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Lord Oakeshott of Seagrove Bay: My Lords, before the noble Baroness sits down, I asked a question about when the limit of 75 years old was fixed. If she does not have that information, perhaps she may write to me.

Baroness Hollis of Heigham: My Lords, I shall do my best to find out, but I do not know the answer to that.

Lord Higgins: My Lords, I think that the answer is time immemorial. Certainly, in the light of the Turner report and the latest figures available, the 75 years-old is inappropriate. It may not need to be raised to 105 years old but an uprating at the very least would be appropriate.

I am most grateful to the noble Baroness for that very thoughtful and extensive reply. I obviously have quite a lot of work to do between now and Third Reading. As regards the point that she made about the change in structure, in a sense, she knocked down her own argument. As she rightly pointed out, in a defined
 
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benefit scheme the risk is taken by the employer. In a defined contribution scheme, the risk is taken by the individual, which is why it is such a tragedy that we have seen the changes that we have from one to the other. Given the rate at which defined benefit schemes are declining, I am doubtful about the relevance of that argument.

Crucially, we should convince the Government that the arguments on this are right. However it is drafted, there is widespread concern. People are being forced to make investments that they do not want to make at a particular time, which is wrong. In a way, the number of people who are affected is more important than the argument about whether someone gets a legacy.

The noble Lord, Lord Oakeshott, will know more about the effect on financial markets than me; I view those arguments with some scepticism. But this has been an extremely helpful debate. I shall throw away my Income and Corporation Taxes Act 1988, which will help the environment by way of recycling, and look up the one to which the Minister referred.

Certainly, none of these amendments are as "crackpot" as the scheme that the Chancellor of the Exchequer came up with, which I do not think anyone understands other than the Plymouth Brethren who no doubt are delighted about it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 289 to 290B not moved.]

Baroness Turner of Camden moved Amendment No. 291:

After Clause 295, insert the following new clause—

"ENTITLEMENT TO A CATEGORY A RETIREMENT PENSION (WOMEN)
Women whose national insurance contributions would otherwise be insufficient to entitle them to a full Category A retirement pension may become entitled to receive such a pension, subject to a United Kingdom residency test in accordance with regulations to be devised by the Secretary of State."

The noble Baroness said: My Lords, in Grand Committee my noble friend Lady Dean introduced an amendment, the text of which had been supplied by the EOC, attempting to deal with the pension entitlement of people acting as carers. It was understood that it would apply mostly to women, and attempted to cover the situation of people who had more than one low-paid, part-time job. The idea was that such a person would be entitled to a category A retirement pension whether or not national insurance contributions had been paid on earnings above the lower earnings limit, provided that certain conditions were met.

The Minister did not accept the amendment, although I think that she expressed some sympathy for it. It was felt that the proposals were rather complicated. In fact I think the EOC accepts that devising an amendment to deal with low pension entitlement among so many women is a complicated matter.

Sixty-four per cent of retired people are women, but their income in retirement is just 57 per cent of that of men. Poverty in old age is mostly found among
 
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women, one of the reasons being that many women spend time out of the workforce as carers of children, sick relatives, the disabled and, later, often of their spouses. But those are not the only reasons. Another reason is that 1.4 million women are prevented from making contributions to their state pension because they earn less than £77 a week. Someone working for 16 hours a week on the minimum wage does not earn enough to qualify for a state pension.

The majority of people in low-paid, part-time work are women. Under the current system, anyone who earns less than the lower earnings limit from a single employment makes no national insurance contributions. Our system is based upon contribution payments. I have always supported that idea. It stems from the original programme based on the Beveridge concept, to which most of us gave complete support. But more recently it has been questioned, and this is particularly true so far as women are concerned. Has the time arrived for a completely new look at the way we seek to ensure that women do not suffer poverty in old age?

We now have a significant number of low-paid workers who are immigrants. In my view much more should be done, including by unions, to ensure that they are more successfully integrated into the workforce and are not simply used as cheap labour. But that is another argument. In the mean time, they may be here for many years and have no entitlement to pension benefits when they can no longer work. Devising a system that deals with women in caring roles can be a complicated matter as well.

The time has come to look at the whole issue again. Indeed, it seems from statements made recently that my right honourable friend the new Secretary of State is already thinking about it. I do not know whether this amendment is the right way forward. I know only that it is time for us to look at the whole matter of women and pensions with particular reference to those who, for no good reason and through no fault of their own, are quite unable to comply with the present contribution requirements.

My amendment is grouped with Amendment No. 297A, tabled by the Liberal Democrats. Their amendment goes rather beyond mine, which concentrates on women. The Liberal Democrat amendment addresses that party's more general policy in support of a citizen's pension. No doubt the case will be made for that. In the mean time, my amendment is directed quite specifically at low-paid women and at the need to take an entirely fresh look at the problems. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, in view of the lateness of the hour, I shall not be moving the Liberal Democrat amendment grouped with Amendment No. 291, but I am delighted to support this amendment. The noble Baroness, Lady Turner, has rightly pointed out that it is consistent with the Liberal Democrat policy regarding a citizen's pension.
 
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A woman is waiting for me at the Liberal Democrat ball tonight. I hope to get at least one dance before the glass coach turns into a pumpkin. I am happy to support the amendment.

Lord Hoyle: My Lords, before my noble friend rises to respond, I wish to support this amendment. While I understand that there are difficulties with the amendment, we ought to look at how they can be resolved. We should not have such women living in poverty. They were exploited while they were working because they earned such low pay. I hope that my noble friend will come up with a solution.

Baroness Hollis of Heigham: My Lords, like everyone else, I shall try to be brief. I am very interested in this subject and, as my noble friend said, my Secretary of State has a genuinely open mind about it. He finds aspects of it very attractive, particularly insofar as it deals with the situation of women. So, in that sense, there is a consensus of minds around the problems that women face if they undertake the caring responsibilities and so on that we, as a society, ask of them, and that they, as individuals, are more than willing to embrace.

None the less, they then get punished for doing what is right. They find that, as a result, their pensions are very often incomplete and inadequate in retirement. I could go on at very considerable length about this, but I will not do so.

There is a series of very real issues associated with the desirability of a universal citizens' pension. There is an issue of cost but I do not wish to concentrate too much on that. Clearly, whether you are talking about gross or net costs, the trailing of benefits and women's HRP will help, over time, to bring more and more of them into the basic state pension system. That is important.

It is also the case that although 50 per cent of women have a full BSP, most are widows who enjoy the BSP by virtue of their husband; only 14 per cent of recently retired women have a BSP in their own right. So, as marriage will increasingly not carry protection in retirement for women, there is an issue there.

There is an issue of costs, an issue of trying to see where the future may lead, and an issue of whether individuals rather than relationships should carry pension provision. There is also an issue of the transitional arrangements. Above all, there is the very real issue about what happens to the basis of the Beveridge settlement, which is that there is a contributory pension to which people believe they have a right and an entitlement. So there are bigger issues.

Unless, until and if there is to be consensus about the future of the contributory principle and whether it can be maintained, we must continue to debate how it equates into a language of rights and responsibilities, what is earned and what one is entitled to, as well as the practical issues of costs, coverage, redistributional effects and transitional arrangements. There is still a great deal of debate to be undertaken.
 
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My right honourable friend the Secretary of State, Alan Johnson, recognises the situation in which too many women find themselves, even today. Pension credit was designed to address their immediate problems and, if I may mix my metaphors, there has been the beginning of a sustained debate on whether pension credit will carry all the obligations towards women that we seek to impose on it.

We have done a great deal to help poorer women, but over the next few years we have to try to get our responses right. We have to consider whether the basic state pension, our provisions on HRP, our provisions on pension credit, our provisions on S2P and so on will fully address the dilemma that women face in caring not only for their children but also for older people as we live longer. That debate is only just beginning.

I have to ask my noble friend to withdraw her amendment today. The time is not right. I ask her to do so not by saying that the Government will not contemplate it—on the contrary, the Secretary of State has said that he is attracted to it but that there are very profound issues to address before the issue can be taken further. There are not only practical and administrative issues; we need to consider what the pension settlement that will take over from Beveridge should be asked to do. All of these issues will require much more work than has so far been done on them.

With that not unsympathetic response, I hope that my noble friend will feel able to withdraw her amendment.

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