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Wednesday, 30 March 2011.
3 pm
Prayers-read by the Lord Bishop of Ripon and Leeds.
Viscount Hanworth made the solemn affirmation.
Schools: Physical Education
Question
3.07 pm
To ask Her Majesty's Government what assessment they have made of the quality and quantity of physical education in schools.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford): My Lords, Ofsted's report Physical education in schools 2005/2008 found that the overall quality of teaching in physical education was good or better in two-thirds of the schools visited, although it was more variable in primary schools. The PE and Sport Survey 2009/10 found that 84 per cent of pupils aged five to 16 participated in at least two hours of physical education per week in curriculum time.
Lord Addington: I thank my noble friend for that Question.
Lord Addington: Sorry, I thank my noble friend for that Answer.
Will the Minister give me an assurance that the Government will look at whether the type of education is of sufficiently high quality to allow people in schools to access school-age sport outside? Making a link with amateur clubs is probably the best way of keeping people involved in sporting activity after the age of compulsory schooling.
Lord Hill of Oareford: I agree with my noble friend. I know that there is research by Sport England that shows that, as one would expect, the earlier that children get involved with sports outside school thorough clubs, the more likely they are to carry on participating after they leave, and that most children, when they leave school, stop participating in an organised way. Sport England is working with the governing bodies of, I think, 34 of the national sports bodies to try to find ways of building links between school and junior clubs and to increase the number of participants going into junior clubs. More generally, I agree with my noble friend that we need to try to make that transition better so that children can carry on into adulthood and get the benefit of sport.
Baroness Massey of Darwen: My Lords, is the Minister aware that what he has just said is particularly relevant to girls and women who play sport? Are there particular initiatives in schools to encourage girls, particularly at an early age, to take up sport?
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Lord Hill of Oareford: As the noble Baroness, Lady Massey of Darwen, will know, our general approach is to encourage schools to take responsibility for encouraging sport in school. I take her point about the importance of this particularly for girls. We have discussed before that when one is talking about sport and physical activity in schools, it is important to realise that for a range of children, maybe girls particularly, traditional competitive sport and team games are not necessarily what is going to inspire every child. However, I take the noble Baroness's point that it is important that we ensure that provision is there for all children of both sexes, particularly children with special education needs, to ensure that they get the chance to take part as well.
Baroness Heyhoe Flint: My Lords, I thank my noble friend Lord Addington for tabling this Question, not Answer. He and I jointly declare an interest because we are both such finely tuned athletes. [Laughter] Well, I am; I do not know about the noble Lord.
My hope is that the quantity and quality assessment of schools physical education is relevant and ties in, first, with the Department for Education's announced £65 million worth of funding, for two school years from 2011 to 2013, to release secondary school physical education teachers to organise competitive sports and train primary school teachers; and, secondly, with Sport England's-
Baroness Heyhoe Flint: My question to the Minister is: will he assure the House that there will be a clear pathway for schoolchildren from mass participation in physical education to competitive team sports so that we get value for money in this process?
Lord Hill of Oareford: My Lords, I am not sure I can attest to the state of the physical tuning of the noble Lord, Lord Addington, but I know he is extremely knowledgeable about the whole area of sport. I have a fancy that he may have played rugby at some point in the past, so there may be others who can attest to his physical force. On the questions raised by my noble friend, I very much agree that it is important that there is an emphasis on competitive sport. One of the hopes is that, through the school games that are being organised on the back of the fantastic opportunity provided by the Olympic and Paralympic Games, there will be an opportunity to get more competitive sport into schools. I very much agree with my noble friend.
Lord Taylor of Blackburn: Is the Minister aware that a number of schools are still locking up their playing fields at 4 pm, when children in the area want to use them after school hours?
Lord Hill of Oareford: The general point made by the noble Lord is a good one. If he knows of particular cases, I would be happy to talk to him about them. Generally, I am also aware that many schools are particularly good at making their sports facilities available outside school hours to the community more generally-not just to the schoolchildren. The more that those
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Lord Storey: My noble friend the Minister will be aware that in deprived communities there are often children who show real talent in specialised sport, and find it very difficult to access county and team clubs because of the cost of travel and so on. Will the Minister look at ways in which we might support those young people in developing their talents further?
Lord Hill of Oareford: I take the point about the need to make sure that there are opportunities for talented children, particularly those from deprived backgrounds. I know that the noble Lord speaks with great authority from his own school. I would be very happy to talk to him about any ideas he might have.
Baroness Hollis of Heigham: My Lords-
Baroness Billingham: Having just come off a tennis court, I make no claims to being as well tuned as two of the previous speakers. How will the Minister ensure that all these things will happen unless we have properly trained teachers? That is my concern. Where is the quality of training as people come into the teaching profession? We need it in both primary and secondary schools.
Lord Hill of Oareford: I very much agree about the importance of training, whether it is for PE or a whole range of other areas. One of the ways in which the money that the Government have put in will help is by paying for PE teachers from secondary schools to spend a day a week out of school, perhaps working particularly with primary schools to embed best practice there as well.
Baroness Farrington of Ribbleton: My Lords-
Further Education: 16 to 19 Year-olds
Question
3.15 pm
Asked By Lord Willis of Knaresborough
To ask Her Majesty's Government what support they plan to give 16-19 year olds in further education.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford): My Lords, we are committed to raising the participation age to 17 by 2013 and to 18 by 2015. We are protecting funding for 16 to 19 learning, expanding the number of apprenticeships for 16 to 18 year-olds to 131,000 and creating more training places. We are also doubling the number of UTCs and have announced a £180 million 16 to 19 bursary fund, which will be targeted towards those young people who most need support to continue their education and training post-16.
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Lord Willis of Knaresborough: I thank the Minister for that, as ever, helpful reply. In terms of the bursary fund, will the £70 million shortfall be arrayed on the 16 to 19 budgets that are already there? The recent AoC inquiry looked at reasons why students were not staying on in colleges and found that, for 94 per cent of colleges, the reason was access to transport. Local authority after local authority is doing away with 16 to 19 transport. Will my noble friend please look at this, because there is no point having good colleges and good courses if the students cannot get there?
Lord Hill of Oareford: From the whole range of conversations that I have had with principals and with Members in another place from all parties who have brought them in to see me, particularly from rural areas, I am very aware that there are particularly acute transport provision issues, as my noble friend says. One of the points of the new discretionary fund, unlike the current one, is that schools and colleges will be able to make provision for transport. Local authorities have a statutory duty under the Education Act 1996 to set out what provision they are making for post-16 transport. However, I agree with my noble friend that that needs to be kept under review. We need to see what local authorities are doing and how they are discharging their duty and to bear in mind the importance of transport going forward.
Baroness Wall of New Barnet: Does the Minister agree that, in addition to the issues that have been raised by the noble Lord, Lord Willis, one of the key issues is having teachers who understand what trades and skills are required for apprenticeships? Most employers who are very keen on apprenticeships have this dilemma, as teachers do not understand and do not take young people through this route. We have a lot of information to give them.
Lord Hill of Oareford: I very much agree with the point that lies behind the noble Baroness's question. There are two connected issues. One is to do with trying to make sure that children and young people are given impartial and independent careers advice. I know that there are concerns that schools not only might not have teachers who have an understanding of apprenticeships and the benefit of apprenticeships but might have an interest in advising the child in a way that is in the school's interests financially, perhaps persuading them to stay on rather than saying that they would better placed in an apprenticeship. I accept the force of what she says. I know how much work the last Government did to encourage and promote the uptake of apprenticeships, which is very much a goal that we share.
Lord Boswell of Aynho: My Lords, over and above the fact that apprenticeships are centrally important in delivering high-quality education, as well as a craft training experience, is it not very much to our benefit that they provide a contribution by employers to the process of education in this age group? Is it also not very encouraging that the Government seem in difficult times to have been able to make progressive improvements in that programme?
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Lord Hill of Oareford: My Lords, I am glad that we have been able to make provision for an increased number of apprenticeships both at 16 and, in the Budget last week, at post-18. I agree with my noble friend. The benefits of good apprenticeship schemes are not just for the young people on them but for the employers and the businesses; it is very much two-way travel.
The Lord Bishop of Ripon and Leeds: My Lords, how do the Government intend to encourage basic skills, citizenship and spiritual and moral education for 16 to 19 year-olds in FE, given the cuts in entitlement funding?
Lord Hill of Oareford: I am very much aware from conversations that I have had with a whole range of sixth-form heads and college principals how much value those institutions place on entitlement funding and what is able to be taught through the entitlement funding. I know therefore that the cuts in entitlement funding are a cause of concern to them. The Government decided that the key areas that we had to safeguard were those of the core academic and educational programme. If we can get to a point where funding in sixth-form colleges, FE colleges and school sixth forms is not tied to specific activity but goes to the college and the principal can spend it with discretion, in the same way as we are trying to do in schools, that will go some way towards addressing those concerns.
Baroness Hughes of Stretford: My Lords, does the Minister agree that the very limited bursary scheme that he announced this week will deny financial support to hundreds of thousands of young people who currently receive the education maintenance allowance, who are all, by definition, living in very low-income households, and that all the Government are doing is taking money away from students in poor families to give it to only the very poorest, which is a political choice? Before he mentions deficit reduction, does he also agree that the cost will still fall on the Government through rising unemployment, leaving aside the cost that the young people and the families themselves will pay?
Lord Hill of Oareford: I know that the noble Baroness and Peers on the opposition Benches are very concerned about education and training and have worked extremely hard to promote it over a long period and that she and others are particularly concerned about unemployment among the 16 to 18 age group. Fortunately, in the last quarter that has fallen a little, but we need to keep going on it. I understand entirely why the EMA was set up and what the moral purpose behind it was. It was paid to 45 per cent of children, which is hard to define as a targeted form of assistance. Overall we have moved from a situation where it was an incentive payment to one where participation up to age 18 is to be compulsory. As the participation age is raised going forward, the argument for a broad scheme like that is weaker. Therefore, it is sensible to concentrate the money that we can afford on those who need help the most.
Lord Martin of Springburn: My Lords, may I put it to the Minister that the apprenticeship schemes are very welcome? The young apprentices learn practical
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Lord Hill of Oareford: I agree with that point. I would be very keen to have a conversation with the noble Lord about UTCs, which I hope will capture some of the issues about which he is concerned.
Afghanistan: Women's Shelters
Question
3.23 pm
To ask Her Majesty's Government what representations they have made to the Government of Afghanistan about recent proposals to take control of women's shelters.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, working with the United Nations, international partners, the Ministries of Justice and Women's Affairs in Kabul and Afghan civil society, we have reviewed the Afghan Government's draft regulation on these centres and submitted our comments and concerns to the Afghan Government. We continue to monitor this issue closely.
Baroness Hussein-Ece: I thank my noble friend the Minister for that reply. Does he agree with me that the shocking case of 18 year-old Bibi Aisha, featured on the cover of Time magazine, who had her nose and ears cut off after fleeing abusive family members, shocked the world and underlined the importance of independent women's shelters in Afghanistan? Is he aware that President Karzai presides over a country where 87 per cent of Afghan women are illiterate and one in three Afghan women experience physical or sexual violence? Given the high financial and human cost of the war in Afghanistan, how can we in the West believe that Afghanistan really is a democracy and that things are getting better for Afghan women?
Lord Howell of Guildford: My noble friend is absolutely right to highlight the appalling conditions, the tragedies and the atrocities which are inflicted on many women in Afghanistan. Her Question was about women's shelters, which were set up some years ago and were, basically, a very good idea, but recently there has been controversy because it appeared that the Afghan Government were seeking to control them in rather draconian ways. Some very brave women raised their voices firmly in saying that this was not the right way forward. I can tell my noble friend that the Afghan Ministry for Justice, following representations from many NGOs and many Governments, including this one, are working on a redraft of the regulations and are planning not to take over the shelters but to improve them. That must be a small step forward in a potentially hideous situation.
Baroness Flather: My Lords, I am sure you are all aware of the awful conditions which prevailed for women during the previous period. Many of them
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Lord Howell of Guildford: Yes, that is absolutely correct. I think there are some small signs that one or two things are getting better, but there is a long way to go, as my noble friend on this side has just observed. The conditions for many younger women are appalling. An estimated 70 per cent of all marriages are still forced and half of all young married girls are under 15, which opens the way for victimisation and violence on an appalling scale. It is slightly improving, as the Government are under constant pressure to observe human rights standards and have committed themselves to the United Nations undertakings. There are efforts and we are going slowly forward, but it is still a very ugly situation.
Baroness Symons of Vernham Dean: My Lords, will the Minister publish the paper giving the comments and concerns that he said in his initial Answer had been the Government's response? It would help the whole House if he were able to do that. Can he tell us what resources are available to our embassy in Kabul to make contact with women and help to develop women's role in civil society in Afghanistan?
Lord Howell of Guildford: Resources are available. Our officials in Kabul are involved in regular meetings and there is one going on now to see whether the women's shelter idea can be taken forward. That is a valuable input and we will continue to do more than monitor the situation by pressing for the right solution for women's shelters and for protection of women generally. As for the publication of detailed pressures and exchanges, I will look at that, but sometimes the full publication of these exchanges undermines the degree of trust and confidence one needs to make progress. It may not work, but I will certainly look at it.
Baroness Falkner of Margravine: My Lords, given the gravity of the situation and the fact that Afghan women's rights are likely to be eroded with further conversations about the Taliban coming back into government, does my noble friend agree with the suggestion of the noble Baroness, Lady Symons of Vernham Dean, some months ago that the UK Government should appoint an individual, or at least get the EU to appoint an individual, to go and look at the status of women's rights in Afghanistan and to come back and continue to keep a watching brief on that until the transition is complete?
Lord Howell of Guildford: Again, that may be an idea, but a lot is going on already, as I think my noble friend is well aware. A number of countries and non-
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Saudi Arabia: Human Rights
Question
3.30 pm
To ask Her Majesty's Government what is their assessment of the political and human rights situation in Saudi Arabia.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, following events elsewhere in the region, there have been a few very limited protests in Saudi Arabia. However, the Government have brought in a reform process and a national dialogue initiative to keep pace with the people's wishes. We have serious concerns about the human rights situation in Saudi Arabia. We have made our views well known, including through the universal periodic review process, and we make those concerns clear to the Saudis at the highest levels, just as they are frank with us on issues that concern them.
Lord Ahmed: I thank the Minister for his reply. Is he aware that thousands of detainees are held in Saudi prisons, without any charge, trial or representation-some for more than seven years, and a few for more than 13 years? The Minister will be aware of the recent concerns of Human Rights Watch and Amnesty International in relation to the arrests of peaceful demonstrators and the use of force against them. What is the position of Her Majesty's Government regarding arms and security sales, given recent events in Saudi Arabia and Bahrain? Will the Government review arms and security exports to Saudi Arabia until they are clear that UK equipment is not being used for internal repression?
Lord Howell of Guildford: All questions on arms exports are under review, as the noble Lord may know, and we have grave concerns about the use of crowd-control equipment. Because of those concerns, a review of the whole policy and practice of Her Majesty's Government on the export of equipment that could be used for internal repression-in particular, crowd-control goods-has been commissioned and is under way. As to the noble Lord's question on Bahrain, the Saudi forces are there to protect installations-or so it is reported to me. That may not be 100 per cent accurate, but that is the intention. The Saudis share the same goals as the Government of Bahrain, which are, of course, to have a dialogue on reform and to address the concerns of
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Baroness Falkner of Margravine: My Lords, my noble friend will no doubt be aware that the Saudi rulers have requested their clergy to issue a fatwa, stating that all democratic peaceful protests are un-Islamic. Does he agree that turning democracy into a religious issue sends a message to 1.5 billion Muslims that democracy is not an option open to them if they wish to adhere to their religion? Does he think that Saudi Arabia, given that attitude towards freedom, can any longer be trusted to pursue peace and stability in the Middle East?
Lord Howell of Guildford: Of course, as the noble Baroness recognises, there are attitudes that we do not like and seem to go against our values and views of how democracy should work. We do not miss any opportunity-in fact we take all opportunities-to put these matters frankly to the Saudi authorities and to other countries. One has to think in positive terms; the aim is to make progress by establishing trust, rather than by dismissing the efforts of certain countries and saying that they no longer qualify to operate or to make a sensible and responsible contribution to world affairs. The positive approach is the one that pays off in the end. While I recognise many of the worries that my noble friend articulates, I believe that the approach I am describing is the best one.
Lord Soley: In those discussions, how much emphasis has been placed on access to forms of justice in Saudi Arabia, and on the promotion of the rule of law?
Lord Howell of Guildford: I am sorry, but I did not hear the first part of the noble Lord's question.
Lord Soley: In the discussions with Saudi Arabia to which the Minister referred, how much emphasis is put on access to justice for the people of that country and on promotion of the rule of law?
Lord Howell of Guildford: These are our values and these are the points that we put to the fore in our ongoing dialogue with the Saudi authorities. Because of certain relationships of trust and our close alliance, we are in a position to put those matters forward and get a hearing for them. I cannot measure precisely the amount of emphasis, but these issues are very much to the fore in all our dialogues.
Lord Avebury: My Lords, while it is true that Saudi troops have entered Bahrain simply to guard installations, does that not mean that the forces under the control of the Bahraini authorities are released from those duties and can engage in further internal repression?
Lord Howell of Guildford: When I mentioned that a moment ago, I did say that this was reported to me. I do not know whether it is 100 per cent accurate. However, I would slightly query the logic of my noble friend's statement that this action releases Bahraini troops to indulge in internal repression. Bahraini troops may well have made some bad moves, which we ought
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Lord Clinton-Davis: How can we support Saudi Arabia's intervention in Libya when it has such difficulty with basic human rights? Are they not very important? The reaction of the Saudi Arabians is very little improved as far as that is concerned.
Lord Howell of Guildford: It is very hard to generalise. There are reformers in Saudi Arabia who are anxious to take the country forward. There are also very reactionary people who are trying to stop them. It is the reformers whom we need to identify and support. If we do, we may be able to make progress, as, ironically, was being made in Bahrain, which was one of the few countries that had quite lively democratic elections.
Lord Reid of Cardowan: My Lords-
The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, it is now 30 minutes and Question Time is finished.
European Union Bill
Order of Consideration Motion
3.37 pm
Moved by Lord Howell of Guildford
That it be an instruction to the Committee of the Whole House to which the European Union Bill has been committed that they consider the Bill in the following order:
Lord Tomlinson: My Lords, I raise one small point on this matter. So far on this Bill we have had Second Reading. We have also had the allocated dates for the first and second days of Committee. The date of Second Reading was 23 March and the dates for Committee will be 5 April and 26 April. The one thing that these dates have in common is that they are all Tuesdays and therefore clash with the meeting of the European Union Select Committee of this House. It strikes me as rather absurd that we should discuss the European Union Bill on all three days when it clashes with your Lordships' European Union Select Committee. I raise no objection to this Motion, but I ask the Leader of the House whether he can look at this and make sure that we do not downgrade the work of the Select Committees in the way that these arrangements do.
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Lord Waddington: My Lords, in view of what happened on the Second Reading of this Bill, will my noble friend take this opportunity to remind noble Lords of their obligation to treat with courtesy all noble Lords in this House? Will he express the hope that there will be no repeat of what happened on Second Reading, and that if the noble Lord, Lord Pearson of Rannoch, rises to speak, he will be listened to with patience and respect even when he expresses views that others find very unpalatable?
Baroness Anelay of St Johns: My Lords, the noble Lord, Lord Tomlinson, raises a very pertinent matter. Naturally, when the scheduling of business is carried out in negotiation with Her Majesty's Opposition, all matters are taken into account, including the availability of Front-Bench spokesmen and the interests of the House itself. The noble Lord has raised a matter of which, of course, the usual channels are aware, and they are taking urgent action to resolve it. As the noble Lord, Lord Tomlinson, has indicated, it is important that all those in this House who have an interest in the Bill and who have expertise in such matters should have a full opportunity to participate in it. I assure the noble Lord that we are taking urgent measures, in negotiation with the Deputy Chairman of Committees, to ensure that his concerns are addressed.
My noble friend Lord Waddington raised the matter of the behaviour of Members of the House. I have had representations from all quarters of the House. Noble Lords expressed concern about the asperity not of speech but perhaps of manner on the occasion of the Second Reading of the European Union Bill. This is a matter that all Members of the House will care about. Members have also expressed wider concerns about the normal behaviour in the House. Discussions will proceed, and I know that all Members have at the core of their being a devotion to the House of Lords and to its continuance as an important place within Parliament.
Lord Richard: My Lords, is the government Chief Whip aware that in the Second Reading debate on the Bill, I was sitting where I stand now, and the noble Lord, Lord Pearson of Rannoch, was immediately behind me. In the whole of the debate, I detected no sign of distress or concern on his part at the way in which he was treated. It seems to me that he took it in his usual good spirits. There was a fair amount of joshing and no harm was done. When the noble Lord, Lord Waddington, made his complaint, I did not understand it.
Baroness Anelay of St Johns: My Lords, I understand entirely the point made by my noble friend Lord Waddington. His concern is shared by Members across the House. The noble Lord, Lord Richard, draws attention to the fact that the noble Lord, Lord Pearson of Rannoch, is a redoubtable person in this House who is well used to the slings and arrows of the political arena and who is able to give as good as he gets. However, the wider concern of the House is that there should be respect during proceedings, and that we came close to a difficult point that we wish not to approach again.
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Lord Tomlinson: Further to that point, if that was widespread concern across the House, perhaps it would have been better raised by someone who was in attendance at the debate.
Lord Stoddart of Swindon: My Lords, I was in attendance at the debate and was concerned at the way in which the noble Lord, Lord Pearson, was treated. The fact that he was able to take it with his usual good nature should not detract from the fact that some remarks were made in a spiteful way. That is not in accordance with the traditions of the House, and nor should it be. I am sure that the little debate this afternoon will be taken note of, and that future debates on European Union matters will be a little less vicious.
Warm Home Discount Regulations 2011
Motion to Approve
3.44 pm
Relevant document: 17th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 29 March.
Immigration and Nationality (Fees) Regulations 2011
Motion to Approve
3.44 pm
Relevant document: 18th Report from the Joint Committee on Statutory Instruments.Considered in Grand Committee on 29 March.
Pensions Bill [HL]
Bill Main Page
Copy of the Bill
Explanatory Notes
Amendments
Report
3.44 pm
Clause 1 : Equalisation of and increase in pensionable age for men and women
Lord McKenzie of Luton: I shall speak also to the other amendments in the group. Their detail may appear a little intricate, but their effect should be clear and straightforward. The amendments provide for the retention of the existing timetable for the equalisation
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The Bill also brings forward the increase in the state pension age to 66, but it would be completed between November 2018 and April 2020. Because the increase for men cannot run ahead of women's state pension age, the Government have put themselves in a position where they have to accelerate the date for equalisation of the SPA to November 2018, thereby disturbing the settled timetable of the 1995 Act. The Government propose to move to a state pension age for women of 65 by November 2018, rather than March 2020. The acceleration for that begins in May 2016. Between November 2018 and March 2020, the state pension age will rise for both men and women to 66.
What the Government seek to do is a clear breach of the coalition agreement, which committed that the state pension age for women would not start to rise to 66 until 2020. Had it been honoured, we could have reached a consensus on the way forward. Our amendments accept an acceleration of the move to a state pension age of 66, bringing it forward four years from the current timetable, but because that does not need to start until 2020, when men and women will each have a state pension age of 65, there is no need to change and no justification for changing the 1995 provisions.
The Government's proposals affect nearly 5 million people, about 2.6 million of them women. Of those 2.6 million, 1.5 million women will have to wait a year longer for their pension, of which 500,000 will have to wait more than a year, including 300,000 for more than 18 months and 33,000 for exactly two years. Those first affected will have just five years' notice. Our amendments would affect 1.2 million fewer people; they would affect approximately equal numbers of men and women; and no one would have to wait more than an extra year for their pension. There would be a minimum of nine years' notice for all those whose state pension age will change.
Before expanding on our reasons for that proposition, let me reiterate, as I said in Committee, that we do not dispute the updated information concerning life expectancy and the need to change the status quo. We further recognise that the current timetable for increasing the state pension age to 67 and 68 is unlikely to survive. Whether the Chancellor's wish for a more automatic process to update that will achieve a consensus will depend on what view is taken of such matters as fair notice periods and health inequalities.
It is also accepted that our amendment would achieve only two-thirds of the savings that the Government hope to secure by drawing the line where they have. Our proposition is the same as option 2 in the impact assessment. We will hear from the Government, as we did in Committee, that we cannot forgo the difference
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One cannot ignore the medium or long term, particularly on pensions, but intergenerational judgments also involve assessing who is to bear the pain now. Savings to the Government and future taxpayers are pensions forgone by the 5 million individuals, the majority of them women, who are hit by these proposals. If intergenerational issues are to be judged on the basis of the number of years in receipt of state pension or the proportion of adult life spent in receipt of state pension, the impact assessment shows little difference between the Government's position and our amendment.
We contend that any changes to state pension age have to be reasonable and fair and should not disadvantage any group disproportionately. The Government's proposals fail this test. Women's pension age is rising by up to two years; no man will see more than a one-year rise. Some women are being given six years' notice of a two-year change; men are being given seven years' notice of a one-year increase. Forty per cent of women in the age group affected by these proposals have no private pension wealth. Many who were part-time workers were excluded from occupational pension schemes until the 1990s. Women's pension assets are only one-tenth of those of men. Women are more likely to take on caring responsibilities and to have reduced their hours of work or left the labour market on the expectation of a pension at a fixed date. Just on these issues, it is difficult to see that they have not been disproportionately disadvantaged by the Bill.
Of course, it is not possible to redress all the historic disadvantages women have endured in pension provision, but reasonable notice periods for changes to the state pension age is clearly one way of allowing maximum time to adjust. The 1995 Act gave 15 years' notice. The 2007 Act gave 17 years' notice. This Bill gives five years' notice. What is reasonable notice can be judged in part by looking at attachment to the labour market. Analysis shows that women tend to leave the labour market earlier than men. In 2010, 65 per cent of women aged 55 to 59 were still economically active, but by age 60 to 64 this declined to 34 per cent. If individuals are to be able to respond to changes to their economic circumstances caused by a deferral of their pension, they need to know before they make irrevocable decisions about their employment. This assumes that individuals are in a position to mitigate their pension loss by continuing in or rejoining the labour market. We know this is more difficult for some than for others. The impact assessment suggests that ethnic minority groups in particular will be adversely affected. Analysis shows that notice for men should be at least five years and, ideally, 10 years, and for women
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The Government are right to address the consequences of increasing life expectancy. The much-lauded triple lock has to be paid for, but the Government have gone about it in the wrong way and will cause great unfairness, particularly to women. This group of amendments offers a fairer alternative. I beg to move.
Baroness Howe of Idlicote: My Lords, first, I apologise to the House that due to a previous commitment I was not present to support the amendment of the noble Lord, Lord McKenzie, in Committee.
As other noble Lords have said, there are a number of changes which we welcome, not least that auto-enrolment into occupational pensions will in future help more people to save for retirement. However, as we all know, both from individual letters we have received and from organisations such as Age UK, Saga, the TUC and others, considerable numbers of women are very concerned. A total of some 2.6 million women are affected by all this, and they are very concerned at the Government's proposed acceleration of the state retirement age. To be fair, they had certainly not expected such a step.
I am sure it will not surprise the House to learn that I want to concentrate on the adverse effect that some of the Bill's proposals will have on women, particularly on those turning 57 in March and April this year who will now have to wait until they reach 66 to receive the state pension they have contributed to during their working lives. They have had less than eight years' notice of an additional two years without that state pension. Equally, we need, as the noble Lord has already said, to face two realities: first, that our parlous economic situation will inevitably reduce everybody's quality of life, and secondly, the realisation that our increasing longevity means that all of us will in future have to work longer to earn a decent state retirement pension. However, we shall as well be seeing-I hope, as finance improves-far more effective equal opportunity practices available at all workplace levels for both sexes, which should mean that men as well as women can genuinely share rather more of the family responsibilities. That in particular is why I want to support the noble Lord's amendments, for it seems to me that they have indeed faced these realities. On economic as well as longevity grounds, they do not ask for the full commitment which the coalition Government's agreement promised to give to women to be fully honoured, but merely for a slight increase in what the Government themselves propose. For that reason, I really hope that when the Minister replies he will feel able to accept that compromise.
I have to admit that my own preference would be for the commitment to be fully honoured. In my early days as deputy chairman of the Equal Opportunities Commission in the 1970s, pensions were not even perceived as pay. I am glad to say that that situation was very soon seen to be untenable.
I return to what is proposed. A total of some 2.6 million women are affected. Of those, 33,000 women born in the 1953-54 period will see their state pension
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When we consider the just and fair thing to do in this situation, we all need to accept who bore the responsibility for bringing up the generation of healthy, well adjusted young people who are today those responsible for paying our state pension entitlement. We also have to remember that none of the savings that the Government claim to be making will be made during this period of major financial crisis. So why victimise this already exceedingly vulnerable group of women-the poorer they are, the more they will suffer-when no actual money will be saved during this Parliament and not least when, realistically, the likelihood of women in this age group finding or keeping jobs is minimal?
If you add to all that the fact that, in our move towards a unisex retirement age-it is likely to be further increased as our longevity increases-we are asking women to increase their current earlier retirement age by a huge leap of six years compared to the one year expected of men, which was lower than that of men to compensate for the handicap of women in the workplace as a result of their family responsibilities, frankly, we should all be ashamed of doing anything less than what is proposed in these amendments.
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Lord Boswell of Aynho: My Lords, perhaps I may respond briefly to this amendment, having spoken on these matters in Committee. It provides a convenient opportunity to differentiate comments that I might make on this amendment from those that I might make on a subsequent amendment in the name of the noble Baroness, Lady Greengross, on the impact on women. I have felt on reflection since I considered the exchanges in Committee that there is an increasing, and I think more intensely felt, acceptance on my part that we have to get on with this and therefore, in order to raise money, accelerate the equalisation of the state pension age. Because of the doctrines that we have on equal treatment, it is only at that point that we are able to effect an increase in the overall unisex state retirement age towards 66 and perhaps at a later stage further in the way that the noble Lord, Lord McKenzie, reasonably accepted.
We know that we have to get on with this and that we have to wrestle with longevity, which has already knocked sideways the assessments under the Pensions Act 2007. While I am aware that we are not discussing private pensions in this part of the Bill, I happened to see some figures the other day on the universities
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Therefore, again as the noble Lord very reasonably said, this raises some interesting and rather intense issues about intergenerational transfers. Either we can redistribute this-we might both perhaps wish to return to that in a later group-or we have to consider pushing some of the burden on to today's working population and taxpayers. It is perfectly true that none of these amendments-even on the Government's proposed timescale towards equalisation, which I accept is rather rapid-cuts into the present deficit reduction programme, the present Parliament or the immediate outcome of dealing with the crisis.
Nevertheless, we have this inexorable march forward. If we do not do something about it now, particularly if we are anxious to give the maximum possible notice, it will not be possible to tackle the pensions problem before it overwhelms us. The only people who could end up paying for this are our children and our grandchildren through their taxes because of the pay-as-you-go system. We have to grasp the nettle now.
I do know-I was rather appalled at the estimates of costs in Committee-that the noble Lord's amendment would cost some £10 billion a year. It is a small proportion of the savings which the Government have set out in their indication of the savings. The noble Lord is shaking his head.
Lord McKenzie of Luton: I am sorry to interrupt the noble Lord, but it is not £10 billion a year; it is a net present value figure spread over five or six years.
Lord Boswell of Aynho: The noble Lord is entirely right to correct me. I had added the words "per annum", which are not in the calculations. However, it is still a very substantial sum, and I do not think that Governments at the present juncture can forgo that. To put it another way, they would have to find an alternative means of financing even proposals that I put forward in Committee, which we may touch on later. Those were alleged to be likely to cost £7 billion, which, frankly, is rather more than I had anticipated or indeed would be sustainable. We are into a difficult calculation, but we cannot, in the circumstances of longevity, responsibly countenance the noble Lord's amendment as it is at the moment. However, if for some reason the figures are not as pessimistic as we thought, I would very much like to hear my noble friend's response when the time comes.
The Lord Bishop of Ripon and Leeds: My Lords, I have put my name to these amendments because I want to talk about the speed with which the goalposts are being moved and the unfairness between individuals that that represents. I speak as the Bishop who has had major responsibility for changes to the Church of England clergy pensions scheme and the reduction in benefits that is involved in that. I have had to present those to the General Synod and I bear some of the
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I fully accept the arguments for equalisations and those based on longevity to which the noble Lord, Lord Boswell, has just been speaking. Change is needed, but I cannot accept that this speed of change is necessary. From my own experience, from my clergy postbag, and from my postbag about the Bill, I know that the two things that potential pensioners most resent are changes to their expectations with comparatively little notice and perceived unfairness. These proposals fail under both those headings, and the amendments put forward by the noble Lord do much to mitigate that unfairness and failure.
Individuals find changes in pension planning extremely complex and difficult to implement on a personal level. Many of the women who are affected here have taken time out to care for elderly parents, having worked long enough to qualify for the full pension. They have done that deliberately and they have responsibly assessed the way in which they are approaching retirement. Now they are simply being told, with only five to seven years' notice, that they will have to cope on existing resources for one or two more years than they had anticipated-and than they had been told to anticipate as recently as the last changes in 2007. That is actually draconian for a group of individuals, notably the women, mentioned by the noble Baroness, Lady Howe, who were born in that month of March to April 1954. They face an immediate two-year increase in their state retirement age. Some 33,000 women are unfortunate enough to have been born in a particular month. It is not a tiny number, although it may be a small proportion of those who in one way or another will see a reduction in their pension expectation through the timetable of the Bill. We are often exhorted to plan carefully for retirement. It is understandable that people see little point in doing so if, for some, the goalposts are then moved to the other end of the pitch. This may not technically be retrospective legislation, but in practice that is exactly what it is for a significant number of women.
It causes changes to expectations at short notice and, secondly, unfairness. The proposals as they stand create a situation in which a woman born in 1950 obtained her pension in 2010 whereas her sister, born in 1954 and four years younger, has to wait until 2020 for hers-a six-year increase in the pension age, the best part of a decade between the times these sisters receive their pensions. When we look at the figures, it is easy to see the need for change, but we must also take account of the unfairness that that creates between neighbours, family groups and work colleagues, and the tension and pressure on friendships and relationships. That is why we need to think again on the timetable. The changes in the Bill bring no additional savings until 2016. The savings do not contribute to tackling the present economic crisis. It is a matter of justice for a significant number of women that we change that timetable today.
Baroness Hollis of Heigham: My Lords, I, like others, very much support these amendments. I have here the coalition programme for government, drawn up 10 months ago. On page 26, it makes seven promises
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"We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women".
I agree with the coalition programme on that too: it is a clear and reasonable promise that was made just 10 months ago. We need to equalise, in a steady way, and that coalition commitment would have delivered that. Now in this Bill, just a few months later, that key coalition agreement promise-the one that most directly affects women, and poorer women at that-has been torn up and junked.
Whereas women before 2016 are seeing their pension age rise gradually, in steps of one year for every two years, suddenly from 2016 the rate at which their pension age is deferred extends, so that they have to wait three years instead of two and four years instead of three. From then on, half a million women will have to wait more than one year for their pension, 300,000 for more than a year and a half and 33,000-as the right reverend Prelate emphasised-for two years. It means that Susan, born in March 1953, will reach pension age at 63 in 2016. Her cousin Barbara, born a year later in March 1954, will reach pension age in March 2020, when she will be 66-one year younger, and she waits a further four years for her pension. Is that fair? Of course not. Is it necessary? The Government ran two arguments in their impact analysis and in Committee: first, given the deficit, that we need to find savings even from the pensions of the poorest women to sustain fiscal futures; and secondly, given increasing life expectancy, that we need to raise the pension age faster than anticipated.
Neither of these arguments, in my view, is valid. Given the deficit and the need to find savings-as has been mentioned by my noble friend Lord McKenzie and others today-and given that this acceleration starts in only 2016, we are already beyond the deficit period. Anticipated savings of £30 billion-virtually all from women-are not part of the four-year plan. Is it necessary, however, for longer-term fiscal stability? In the longer term, yes; it is the speed that we are objecting to and the unfairness for women dependent on the month in which they are born as to whether they get a reasonable or a very bad deal from the state. It is a lottery, my Lords. The Government, unlike the markets, should not engage in lotteries with people's pensions.
4.15 pm
As for fiscal sustainability, there are plenty of options, including, for example, treating pensions like ISAs-taxing them on the way out, which would save rather more money than this. As for increased longevity-the other argument made by the Government-the stats were known 10 months ago when this coalition promise was given. Indeed, the Marmot report of just last December pushes the argument the other way. As we know, the gap between men and women's
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Poorer women not only do not live so long as the better-off but have fewer years of their reduced life expectancy free from disability. It is precisely these women, and some men-those at the bottom, the poorest with the poorest health-who will be most hurt by these proposals. We will be making them poorer still. The two arguments of the Government-savings and fiscal stability, and increased longevity-are either not relevant or not new. The coalition programme, with eyes open just 10 months ago, entered into a promise that could and should be honoured.
Whom will this change hurt? Not so much the women who want to continue to work; not so much the women with good occupational pensions. Neither of those groups is so dependent on the state pension. The ones who will be hurt-the right reverend Prelate has already indicated this-are the women who all their lives have juggled part-time jobs and caring responsibilities for their children, their grandchildren so that their daughter can work, and now their own frail elderly parents.
One-third of women between 55 and 59 are not employed. Why? This is because half of them are disabled or in poor health, and over half the rest have family responsibilities including caring. They will have no other income but their state pension. It is on the backs of these women-the poorest, the frailest, and those with the heaviest burden of home care-that the Government propose to save much of their £30 billion. Such women are not going to rejoin the labour market, despite the absurdly optimistic figures in the impact assessment. Their health is not always good, their skills are out of date, and their confidence is low. Few employers will want them in the labour market. Instead, these women will linger longer on lower benefits, finally entering retirement later, poorer and more defeated than before.
Your Lordships-all of us, I hope-have always been among the first to protect such women, recognising the value of their unwaged work for their families, and recognising their vulnerability as disabled people. We know that the Government are not only forsaking a coalition agreement made 10 months ago but, worse, forsaking thousands of women who have done their best for their families and society over the years. That is not right. Your Lordships have protected such women in the past. I hope that they will continue to do so today by supporting my noble friend's amendment.
Lord Flight: My Lords, the noble Lord, Lord McKenzie, and the noble Baroness, Lady Hollis, make a persuasive case, but I would refer to it as a persuasive case in an ideal world. First, no alternative way of saving the present value sum of £10 billion has been offered. Secondly, the real priority is to move to a much better state pension at 70-as many noble Lords
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I cannot deny that there is an apparent unfairness here but, without giving offence, I hope, I point out that my wife was one of the lucky ones in getting a state pension at 60-she was just on the cusp, whereas a lot of her friends had to wait a lot longer-but I do not get one until 65 although I am likely to live two and half years less than her. Historically there has been enormous unfairness in the provision of state pensions regarding men and women. Men, who lived shorter, had to wait longer for their pensions. That is going to be ended as pensions are brought into line and made the same for both sexes, but I do not think that I ever heard people complaining on behalf of men that they were getting an unfair deal in relation to women.
One has to accept the idealistic fairness of the case, but £10 billion has to be raised and the priority for all of us is to move towards a much better pension for all at 70. As the noble Baroness, Lady Hollis, pointed out, for the many women who will continue to work, whether to 65, 70 or 75, this will not have a huge effect; it will have a bigger effect on those women not in a position to do so. It is potentially better to deal with that problem by means of the welfare reforms that are going through than to delay the bringing together-or, in fact, the acceleration-of the retirement ages for men and women.
Baroness Bakewell: My Lords, I support the idea that these changes to the pension age are going too fast. There was a successful film recently called "Made in Dagenham", which helped to bring home to a new generation of women how much the gender equality gap had changed. It pointed up the distance that women have come today from what they called the bad old days of discrimination. Look at us today, the film said; we enjoy much greater equality, and now we have the law on our side to back us up. Barbara Castle featured in the film, brilliantly played, and she was feisty in her defence of equality for women. The film assumed that the audience who saw it would feel that the story was complete and that equality was an accepted part of our society.
Therefore, it is sad to see a necessary piece of legislation going through that harps on the idea that women will just have to put up with this new piece of discrimination. Half the population of this country are highly tuned to notice what happens to women and the disadvantages that are placed on their lives. Women have more complicated lives than men, as we know; they take time out to have children, to nurse older people and to create stable households-an ideal that I know the Government hold precious. Women therefore need consideration in the pattern of their lives that the amendment seeks to improve.
Bringing in this change to the pension age is extremely important; it is evident that we are an ageing population and we will all of us have to work longer. It is the method by which we bring that about that calls for
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This legislation is not gender-free. It cannot be said too often. My colleagues on these Benches have said so already. Listen to the numbers: one-third of a million women will see their state pension age rise by 18 months. Thirty-three thousand will see it increase by two years. It is not just those women who are affected by this but their children, families, neighbours and other women. Women are very aware of legislation that goes against them. It is unfair-we can see that it is. Women are being penalised out of the blue because the Government are rushing forward with pension proposals that need slower and fairer introduction.
One of the Government's flagship aspirations is to get people to show a greater personal responsibility. That is an excellent thing but how can people do that-how can they plan for their old age, which will take a lot of complicated financial arranging as people live far longer-in so short a time? Indeed, as people age and begin to look forward to their retirement, they formulate attitudes towards it that are hard to change. They see it coming towards them; they make allowances for the time it will give them to look after their own, by now very aged, parents. They may feel they deserve to see a reward coming towards them for a life of hardship and trouble. I know people feel this because they write to me, as they do to my fellow Peers. They complain in their letters that it is an outrage.
This is not a matter of discrimination that will go on in the way that the film showed discrimination operating in the 1960s and 1970s and earlier. We know that this is a transition and one that is important. Of course we have to move to a fairer system. We will all work to 70 and things will eventually come right. However, is it legitimate to see them coming right at the expense of a group of poor and disadvantaged women, who somehow have to be sacrificed on the altar of this speedy operation? In this case there is an alternative.
Baroness Hollins: My Lords, I, too, am concerned about what the noble Lord, Lord McKenzie, described as disproportionate disadvantage. I am concerned about women, the great carers in our society-the people who care about the members of their family who are perhaps more vulnerable or dependent and need extra support. They are the people who, because they care so much, are willing to give up their time and perhaps work part-time. I belonged for a period to the Standing Commission on Carers. A survey was reported to the standing commission in its first year which found that the vast majority of family carers are indeed women. It found that when women care, they are more likely to work part-time or give up their occupation, and that men who cared did so extremely well but for fewer hours. Caring was much less likely to impact on their employment hours.
This change is being made too quickly and comes too soon. I acknowledge that, on the face of it, women live longer and that it is perhaps anomalous that their
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They said that pension equality is fine, but that perhaps it should come into effect when society is more equal-when women start getting equal pay and occupational pensions, and particularly when men begin to share the caring burden more equally. They support the right of carers to work; they recognise the role of work as respite. They wanted me to stress the importance of not underestimating the effect on carers of a rapid change in their pensionable age when they might have made decisions about caring and occupation in anticipation of an earlier pension age. They talked about the need for health and strength to be an effective carer and the insidious nature of caring-the way in which it can lead to so much tiredness and often depression. They said: "Adrenalin keeps us going when we are caring. But sometimes when our caring responsibilities end, that is the moment when we ourselves begin to experience health problems which we have been storing up during those caring years".
These are people who have saved the country huge amounts of money through giving up their own occupation and their own time to care and support more vulnerable members of their families. I appreciate that, in a good carers strategy, it might well be that welfare reform will attend to carers' needs. What they would have liked as carers is a flexible pension that took account of individual need rather than assuming the same age was right for everybody. However, I support these amendments. The speed of change is too rapid particularly for this very vulnerable group, who represent a significant number of people if it is true that as many as a sixth of this particular age group are at the moment affected or carers, as the noble Baroness, Lady Hollis, suggested.
4.30 pm
Lord Stoddart of Swindon: My Lords, I have not intervened in these debates so far, and I hope that I will be forgiven for doing so now. I do not know whether the noble Lord, Lord McKenzie, will welcome what I am going to say, but he will be pleased to know that I will support his amendments. So far I have left things to people who are more expert than I am in these matters, but today I want to support these amendments. It is quite intolerable that women should be required to wait longer for a proper pension provision which was, as we have heard, promised to them in the coalition agreement.
We have heard quite a lot this afternoon about the cost. It is £10 billion apparently. It seems that the Government will find that difficult to find. However, I notice that, over the weekend, our Prime Minster
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There is another point. The coalition agreement stated that the overseas aid budget should rise by £3.5 billion-I believe by 2012. That, too, will be an ongoing commitment, year in and year out. A lot of money is being spent to relieve other people but we are not prepared to do our own women justice. I know that I might be criticised for my remarks about overseas aid. I am a great supporter of overseas aid and believe that this country has made extremely good provision in that regard. However, it has to be shown to provide value for money. Noble Lords will have noted that a much more significant figure than myself-the noble Lord, Lord Mandelson-has raised this very point. He has said, and I agree with him, that the money which is paid in overseas aid must be subject to proper control, be seen to be value for money and should not go to the leaders of the relevant countries but to the people of those countries. Those words should be taken seriously.
I certainly support these amendments. In so doing, I believe that I am supporting the women of this country. The argument that we do not have the money is a spurious one, as it appears that we have plenty of money to give to other people outside this country.
Lord German: My Lords, before I say a word or two about this particular group of amendments, I want to say a few words about the opposition to these proposals as a whole and the manner in which it has been expressed. I refer to the opposition outside this Chamber, not within it. It is interesting to note the advocacy that has reached our ears from a huge number of organisations that have put a lot of effort into researching and tackling the issues before us. In any normal protest, you hear two questions: "What do you want and when do you want it?". I suspect that the answer to the second question, which is always "now", cannot be applied to pensions. This is the issue with which many of us are having to wrestle. How do you plan for the future? How do you anticipate the future? How do you look at the future? How do you predict what will happen in the years to come? The standard answer is, "We would not be starting from here". However, pensions
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In Committee there were amendments to this section of the Bill not only from the Conservative Benches, but from the Labour Benches and from us, all of which were differently phrased, but all of which sought to look at some very specific issues. It would be nice to have gender-free pensions language, as the noble Baroness, Lady Bakewell, said. We cannot do that until such time as we have equality in the pension age. We have to arrive at that point before we can have gender-free language. It would be very nice for men to be able to contribute, and perhaps there may be a way for men to contribute in the longer term, which is something that we ought to be saying at this stage for the future. We may be able to look at those issues, and the Minister may be able to suggest some avenues.
Two specific issues were raised in Committee. It is the most vulnerable who are, of course, the least vocal in our society. Perhaps that is one reason why we have had not vocal protest but advocacy protest about some of these measures. It is the most vulnerable in our society who are going to be affected-those with no private pension savings, no partner's pension to rely on, and for whom the personal state pension is the key. They are about 14 per cent of the women in the whole cohort and this 14 per cent of women shows why it is so important to have a good single-tier pension.
I welcome the announcement in the Budget of a £140 basic state pension because that is a huge rise. Can the Minister give us some more flesh on the bones of what the Chancellor said about this? He is smiling because this is an issue that I have constantly raised with him-that the replacement should be a basic provision for all which is both gender-free and acceptable to everyone: everyone can receive it. I hope that this big increase in the basic state pension will deal with some of the issues about the most vulnerable.
Secondly, there was the issue of inequity for the group of people who were born in 1953, 1954 or 1955. These are the people for whom there will be inequitable treatment compared with other women in their cohort. We have already heard about the sister; the right reverend Prelate gave the most extreme example earlier. We need to hear from the Minister that there is a solution for these people. Given the level of interest in this matter, how will he acknowledge and address this inequity? I hope that he will acknowledge it in his response to this group and a subsequent group of amendments.
A variety of solutions were put forward in Committee, some of which we will be debating and reflecting on today, but at this stage we must reflect the fact that this
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Finally, if you are trying to predict at the moment what your pension might be and when your pension age might come and you go on to the Government's website to find out, you will still find the existing proposals. It would be worth having the website reflect more strongly that changes are proposed and give some indication of what those changes might be, so that people who will be thinking about these matters during the course of the Bill will be able to see the changes that affect them. We need transparency and I hope that the Minister will address that.
4.45 pm
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, this set of amendments puts forward the first of two alternative routes to achieving a combined retirement age at 66. We shall discuss the second route in the next group of amendments, tabled by the noble Baroness, Lady Greengross.
I thank the noble Lord, Lord McKenzie, and the noble Baroness for giving us a further opportunity to debate the issues that the amendments in this group raise. Let me start by saying that we are not insensitive to the impact that our timetable will have on the women who will face a much steeper increase in their state pension age than they were expecting. We also appreciate that we are asking them to make this adjustment with less notice than we would provide in an ideal world. However, for reasons that I shall explain, we are not in an ideal world, as my noble friend Lord Flight has just said. We remain of the view that, although this is a genuinely difficult decision, it is still the right one.
Baroness Browning: When my noble friend explains his intentions to the House, will he include an explanation of what the practical implications would be of helping those women most affected by shifting the burden on to the wider pensioner population?
Lord Freud: Yes, I will try to address that now. If we were to look for funding by asking men and women, after their pension ages were combined at age 66, to go on for a little later than 66, the sums of the adjustment-although it is not easy to do them-would be roughly £330 million a year per month. It would depend on how many years you have. I will write to my noble friend and try to spell out the figures on making that adjustment.
Let me revert to the amendment, which is fundamentally the same proposition that the noble Lord, Lord McKenzie, made in Committee. I shall recapitulate why-notwithstanding the many concerns that we heard today and in Committee-we believe that we are taking the right course of action. It is common ground all around the House that we simply cannot go on ignoring the increases in life expectancy
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As many noble Lords have pointed out, the amendment would cost the public purse upwards of £10 billion that would need to be found elsewhere. When the coalition Government came into power, we had not only to combat the huge financial debt the UK was in at that time, but put the country on a sound financial footing for the future.
I remind noble Lords that the financing of old age as a whole is the single biggest structural, long-term economic issue facing this country. We need to address the long-term costs of our pension system and ensure that we can deal with any wider economic problems that may appear on the horizon-a point made by my noble friends Lord Boswell and Lord German.
We expect public debt to be on a declining path by 2015-16, but it will still be well above pre-crisis levels. By the end of this Parliament, we will still have a national debt of £1.3 trillion. Waiting until 2020 to start moving to retirement at 66 would reduce the savings that we are looking for by a third-£10 billion off a total of £30 billion. That is the equivalent of reducing the education budget by 10 per cent over the spending review period, or one year's capital budget for health. We have not yet heard a plausible alternative that would deliver those savings-with apologies, perhaps, to the noble Lord, Lord Stoddart. This is not an insignificant amount of money that we can easily pass up.
We believe it is right that those people who will benefit from recent increases in life expectancy make a contribution to the additional cost that comes from those longevity improvements. Women, no less than men, have benefited from increases in life expectancy. In three generations, projected average life expectancy at age 65 has risen by nine years for women. At the same time, women's basic state pension outcomes have been rapidly catching up with those of men and continue to improve. In 2006, only 30 per cent of women retired on a full basic state pension. In 2010-11, that figure has increased to around 75 per cent. The projection is for it to reach 90 per cent by 2018, which is a big change-around in the support that older and retired women will get.
On the point made by the noble Baroness, Lady Howe, we have also taken action to ensure that the state continues to provide a decent income for people when they retire, with the state pension supported by the triple lock and key support elements for pensioners protected, such as free TV licences, cold-weather payments maintained at £25 and so on.
As the Chancellor has now officially announced, we will be consulting shortly on proposals for a simpler state pension, which will boost state pension outcomes further for the groups which are traditionally disadvantaged in the current system by low earnings and by interruptions, which is a point that several noble Lords have made. I have been challenged by my
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The single-tier system would be around £140 a week and its main benefit would be much greater simplicity for individuals, which would give them a much clearer idea of how to plan ahead. It is also cost-neutral, a factor that is particularly valuable in the current climate, as I have pointed out. However, this is a complicated thing to do, and it is important that the reforms fit in with the programme of automatic enrolment and we will actively consult on the proposals. I take to heart the point about information made by my noble friend Lord German. I will take that back to the department and see how much clarity I can get.
Women retiring at 66 in 2020 should receive their state pension for 24 years on average. That is the same amount of time that we expected this group of women to receive their state pension for at the time that the pensions commission reported in 2005, when they were due to retire at 64.
Of the 2.6 million women affected by the change in state pension age, around 12 per cent face an increase of 18 months or more, and 1 per cent face the maximum increase of two years. That point was made by the noble Baroness, Lady Bakewell. Survey data show that 70 per cent of these women are still in employment. While I accept that we are asking these women to work longer, they will benefit from additional income and a potential boost to their pension savings and entitlements. In response to the point made by the right reverend Prelate the Bishop of Ripon and Leeds, data show that only 4 per cent of the women affected by these proposals have already retired.
The noble Baroness, Lady Hollins, raised the issue of carers. Clearly, they are a most valuable group in society, and we acknowledge them as such. There has been a downward trend in the proportion of women who say that they are not in the labour market because of caring or domestic responsibilities-the figure fell from 10.7 per cent in 1998 to 6.9 per cent in 2010.
The data show that employment rates decline as people approach the state pension age. Currently, the average age at which women leave the labour market is two years below that of men, although it is still two years above the current state pension age for women. The noble Lord, Lord McKenzie, made the point that women are less able to cushion the impact of any change. Current employment patterns for women in their early 60s are not a reliable indicator of future trends, as those women will already have started getting their state pension. It is difficult to predict with certainty how women will respond to the changes in the state pension age. I recognise that women are more likely than men to face competing demands in the form of caring and other responsibilities. Despite this, the figures show that the age at which women exit the labour market has risen steadily, from sixty-one and a half in 2004 to sixty-two and a half in 2010.
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We had to act quickly to reduce the increasing costs imposed on the state pension system by the increase in longevity. It has not been possible to give a notice period similar to those given for previous increases in the pension age, but these women will still have between five and a half and six and a half years' notice of an increase in their state pension age, enabling them in many cases to change their retirement plans.
In order to get to 66 by 2020, we have had to make some hard decisions. The noble Baroness, Lady Hollis, talked about our coalition plans. I point out to her in reply that the single-tier pension was also not in the government programme. Clearly, the new timetable creates a pension age gap between women born in March 1953 and March 1954, which increases from one to three years, but that is the most extreme contrast and applies only to women born in that month.
5 pm
The challenge is to find a solution that balances the impact across all groups affected but at the same time achieves the financial savings that we achieve by bringing forward the increase in state pension age to 66 by April 2020. We need to ensure the sustainability of the state pension system, and we believe that our timetable strikes the best balance between the impact on individuals and fairness to the taxpayer. I therefore urge the noble Lord to withdraw his amendment.
Lord McKenzie of Luton: I thank all noble Lords who have spoken in this extremely well informed debate. I entirely accept that the Minister is not insensitive to the timetable and the issues that it has raised. I note that he, too, accepts that the notice period which has been given is less than ideal. He spoke about the simplified state pension, or single-tier pension, in response to a question from the noble Lord, Lord German. I am not sure whether the noble Lord gained much comfort from what was said. Clearly, it is a good idea, but the Chancellor himself, in introducing the Budget, said that this was a long-term project, so how it will help today's debate is less clear.
I accepted when I moved the amendment that there is a difference on costings: our proposition achieves only two-thirds of the savings of the Government's proposal. Several noble Lords, including the noble Lord, Lord German, made the point that it is a matter of where you draw the line. The savings we are talking about are not savings today, tomorrow, next year or the year after that; they begin to accrue in a brief period until there is an alignment of the two in about 2018-19. It is inevitable, when we are talking about millions of pensioners, that the numbers will be big. That does not make them any less important. Dealing with a number in isolation is not very helpful; we need to put it in context. We also need to look at the other side of the equation. The extra savings that the Government said are borne by someone: the pensioners who are the subject of the amendment.
Several noble Lords talked about costs. The noble Lord, Lord Stoddart, widened the terms of the debate a little. He will forgive me if I do not answer in detail each of his points, because I do not want to lose his vote. The noble Lord, Lord German, said that costing
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Several noble Lords talked about the speed of change, including the noble Baroness, Lady Hollins, and the right reverend Prelate the Bishop of Ripon and Leeds. I think that the right reverend Prelate termed it a matter of justice, and that is absolutely right. He obviously speaks with some scars, as he said, from dealing with the Church of England superannuation fund. The speed of change is important. He also made the important point that the Bill is dealing with state pensions, but the changes being imposed and the extent to which they have disconcerted people do not help with general confidence in the pensions environment, which we should all be working hard to improve.
My noble friend Lady Hollis correctly focused on the coalition agreement. She made the very telling point that issues around longevity and the data that are being used to justify what the Government are doing were known when that coalition agreement was written. They are not new data. She talked about the difficulty of women who have been away from the labour market getting back into it to mitigate the effects of these pension changes.
My noble friend Lady Bakewell made the same point in a different way. She said that people formulate attitudes to retirement that are sometimes difficult to change. She also made an interesting point when she called for nuance. When you think about it, the difference between the Government's proposition and ours is two years in arriving at 66 as the state pension age. The extra problem the Government have by doing it those two years earlier is that they have to mess with the 1995 timetable to change the timetable for equalisation. That does not arise if you do not start that move until two years later. We are talking about two years. It is not a huge gulf, but I accept it has not insignificant ramifications for costs.
The noble Lord, Lord Boswell, talked about not insubstantial sums. As he said, the numbers are inevitably going to be big. When we are talking about millions of pensioners, that will inevitably follow.
I am grateful for the support of the noble Baroness, Lady Howe, on this amendment. She has been a doughty campaigner on pension issues. She was relaying some of the concerns that many people have had expressed to them, especially by those who are going to suffer an extra two-year wait.
The noble Lord, Lord German, focused on the interesting point that we are hearing those who are involved in advocacy. He spoke as though there was somehow a problem with that. Part of the problem with pensions generally is that they are complex. People shy away from them. That is why auto-enrolment and all those issues are rightly being addressed. We need people who understand these things and have that expertise to speak on behalf of, particularly, poorer people who are sometimes less able to deal with the complexities of these issues. The extent to which the
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I hope I have done justice to each noble Lord who has spoken. I do not think the debate has changed my view of where we should be heading. I am well aware that it has not changed the Minister's. This is a very important issue. There is a lot at stake here. Hundreds of thousands of women are affected by this, and their position could be ameliorated. On that basis, I wish to test the opinion of the House.
5.08 pm
Contents 214; Not-Contents 226.
Aberdare, L.
Adams of Craigielea, B.
Adebowale, L.
Ahmed, L.
Alli, L.
Anderson of Swansea, L.
Bach, L.
Bakewell, B.
Bassam of Brighton, L. [Teller]
Beecham, L.
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Billingham, B.
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Boyd of Duncansby, L.
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Bragg, L.
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Brooke of Alverthorpe, L.
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Brooks of Tremorfa, L.
Browne of Belmont, L.
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Cameron of Dillington, L.
Campbell of Loughborough, B.
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Chorley, L.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cobbold, L.
Collins of Highbury, L.
Corbett of Castle Vale, L.
Corston, B.
Coussins, B.
Craigavon, V.
Crawley, B. [Teller]
Cunningham of Felling, L.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Deech, B.
Dixon, L.
Donaghy, B.
Drake, B.
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Dubs, L.
Eames, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Watford, L.
Falkender, B.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Ford, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Fritchie, B.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Gilbert, L.
Glasman, L.
Gordon of Strathblane, L.
Gould of Potternewton, B.
Grantchester, L.
Greengross, B.
Grenfell, L.
Grey-Thompson, B.
Grocott, L.
Hanworth, V.
Harries of Pentregarth, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollins, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howe of Idlicote, B.
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Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Janner of Braunstone, L.
Jay of Paddington, B.
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Jones of Whitchurch, B.
Jordan, L.
Judd, L.
Kennedy of Southwark, L.
Kennedy of The Shaws, B.
Kerr of Kinlochard, L.
King of Bow, B.
King of West Bromwich, L.
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Knight of Weymouth, L.
Laird, L.
Laming, L.
Layard, L.
Lea of Crondall, L.
Leitch, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Low of Dalston, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Martin of Springburn, L.
Masham of Ilton, B.
Massey of Darwen, B.
Mawson, L.
Maxton, L.
Mitchell, L.
Morgan of Drefelin, B.
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Morris of Aberavon, L.
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Morris of Yardley, B.
Neill of Bladen, L.
Nye, B.
O'Loan, B.
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Ouseley, L.
Palmer, L.
Parekh, L.
Patel, L.
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Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
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Prashar, B.
Prescott, L.
Prosser, B.
Puttnam, L.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Reid of Cardowan, L.
Rendell of Babergh, B.
Ripon and Leeds, Bp.
Robertson of Port Ellen, L.
Rogan, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sandwich, E.
Sawyer, L.
Sewel, L.
Sheldon, L.
Sherlock, B.
Simon, V.
Slim, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Snape, L.
Soley, L.
Stern, B.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Tenby, V.
Thornton, B.
Tomlinson, L.
Touhig, L.
Triesman, L.
Turnberg, L.
Turner of Camden, B.
Walpole, L.
Warner, L.
Warwick of Undercliffe, B.
Wedderburn of Charlton, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wigley, L.
Wilkins, B.
Williams of Elvel, L.
Williamson of Horton, L.
Wills, L.
Winston, L.
Wood of Anfield, L.
Woolmer of Leeds, L.
Young of Hornsey, B.
Young of Norwood Green, L.
Addington, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Archer of Sandwell, L.
Armstrong of Ilminster, L.
Arran, E.
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Baker of Dorking, L.
Ballyedmond, L.
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Glasgow, E.
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Hamwee, B.
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Younger of Leckie, V.
5.21 pm
Baroness Murphy: My Lords, I am sure that the noble Baroness, Lady Greengross, will be here to speak to her amendment in due course, so I am speaking on her behalf. This is not a filibuster despite the comment I have just overheard. In Committee I spoke to the suggestion that we should have a halfway house and that there should be an amelioration of the difficulties that some people will face. I have today supported the Government in the main thrust of their policy but I think that a modest change to help the few who need it would be very helpful indeed. I am now assured that the noble Baroness is in her place, and no doubt she will outline her amendment in more detail. I beg to move.
Baroness Greengross: My Lords, I start by thanking the noble Baroness, Lady Murphy. I am sorry; I did not realise that people had come back into the Chamber.
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We know that life expectancy is rising much faster than many of us had realised, and during the Second Reading debate on this Bill I accepted the argument that rises in the state pension age must take place. However, I also said that while I understand completely that deficit reduction is a priority for the Government, this legislation could have a hugely negative impact on certain women. It will have a negative impact on many women, but some groups will be particularly affected. The 33,000 who are the worst affected will face a two-year hike in their state pension age. They will not have any possible opportunity-because they will not have had notice-that will enable them, even if they could, to plan financially for this delay in getting their state pension.
This group of women will be particularly and disproportionately hit by the Government's proposals. It will also be the second time that these women have had their state pension age changed. Many will also be totally unaware of the changes and they will not be in any way prepared for them. Many of these women, as the noble Baroness, Lady Hollis, illustrated graphically, will be single women and women on lower incomes, who face, as we know, lower life expectancy on average. Many of them have not had a chance to accumulate any form of private pension. They will be reliant solely on the state pension. Many of these women care for older parents or younger grandchildren, and sometimes both at the same time.
Furthermore, the timetable proposed in the Bill is faster than that laid out in the coalition agreement, which promised that the state pension age would not start to rise to 66 until 2020 at the earliest. I do not think I am alone in having received many letters illustrating this point from people who are going to be caught out by this change, which would in any case not offer any immediate help in cutting the deficit, because, as we have heard, there will not be any savings until 2016, by which time the Government plan to have eliminated the current deficit.
The figures in the table I have produced have been verified by some key experts in the pension field as dealing with a particularly difficult problem. Many people I know feel very strongly about this matter and by accepting these amendments the Government could-and I hope will-demonstrate that they want to help the people most affected and worst affected by this necessary reform of the state pension age. I very much hope that the Minister will support my amendments.
5.30 pm
Lord Boswell of Aynho: I am grateful to the noble Baroness, Lady Greengross, for moving her amendment, which is cognate with one that I moved in Committee.
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These are big sums but my point earlier, which I wish to talk about now, is that in making a macroadjustment-which I believe is essential and for which I established a case on which we have just triumphed-there is nevertheless a very real problem for individuals. I should say, if there is any doubt, that I have a certain background, if only because I have a household that is 80 per cent female, or was before my daughters grew up. I have no lack of sympathy with women's issues and am well aware from the data that many women look forward to a less than generous pension and have not had an opportunity to build up the entitlement that some men have. Those are the data. We are gradually, by degrees, achieving social advance.
There is now a suggestion that, in dealing with the major problem that we have to address, we may be affecting a particular group of women very hard. We have to answer the question of how we deal with it. In terms of the overall cost of a grand architectural amendment, I can see that that would be very substantial indeed, which, as I have already indicated to your Lordships' House, might well fall on taxpayers and the active working population of today-our children and our grandchildren. That would have adverse consequences. We have to find ways other than that of dealing with it. It is possible that one could make some slight adjustments within the system by flexing the exact provisions of the Ministers or the proposals of the Government or the proposals of the noble Baroness, Lady Greengross, thereby sharing the cost between the various women who would otherwise be affected.
My concern, and it is a paradox, is that with the best intentions, as the Minister explained to us painstakingly in Committee, the equal treatment directive-I do not dislike the equal treatment of women and I do not as a matter of fact dislike the European Community-constrains us on sharing the burden with men, unless and until we have caught up to the common age of 65. The present arrangements are a derogation from equal treatment until we reach that equality of pension age which is inhibiting this process.
One way forward, which has been touched on briefly in the earlier exchanges, may be to look at something beyond the pension age of 65, or even 66, as a compensating adjustment for burden-sharing. An alternative approach would be to go for a specific targeted scheme, but there are some difficulties even with the law on that if one were to have a differential pension credit arrangement. I have asked the Minister some Parliamentary Questions on that. The cost is much lower, but it is indeed setting up a special scheme to try to sort out the problems of individuals.
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If we could have a system whereby nobody went without their pension for more than 12 months, as the noble Baroness suggested, or something like that, we could reasonably argue, given the timescale-not perfect, not ideal, we have all accepted that-that that is something with which people could accommodate themselves. A doubling of their loss, or a further acceleration of the timescale, would not be acceptable.
I urge the Minister to try to find some acceptable approach, or to signal some acceptable approach, which can, within the constraints that have been mentioned, help this group of women who are seriously and significantly affected, where there is a sense of unfairness, or of harsh treatment, without as it were destroying the intentions or the efficiency of the overall change which we need to make. I hope the Minister will consider that very seriously. It is not a matter of party politics. It is a matter of a common feeling that we should try to do something. I very much hope that, one way or another, through our combined wisdom, or at least our combined persistence, we will reach an acceptable solution.
Baroness Howe of Idlicote: My Lords, I congratulate the noble Lord, Lord McKenzie, on his amendment and I thank everyone for the very warm support that it got. Obviously, I would rather that amendment had won, but the vote was indeed very narrow. With that in mind, I would certainly want to support the proposal of my noble friend Lady Greengross, which would certainly do something along the lines that the noble Lord, Lord McKenzie, was trying to achieve with his amendment.
If the Minister can find a way to accept that, it will give some comfort at least to those who feel strongly-and have shown how strongly they feel-about this issue. I hope he will bear that in mind when he comes to reply.
Baroness Grey-Thompson: My Lords, I rise to speak to this amendment as someone who is certainly not an expert in pension provision; I admit to finding a lot of it rather confusing. The amendment tabled by the noble Baroness, Lady Greengross, is a very positive and useful way forward.
What concerns me is not the arguments that we heard earlier about the 2.6 million women having to wait longer than expected, the 330,000 who will have to wait 18 months or even the 33,000 who will have to wait two years to receive their pension, but the fact that, of the current pensioners who live in poverty, two-thirds are women. The Joseph Rowntree Foundation has made estimates about the poverty level, which it set at around £14,000 a year, and recognises that one in four women retiring today has less than £10,000 a year to live on. We know that women earn less pay on average, while taking time out to raise children means that they earn less over their lifetime. For me, though, the inequality in savings that women have access to is a stark reminder of where many women live today. The average savings in pension schemes of women between 51 and 59 are £37,000, compared to the £54,000 that men hold.
We have heard many case studies. I am very fortunate. I employ someone who is 56 and has a sister who is four years older. Maureen will have to wait 10 years
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It may be true that we need change and need to move on. It might be true that women have relied too heavily on their husbands' careers and earnings in setting their pension limits, but I strongly believe that women deserve to have more time to adjust to this change in thinking.
Lord Stoneham of Droxford: We are very sympathetic to the noble Baroness's amendment. I congratulate her on an important contribution to this debate on an issue that the Government must address. A number of reasons have been explained, in this debate and in the preceding debate, on why that is important. Men are not being disadvantaged by more than one year, but over half a million women are. The period of notice is inadequate. Women in this age group are some of the most disadvantaged in terms of their pension provision. We have to accept that there is a contradiction with the coalition agreement. We are expecting some assurances from the Government in this debate, but we also accept that this is largely a negotiating matter with the Treasury. We welcome the announcement in the Budget of the new basic pension.
The noble Baroness, Lady Hollis, complained at Second Reading that the Pensions Bill ignored the £140 new basic pension, and said that it was like Hamlet without the prince. Now we have Hamlet with the prince but without a script. We want to see some details of the government proposals before committing ourselves to new transitional arrangements. We know that in present value terms the amendment will cost £7 billion, but the Government need to address the problem and come back with a considered amendment during the passage of this Bill in the other House with regard to how women affected by these transitional arrangements will benefit from the new higher basic pension.
Baroness Hollis of Heigham: My Lords, I will be brief because a lot of the arguments were effectively aired on all sides on the previous amendment. I support this amendment. I spent many hours-I will not say happy hours-last weekend trying to find a compromise, what I would call a fallback amendment, that would address the issue that we have all identified today. That issue is the women who are seeing an acceleration in the time that they have to wait-if that is not a reverse phrase-for their pension.
The Government are proposing to accept the existing timetable to 2016 but, instead of continuing it to 2020, to collapse it to 2018, so that what would have happened over four years is happening over two. That is what is producing the problems of bunching, the unfairness, the lottery, the roulette, one sister against another, one neighbour against another and the like.
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We have heard the arguments. I tried, as I said, over many hours at the weekend to find a fallback compromise that overcame the problem of bunching without taking us up to 2020, but could not find one. What the noble Baroness, Lady Greengross, has done, for which she has our warmest congratulations, is none the less concentrated on the post-2020 period and reduces somewhat the period by which pensionable age would rise to 66. That produces the £3 billion of additional savings that the Government are so anxious to secure. It also protects the situation of women. It is smooth, as no woman waits more than one year for every additional year of her age. It is fair to all women. It is a compromise: we get to 66 somewhat earlier than I would like. None the less, it overcomes the basic unfairness of women having random times until which they must wait, according to the random month in which they were born. You cannot make state public policy on the basis of such a lottery. The amendment of the noble Baroness, Lady Greengross, addresses that issue, compromises on the later point and makes savings. I hope it will enjoy the support of the whole House.
Like others, I am thrilled by the proposal for a new state single pension of £140. I warmly congratulate the coalition in this House and the Ministers in the other place on it. Had there been eight bullet points, I would have agreed with eight out of eight instead of seven out of seven. I do not want to put this in a way that makes the noble Lord thump the Dispatch Box, but I hope he will today restore the honour of the coalition agreement by making it clear that he can accept this amendment or a version of it. The substance of what was promised in the coalition agreement by both parties forming the Government-that women's pension age would not rise to 66 until 2020-will then be honoured, either through this amendment or the Government's promise to come back with another. All sides of this House could then feel well content that they have protected some of the most vulnerable women, who rely solely on their state pension for their income in retirement. We will have treated them honourably, fairly and decently.
Lord German: My Lords, I echo the noble Lord, Lord Boswell, and the noble Baroness, Lady Hollis, in saying that we look to the Minister to address the issue behind the amendment of the noble Baroness, Lady Greengross, which is that no woman's pension age should be accelerated by more than 12 months. That is the issue that I raised in the earlier debate. It is a concern about equity. I hope that, in the architecture that the Minister may describe to us, he might find a way of answering that question. Whether it is this or some other architecture, as the noble Baroness, Lady Hollis, just said, is not the issue at stake here; it is about the intention. It is the intention to create that level of equity that is important.
Unfortunately, I have a question for the noble Baroness, Lady Greengross, when she comes to answer this debate. It is on a very technical point. This morning we took the liberty of plotting the dates in her amendment on a graph. Unfortunately, there were two kinks in the graph, which meant that it was not a straight line. I
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Lord McKenzie of Luton: My Lords, I will be brief. Like others, I warmly congratulate the noble Baroness, Lady Greengross, on tabling this amendment, which addresses an issue of wide concern. It does not go as far as most of us would like; it raises the pension age to 66 one year earlier than we would want and one year later than the Government would want. However, apart from a couple of minor kinks, it smoothes the position so that nobody has to wait for more than 12 months. It is a considerable achievement to craft an amendment of that nature. We should be very grateful to the noble Baroness.
The issues are very much as they were previously. However, I would challenge the Minister. If the response was, "We like the look of this; we'll try to bring something back, but we'll do it in the other place", then it would not be a particularly satisfactory one. The reality is that we stand a better chance of getting amendments through at this end than at the other end. What further information might the noble Lord and his team need to be able to produce an amendment now or at Third Reading? The noble Baroness seems to have given us a very good platform for moving forward.
I was not sure about the costing; the noble Lord, Lord Stoneham, said that it was £7 billion. I would guess, from the Government's point of view, that that is certainly an improvement from where we were on it. If the noble Baroness was minded to press the amendment, we would certainly go into the Lobby to support it.
5.45 pm
Lord Freud: I thank the noble Baroness, Lady Greengross, for this amendment, and for seeking to achieve a compromise position between what we have proposed and what the noble Lord, Lord McKenzie, put forward-the rather more costly proposition that we were discussing a few minutes ago. No one wants to hear a rehearsal of all the arguments that we have just gone through, so I will avoid it. I thank the noble Baroness for her ingenious approach to trying to develop this compromise position. It is a real achievement that she has got ahead of the noble Baroness, Lady Hollis, on a weekend when she had a towel around her head.
This amendment attempts to recoup at least part of the savings that are lost by a gentler transition to 66 years for women by increasing the pension age for men to 66 years first, and then staying within the European equal treatment directive. As she explained, the amendment is intended to ensure that no women will have their state pension age increased by more than 12 months, which would place women on a similar footing to men at least in respect of the adjustment
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This timetable would result in deferring the point at which a state pension age of 66 is reached until 2021. However, unlike the amendment tabled by the noble Lord, Lord Boswell, in Committee, which had the same end point, her amendment would cost some £2 billion compared to his £7 billion because the increase in state pension age for men to 66 by April 2020 would go ahead as we have planned. That is why this is such an ingenious amendment.
I must now air the issue of the equal treatment directive, which, frankly, has bedevilled the whole situation and created a lot of problems in devising how we approach it. I ought to spend a little time on the directive.
Directive 79/7 deals with the progressive implementation of the principle of equal treatment for men and women in matters of social security. It provides that there shall be no discrimination on grounds of sex in relation to the benefits to which it applies. When the Pensions Act 1995 was passed, the UK legislated to end gender discrimination in the state pension age by April 2020. Any change we now wish to make needs to be considered in relation to the position left by the 1995 Act. In particular, we need to consider whether any alteration would hinder progress towards equal treatment by either increasing the present gender gap in pension age or prolonging the period of unequal pension ages. Doubtless with the first of these considerations in mind, the noble Baroness's timetable aims to control the gap. It is certainly the case that the difference in pension ages between men and women sharing the same birth date is no greater than it would otherwise have been under the original equalisation schedule. It does, however, result in a difference of treatment between birth cohorts. I shall try to illustrate that.
At the point that the noble Baroness's timetable parts company with the proposals in the Bill-that is, for women born from 6 October 1953-the pension age gap between men and women for that birth cohort would stand at five months. It falls to three months for the following cohort but then starts to rise again, to a year for men and women born in March 1954, before rejoining the path set by the 1995 Act, albeit at a year older. By reducing and then increasing the difference in the state pension ages between men and women, and by delaying the final point of pension age equalisation by 12 months relative to the timetable legislated in 1995, the amendments can be seen to be adverse to the progressive equalisation of pensionable age both in themselves and by reference to the Pensions Act 1995.
As I said, the noble Baroness's proposals would still reduce the overall savings by around £2 billion. While this is significantly less than the £10 billion price tag attached to the amendment of the noble Lord, Lord McKenzie, it is still not a negligible sum. As I have tried to explain, the issue around this amendment is the extent to which it runs contrary to the progressive
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Baroness Murphy: I believe that I must respond to the Minister since I moved the amendment. I have listened to the debate very carefully and thank everyone who has spoken in support of the amendment of the noble Baroness, Lady Greengross. I say to the noble Lord, Lord German, that I do not have a clue why the kinks have arisen. If I was the Minister, I would say at this point, "The noble Baroness, Lady Greengross, will write to you with her responses". I am sure that we would all like to know the answer to that.
I am very disappointed with the Minister's response.
Baroness Murphy: Although he is clearly hampered by the commitment to the directive, it does not seem to be beyond the wit of the Minister and his colleagues to devise a rather warmer response to the wish of this House that a compromise should be made. Given my experience on previous occasions, I think that it would be a good idea for the House to express its opinion on this matter. I wish to test the opinion of the House on this amendment.
5.55 pm
Contents 203; Not-Contents 215.
Aberdare, L.
Adams of Craigielea, B.
Adebowale, L.
Ahmed, L.
Alli, L.
Anderson of Swansea, L.
Archer of Sandwell, L.
Armstrong of Ilminster, L.
Bach, L.
Bakewell, B.
Bassam of Brighton, L. [Teller]
Beecham, L.
Berkeley, L.
Bew, L.
Bhattacharyya, L.
Billingham, B.
Bilston, L.
Borrie, L.
Boyd of Duncansby, L.
Bradley, L.
Bragg, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Browne of Ladyton, L.
Campbell of Loughborough, B.
Campbell-Savours, L.
Carter of Coles, L.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corbett of Castle Vale, L.
Coussins, B.
Craigavon, V.
Crawley, B.
Cunningham of Felling, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Dean of Thornton-le-Fylde, B.
Deech, B.
Dixon, L.
Donaghy, B.
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D'Souza, B.
Dubs, L.
Eames, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Watford, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Ford, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Fritchie, B.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Gilbert, L.
Glasman, L.
Gordon of Strathblane, L.
Gould of Potternewton, B.
Grantchester, L.
Greengross, B.
Greenway, L.
Grenfell, L.
Grey-Thompson, B.
Grocott, L.
Hanworth, V.
Harries of Pentregarth, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollins, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Hoyle, L.
Hughes of Woodside, L.
Hylton, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
Kennedy of Southwark, L.
Kerr of Kinlochard, L.
King of Bow, B.
King of West Bromwich, L.
Kirkhill, L.
Knight of Weymouth, L.
Laird, L.
Laming, L. [Teller]
Lea of Crondall, L.
Leitch, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Listowel, E.
Low of Dalston, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Martin of Springburn, L.
Masham of Ilton, B.
Massey of Darwen, B.
Mawson, L.
Maxton, L.
Meacher, B.
Mitchell, L.
Morgan of Drefelin, B.
Morgan of Ely, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Murphy, B.
Neill of Bladen, L.
Nye, B.
O'Neill of Clackmannan, L.
Palmer, L.
Parekh, L.
Patel, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Prashar, B.
Prescott, L.
Prosser, B.
Puttnam, L.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Reid of Cardowan, L.
Rendell of Babergh, B.
Ripon and Leeds, Bp.
Rogan, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sandwich, E.
Sawyer, L.
Sewel, L.
Sherlock, B.
Simon, V.
Slim, V.
Smith of Basildon, B.
Snape, L.
Soley, L.
Stair, E.
Stern, B.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Tenby, V.
Thornton, B.
Tomlinson, L.
Touhig, L.
Turnberg, L.
Turner of Camden, B.
Walpole, L.
Warner, L.
Warwick of Undercliffe, B.
Wedderburn of Charlton, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Williamson of Horton, L.
Wills, L.
Winston, L.
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Woolmer of Leeds, L.
Young of Hornsey, B.
Young of Norwood Green, L.
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Arran, E.
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Avebury, L.
Baker of Dorking, L.
Barker, B.
Benjamin, B.
Berridge, B.
Black of Brentwood, L.
Blencathra, L.
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Bowness, L.
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Hamwee, B.
Harris of Richmond, B.
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Howe, E.
Howe of Aberavon, L.
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Hunt of Wirral, L.
Hussain, L.
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James of Blackheath, L.
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Lamont of Lerwick, L.
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Lester of Herne Hill, L.
Lexden, L.
Lindsay, E.
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Macdonald of River Glaven, L.
MacGregor of Pulham Market, L.
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Shrewsbury, E.
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Walmsley, B.
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Wilcox, B.
Williams of Crosby, B.
Willis of Knaresborough, L.
Wolfson of Sunningdale, L.
Younger of Leckie, V.
6.08 pm
9: Clause 1, page 2, line 19, at end insert-
"( ) After sub-paragraph (10) insert-
"(11) The Secretary of State may by regulations vary the provisions of this Schedule to provide for an earlier pensionable age in individual cases without loss of benefit in the event of-
(a) prolonged ill health, or
(b) arduous or dangerous employment,
or both.""
Baroness Turner of Camden: My Lords, I return to a notion that I raised previously in Committee, although I realise that I did not then formulate my amendment very well and I have made a change to the wording. I still hope, however, to persuade the Government that there is a serious issue here.
I agree, as I think we all do, that longevity, although very welcome, means that we have to look again at retirement ages. There must be some revision. Last year, I spoke to a briefing supplied by Age Concern about the default retirement age. Many people were holding jobs that meant a great deal to them, they did not want to retire and felt they had a great deal to contribute. That argument has largely been won.
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However, I have always held the view that jobs are not all the same, and neither are people. Many are not particularly committed to their work, which is sometimes arduous and dangerous, and may not be suitable for older people who may simply be longing for the time when they no longer have to do it. It would be good to think that there would be lighter work to which such people could be transferred. Often, however, such work will not be available, and the people concerned may have manual skills but not the kind of educational background that would make it easy for them to do other work. After a lifetime in their original jobs, it may be better for them to retire and to receive the benefit that they had anticipated.
I recently received a nice letter from a lady who thanked me for what I had said in another debate on health and safety at work. It did not involve pensions, but it has some relevance here. She and her family had been trying for some time to obtain compensation following the death of her husband in a work accident. She sent me a copy of a magazine called Hazards, which campaigns for compensation for people injured in accidents at work, some of which lead to deaths. It does, however, serve to remind us that a great deal of the work that all of us depend on in our daily lives has hazards. We should not insist that the people who do it should simply go on and on. There is a case for treating them very differently from those who are committed to their jobs and want to work.
In the year from April 2009 to March 2010, 1.3 million workers reported that they were suffering from illness caused or made worse by work. It is often alleged that our health and safety at work system is the best in the world and that very few people are hurt at work. Unfortunately this is not completely accurate, although the Health and Safety Executive performs an excellent function in reducing work hazards. However, its resources are apparently being reduced, and that does not look so good. In any event, the HSE says that employers should be aware that there may be some reduction in physical and mental capacities with age and that suitable accommodation should be put in place. However, as I have indicated, this may not be easy. "Work till you drop" is not a good idea and may have dangers for other members of the workforce. I hope that the Government appreciate that there are real problems here. We are not all middle class, despite what the media tell us, and we often require people who have manual skills to work very hard on our behalf. We have a duty to ensure that they do not have to work beyond their capacity to perform their tasks, and that is the reason for my amendment. I wait with interest to hear what the Government have to say about it.
Baroness Drake: My Lords, I rise to speak to Amendments 11 and 14 in this group. In doing so, I have some sympathy with the concerns expressed by my noble friend Lady Turner. These amendments address the position of the poorest men and women in the population who are disproportionately impacted by the acceleration of the timetable to achieve the equalisation of the state pension age. Under this Bill the age of eligibility for receipt of pension credit, which is targeted on the poorest pensioners, increases at the same accelerated rate. This is because, under
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Pension credit in 2011 is £137.35 per week for a single person, so a deferment of up to two years can result in a loss of £15,000 for those affected. Even on a deferral of one year, the loss of income is still substantial to those concerned. Amendments 11 and 14 would ensure that both men and women who are presently in their late 50s and who are likely to be the beneficiaries of pension credit do not experience the markedly higher loss of lifetime pension income that would otherwise occur. This would be done by allowing the age of eligibility for pension credit to track the original equalisation timetable set out in the Pensions Act 1995. That would mean that those eligible to receive pension credit, both men and women and their birth cohorts, would do so on the same date between 2016 and 2020 as they would have done under the original timetable. I believe that these amendments may provide a more focused mechanism than that proposed by my noble friend Lady Turner in her amendment.
There has been much debate on fiscal sustainability when assessing timetable options for accelerating or mitigating the acceleration of the increase in the state pension age, but this amendment in no way undermines long-term fiscal sustainability. The savings from accelerating the age of eligibility for receipt of pension credit do not start to flow until 2016.
6.15 pm
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