Clause 2 — Entitlement to state pension at full or reduced rate

Part of Pensions Bill (Programme) (No. 3) – in the House of Commons at 4:00 pm on 17 March 2014.

Alert me about debates like this

Photo of Gregg McClymont Gregg McClymont Shadow Minister (Work and Pensions) 4:00, 17 March 2014

I shall of course be disagreeing with the Government’s disagreement with Lords amendment 1.

Let me begin by putting the amendment and the labour market issues it pertains to into some context. Since 2008, only one quarter of the jobs created in this country have been permanent. There are hundreds of thousands of short-hours contracts and, according to some figures, approximately 1 million zero-hours contracts, in addition to other non-standard job patterns. Some 40% of all jobs are not the permanent, full-time positions that we traditionally associate with the UK labour market. That context is important to bear in mind: the Minister rightly referred to the need for the pensions system to keep up to date with changes in the labour market, and that is the reality of the labour market we are now all living with and working in.

The labour market structure needs to be seen alongside the structure of the state pension system. The Minister alluded to that, but as things stand, by 2016, under the Government’s state pension reforms, people will need 35 years of contributions to get a full state pension. Alongside that is the system of credits, which has been mentioned and others will doubtless refer to. Someone who is unemployed and on jobseeker’s allowance gets credits for the state pension, as does a working mother who has a child under 12. A grandparent caring for the child of a working mother can get credits for the state pension, as can someone on disability benefits or carer’s allowance. It is important to recognise those points in the context of an ever more complicated labour market.

The amendment is clear that it does not propose a particular solution. It is a permissive amendment and relates clearly to job insecurity issues and the changing nature of our labour market. The House had a very interesting debate on job insecurity at the beginning of February that covered a number of important issues, yet during it, the pensions aspect was not raised. That reflects the extent to which we are all trying to catch up with this non-standard labour market—the shift from the full-time permanent employment that has historically characterised work in this country.

The Minister said, I think, that those who support the amendment should be aware that the Department for Business, Innovation and Skills is currently assessing zero-hours contracts. He is absolutely right, but if the Government accepted this permissive amendment, the DWP would be poised to respond swiftly to the BIS zero-hours contract review.

The amendment seeks to future-proof the Bill, to construct a pensions platform underneath the poorly paid—those in deeply insecure, fractured work—and to make it clear that this House believes that they should not lose or be denied a full state pension because of changes in the labour market structure which are not of their doing.

Let me deal with some of the other points the Minister made. I shall begin at the end, so to speak, with the extraordinarily attractive offer that he made. He said that the Government are committed to a literature review and to an analytical stakeholder forum. One can hardly wait. He suggested that there are 17 logical flaws in the amendment. I am sure that Baroness Hollis would be delighted to hear all 17—assuming he has not just come up with that figure spontaneously—and it would be useful to know what they are. After all, we all believe in saying what we mean and meaning what we say.