Clause 13
Pensions Bill
4:30 pm
Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)
I welcome you back to this afternoon’s sitting, Mr. Gale.
Clause 13 is very important. It deals with the increase in state pension age. I note from the schedule in the White Paper, which helpfully sets out the ages and increases in retirement age, that in order to collect my basic state pension I will have to work until my 66th birthday. I think, if I am right about the Minister’s age, that he will have to work until his 67th birthday before he collects his basic state pension. Perhaps other Committee members should declare an interest if they choose to speak to the clause and let us know how the measures affect the age at which they will collect their basic state pension.
I believe it was Bismarck, the German Chancellor, who first picked the age of 65 as the age at which retirement benefits would be paid. I agree with my hon. Friend the Member for Eastbourne, who has said on more than one occasion that raising the state pension age is, in a sense, a no-brainer when one considers the increases in longevity that have occurred since Bismarck’s time. We must also, quite properly, bear another issue in mind when we address the clause, which is the question of inter-generational fairness.
One option would have been to load all the costs of increasing the basic state pension now on to future generations—our children and grandchildren—by sending the bill down through the generations to them so that pensioners now and in the near future could enjoy higher pensions. That would have been wrong. Virtually all of us exist in families and many of us have children or even grandchildren, so we need to bear in mind the effects of such a major change on different generations.
Returning from Germany, it is worth considering briefly the history of the pension age in this country. In 1909, I think, the Liberal Democrats first introduced pensions at the age of 70. In 1925, the age became 65 for men and women, which is the direction in which we are heading—we hope to end up there by 2020. It was not until 1940 that the age went down to 60 for women, remaining at 65 for men. In a sense we are going back to the future, to the 1925 position. Who knows? Perhaps at some point in the future we will end up back in the 1909 position. I am certainly not proposing that now, but given what might happen to longevity in the future, we might arrive at that point again.
New clause 1 contains a requirement on the Government Actuary to
“present a Report to Parliament every five years setting out the latest evidence on trends in longevity.”
It would also place a duty on the Secretary of State for Work and Pensions
“to make a motion in the House of Commons in relation to any report”.
The Government are right to point to the available statistical information, some of which has been helpfully set out in the regulatory impact assessment on the Bill, which points out that, on average, people enjoy 20 years of life expectancy after reaching the current state pension age and that that figure is expected to increase to 21 years after 2046. So far, so good. So far, so reasonable.