New clause 5 - State pension rights of women with a - record of reduced rate contributions

Pensions Bill – in a Public Bill Committee on 18th March 2004.

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'(1) The Secretary of State shall compile a list of all women whose record of National Insurance Contributions includes one or more years in which they paid contributions at the reduced rate for married women (''the list'').

(2) The Secretary of State shall write to all women on the list with a forecast of their state pension entitlements.

(3) Women on the list shall be entitled to make additional National Insurance Contributions in respect of any year in which they held an election for reduced rate contributions but did not make any such contributions.

(4) Any contribution made under subsection (3) may be taken into account only for the purposes of state retirement pension or bereavement benefits.

(5) The Secretary of State shall require the Government Actuary

(a) to report to him, within six months of the coming into force of this Act, on the operation of the system of reduced rate contributions for married women, and

(b) to make make recommendations as to any redress that might be made in respect of women on the list.'.—[Mr. Webb.]

Brought up, and read the First time.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 9:30 am, 18th March 2004

I beg to move, That the clause be read a Second time.

Good morning, Mr. Griffiths. We are a select band, but quality makes up for lack of quantity. The purpose of new clause 5 is to address the needs of women who, at some point in their contribution history, have paid national insurance at the reduced rate that is available only to married women and subsequently if they are widowed.

The Committee might say that the Bill is mainly about company pensions, private pensions and regulators, so why spend time on a new clause about a specific group of people and their state pension entitlement? My reason for tabling the new clause is that the Government accepted in their pensions Green Paper that women's pensions were a particular issue and devoted a whole chapter to the nature of the problems that affect women. We had assumed that, when the Department for Work and Pensions had time, it would introduce legislation about women's pensions. However, the Pensions Bill is pretty much silent on the subject. The new clause would tackle one of the injustices that women face, which is why they continue to be poor relations in the matter of pensions.

In the constructive spirit of the Committee's proceedings, I refer hon. Members to early-day motion 131 that was tabled in the previous Session. It is almost the same as new clause 5 and was signed by more than 200 hon. Members. As well as myself, my hon. Friend the Member for Chesterfield (Paul

Holmes) and the hon. Member for East Carmarthen and Dinefwr (Adam Price), four Labour members of the Committee kindly signed the early-day motion. They were the hon. and learned Member for Redcar (Vera Baird), a co-sponsor of the motion, and the hon. Members for Coventry, South (Mr. Cunningham), for Burton (Mrs. Dean) and for Monmouth (Mr. Edwards). I am grateful to them for signing an early-day motion that was headed by the name of a Liberal Democrat, although it was a cross-party motion, because they strongly felt that an injustice needed addressing. I hope that the Committee will consider that the issue is not partisan but unites us all.

I shall set out the background to the problem. Under the system, married women could elect to pay a reduced rate of national insurance. In return, they forwent entitlement to retirement pension and certain other benefits on their contributions. Why have such a system in the first place? Well, as the Minister will know, it was based a male breadwinner view of the world. The presumption was that men earned money and that women had babies, so only men needed their earnings replacing and would therefore be part of the system and pay the full rate of national insurance, but married women—as distinct from single women, who were never part of the scheme—could pay less and receive less. In a 1940s view of the world, there was a certain logic to that idea.

In principle, we could ask what was the problem. We had a system under which people made an informed choice. They saved money at the time and recognised that, when they were old, they would not receive it, but they would have husbands. Had that worked, we would probably not be here discussing such matters, but the truth is different. There are several respects in which, in fact, the choice that the women made when they opted for the reduced-rate contribution was not an informed choice in the way that we understand that term now. [Interruption.]

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

Order. I remind hon. Members to turn off their mobile phones, their pagers and any other instrument that might disrupt the sitting.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

Thank you, Mr. Griffiths. When women opted for the reduced rate, was it a free, informed choice of the sort that happens today in pensions? The Government's line has always been that, to be entitled to the reduced rate, women signed a form. The form stated, ''I have read and understood the leaflet''. We would assume therefore that that was the end of the story. But there are several examples of that not happening. I know that because when I first raised the issue in the House—I have since raised it regularly over the past seven years—I was contacted by angry women from throughout Britain who have formed themselves into a campaigning organisation, Support Women Against Pensions Poverty, or SWAPP for short. The organisation now has a network of more than 1,000 members, all of whom are aggrieved at the way in which the married woman's stamp has treated them. They are the tip of the iceberg. Every time we raise this issue in public we get more letters saying that the system was not fair.

Let me explain what I mean. First, I am not saying that nobody understood. Sometimes when I make

these arguments a straw man is set up in response. It is quite clear that some people signed the form, read the leaflet and made an informed choice to save some money now and do without a pension later. However, it is also clear that that is not true for many women. To give an example, we are talking typically about the '60s and '70s. The culture was different then. Often women married very young, so many of the women who switched over to the married woman's rate were teenagers or in their early 20s. One woman who wrote a letter to me explained that she came back from her honeymoon, at the age of about 19, and the man from payroll came round and said, ''Did you have a nice honeymoon, love? Sign here. You're a married woman. You pay the married woman's rate.''

Most people, even today, do not really understand how national insurance works. Certainly back then many did not. People report that, although they signed the form, they were not shown the explanatory leaflet and were simply told that that was the way in which the system worked. There are many examples. The woman I referred to said that the payroll man used to be in the Army and people do not argue with a brigadier. That is a world away from the informed pensions choice that this Bill is about. However, that is what happened. Unless the Government think that all those women are liars—I have 1,000 letters in my office from women making such points—they have to accept that what the women describe happened. Some women signed the form because they were told to; things were not explained to them.

Before some women signed the form, they asked for information and advice. They rang up the then Department of Health and Social Security—or whatever it was called at the time—and quite often they were given duff advice. Can they prove it? Well, of course they cannot: it was a phone call that took place 30 years ago. They cannot prove it, but I am convinced that it happened. They would ring up and they would be told, ''You don't need to pay national insurance, love, because you'll get a pension off your husband.'' It is true that when their husband reaches state pension age, they are entitled to a 60 per cent. pension on his contributions. However, what was seldom, if ever, explained to them was that they do not get a penny until their husband hits 65.

Significantly, given that the women's state pension age is 60, when a woman who is the same age as her husband hits 60, she gets nothing at all for five years. A departmental officer who explained that, ''You don't need to save for a pension, love,''—that is probably how it would have been put—''because you'll get something off your husband,'' would have been giving a misleading impression if they did not go on to say, ''But only when he is 65.'' One poor lady is 20 years older than her husband. Frankly, she will be dead before she gets any pension on his contributions. Obviously a whole range of women are involved. Some will be younger than their husbands, so the issue will not arise. However, this is another example of the lack of good information at the time leading to an injustice.

If what happened then happened today, there would be compensation claims, ombudsmen and all sorts of things, but we are talking about a different world. One problem is that it is only now, as they approach pension age, that people are finding out about the past and the consequences involved. One reason why the first two subsections of the new clause 5 provide that the Secretary of State shall compile a list of women who paid the married woman's stamp and write to them all—that is very much in the spirit of the Bill, which is about giving people pensions information and forecasts—is that, even now, many women approach pension age and get a nasty shock. They hit 58 or 59, send off for a pension forecast and find that, in some cases, they are entitled to pennies.

When I made a television programme about this issue, hundreds of people wrote in. One of the women retired last summer with a pension entitlement of one penny. Most people do not believe that that can be the case. People simply do not understand. It therefore seems entirely reasonable for the Government to accept the first two subsections of my new clause, if they do not feel that they can accept the whole of it. I would regard it as serious progress simply to tell people. We are not talking about a marginal little bit of the system that affects a handful of people. Although it is true that now only tens of thousands of women are on the married woman's stamp, 4.5 million married women were paying it at its peak, and it has affected the future pension rights of the vast majority of those women.

I have not focused the new clause on the 80,000, 50,000 or however many are left on the married woman's stamp but on the fact that the Government Actuary estimates that even now well over 1 million married women whose contribution record was affected by it have not yet reached state pension age. That explains the purpose of the first two subsections of the new clause.

The third subsection is about filling the contribution gap. Once we have notified women that they are heading for a pathetic pension, we might want to allow them to do something about it, but again the law stops them. As I am not sure that the new clause is worded absolutely correctly for what I am trying to achieve, I shall explain my intent. People can pay class 3 voluntary national insurance. In some cases, contributions can be backdated several years to fill gaps in their national insurance contribution record, but married woman on the reduced stamp cannot make such payments for any year in which the married woman's election was in operation. I am sometimes accused of demanding something for nothing for those women, but that is not the case in subsection (3) of new clause 5, which asks the Government to accept payments from them.

A typical situation would be the woman who left school at 15—let us think about when this happened—worked immediately after school for, say, five or six years, and then married and went on to the married woman's stamp. She is only a few years short of getting at least a 25 per cent. pension in her own right. We might discuss the 10-year rule or the 25 per cent. rule at a later stage of the Bill, but, leaving that to one

side, if those women were allowed under subsection (3) of new clause 5 to make additional contributions in order to fill gaps in their record, they would receive something for something.

I stress that I am not asking for something for nothing. A misunderstanding is that the women paid nothing. In fact, they paid a reduced rate that was far more than the value of the very limited benefits that they received; it was not an actuarially fair reduced rate. They paid about one-third the amount of national insurance—that was certainly the case when we went to earnings-related figures—but what they received was not remotely related to their contribution. We are not asking for something for nothing but something for something; for example, the chance to top up contributions. Subsection (4) clarifies that, because of the scope of the Bill, contributions should fill gaps in retirement pension records.

Subsection (5) is the critical and, perhaps, most controversial part of the new clause. It asks whether there is a bigger issue involved. Is there something that the Government Actuary should consider? I am absolutely convinced that there is, as the system has failed in several ways. I mentioned earlier that people made their initial decision when the literature and explanations were not very good. Lord Rooker, the Minister's predecessor but several as the Minister with responsibility for pensions, admitted in the House that the leaflets available at the time would not pass the plain English test. He went on to state:

''It was as if there was an ordinance that Departments did not give advice—they were not in the advice business. All we could say to constituents was, 'Make a claim and you will get a decision' ''—[Official Report, Westminster Hall, 23 May 2000; Vol. 350, c. 187WH.]

The culture was completely different then. Indeed, as one departmental official memorably put it recently, they did not have plain English in those days. That was the sort of world that existed.

As not all the Opposition Members were able to be here at the beginning of the sitting, I repeat that the hon. and learned Member for Redcar has actively promoted these arguments in the House, and other hon. Members have endorsed them. I hope that they will contribute to this debate.

Why should the Government Actuary launch an investigation, and what should it be about? A key point is that even if the women had made an informed choice at the time, the world and pension systems have moved on. What may have been the right choice then became the wrong choice later. I wish to give some examples. The classic one, as this discussion is about married women, involves home responsibilities protection. It was introduced in 1978 and said that a woman—the beneficiary was typically but not always a woman—drawing child benefit could have her pension record protected for the years in which she received child benefit through home responsibilities protection, but married women paying the married women's stamp were excluded from such protection. How many married women knew and understood that by not revoking their reduced-rate election they were potentially forgoing a decade of pension protection?

One gets home responsibilities protection for every year of child benefit, so a woman who stayed at home with the kids for the whole time that they were at school would lose 16 years of pension protection. That could produce the following extraordinary situation. Let us say that two women lived next door to each other, both worked at the same factory and gave birth on the same day, but one paid the full stamp and one the reduced stamp. For the next five years, until their kids started school, both were at home. One woman paid no national insurance, but previously paid the full rate, and would get her pension right protected; the woman next door, who also paid no national insurance, would get no pension protection.

It might sound as though I am talking about the '60s and '70s, but there is a huge legacy in pensions that means that, even today, many married women retire with pathetic pension entitlement because of matters such as not being entitled to HRP. Those women who, pre-1978, elected for the reduced rate may have made the right decision, but they might have been well advised to opt back in later. Did the Government tell them? Not only did they lose home responsibilities protection, but they lost state earnings-related pension scheme entitlement. That did not exist pre-1978, so a woman who made that choice before then could not have known that she would exclude herself from it. Unless she followed the proceedings of the House, she would not have known a lot about SERPS and would probably not have known that she was excluding herself from it by continuing on the reduced rate.

There are other complications that it would be unreasonable to expect anyone to have understood about the choice. There was something called the half test, which applied—guess what?—only to married women. It said that married women, and only married women, had to build up half their working life in pension rights before they could get any pension. That rule was later scrapped.

Thus there will have been married women who were right, at the time that they opted for the married woman's stamp, because the half test would have terrified them. They would have thought that they would never work for half their ''working life'', and so paid the reduced stamp. Then the half test was abolished, but did anybody write to married women and tell them? If they had, the answer would have been, ''What's the half test?'' What I am trying to communicate is that it was a fiendishly complicated and evolving system. Women made choices decades ago that would have consequences for years to come in a culture that was completely different from today's.

The Minister was challenged by the hon. and learned Member for Redcar, or another Member, in the House on Monday at departmental questions on the issue. He gave two answers about why he rejected the general approach of doing anything for married women who paid the reduced stamp. The first was that it would not be fair to the women who paid the full stamp. That is a legitimate problem. As I said, when I produced a short television programme about the issue, I received hundreds of letters. Ninety-five per

cent. were from women who paid the reduced stamp and would be covered by the new clause. Five per cent.—not a bad ratio for me, actually—was hate mail from women who had paid the full stamp and who knew what they were doing, who said, ''I knew what I was doing. I paid the money. I made the sacrifice. Why should they get something for nothing?'' Were I calling for something for nothing, they would be exactly right.

However, I am not saying in the new clause that we should pay full pensions to married women who have only ever paid the reduced stamp. I am saying, first, that they should be told, which seems reasonable; secondly, that they should be able to spend their own money topping up the contributions they made in the past; and thirdly, that the Government Actuary should consider—

Photo of Kevin Brennan Kevin Brennan Labour, Cardiff West 9:45 am, 18th March 2004

On the issue of topping up, has the hon. Gentleman done any calculations on whether it would be worth the women paying that? Someone in her late 50s would have to pay a disproportionate amount for the benefit that she would get.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I am grateful for that intervention. It is a perfectly fair point. It is clear that it would not be in everybody's interest to top up. At the moment, though, it is prohibited. The hon. Gentleman may have been delayed in arriving and missed me giving an example of where it might make good sense. There is a rule that says that people have to pay for 25 per cent. of their working life to get anything. Many women will have paid eight or nine years' worth of contributions, for which they will get nothing, and by paying one extra year's contribution to bring them up to the threshold, they will get a 25 per cent. pension. For one year's worth of top-up of NI, they can get a quarter pension. If, for example, their husband is substantially younger, they can get that pension for several years until he is 65.

I fully accept the point made by the hon. Member for Cardiff, West (Kevin Brennan); it will not always be in people's interests to top up, but I do not believe that we should prohibit people from doing so. I want to stress that I am not asking for something for nothing; I am asking for a fair return on contribution. That would not mean simply handing over a full pension to those women. That is not what I am calling for. I am sure that the Minister will respond in good faith, and I hope that he will not parody what I am saying as, ''Well, we'll just hand them over a pension.''

Photo of George Osborne George Osborne Shadow Minister (Treasury)

Does the hon. Gentleman have any costings for what he proposes? Would there be a charge to the taxpayer, and what would it be?

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

The cost of subsections (1) and (2) of the new clause would be negligible. It would be the cost of 1.5 million stamps, essentially, plus that of turning the handle. Given that the Government plan to send pension forecasts to everyone eventually, it would happen anyway, but we want to bring it forward. It has no significant cost.

The cost of allowing people to top up is difficult to estimate. In the short term, it would bring money in. It would allow people to pay extra national insurance contributions now, and build up future entitlements. To be honest, I do not know what that would cost in the medium term, partly for the reasons raised by the hon. Member for Cardiff, West. There will be people for whom it does not make sense, and therefore the number of people who take up the option might be quite limited. The amounts of pension that they get will probably run on only until their husbands are 65 and there will be pension credit offsets, so the issue is quite complicated. I do not think that we are talking about a large sum of money. The Government Actuary will report and investigate the issue if he thinks that there has been unfairness.

Photo of Kevan Jones Kevan Jones Labour, North Durham

I am grateful to the hon. Gentleman for giving way. He is stating that the measure will not solve the problem for quite a large number of people. Are the Liberal Democrats suggesting another alternative for those people who will not find it in their interests to pay additional credits, and has that been costed?

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

We are, and I would be happy to expand on those proposals at length, but I feel that you might prevent me from going beyond the scope of the new clause, Mr. Griffiths. I would be happy to take a coffee with the hon. Gentleman afterwards and talk him through Liberal Democrat pension policy.

The Minister said to the hon. and learned Member for Redcar that the new clause would not be fair to the people who had paid for the full stamp. I have forgotten the second reason why he said that he would not accede to the new clause, so I cannot rebut it. If the Minister wants to intervene and remind me of that killer objection, I will be pleased to respond. It has obviously passed him by as well—[Interruption.] Oh, it is proof. I am greatly relieved.

The Government's other objection is to say, ''Fine. Give us a case. Show us someone. You say you have had hundreds of letters: show us one. Prove it.'' What happens when one tries to do that? If one asks the constituent, they say, ''Do you honestly think that I have my payslips from 1962?'' If one asks the Government to show the form that the person signed to say that they wanted to be on the full stamp, the Government say, ''Actually, we have shredded that.'' The Minister is obviously a reasonable man, but he is just coming across as reasonable by saying, ''We will look at individual cases'', and everyone goes away happy. We then discover that the only way that one can look at individual cases is to have a transcript of a telephone call from the mid '70s or a copy of a form from the '60s. That is not going to happen.

I do not believe that all these people are trying to mislead us. Had they got together and concocted a collective story—like one of those trials where all the witnesses agree a story—one might not have trusted them. These are individual women who have never spoken to each other before we got them together. They wrote in, saying exactly the same thing.

I should like to draw one final parallel on the issue of inherited SERPS, where the Government failed to

give information to pensioners, who lost out as result. The Government took the view that if someone said that they had telephoned the Department and were given misleading information, the Department would presume that they were telling the truth unless it could demonstrate the contrary. I have quotes from Baroness Hollis of Heigham relating to this issue, and from another of the Minister's precedessors, who is now Minister for Energy, E-Commerce and Postal Services, the hon. Member for East Ham (Mr. Timms), who said:

''If . . . people have received advice by telephone, we shall take that into account''—

he is talking about inherited SERPS.

''If what the hon. Gentleman is putting to me is that people may have received advice—for example, over the telephone—on the basis of which they decided not to do something that they would otherwise have done, then they . . . will have a case for compensation.''—[Official Report, 24 June 1999; Vol. 333, c. 1313.]

That is the nub of the final bit of the new clause. The Government say, in relation to inherited SERPS, that if people say they made the calls, were misled and lost out, the default and presumption is that they are not lying. I fear that the Government presume that all these women are lying, trying to give a misleading impression, and that they want something for nothing. That is not true. I hope that the Committee will accept new clause 5.

Photo of Vera Baird Vera Baird Labour, Redcar

It was indeed I who belaboured the Minister of State with this issue, yet again, only a few days ago.

The second answer that the Minister gave—the hon. Member for Northavon (Mr. Webb) mentioned the first—was that women had done very well out of the state pension system since that time in terms of benefit, and particularly from the means-tested element, because they were the poorest pensioners and money had been rightly directed to them instead of being put into rectifying the situation about which we are talking. I accept that that is a valid point.

The first answer that the Minister gave, which has already been mentioned—that women who chose to take that route have more money in their pockets—has a slight flaw. Indeed, they did have more money in their pockets—perhaps they took that decision because they needed it. However, I am pretty sure that there was a time when, because of the way in which the contributions were configured, the married woman's contribution was higher than the one she would have made if she had not opted out. In that sense she did not have extra money in her pocket.

Rather than arguing about whether somebody had an extra pound in their pocket 30 years ago, we should concentrate on the issue of whether they acted in a properly informed way at the time. That issue repeatedly comes to me in constituency surgeries and is reinforced by the fact that my own case worker, who works for me, is in that situation. She was asked, ''Why do you need to pay anything at all? You are a married woman—your husband is providing for you already, so it is a waste of money''. As my case worker puts it, those were the days when women, who were not far from the domestic hearth, did what their husband told them—and certainly did so if that was

reinforced by what the boss told them. There was a need to say more than that to those women. Women complain that no more was said and the consequences of something befalling their husband—or a divorce—in terms of their individual rights were not explained.

I would be inclined to support the thinking behind new clause 5, that raising an inquiry would not be expensive and it would be easy to ascertain the view of the the roughly 1.5 million women who paid the married woman's contribution. That will not raise great hopes. I would not be in favour of something that would persuade women, just by writing to them, that they would get some change or some benefit. However, it would at least ascertain the size of the alleged problem and the numbers of people who say that they misunderstood and were not properly informed. The Secretary of State plans to write to everyone with a forecast of their pension. Consequently, that would not add anything to the cost.

Save for the striking example given by the hon. Member for Northavon, I cannot imagine that subsection (3) would help many people very much. The clause would simply require better information to be obtained. It would leave behind an element—perhaps quite a large element—of women who were in that position and could not do a great deal about it because it would be too late for them to catch up. I do not have much of an answer to give those people.

There are two issues. The first is that those people do not have their pension rights, but that is subsumed to an extent in the fact that they have the pension credit to top up their pension, so the issue is not just a shortage of money. The second issue is the strong sense of grievance that those people feel about having been misinformed, or not fully informed, and about the fact that although they have worked—and in some cases looked after children—for a long time, they have next to no rights. Some women were waiting for their husbands to retire before they did anything.

The provisions in subsections (1) and (2) would not be expensive. I would widen the inquiry mentioned in subsection (1) to include two questions: first, what information were women given about the choice to pay only a married woman's pension contribution? Secondly, what information, if any, were they given about home responsibilities protection when they left work to have children? The second question is probably more of a problem than the first. It is certainly a big issue, because it is such a complicated matter to explain, in non-plain English form, to someone who thinks that they have already taken the only decision that they need to take for their pension future. I doubt whether the position was clearly explained, and that may have caused a great deal of resentment and difficulty.

Of course, I would not vote to include the new clause—which is far from perfect, as the hon. Gentleman said—in the Bill. However, I am raising the principle again and emphasising that there are two aspects to the issue. One is the money side, but the other is that there is truly a sense of grievance on the

subject. I invite the Government to do all they can by allowing women to catch up, if it is practical, in order to put the money problem right. I also invite them to make the inquiries, with a view to assuaging that grievance for as many women as possible.

Photo of Mr Huw Edwards Mr Huw Edwards Labour, Monmouth 10:00 am, 18th March 2004

It is a pleasure to contribute to the debate on a new clause. I was wondering whether I would be moved to speak on any clause, but having heard the contribution of the hon. Member for Northavon, whose expertise on the subject is well known, I would like at least to support the spirit in which he tabled his new clause. I was one of the signatories to early-day motion 131 in the previous Session of Parliament, and women in my constituency have contacted me and asked me to support the hon. Gentleman's campaign.

The hon. Gentleman and others, including my hon. and learned Friend the Member for Redcar, have identified an important anomaly. If 50 per cent. of women pensioners in this country do not receive the full state pension, that anomaly is the major contributory reason why. That anomaly has existed in our social security system for 50 years, and has never really been adequately addressed. It is right to say that at the time, many women were just accepting the norms and standards, and believing what their husbands, bosses and even the state told them, which was that they did not need the security of social security if they were married, because of the security of marriage.

Sadly, many women have realised that marriage did not give them great security. If they were dependent on husbands' contributions, they were effectively disadvantaging themselves later in life. Because of the reduced national insurance contributions, they were disadvantaged not only in terms of pension contributions, but in relation to unemployment, sickness and even maternity benefit, too. That is one of the anomalies associated with the problem. If the Government cannot accept the clause, I would like them at least to think about the fact that the new clause is in the spirit of what they ought to be doing. They should come forward with something to help rectify the anomaly.

One of my peculiar hobbies is to study the recommendations in the research and reports of academics who later become Ministers. There is no better example in the House than that before us today: the superb work on the minimum wage done by my hon. Friend the Member for Gravesham (Chris Pond), and his goldmine of recommendations on what that minimum wage should be. Now he is a Minister—[Interruption]. Yes, the minimum wage has just been uprated; I would not want to embarrass the Under-Secretary by discussing some of the recommendations that he has made in the past 20 or 30 years about minimum wage levels. That is not an issue for the current debate.

However, the Minister for Pensions has been a great specialist in family policy. I will not taunt him today by asking him if he can recall making any recommendations that would rectify this anomaly in

any of his research reports. I was on a Committee some months ago and I would have been able to quote, from a seminal piece of work by the Minister called ''Old and Cold'', his recommendations on how to combat fuel poverty and hypothermia. To his credit, his work greatly influenced the debate. I can only ask the hon. Member for Northavon to examine some of the recommendations that the Minister might have made about family policy and see whether, in the spirit of those, he could table a clause to rectify the anomaly.

Photo of Sally Keeble Sally Keeble Labour, Northampton North

I agree with a great deal of what has been said by the hon. Member for Northavon, my hon. and learned Friend the Member for Redcar and my hon. Friend the Member for Monmouth. Although they have correctly identified the problem, I do not think that what the hon. Member for Northavon recommends is the solution—and women need some serious explanation as to why it is not.

All of the statements made so far have assumed that the issue involves women who left work when they were young, and then went into the factories. After my degree, when I left university and went out to work, I too signed up for the married woman's stamp. That was what one did. One got married, changed one's name and signed up for the married woman's stamp. That is what the employer did; it was what one's mother and everybody else said happened, so it was what happened. People were not given information at that time. I have frequently said to women who have come to me with that complaint, ''Look, you go and find a leaflet. If I can see anything that will prove you were wrongly informed, I promise you I'll take your case to the ombudsman''—but I cannot find such proof, and neither can anybody else, because the papers have disappeared.

That does not mean that the problem can be solved as the new clause suggests. There is an issue about the fact that one paid more than one would have done otherwise, so the situation does not look quite as good at the time as it might have seemed. In addition to signing up for the married woman's stamp, most of the women, because they had children, had problems with career breaks. It was a different world, and women accepted that they were expected to stop working while they had their children, although an awful lot of women were hard up and had to carry on with the grind as they do now. Many women worked part-time once they were married or once they had children, and there were problems of unequal pay and job segregation. Therefore, the discrimination that women have faced, which has influenced their pensions, was not just about the married woman's stamp. It related to a whole host of other issues too.

I could not afford to top up all the contributions and benefits that I have missed through having children, through paying the married woman's stamp for a while, and for doing this, that and the other. Even if women could make up the married woman's stamp contributions, they would still have the missing years, and they would still have had the different kinds of jobs and all the other things that have influenced their pension.

One thing that has not been recognised—I am mentioning this to the Minister because something can be done about it—is that this is not simply about the social security system and how much people pay. It is about equality and the fact that women were treated as unequal and inferior, and as appendages to their husbands, who were the breadwinners and the people who ran the world. That is partly why, for many women, this problem sticks in the gullet so much. Many women in my constituency who have worked all their lives, even when they had children, come to see me about it.

Some people say that women were dependent on their husbands in those days. Rubbish. Women in Northampton have always worked; they worked long hours and looked after their children as well. I have had moving letters from women who are now retired, saying, ''We didn't do what you did. We didn't have child care; we looked after our children ourselves. When our husbands came home from work, we went out to work, and we shared the child care between us.'' There needs to be a recognition that the system has been unfair to women and has treated them as if they were appendages to their husbands.

I remember that on one occasion, while I was canvassing in my constituency, a woman came at me like a bat out of hell; she was so furious. She said that she had worked all her life, looked after her children, worked part-time and paid all her married woman's stamps. She had had a thoroughly useless husband, whom she had finally divorced, and at the age of 58 had married a younger man, much to her joy.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

She would be dead before she got a pension on his contributions.

Photo of Sally Keeble Sally Keeble Labour, Northampton North

Exactly. Two years later, she was denied her pension. She was beside herself with fury, and I could understand why. What grates is the idea that the only reason why a person does not get a pension is because she is a woman. That needs to be acknowledged.

I think that the way in which the Government have made sure that women have proper pensions is right. Committee members will probably say, ''She would say that, wouldn't she?''—but we we cannot go back through an unfair system and try to make up for the bits and bobs here and there that made it so unfair. We could deal with the married woman's stamp, but there would still be part-time staff. What would we do about women who took career breaks to have children, and about the fact that for years women have been discriminated against in pay, and have been excluded from jobs with proper pay? What would we do about women who have not had the bonus systems, the access to overtime or all the other extra pay deals that come through unionised and regular employment?

That is why things such as the state second pension need to be promoted much more, and to be better understood. The carer's pension in particular, for women who take time out later to look after older relatives—that is an increasing pattern now—needs to be understood. People look after disabled relatives; for many people, that is becoming much more of an option. The stakeholder pension that women take with

them and then make up the contributions needs to be understood. The idea is no longer that once a woman has stopped working to have children, that is it, and she is out of the running for a pension. For the women who have lost out now, there are measures such as the pension credit; their income can be properly increased, not out of charity but as of right, and in a dignified and sustained fashion.

The idea of the married woman's stamp sticks in my gullet as much as it does for any other woman who has been caught by it. None the less, a much better way forward is to give an acknowledgement that the system was unfair, coupled with the implementation of the measures that we have to make sure that women have proper incomes in retirement, and the measures that will give women proper independent pension rights of their own, so that future generations of women do not have to go through the same problems that the present generation of women pensioners are suffering.

It is really important that what is offered now to women who have already been through the nonsense of the married woman's stamp will give them a real solution to their problems, and will ensure first that the injustices done through the system are acknowledged, and secondly, that they have secure incomes for their retirement.

I do not agree with the new clause. I agree completely with the sentiments behind it, and I would probably agree with a vast number of the arguments of the hon. Member for Northavon in favour of it. However, I think that the matter should be dealt with in a different way.

Photo of Janet Dean Janet Dean Labour, Burton 10:15 am, 18th March 2004

I am grateful for the opportunity to take part in the debate.

I have some difficulty with the new clause. Notifying people of their situation is one thing, and that is going to happen. I agree with my hon. and learned Friend the Member for Redcar that it would help if those who have paid only the married woman's stamp are highlighted in such correspondence. If people were to pay back contributions for the years in which they paid the married woman's stamp, we would have to be very careful to give the correct advice. There is a danger of suggesting that people pay back the money in a way that would cost them more than they would gain in the long run.

As my hon. Friend the Member for Northampton, North (Ms Keeble) said, the subject is broad. Traditionally, women worked part-time to fit in with child care demands, and many of them still work in the evening when their husbands are at home. That is how families cope with the need for child care. Although the minimum wage has been introduced, the earnings of women in particular can be below the level at which national insurance is paid. Therefore, younger women can still fall into the trap of having not paid enough national insurance to benefit from pensions in the future.

Photo of Vera Baird Vera Baird Labour, Redcar

Is there not an aggregating factor? Married women often have two jobs. For example, they might be a dinner lady at lunchtime and then go

out to work again when their partner comes home. They cannot aggregate the earnings to bring themselves above the lower limit, so they cannot contribute to their pension.

Photo of Janet Dean Janet Dean Labour, Burton

My hon. and learned Friend is right. Women can have two or three jobs and still end up not paying national insurance because they cannot add their earnings together. That problem will persist unless the Government address it. I urge Ministers to examine the anomalies that arose in the past because they will continue unless something is done. I want them to look again at the six-year limit on the purchase of added years of national insurance. That is restricting and changing it might help many people, such as those who have paid the married woman's stamp for some time and those on low incomes who have always paid the full stamp.

Photo of George Osborne George Osborne Shadow Minister (Treasury)

This debate and the two that we are about to have on the other new clauses provide a moment for us to talk about the things we wish the Bill had addressed. That turns our usually technical discussions into something more like a series of Westminster Hall debates, which is worth while, not least because it allows Government Members to say their piece.

All of us—certainly in the Conservative party—accept that many women have inadequate pension provision and that the poorest pensioners are often older single women. The statistics make stark reading. Women receive on average only 71 per cent. of the basic state pension, although that will increase to about 90 per cent. The Fawcett Society has been mentioned in previous debates. It states that 46 per cent. of single women pensioners are in poverty. The causes of that have been discussed. They include many decades of unequal pay and periods of absence from employment to raise children. Women have longer life expectancy, too. That is an important additional feature, which has not been mentioned. There is also the historical reason for the married woman's stamp. I think that it was Barbara Castle who described it as an alibi for the inferior treatment of women—although I was about five at the time, so I do not remember her actually saying that.

There is a lively debate to be had on whether women, particularly after 1977, were fully aware of the consequences of paying the reduced stamp, and we had some of that debate this morning. The hon. Member for Northavon is right that the answer to that is a bit of one and a bit of the other. Some women knew full well what they were doing. In a Westminster Hall debate organised by the hon. and learned Member for Redcar, my hon. Friend the Member for Upminster (Angela Watkinson) intervened to say that she knew exactly what she was doing in paying the full contribution. She resented the fact that she paid that extra money from her monthly salary and that other women, who did not make that sacrifice, were going to be compensated for not doing so. Her feeling is reflected by a number of women, as the hon. Member for Northavon said.

I also accept that pensions law and national insurance are so complicated that not all women could have been fully aware of the consequences of the choices they made. However, both this Government and the last one have tended to side with the argument that most women knew what they were doing and compensation would be unfair to those who paid the full stamp.

When I was considering whether I could change the Conservative party's position, I started reading what people such as my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) said when he was Pensions Minister. I decided that the change would be too much of a leap. I suspect that the Minister will read out the same speech that Pensions Ministers have read out for the past 15 years. However, I agree with the hon. Member for Northampton, North that is difficult for Governments of any complexion to try to rectify past errors. A more fruitful approach would be to look to the future to see what we can do to tackle poverty among female pensioners.

I suggest that we follow two paths. First, we should do everything we can to support occupational pension provision. Two thirds of women now have private sector provision and figures suggest that younger women in the workplace are now making better provision for their retirement than younger men. In 50 years' time, we might be talking about the problems of male pensioner poverty because of their inadequate pension provision. We must support occupational pension provision. We would have liked more in the Bill on that. In many ways, the Bill will add to the burdens on occupational pension schemes and may undermine occupational provision.

The second path is to tackle the problem of means-tested benefits, which anticipates the debate that we are about to have on the Plaid Cymru new clause. A solution identified by almost the whole pensions world, the hon. and learned Member for Redcar, many Labour MPs and now the Conservative party, is greatly to increase the value of the basic state pension by restoring the link with earnings. My hon. Friend the Member for Eastbourne (Mr. Waterson) referred to what Age Concern and the Fawcett Society said about pension equality among women and it is worth repeating. He said:

''A non-means-tested state pension, paid at a level that would cover basic costs, remains the simplest way of addressing women's access to a decent income in later life and would provide the clearest incentive for people to build up additional private pensions and savings.''—[Official Report, Westminster Hall, 28 October 2003; Vol. 412, c. 14WH.]

While I was reading the Westminster Hall debate on the subject, initiated by the hon. and learned Member for Redcar, I noted her words:

''If both current and future generations of women pensioners are to come out of poverty, it is essential that the basic state pension should be improved, for example . . . by linking it to earnings growth''.—[Official Report, Westminster Hall, 11 March 2003; Vol. 401, c. 7WH.]

The Conservative party has adopted that approach as the solution to the problem.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

We have had a useful and thought-provoking debate,

which I have enjoyed and which was ably led by the hon. Member for Northavon, with notable contributions from my hon. and learned Friend the Member for Redcar, my hon. Friends the Members for Monmouth, for Northampton, North and for Burton, and the Opposition spokesman who enlivened our proceedings by quoting Barbara Castle. I shall dig out some other quotes from Barbara Castle about her views on the Conservative party for later use. Long may the hon. Gentleman's further education continue.

The debate has been interesting and while dealing with the specific issue of the married woman's stamp, it has touched on—obviously not too much because you would not allow it, Mr. Griffiths—wider issues about women and pensions. I am tempted to go down that path, but I will not, although a range of issues, including how to get more workers into decent occupational pension schemes and on to the pension credit, are not irrelevant to the debate.

I was touched by the way in which my hon. Friend the Member for Monmouth referred to one of my early publications. I notice that Opposition spokesmen now seem to be reading some of my early works, and I am very encouraged by that. I would have to declare a financial interest in that book were it not for the fact that, sadly, and this will not surprise hon. Members, it has been out of print for a number of years. Our debate may encourage that paperback—''Old and Cold: Hypothermia and Social Policy''—to become a Christmas bestseller, rather like that one on where to put the apostrophe. I live in hope. If it happens, I will, of course, retrospectively—retrospection has been a feature of these debates—declare a financial interest.

The Liberal Democrat new clause would require the Secretary of State to compile a list of all women who have paid reduced-rate national insurance contributions and give them the option of paying additional contributions in respect of the period for which those reduced contributions were paid in order to improve their national insurance record and hence get higher rates of state pension or bereavement benefit. They cannot do that now, but they can revoke their election to pay the reduced rate at any time.

I note the hon. Member for Northavon's reminder about the social history and the time when married women were considered to be dependants of their husbands and could rely on their husband's contribution record. Given the amiable and serious way in which we have conducted the debate, I will not remind the Committee that much of that was based on the Beveridge report and that great Liberal's view about the respective roles of men and women at the time, which, to be fair, were widely shared by other political parties.

The option to pay reduced rate national insurance contributions existed from 1948, although it is worth remembering that it was removed in 1977, which is quite a long time ago. Women holding elections before that period were allowed to continue paying reduced rate national insurance contributions because it was appreciated that some would have gained nothing by switching to the standard rate. Married women have

benefited from paying those contributions. They will have received higher take-home pay compared with their colleagues who made a different election, those who chose to pay full-rate contributions or those who were not offered any choice.

It would be wrong to provide those women with a new choice that, with the benefit of hindsight, would give them a clear advantage over other married women who chose to pay full-rate contributions. That is not the way in which insurance works. Many women who have sacrificed take-home pay for many years to secure benefits based on their own contributions would rightly find that inadequate.

The hon. Member for Northavon said that following one of his many TV appearances, only 5 per cent. of the mail he received was hate mail—I thought for a moment that he was referring to my replies to his correspondence, which, although at times rigorous and vigorous, are never hateful. Were we to say, ''Look, let's give them equal rights,'' that 5 per cent. would grow to include a large number of women constituents who would understandably argue, ''I am not daft''—I am not saying that the others are daft—''I knew what I was signing up to, so don't regard me as some chattel. I knew what I was signing and I decided to pay the full stamp.''

Photo of Sally Keeble Sally Keeble Labour, Northampton North 10:30 am, 18th March 2004

What does my hon. Friend say about the fact that in those days—bearing in mind that there was a gap in employment protection, equal pay and sex discrimination legislation, and no minimum wage—a married woman would be paid less and would be given a job only if she agreed to the employer's terms, which could be outrageous? There was not a level playing field for married women who were looking for jobs, and they did not have access to equal pay.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

I am sure that different women face different circumstances, but I have met many women who have made a judgment, in the full knowledge of what they were signing up to. Circumstances may differ in different towns and cities.

It is neither practical nor appropriate for the national insurance scheme to revisit an individual's circumstances with a view to changing their records and obtaining the best answer. Some women may not have benefited as much as expected from paying the full rate, but there is no suggestion that they should be allowed to change that retrospectively. More specifically, if a married woman who has paid the reduced-rate contribution feels that she was misled by the Department—that she never signed the document—she can of course contact the Department. We would reconsider the case, subject to her providing evidence to show that she was misled.

Photo of Vera Baird Vera Baird Labour, Redcar

What kind of evidence does my hon. Friend have in mind, so that I can advise the constituents who have complained to me what they should look for?

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

I suppose that I have in mind, in cases where people were clearly misled, written

documentation to that effect from the Department. It would have to be evidence of that kind.

Those who now find that they are a few years short, as it were, have a potential solution. All that they need to do is terminate, now, the election to pay at a reduced rate, and pay either class 1 or class 3 contributions. They have the choice. For example, a 55-year-old woman can terminate her election to pay, and then pay class 3 contributions to make up the 10 years she needs to get to the 25 per cent. pension. It depends on individual circumstances and proper advice.

Photo of George Osborne George Osborne Shadow Minister (Treasury)

Do the Government offer advice or express an opinion about what women paying the reduced stamp should do?

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

Does the hon. Gentleman mean at the moment?

Mr. Osborne indicated assent.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

No; it is for the Government to provide information, and I was going to say that our forecasts on state pensions are rather important. We now issue far more information on state pension forecasts. Automatic state pension forecasts will soon have gone, for example, to all self-employed people of working age. The next phase will start in October. By the end of the spending review 2004 period—that is, by the end of 2006—the whole working-age population will have been included in the state forecasts. That is, I think, part of what the hon. Gentleman is asking about.

As to advice and what options to take about revocation, things are quite complicated. Even if some of the women were allowed to pay the difference in contributions, they might not benefit, because they are entitled, after all, to 60 per cent. of their husband's pension.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

When he is 65—which is precisely the point. The Minister was about to move on without making that qualification. They get that money only when their husband is 65. This exchange replicates the conversation that has taken place probably hundreds of thousands of times, leading women to think, ''I don't need a pension, because I'll get one,'' because they did not hear the final clause, which the Minister just omitted. Does that not illustrate the problem?

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

Yes, obviously that would occur when he is 65.

I was trying to make the point that it is a complicated judgment. It is not so complicated that it is impossible to make it, but one would need proper information as to whether to revoke. I will not go into too much detail, but we must balance the fact that some people will have signed the form without quite realising what they were signing, with the fact that in law, when one has signed a form, one has signed a form. Many of us might have signed documents that we did not fully read or understand, but we must be careful of saying that it does not really mean anything when one signs something.

Married women who opted to pay reduced-rate contributions made that choice, and they were required to give written notice of that decision on the form attached to leaflet N11. The leaflet clearly described the consequences of that decision and the women were required to sign a declaration that they had read and understood that leaflet. In human terms, that does not mean that they did understand it, but those women who chose to pay reduced-rate national insurance signed it and were each issued with a certificate for their employer. That was the process. Employers were not allowed to deduct reduced-rate contributions without that certificate. Arguably, that process should have meant that the women knew what they were doing, although I do not say that that would always have been the case.

We could argue that different Governments made other efforts to inform women about choices. If the hon. Member for Northavon wants me to write to him and the Committee about that, I will. I shall not go into detail now, but I will write to him about it and copy the letter to hon. Members. That seems sensible.

The story becomes more complicated—my hon. and learned Friend the Member for Redcar touched on this point. In 1989, changes to the national insurance structure gave rise to a situation in which some low-earning women who were paying the reduced rate might have had to pay more national insurance contributions than if they were paying the standard rate, because of the low-income proviso. However, mailshots were sent in August 1989, before the national insurance structure was changed, advising women that if their earnings were low they might be better off paying standard-rate national insurance contributions. There are several other situations concerning the issue of choice in which information was available.

The situation is complicated. I do not mean this in a frivolous way, but hindsight is a wonderful thing when considering the choices that people made many years ago when social and familial circumstances were rather different from what they are now. When it comes to those married women who made informed choices, there is a serious issue of equity. We must be careful not to generalise. To imply that all women did not know what they were doing is a bit of a slur on the many women who did know what they were doing. Many women consciously decided to pay the married woman's stamp knowing full well what that meant—I happen to know one such woman very well. To imply that no one knew what they were doing is an unfortunate generalisation. Some people decided to pay the reduced rate, and some, who were fully conscious of the implications, thought, ''No, I'll pay the full contribution because I want to build up my own contributions.'' It would be difficult to address their sense of inequity if such changes were made.

Having said that, the question raised by the new clause—as to why women cannot now have the opportunity to pay back national insurance contributions—is a fair one, which I have reflected on. I cannot accept the hon. Gentleman's new clause today, but my Department will consider it further. I am not making any promises about the outcome of

that reflection, but these are no mere words: we will reflect on whether there is a case for enabling women to pay back contributions, and we will consider the implications of that. I shall return to the House when we have reflected. I hope that the hon. Gentleman will withdraw his new clause, and consider that this has been a useful debate between the position that he presented and that presented so ably by my hon. Friends.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I thank every hon. Member who has contributed to the debate. This new clause is the one that has attracted the most widespread interest. Many of our constituents are concerned about this issue, which is not party political and affects us all. I also thank the Minister for the constructive spirit in which he has responded—he has been more constructive than several of his predecessors to whom I have put similar points. I welcome that. I thank the Committee for enabling us to have this debate at prime time rather than at the fag end of the Bill; otherwise, we might never have had it.

I shall not detain the Committee unduly, as we have kicked this issue around for some time, but I will make a couple of observations. During the debate, the words ''it sticks in the gullet'' and ''a sense of injustice'' were used. There is a lot of anger among the women we are talking about. No one suggests that people did not know what they were doing, but some people were clearly confused or misled. One or two Committee members suggested that the pension credit was the answer; certainly that ameliorates some of the problems, but that credit applies only if the couple are on a low income. We are talking about individual women and their sense of justice—their feeling of getting something for what they have paid. If a woman has a husband who is working, the family may not be poor, but the woman will not have justice, and that is why the pension credit is not the whole answer.

The hon. Member for Northampton, North said that the issue was one small part of a big picture. I accept that and I hope that I did not suggest that the new clause was a panacea. However, we should not say, ''We can't deal with the whole problem, so we are not going to deal with any of it.'' I was trying to do what I could to deal with a small part of the problem. I was interested in the suggestion that we lift the six-year backdating. I hope that that feeds into the Minister's thinking.

The hon. and learned Member for Redcar and the hon. Member for Monmouth were most sympathetic in spirit to the new clause. The hon. and learned Member for Redcar asked the important question about what information people were given about home responsibilities protection when they had children. That is key, as most of the women did have children.

I want to make a couple of observations about the Minister's response, which was summarised in two words. One was ''hindsight.'' If people did not have proper sight in the first place, it is not wrong to go back and consider whether they should have had better sight. Was personal pension mis-selling about hindsight? No; people were given bad advice at the time. The mistakes with inherited SERPS were

nothing to do with hindsight; things went wrong and we have put them right. The second word was ''equity.'' How do we treat women on the full stamp and those on the reduced stamp? I am not saying, ''Give them the money.'' There is an important practical issue; if we allow married women on the reduced stamp to revisit what they did, equity demands that we allow married women on the full stamp to revisit what they did.

The Minister says that forecasts will go out by the end of 2006. That is important. The Government have prioritised the self-employed already, and subsections (1) and (2) ask that the next priority be married women who have paid the married woman's stamp. I wonder whether they might be the next priority group. The Government clearly have the technology to pick out groups and send them their forecasts. I wonder whether the 1.5 million who are still of working age and have paid the married woman's stamp will be the next lot because time is running out for them. Although 2006 is not a million years away, those extra two years could make all the difference. Will the Minister reflect on that?

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I am grateful. The fact that the Minister will consider the issue of going back is encouraging. I would be happy to meet him informally to talk through the options relating to what going back might mean. I am heartened by the spirit and content of today's debate, and because things might be moving, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.