Women’s Single-Tier Pensions

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 11th March 2013.

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Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 2:30 pm, 11th March 2013

What recent assessment he has made of the effects of the Government’s proposal for a single-tier pension on women born between 6 April 1952 and 6 July 1953.

Photo of Catherine McKinnell Catherine McKinnell Shadow Minister (Education)

What recent assessment he has made of the effects of the Government’s proposal for a single-tier pension on women born between 6 April 1952 and 6 July 1953.

Photo of Kate Green Kate Green Shadow Minister (Equalities)

What recent assessment he has made of the effects of the Government’s proposal for a single-tier pension on women born between 6 April 1952 and 6 July 1953.

Photo of Heidi Alexander Heidi Alexander Labour, Lewisham East

What recent assessment he has made of the effects of the Government’s proposal for a single-tier pension on women born between 6 April 1952 and 6 July 1953.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

With permission, I will answer this along with Questions 7, 8 and 16.

We have today published a document analysing the pension outcomes of this group of women. Overwhelmingly, women in this group—who reach state pension age up to three years before a man born the same day—would get more pension benefits over their lives than a man with the same national insurance record.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

The Minister may have a formidable intellect but I am going to disagree with him. As he will know, half a million women born between 1952 and 1953, many of whom will have celebrated mother’s day yesterday, will lose out on this single-tier pension. Will he apologise to the 700 women in my constituency who are affected and have written to me? Will he do something before they lose out?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I take your correction on the question numbers, Mr Speaker.

I think that the hon. Gentleman should apologise to the 700 women in his constituency, as he seems to be asking us to treat them the same as a man born on the same day—that appears to be the essence of his problem.

If we did that, those women would have to wait up to three years longer for their pension, and they would not thank him for that.

Photo of Catherine McKinnell Catherine McKinnell Shadow Minister (Education)

Some 1,700 women in Newcastle will miss out on the single-tier pension, yet men born in the same period will qualify. Claiming that those women are better off because they are allowed to retire earlier is simply not good enough. If they are retired for 20 years, they could lose up to £38,000, which is well over twice what they would receive through benefiting from retiring earlier. What message does this send out to the hard-working women of Newcastle, many of whom celebrated not only mother’s day yesterday, but international women’s day on Friday?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

The message it sends out is that their MP did not listen a moment ago. We have published research today that shows that 85% of these women will do better over their entire retirement—both the first few years and their entire retirement.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

Unless the hon. Lady has read the research, I do not know why she should be shaking her head. It says that 85% will do better by being treated as women than they would by being treated the same as men.

Photo of Kate Green Kate Green Shadow Minister (Equalities)

You and I, Mr Speaker, have just had the great pleasure of welcoming a rather beautiful portrait of Emmeline Pankhurst to Parliament, and I hope that all colleagues will want to go to admire it in the Upper Waiting Hall. It is important that we remind ourselves that women’s political interests can sometimes be different from men’s, and I am grateful to have the chance to ask the Minister about his pension proposals and their implications for women today. Many women will struggle to achieve 35 years of full employment and full contributions, partly because of caring responsibilities and also because of labour market discrimination. What steps does he intend to take to address that disadvantage?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

As the hon. Lady says, we have a system of not only paid contributions, but credits. Although 35 years will be needed for the full £144, even a woman with 30 years will get thirty thirty-fifths of £144, which is more than the current basic pension of £107. So, many women will benefit from the new rules.

Photo of Heidi Alexander Heidi Alexander Labour, Lewisham East

The Minister says that 85% of women will benefit under the proposals that he has announced today, but what about the 15% who do not?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

It is gratifying that the main Opposition response to our proposals is that they want more people to benefit from them. The hon. Lady is right: there is a set of women—a small number of women—who would do better under the new system than the old, but overwhelmingly the vast majority will do better under the current system. She raises an issue about allowing people to choose whichever was the better, but it is not always certain—at the moment—what the better answer would be for their entire retirement. So we could not actually advise people in advance which category they would be in.

Photo of Jane Ellison Jane Ellison Conservative, Battersea

The Minister might be aware that during the pre-legislative scrutiny of the Bill there has been considerable confusion about how much some of these women would lose. There is considerable misunderstanding out there, so could he provide some clarity in this area?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I am looking forward to two hours with the Select Committee this afternoon after this warm-up. My hon. Friend is absolutely right, in that some of the women in the group we are talking about will miss out on nearly £20,000 of pension if they were to be treated the same as a man born on the same day. I think that very few of them would think that a good deal.

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley

Does my hon. Friend agree that the reforms to the state pension will be advantageous to women in the future?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

Absolutely. The process of state pension reform was happening at a glacial pace and equality between men and women was many decades away. We have brought that equality forward and men and women on both sides of the House should welcome that fact.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

We look forward to seeing the Minister later. Does he agree that one of the problems is that people just do not understand what the change will mean for them? What plans do the Government have to write to everybody to tell them what pension they would have received under the old system and what they will receive under the new one?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

My hon. Friend is right to say that information will be crucial. One thing we have been doing with the changes to the state pension age, for example, is writing to the individuals affected so that they know exactly what position they are in. All too often in the past, laws have been passed, no one has been told and it has taken many years for people to find out about it. An information campaign will be central to taking forward these excellent proposals.

Photo of Gregg McClymont Gregg McClymont Shadow Minister (Work and Pensions)

The Minister has so far provided cold comfort for the 429,000 women who will not benefit from the new state pension when men of precisely the same age will. May I ask the Minister about a specific group of 80,000 women who are represented in Parliament today? Under the Pensions Act 2011, which this Government passed, their retirement age increased with little notice. Now they will miss out on the Government’s proposed new pension with an average loss to the tune of £9 per week. Is it fair to penalise these women twice in two years?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

To be clear about the particular group to which the hon. Gentleman refers, their pension ages increased by a maximum of six months under the 2011 Act. The vast majority of those 80,000 would be worse off if we treated them the same as men, which is what he seems to be calling for. I was not clear what else he was calling for, but treating them the same as men would leave them worse off than they are now.