system in this country is in crisis. There are two legs to the pension system. The basic state pension is completely inadequate, as we have often heard, and the mean-tested pension credit system, which the Government favour as the solution to that, is failing to reach almost 2 million of the poorest pensioners in the country.
Private pensions, which are needed to take people above the basic state pension, are also experiencing many problems. Not enough people save for a private pension, not enough people save soon enough, and not enough people save enough. Those who do have been hit by stock market problems, by the Chancellor's £5 billion pension fund raid, by the mis-selling scandals that resulted from the previous Conservative's Government deregulation of the selling of pensions, and by the loss of occupational pensions more recently, which has affected constituents of mine who work at Chesterfield Cylinders, Dema Glass and Coalite.
All that is leading to a spiral of decline in the private pension sector. One of my constituents who worked for Dema Glass received on her 60th birthday, instead of a letter telling her how much pension she would get, a letter telling her that she would get no pension at all or at best 30 per cent. at some time in the future, but it was not certain when. As a result, her daughter, who is in her mid-20s and works for a very good international firm based in Chesterfield, said, "I was going to take out a private pension with the company but what's the point? If that can happen to my mother after a lifetime's saving, there's no point me saving." Confidence must be restored in the private pensions system if that is to be overcome.
If all that is true of pensioners in general, and of male pensioners, it is even more true of female pensioners, as we have heard.
Sixty per cent. of pensioners get a bad deal, but most of them are women. Women make up 64 per cent. of the overall pensioner population, but a far higher percentage of the poorest pensioners. Typically, women receive 57 per cent. of the male pension, while only 12 per cent. of women get the full basic state pension in their own right; 25 per cent. of single women pensioners live in poverty. A recent joint report from Age Concern and the Fawcett Society showed that women accounted for 75 per cent. of pensioners on income support. As we have heard today, the origins of that lie in the earlier role of women, who used normally to work in low-paid and part-time jobs and would take long stretches of time out to care for children and other members of the family, the elderly and the sick.
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We have heard that that may change, but very slowly. The women of today begin work on much more equal terms, with equal pay and a different attitude to life. It will take 30 or 40 years for that to feed through, so that they receive decent pensions in their own right when they retire. The Minister and his colleagues, with the exception of the right hon. Member for Birkenhead (Mr. Field), have said in the past two or three hours that they are happy with that situation. They are happy with what they are doing for pensioners, and happy with the fact that any benefits that are generated will take 30 or 40 years to have an effect. In the meantime nearly 2 million pensioners, most of them women, must continue to live in poverty.
I hope that the Minister will have time to answer a specific question. The Minister for Pensions was full of praise for the Pension Service and its attempts to break down the barrier of means-tested benefits and get people on to pension credit. I have said the same in the House and in Committee debates. I have observed the good work that the service is doing in Chesterfield, for instance. Last Wednesday, however, along with two of the Minister's Back-Bench colleagues, I met members of the Public and Commercial Services Union. They said that one suggestion relating to the proposed job cuts of between 30,000 and 40,000 would affect workers in the Pension Service. If that innovatory service has indeed proved effective, can the Minister reassure us that it will not be hit? That would undermine the one bit of good work that is being done. I agree with the Minister for Pensions about that.
The recently announced policy of the Liberal Democrats is to give all those over 75—mostly women—a decent pension of £105 a week. That would avoid the present deterrent of means-testing. It has been welcomed across the board—not by the other two major parties in the House, but by financial commentators in the last week. It has been welcomed throughout the press, from the normally Conservative-supporting elements to others, as being realistic, costed and achievable, and as a first step towards a fair basic pension for all.
I hope for the sake of the poorest pensioners—most of them women—that the Minister takes the advice of the right hon. Member for Birkenhead. I hope that he borrows our policy and implements it, because that would be for the good of the poorest pensioners in the country. If he fails to do that—as I imagine he will—I look forward very much to fighting the election, in a few months' time, on our policy of providing a fair deal for the poorest pensioners in our society. It is the first time that that will have happened. Let me refer to our earlier debate, and add that I also look forward to fighting the election on our policy of scrapping the tuition fees introduced by the Government, and introducing a much fairer system of free access to higher education.
6.38 pm
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