Clause 1
Pensions Bill
12:45 pm
David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)
I ought to reciprocate the hon. Member for Northampton, North by saying that I would have liked a still longer speech on these very important proposed new clauses. Perhaps we will go through our proceedings urging each other on to greater things and longer speeches.
I shall begin on a consensual note, as the hon. Member for South-West Bedfordshire did. Clause 1 is important: it will tackle a number of major injustices that have been a feature of the pensions system. It will lead to a better deal for women in particular. The Minister knows that we go our separate ways in terms of our visions for the future of the pensions system, but I welcome the effect that the measures will have on many women. I commend all those individuals and groups who have been active over many years for raising, and lobbying on, the issue of justice for women pensioners. Members from all parts of the House have raised the issue of the way in which the pension system has let women down. The hon. Member for South-West Bedfordshire raised the issue of the contributions that women have made which, scandalously, have not given them any sensible return in retirement. Many of those injustices are being remedied by clause 1.
Proposed new clause 23 asks the Secretary of State to prepare a report on those groups who will reach state pension age in 2010, but who will not be eligible for a full basic state pension. In other words, the proposed new clause is yet another Liberal Democrat contribution to the amendment paper that has no consequences for spending. To meet the demand for a costing of the report that the Minister will inevitably make, perhaps I ought to say that it will be cheap to produce. Although the proposed new clause is probing, I hope that the Committee will accept it, or that the Minister will indicate what research the DWP is doing on the subject, and what the time scale is for concluding and publishing any research.
The hon. Member for Weston-super-Mare, who was here earlier, will be aware that a report on excluded groups was also one of the recommendations of the DWP Committee. The Government responded relatively positively to the proposal, perhaps more positively than the Secretary of State did during the DWP Committee sittings. When asked about the pensioners of the future who would not be entitled to a full basic state pension, he replied simply that such measures would apply to those who do not meet the qualifying conditions. We are hoping that the Minister will shed a bit more light on the issue of the categories of people who will be excluded. We would like to know how the Government foresee their policy developing to reduce the numberof individuals who do not receive a full basic state pension.
We would like the Government to look at the matter retrospectively as well, as the hon. Member for Northampton, North suggested, because we risk becoming excited and complacent about the latest figures showing how many people will be entitled to the basic state pension as a result of the proposals if we do not bear in mind that cohorts of existing pensioners not entitled to the basic state pension will be around for many years. Could the Minister put on record the projected figures on the proportion of men and women, and of the pensioner population as a whole, who will not be entitled to the basic state pension in 2010, 2020 and 2030, rather than looking only at the new generations of pensioners who will be covered and whose lot will be improved by the Bill?
The Government response to the Select Committee report said that they are undertaking further analysis using administrative data, survey data and primary research to examine in detail the characteristics of the individuals who might not receive a full basic state pension even after reform. Where possible, that analysis will consider those reaching state pension age in 2010 as well as after 2025. It would be useful to know how that research is proceeding and when the Government intend to publish it. Will it be a long-term project, or might it emerge—he said optimistically—during the passage of the Bill?
I think that this is the part of our proceedings in which the Minister would invite me to return to the issue that I raised earlier about the Government’s attitude to the contributory principle. It is clear that the Secretary of State and the Government as a whole have a strong adherence to the principles behind it—the Secretary of State made that clear in his evidence to the Select Committee—but at the same time, the Government are taking an approach that will reduce the number of qualifying years of contribution required to get a full basic state pension. It is a slightly unobvious way of underpinning a commitment to the contributory principle to erode it by reducing the number of contributory years. Presumably the Government could have gone about it in other ways by focusing simply on the reasons why people were not credited with contributions in particular years and changing the relevant regulations.
Help the Aged’s evidence to the Select Committee asked what the rationale was for selecting 30 years rather than 25 as the new qualifying period for the full basic state pension. The Minister touched on that issue earlier. I think that he said that that was the total number of years necessary to ensure that a significant proportion of those retiring after 2010 had the full basic state pension, but it would be interesting to know a little bit more about what research was conducted to determine the 30 years and whether the Government would be willing to consider reducing it further.
The hon. Member for Northampton, North has tabled important new clauses for which we have considerable sympathy given our general attitude to pension issues. She has already outflanked me in the spending stakes, proposing from the Government’s own Benches an amendment that would add £1 billion to the cost of our modest and disciplined proposals. It was interesting that she managed to get away with it not only by speaking quite quickly—the Minister might have been delving into his notes—but by describing them as probing amendments. Those are clearly clues that I could use during the rest of our proceedings to get off the hook when he accuses me constantly of making unaffordable spending pledges. Apparently I should simply describe them as probing amendments.
The benefit of the hon. Lady’s point is that it highlights that a large number of pensioners will continue not to benefit from the new arrangements after 2010. Many will be individuals who do not claim all means-tested benefits that the Government make available. The debate raises issues of pensioner poverty, contradicting the Minister’s earlier suggestion that anything retrospective would have no impact on pensioner poverty.
The new clauses are interesting, and I look forward to hearing from the Minister about them. In particular I hope that he is able to accept the principle behind new clause 23.