Clause 7
Pensions Bill
11:45 am
David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)
We have no fundamental disagreement with clauses 7 or 8. Proposed new clause 18 is in my name and that of my hon. Friend the Member for Solihull. She was one of the hon. Members to raise this issue on Second Reading, along with a number of Labour Members, notably the hon. Member for Colne Valley, who made a detailed speech and feels passionately about it. The hon. Member for Dumfries and Galloway also made an intervention during the debate.
The issue relates to how the Government, within the confines of their own approach to pensions entitlement, will include some of the groups that have been left out in the past. The hon. Member for South-West Bedfordshire set out in a detailed, fair way the nature of the problem and some potential impediments to possible solutions.
The proposed new clause is designed to help people with earnings from multiple sources who do not earn at least the lower earnings limit in any one job and therefore end up without a full entitlement to the basic state pension. The inclusion of more individuals in the scope of the basic state pension has been an important part of the Government’s approach. It is an important part of the Bill, which we have already discussed to some extent.
In its second report, the Pensions Commission drew attention to the fact that many female pensioners suffer from problems of the type that we are discussing. The report argued that the need to include those individuals and the practical difficulties of doing so made a strong case for replacing the existing contributory system with a universal pension that would be payable to all who meet a residency test. It pointed out that within the confines of the existing system, it is difficult to fix the problem of individuals who have multiple jobs that are all below the earnings limit.
The magnitude of this problem is set out in the Department for Work and Pensions 2005 report on women and pensions. The report describes how at that time approximately 2.2 million women were not accruing an entitlement to a full working state pension, and of those about 600,000 were earning less than the lower earnings limit, which was at that time £82 a week. Fifty thousand of those individuals are people whom the Government believe to have more than one job and therefore people who would be affected by this new clause, which has good support not only in this place but from a number of bodies outside parliament, including Help the Aged, Age Concern and the Equal Opportunity Commission.