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Page 109, line 48, at end insert:
("( ) In section 44(3) (b) of that Act (as amended by this paragraph) following "for the relevant years" there is inserted "or, if there are more than 44 such surpluses, of those 44 which are the largest"").
Resolved in the affirmative, and amendment agreed to accordingly.
Lord Monkswell: The Minister complained earlier this evening that he had not heard my contribution on the flexible decade of retirement and the alternative dates upon which a common retirement age could be determined. In agreeing to the previous amendment, the Committee has demonstrated that it wants to see, and has obtained, some improvement to the SERPS for the vast majority of comparatively low paid people.
We must recognise that we have a complicated position regarding the requirement to ensure that men and women retire at the same time. One of the ways in which we can look at the problem is from the point of view of the cost of any change to the Exchequer. Another is to look at the fairness of the position. There is a further view. It is the message that our decision sends to the people of this country. The message we have already agreed this evening is that this place wants to be fair to those people who probably do not have a personal pension or an occupational pension. They are probably among the least well off men and women in our society.
We must recognise the message that we send out to the people of this country. If we say that we shall have a state retirement age of 60, we are saying effectively that we do not expect people to work over 60. We are expecting them to work to 60 and then to retire. That would be a sad message to convey. Unfortunately what has happened over the past 10 or 15 years is that more and more people have been forced out of work and effectively retired. In the earlier debate, the Minister gave the figure which shows that 50 per cent. of people between the ages of 60 and 65 are effectively unemployed. I hesitate to ask what the figure would be for those between the ages of 55 and 60.
As a result of economic circumstances, one of the problems is that people have come to expect that they will be finished on the labour market at the age of 50, 55 or 60, when 15 or 20 years ago women could have expected to work until they were 60 and men until they were 65. It is a sad message to send to people that they are considered to be valueless and worthless to our society because of the statement which the Government acceptthat it is okay to be retired and not to work at a relatively young age.
One of the messages we could send today on the subject of a common retirement age is, "Yes, we expect and wish the citizens of this country to continue to be economically active". We know that they can be because people live longer and are comparatively more fit. There are also many more jobs which do not require the expenditure of hard physical labour.
We want people to be economically active for as long as possible and that is one of the reasons why I argue that the state retirement age should be 70. Implicit in that is a recognition by the Government and Parliament that we expect people to work until they are 70. If the economy is not running in such a way as to ensure that people can be economically active, it should be the job of Government and Parliament to ensure that steps are taken to enable people to contribute usefully to society.
It is important to recognise that we expect some people to work in particular ways but where there is no market for their labour in the general accepted sense of that term. I am talking in particular about women, although men enter the category too. I refer to carers; that is, the carers of young children or of elderly or disabled relatives. We recognise the changing attitude to the concept of looking after children or caring after relatives.
In the Bill the Government acknowledge that the work of carers should be recognised. However, they undervalue the work. I argue that, instead of the years spent as a carer counting towards the basic old age pension, a credit should be made to the SERPS contribution record that is equivalent to average earnings. That credit should be given for the years when they were performing that caring role and contributing so effectively to the well-being of our society.
It is only right that Parliament and Government should recognise the role that women in particular play in that caring role. They should recognise the contribution that they make to the well-being and economy of our society. I argue that there should be a credit to the SERPS contribution record of those people who are carers and not in the normal labour market.
The Minister was curious as to why we did not move the amendments which identify the different ages for common retirement and so forth. We must recognise that in Committee it is probably useful to probe the Government on this issue and to ask for information. I am glad to have opened what I hope will be a probing debate and asked the Government for their response to my contribution and those of other Members of the Committee.
Baroness Lockwood: I support the opposition to Schedule 4 being agreed to. On occasions, I reach different conclusions from my noble friend but, despite the slight improvement made by the passing of the previous amendment, many parts of the schedule make the position more detrimental to women.
In responding not only to the amendment which my noble friend moved but also to the other amendments which the Minister thought would be moved, he put forward once again the case for equalising the pension age at 65. Once again, his arguments left out a number of important considerations. Of course, he failed to acknowledge that women will be worse off financially under the Government's proposals and, secondly, that men are moving in a reverse direction because 40 per cent. of men are already retired before they reach the age of 65.
As the Minister said, it is true that an increasing number of women are going into paid employment. Regrettably, it is true also that, under the Government's employment policies, a large proportion of those women are going into part-time low-paid employment. Therefore, they are failing to build up a sufficiently large pension to support themselves in retirement.
The Government's assumption is that by 2010, 90 per cent. of women will have a pension in their own right. One has to ask what kind of pension that will be given the following factors. First, in 1992 only 54 per cent. of full-time and 19 per cent. of part-time women workers were in an occupational pension scheme.
Secondly, 2.25 million women in work earn less than the lower earnings limit and therefore do not contribute even to the basic pension. Thirdly, 1.1 million women workers still pay the married women's national insurance contribution, which means that they are relying on their husband's pension rights and not their own.
On my reckoning, that means that at least some 7 million women of the 10 million women workers will not earn anything like an adequate pension by the year 2010 or even by the year 2020, when the Government believe that they will have a full pension. The
Nor can one be certain that the Government's actuarial calculations will have the outcome that they expect. Government actuaries have cautioned against their likely accuracy when they move into the years ahead. That doubt about the forecast can certainly be supported by the fearful predictions that we had a few years ago about the demographic timebomb which was to go off in the early 1990s. It was predicted that the number of 18 year-olds would be reduced drastically and therefore there would be a great shortage in the labour force. Certainly, the number of 18 year-olds coming out of schools has reduced drastically but the difference from the predictions is that instead of there being a shortage in the labour market unemployment among 16 to 19 year-olds has been running at 22.4 per cent. and among 20 to 24 year-olds at 16.3 per cent. Similar consequences may follow if more 60 to 65 year-old men and women continue in employment. Indeed, the Government's pension scheme for the Civil Service now has a compulsory retirement age of 60.
In May 1993, 53 per cent. of Civil Service pensioners drew a pension of less than £3,000 per annumthat is, £57.70 per week. Although the normal retirement age in the Civil Service has been reduced to 60, those with very low pensions had been able in the past to continue work in order to accumulate a more adequate pension. However, it is now government policy that they must all retire at the age of 60, as a means of reducing the number of civil servants.
Women on the lowest earnings, and, thus, on the lowest pensions, will not be able to draw the state pension which helps make retirement possible for a further five years under the Government's present Bill. The normal retirement age of 60 is now common throughout the public sector and the finance industry, but that will not be so in the future. I really believe that this is double-think on the part of the Government. If they are having to reduce the retirement age in the Civil Service, thus creating such problems for low-paid civil servants, what will happen to workers in other industries?
We must not create more poverty or perpetuate the already existing poverty in retirement. There is no doubt that women would lose out by increasing the retirement age to 65. I suggest that the Government need to rethink the whole of this section of the Bill and, perhaps, come back to us with an improved Schedule 4.
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