New Clause 29 - Pension position of women

Pensions Bill – in a Public Bill Committee at 3:30 pm on 27th April 2004.

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'The Secretary of State shall prepare an annual report setting out changes made to the pension position of women.'.—[Vera Baird.]

Brought up, and read the First time.

Photo of Vera Baird Vera Baird Labour, Redcar

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

The justification for the new clause is that women constitute 64 per cent. of pensioners, but the average female pensioner's income is 57 per cent. of the average male pensioner's income—so at the moment pensions do not work well for women. An annual report would monitor their improvement. The new clause is also rooted, to an extent, in the approach of the Green Paper, on which I congratulate the Minister. It contains a chapter on women and pensions, highlighting the problems faced by women.

However, the Green Paper does not recommend using pension policy as a solution. Rather, it sees the answer in the changing patterns of women's lifestyles. It anticipates that they will become closer to the original Beveridge model by being involved more fully and for longer in the work force with higher, more consistent earnings and, consequently, able to obtain, through national insurance, better state provision and, through investment, better private or occupational provision.

The factors that will improve women's pension provision will, ironically, come from other Departments. Help with child care from the Minister for Children will enhance women's ability to earn more for longer and to get themselves better pensions. Such factors, from diverse sources, influence lifestyle. It is important to keep an annual check on whether that is working.

I know that my hon. Friend the Minister is going to refer to pension credit and I should like to acknowledge the role that that has played in helping poorer women to enjoy reasonable standards of living in retirement. It is because they are unlikely to have full pensions—and even less likely to have occupational pensions—that pension credit has been so efficacious for women. In a sense, it bridges the gap while women emerge more fully into the labour force and become better able to develop self-sufficiency in retirement. I suggest that it needs monitoring to ensure that it is truly a continuous process—women are coming more fully into the work force and getting richer in that way.

Between 1979 and 2002, the number of young women in the work force increased from 52 to 70 per cent. In the past two years, there has been little increase in the number of women working full-time in the work force. They do much more part-time work, and it is difficult to accrue a good pension if one is working part-time.

The other thing about women becoming more ''Beveridgised'' and able to provide for themselves is that it is an extraordinarily slow process. Equal pay has been with us since 1970—implemented since 1974—yet Fawcett calculates that the average income of women in full-time employment has gone from two thirds of average male income to three quarters in 30 years. At that rate, it will be another 70 years before there is equal pay. That means, as I have said many times before, that my great-great granddaughter will start her working career on the same pay as my great-great grandson, with an equal opportunity to accumulate equal pension at the end of her working life—it will apply to no woman before her, and even then that assumes that women will come completely into full-time employment.

I suggest five very quick and fairly cheap things that would speed up the process of women's becoming better equipped to provide their own pensions, and that would recognise the continuing place for women's caring responsibilities and reward them appropriately. To begin with, we should consider the lower earnings limit of £77. Anyone who earns less than that neither gets credited with a national insurance contribution nor pays one. Therefore, although someone might work for 15 hours on the minimum wage, she is not able to make a contribution to pension provision. If the lower earnings limit were lowered by £10, 200,000 women and 60,000 men would be able to start contributing.

Many women—I frequently come across examples in Redcar—have more than one job. They might, for instance, work as dinner ladies at lunchtime, while the children are at school, and then in a convenience store in the evening when their partners are at home. They may earn far more than the LEL, but they cannot aggregate the two lots of pay to make a contribution to their pension. They may be working long hours and earning quite reasonable pay, but they cannot aggregate so they cannot contribute either.

I suggest that the carer's credit could also easily be changed. Child care is dealt with by the home responsibilities protection, which cuts the number of

years that one needs to pay national insurance to accrue a pension, but it only functions for a whole year. If I took nine months of a year off work to look after my child and I went back for the last three months, I would lose the whole year's national insurance contributions. The home responsibilities protection would not work unless I were off for an entire year.

However, the carer's credit only applies to non-child care for basic state credit purposes, although the state second pension is slightly different. The carer's credit is only given to a carer who gets a carer's allowance because they are looking after someone for 35 hours a week. That is problematic. Last weekend, I think, the Prime Minister announced that we were considering availing carers of the ability to ask for part-time work, by analogy with the family-friendly work that working parents can ask for.

However, if a carer took a part-time job, they would not be able to qualify for the carer's allowance by working 35 hours as a carer, so they would lose their carer's credit. If their part-time earnings did not take them over the LEL, they would not pay national insurance either; they would fall through both loops. There is a real need for child care credits and carers' credits to come in a simple, weekly credit for every week that someone is at home caring for another person, which is a major contribution to society and saves the Government millions and millions.

The 25 per cent. rule, as the Minister well knows, states that anyone who pays national insurance for less than 10 years—that is, less than a quarter of the amount of time that they would need to pay to get a full pension—would not get anything at all. It is hard to see what the justification for that is, apart from some ancient rule of book keeping.

All of those quite cheap and not complex processes could help to speed up the evolution to pension equality for women, and give appropriate financial credit to them when they are working in their caring role. It is only realistic to acknowledge that women are likely to continue to live lives of caring mixed with work, even if the proportions change.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 3:45 pm, 27th April 2004

I echo the spirit of what the hon. and learned Lady says. Will she clarify how far what she says is dictated by political realism—by the notion that the most one can expect a Government to do is fiddle? As she correctly said, it will be three generations—or whatever—before anything happens from the labour market. What she talks about will make welcome but minor changes to a bigger percentage of inadequate pensions 20 years down the track. Would she like to go a lot further and to see something much more dramatic done for people who will be pensioners in the next five or 10 years?

Photo of Vera Baird Vera Baird Labour, Redcar

I have my own wish list. Sometimes, when I am in bed on my own, I think about the Pensions Bill as well.

Photo of Vera Baird Vera Baird Labour, Redcar

Good point.

There are all sorts of wider-ranging debates about citizens pensions, for instance, because women would not be assisted at all—or at all significantly—if the basic state pension were upgraded to the minimum income guarantee level, which is the usual demand of pensioners forums. Only 13 per cent. of women have a full basic state pension. They would lose pounds and pounds in comparison to what they now get from the minimum income guarantee.

There are arguments for a citizens pension, but they are big ones. Confining oneself to simple steps available now would make a real improvement. I do not think that the issue is about political reality in any base sense, but about a debate that will take a long time to get through. An entirely new basis for pensions—one which would cut them loose from national insurance contributions—would, I suspect, be quite a long way off, and quite a knotty issue. However, if those relatively small steps were taken—and they would all help older women—the annual report would, of course, show significant improvements.

I have a final base point. There is no doubt in my mind, empirically, that older women off the streets, as it were, of Redcar are aware of their pension inequality. Some leaked polling in The Observer last weekend suggested that women over 55 are very interested in the influential issue of pensions. Women over 55 have a very high turnout rate at elections—67 per cent. compared with 36 per cent. of women of age 25—and although traditionally they voted for the Tories, in 1997 more voted Labour than Tory. However, in 2001 the Tories recovered: 40 per cent. of 55-plus women voted Conservative, and 38 per cent. voted Labour. That shows that this is a group that can be influenced by the policy issues that concern them, of which pensions is one.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I know that the hon. and learned Lady is keen to paint a complete picture. She will have seen the report published yesterday showing that it is precisely those older women who are becoming more rapidly disillusioned with this Government, on a whole raft of issues, than younger women or male voters.

Photo of Vera Baird Vera Baird Labour, Redcar

I have to confess to not having concentrated fully on the report to which the hon. Gentleman refers, but it is clear from the quite old polling I mentioned and the leaks in The Observer last weekend that older women are concerned about pensions. There is evidence that they move from party to party and are influenced by serious considerations. The other reasons for making the changes—notably, equality and equity—are much better ones, and we will be addressing inequality soon, but I point out that dealing with pensions, and reporting on the improvements annually, could be electorally helpful.

Photo of Janet Dean Janet Dean Labour, Burton

I rise to support the new clause tabled by my hon. and learned Friend the Member for Redcar (Vera Baird). It would enable women's pensions to be kept under review and allow us to monitor improvements, and it would also provide an incentive for us to look at the ways in which we can improve women's pensions.

Women have lost out in various ways. There are those who were encouraged to pay the women's reduced rate, and carried on paying it when they would have been better advised not to. There are those who have been careless, although sometimes people do not consider themselves to be so. There are those who might not have always claimed their benefits: they might have looked after a relative who is elderly or has health problems, and manage as best they can without thinking of their own position for national insurance purposes and in terms of their pension in future.

We are encouraging women to go back to work after having children, and as there is better child care now, more women are doing so. However, there will still be periods when people—mainly women—stay at home to care for the children. As we know, home responsibility protection covers the full tax year. My hon. and learned Friend referred to the following problem: in any tax year, it might happen that there were only a few weeks in which the carer's responsibility allowance was paid. If, say, a child reached a certain age, or the woman went back to work part-time at a lower rate and so did not pay national insurance stamps, that year would not be counted because it was not a full year.

There is also the issue, as my hon. and learned Friend said, of low-income and part-time work. Again, people might have several jobs but still not pay national insurance. In the past, it was mainly women who were in that situation, and I suspect that that will still be the case in future, because that is the nature of family life in most homes.

The aspect of most concern is the 25 per cent. rule. The fact that people can pay for nine years and not receive anything is an indictment of our system. With modern technology and computer programs—although I know that most Departments have problems with computer programs—it ought to be possible to recognise all the years for which a person has paid and for them to have a percentage of the pension due to them, rather than people paying for eight or nine years and receiving no pension at all.

I know that my hon. and learned Friend will say that the pension credit will step in in certain situations. I would like to pay tribute to the Government at this point for introducing the pension credit and addressing the problems of poorer pensioners, who are mainly women, by raising the minimum income guarantee and linking that back to wages, a procedure that was broken under the Conservative Government. Since 1997, the Labour party has done good things to try to benefit poorer pensioners and, as I say, those pensioners are more likely to be women than men.

I hope that my hon. Friend the Minister will review the 25 per cent. rule. Simple things can be done, as my hon. and learned Friend has said, which will benefit women pensioners today and in the future. I hope that the Minister will consider introducing a fairer system of carer's credit for those caring for children and for other adults, and that he will reduce the lower earnings

limit, because the fact that those who are working part-time and earning the minimum wage are still not credited with national insurance cannot be right in this day and age.

My hon. and learned Friend did not mention one thing, which I hope the Minister will consider—namely, the option of allowing extra back years to be purchased. At the moment, only up to six back years that have not been paid can be bought. If someone who may have been credited with only nine years could purchase years beyond the six years from when we are notified, it might be of value in attaining some sort of pension. Of course, some people may not be able to afford those back years, but they ought to have the option. It may be that they need purchase only several weeks of a year in order to have a whole year's credit towards their pension. Again, I ask my hon. Friend the Minister to consider that.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 4:00 pm, 27th April 2004

I shall be relatively brief. I think that this debate is a useful opportunity to rehearse some key unfairnesses that apply to women and to women pensioners, which have arisen under successive Governments. The new clause is an excellent idea. It makes no specific commitment to particular changes, and the hon. Member for Burton (Mrs. Dean) and the hon. and learned Member for Redcar have spoken eloquently about practical solutions, some of which are less expensive and some more expensive, some of which are more accessible and some more difficult for Ministers to consider. However, the new clause does not commit the Government to anything except producing an annual report. We think that that is a useful discipline and we would support the new clause.

I see that the new clause stands in the name of the hon. and learned Lady and those of four other members of the Committee. With support from Conservative Members, and, I hope, from the Liberal Democrats and others, we could carry it. It is inconceivable that the Minister will not accept this new clause, precisely because it commits the Government to so little on paper but provides a useful requirement in that this and other Governments will have to make an annual report. These historic unfairnesses will not be addressed overnight, or in the lifetime of one Government. From that point of view, this is a cross-party issue.

The hon. and learned Lady rightly spoke about not only the unfairnesses to older women, but the electoral significance that they hold: because they are older, those women are more likely to vote. Yesterday's Electoral Commission report made it clear that that group of voters is becoming more disillusioned with politics and politicians faster than any other. Having experienced a historically low turnout among 18 to 24-year-olds in the last election, we may find the willingness to participate in the democratic process among at least one group in society—older women—being eroded. As we know, older people are four times more likely to vote than younger people. Pensions may be one, but only one, of the factors involved, but it is important that we listen to what such people have to say. We support the new clause, however.

I pay tribute to the excellent work that Age Concern and the Fawcett Society have done. Like the hon. and learned Lady, I was present at the launch of the report ''One in Four'', which made the point that a quarter of single women pensioners live in poverty. That report was well received, although sadly the Government's reaction was muted, to put it mildly. Age Concern and the Fawcett Society have looked at a range of possibilities, such as reducing the lower earnings limit and having a weekly credit for carers that can be paid into the individual's pension. Personally, I have some sympathy for that idea, but we would want to consider it more closely as a party in the run-up to publishing our next election manifesto. Paying pensions to everyone in the national insurance system is another suggestion that will need some careful examination.

The good news is that a not insignificant proportion of women are helping themselves out of difficulties by getting a second pension. Again, the report from Age Concern makes it clear that although around 54 per cent. of men working full-time are members of an occupational pension scheme, 58 per cent. of women are in the same position. That prompts other questions. Many women work part-time, not full-time. The general question that has run through our consideration of the Bill is whether occupational pension schemes will, for various reasons—possibly including provisions in the Bill itself—go into long-term decline.

Photo of Vera Baird Vera Baird Labour, Redcar

I think that the figure from the paper the hon. Gentleman quotes is age related. Younger women are more likely to opt in to pensions than younger men, but as women get older and have children they are less likely to do so. The figures for membership among women older than 35 are substantially lower than those for men.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I am grateful for the hon. and learned Lady's intervention and I do not disagree with her. What she mentions is another factor. The part-time and age issues are important, and I do not argue with any of that.

I return to the report ''One in Four'' from Age Concern and the Fawcett Society. As it happens, one of the examples in the report is of a constituent of mine, Christine Dunn. She is an interesting example of how the problems arise and how the lucky ones can find a way out. She said:

''I worked for the NHS for 23 years, with only a 14-month break to have my children. I fought for a long time to get involved in an occupational pension scheme but was not permitted for many years because I worked part-time.''

She described how frustrating she found the experience and continued:

''I naively paid the 'married women's stamp' thinking this would secure me a decent retirement income but am now set to receive a state pension of 71p per week . . . despite currently paying £58.54 each month in National Insurance contributions.''

Christine Dunn's story is less depressing than others, as she said:

''Fortunately I re-trained as a teacher at 40 . . . and have subsequently been able to build up an adequate second pension. With such a measly state pension to look forward to, this has been an absolute life-saver.''

That is merely one example of a phenomenon that one can see replicated across the country. Unlike Christine Dunn, however, many women have not even had the option of entering another profession and building up a second pension.

Finally, I touch on the basic state pension, which a much bigger issue that I am sure we will return to on Report. Age Concern made the point in its briefing that

''pension policy must be built around a higher and more inclusive basic state pension. The Government must move away from means testing: it is costly, complex and too many pensioners miss out on their entitlement.''

I could not have put it better myself. I very much support the new clause.

Photo of Paul Holmes Paul Holmes Shadow Minister (Work and Pensions), Work & Pensions, People With Disabilities, Non-Departmental & Cross-Departmental Responsibilities

I offer the wholehearted support of my fellow Liberal Democrats for new clause 29, which calls for the Secretary of State to prepare an annual report on the changes made to the pension position of women.

The past few weeks have shown that hon. Members on both sides of the Room are agreed on the thrust of the Bill, although we have spent much time debating technical details and other aspects. However, there are two glaring omissions. We discussed the first about four weeks ago—the lack of compensation for the 60,000 or 70,000 people who will lose most of or all their occupational pension between 1997 and 2005. The second omission is the one that we are debating now, which affects a far larger group.

More than 60 per cent. of those of pensionable age get a bad deal from the pensions system. The problem is that the average income of women pensioners, who comprise 64 per cent. of retired people, is only 57 per cent. of that of male pensioners. Fewer than 12 per cent. of women receive a full basic state pension in their own right, while 25 per cent. of single women pensioners live in poverty, as was mentioned in the recent report by Age Concern and the Fawcett Society. Women account for 75 per cent. of pensioners on income support. That appalling problem affects as many as 2 million people—many more than the 60,000 or 70,000 who lost their occupational pensions, for whom we feel upset and about whom we have been campaigning.

Why is there such a major pensions scandal? Some answers are obvious. The key answer is to do with the woman's traditional role, which was to be a housewife. That is especially true for the oldest and the poorest pensioners—those over 80. Most of those are women.

I offer my mother as a perfect example of that group. She was a teenager at the start of the second world war and she worked in the cutlery industry in Sheffield. She married almost immediately after the war, giving up work completely in 1952, when her first child, my elder brother, was born. She did not return to part-time work as a home help until the end of the 1960s, when I started secondary school. That record of taking a long career break, of working only in low-paid jobs— [Interruption.]

Photo of Mr James Cran Mr James Cran Conservative, Beverley and Holderness

Order. There is far too much muttering developing in the Room. I wish to hear what Mr. Holmes has to say.

Photo of Paul Holmes Paul Holmes Shadow Minister (Work and Pensions), Work & Pensions, People With Disabilities, Non-Departmental & Cross-Departmental Responsibilities

Thank you, Mr. Cran. That sort of career pattern is typical of that generation of women. Attitudes in society are changing, but only slowly. The hon. and learned Member for Redcar suggested that if change continued at that pace, it would be another two or three generations before women achieved parity.

When I worked as a teacher, at least three colleagues took career breaks as children came along, and it was the man who was taking the break to look after the children. For one, it was a lifestyle choice. In the other two cases, the wives earned more than the men and it made economic sense for the husbands to take the break. Such change is coming through, but only slowly.

Even with those changes in the woman's role in society, and in our attitude to women working, it is still mostly women who take breaks from work—either for child care or, later on, to look after elderly and sick relatives. The majority still have lower-paid and often part-time jobs. They have average earnings of £19,811 a year, compared to £27,437 for the average male. That has a knock-on effect on their entitlement to a pension and on its value.

The Government might argue the point, but another aspect of the problem is that many women in the 1960s and 1970s unwittingly opted for the reduced rate of the married women's stamp, not realising the drastic effect that it would have on their pension entitlement. Of course, there are other factors behind women receiving such poor pensions.

What are the solutions? New clause 29 is not about solutions. It does not go into detail, but it calls for an annual report to highlight the Government's wonderful actions—or the embarrassing lack of action—to tackle that major pensions scandal.

As with compensation for those who have lost their occupational pensions—such as those at Chesterfield Cylinders, Demaglass and Coalite in and around my constituency of Chesterfield—the first step is to establish the principle that there is a problem and that it is the Government's responsibility to deal with it. Looking at the details of the solution comes afterwards.

The details have been very much mulled over already, and we have heard some examples from hon. Members during this short debate. For example, the Government solution is to reverse their promise made in opposition to end means-testing for pensioners and instead introduce ever more complicated and extensive means-testing—first the minimum income guarantee, and now pension credits, which have been praised by two hon. Members today. The problem with pension credits is that nearly half of those entitled to them are not getting the money—that is nearly 2 million pensioners. That is more than the one third of those entitled, whom the Government assume in their

budgetary figures will not claim the money. Those are the poorest pensioners, and the majority of them are women.

The Equal Opportunities Commission calls for various measures that would tackle some aspects of the problem. We have heard some of the details of those measures such as the reduction of the lower earnings limit of £77 per work and the annuity waivers for spouses. The TUC has also campaigned on various aspects that would improve the situation, and during the debate we have heard about abolishing the 25 per cent. rule and allowing greater back-dating on national insurance contributions.

The Liberal Democrats have campaigned for some years for a substantial increase in the basic state pension. Two speakers so far have referred to the need for a better basic state pension, or a citizen's pension as it was called. We have called in particular for an increase for the oldest, the poorest and, primarily, the female pensioners who are aged over 80—on average, men unfortunately tend to die considerably earlier than women at retirement age.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 4:15 pm, 27th April 2004

I am grateful to the hon. Gentleman for giving way, and I agree with a lot of what he is saying. Can he clarify current Liberal Democrat policy? My understanding was that the previous policy had been withdrawn and was ''under review'' pending the party conference. It seems that at the moment the Liberal Democrats do not have a specific policy on the basic state pension. If I am wrong, the hon. Gentleman will no doubt tell me.

Photo of Paul Holmes Paul Holmes Shadow Minister (Work and Pensions), Work & Pensions, People With Disabilities, Non-Departmental & Cross-Departmental Responsibilities

I thank the hon. Gentleman for his intervention. I specifically said that the Liberal Democrats have campaigned on this. How we would achieve it was fully costed in our last election manifesto. There is a detailed policy review going on—as is the case for almost the entirety of Conservative party policy—and we will present detailed and costed answers at our conference this autumn.

We have also called for the Government to write to all women in their 40s and 50s—whoever paid the married woman's stamp in the past—to warn them in good time, so that they do not find out at the last minute, when they are at pensionable age, that their future pensions may be completely inadequate because of the way in which they were duped, short-changed or whatever it was that happened back in the 1960s and 1970s. We have also called for a Government inquiry into future pension provision for women. A Government inquiry that draws from all parties, from across the board and from all interested bodies will carry much more weight than a partisan political approach if it can reach agreement. In dealing with pensions policy, we are looking at 20, 30, 40 or 50 years down the line before things come into effect. We need commitment from political parties over a lengthy period, not just over the horizon of four years until the next election.

All those examples are, as I said at the start, different detailed proposals and suggestions. Some are better than others—the Liberal Democrat suggestions are among the better ones—but they are all open to

argument and debate. The most important first step is to achieve, first in this Room, all-party agreement on new clause 29. That commits the Government to producing an annual report that would highlight the progress, or the lack of it, of whichever Government are in power in tackling this major pensions scandal. It affects not 70,000 people, like the dreadful occupational pensions situation that we talked about four weeks ago, but up to 2 million people of pensionable age. In the spirit that the hon. Member for Eastbourne talked of a few minutes ago, I hope that we achieve all-party agreement, that the Minister will accept new clause 29 and that we will be able to have a yearly audit of what Governments are or are not achieving so that the public can hold the Government to account.

Photo of Adam Price Adam Price Spokesperson (Economy and Taxation; Education & Skills; Miner's Compensation; Regeneration; Trade & Industry)

On behalf of Plaid Cymru, I wish to add our words of support for the new clause. It is fitting that, as we reach the twilight of the Committee, agreement is breaking out all around. I am sure that the Minister will not want to dissipate the warm glow that we all feel. The proposal is modest, practical and constructive. I am sure that he will want to reflect on that for a few minutes as I speak.

We have heard the arguments set out clearly. For many years, there has been a huge gap between the retirement income positions of men and women. According to the Office for National Statistics, the gap has grown. Whether or not the labour market is in transitional mode in respect of gender disadvantage, the fact is that the gap is wider now than it was in the 1980s. The problem is deepening and, on current projections, will probably continue to do so for some considerable time. For that reason, it makes eminent sense to keep the critical issue of pensioner poverty among women under constant review, so that we can consider some less fundamental changes that we have discussed and the citizenship-based state retirement pension. The House of Lords Economic Affairs Committee supported that in its report at the beginning of the year.

The causes of pensioner poverty among women are quite complex and diverse. As we have heard, fewer women than men belong to occupational pension schemes and have personal pension schemes. Clearly, women have less time to build up pension rights but, interestingly, many women have also lost out on pensions through divorce. There have been changes in that area, although it is not clear whether they are having the hoped-for effect.

The compositional character of women's employment gives rise to an interesting debate on full-time versus part-time. The public sector tends to have better provision in respect of occupational pension schemes, and women in full-time employment tend to be skewed more towards the public sector. However, women in part-time employment tend to be in sectors that, by and large, have traditionally had less pension provision. In a report in 2000, the then Department of Social Security said that some types of job and certain sectors were significantly less likely to provide occupational pensions, namely those that were part-time, temporary, seasonal, located in small firms and

occupied by women. The predecessor Department highlighted that issue, and the Government accept that there is a particular problem in that area.

There has been widespread discrimination in the past in both the public and the private sectors in respect of pension provision for women. That legacy remains with us and will do so for some time. With regard to the private sector, I think that it was only in 1990 that the historic landmark decision was taken to ensure equal treatment for men and women in pension provision.

Women earn less than men, which is probably the critical problem, particularly for defined benefit schemes. It is clear what the consequence is because women's average pay is less than men's at the decision point before retirement. As we move to defined contribution schemes, that may be perceived as less of a problem, but there is also a problem with defined contribution schemes. As I understand it, because women live longer than men on average, they get a worse deal when defined contribution pension schemes are worked out. I think that there have been recent legal cases in that area, so it is a moot point whether actuaries, who were maligned during our earlier debates, will be permitted to discriminate based on greater life expectancy under the European convention on human rights. That is something to watch.

At the moment, the position is that a woman will retire with less income than a man who has made the same contribution, because of her greater life expectancy. Wherever we turn, whether it is looking to the future or to the appalling position in the past, we face a serious problem that, by and large, the Bill has not addressed. There have been some minor changes, which are welcome, that have addressed the issue of equality of pension provision for women. Unfortunately, however, on this occasion we have not won the debate on many of the suggestions that have been aired, and which were supported by the Equal Opportunities Commission, Age Concern and the TUC. None the less, the annual report will provide a platform on which we can return to this debate. I hope that the Minister will join the other voices that we have heard in support of the clause.

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

I am struck by the difference between the last amendment, which was proposed by the hon. Member for Eastbourne, and this one, proposed by my hon. and learned Friend the Member for Redcar. Whatever the merits or demerits of the hon. Gentleman's proposal, it was concerned with a small number of relatively rich individuals, who were mainly men. My hon. and learned Friend's proposals concern a large number of people, who are relatively poor and are women. Committee members may want to draw conclusions from the different proposals that have been advanced.

I do not want to use this as an opportunity to outline the range of Government proposals that have impacted on women pensioners. I have a note telling me to do that, but many of the arguments would be familiar. Let me mention briefly that, as my hon. and learned Friend anticipated, pension credit is part of the story. Almost 2 million females—more than 1.9

million—are in pension credit households, whereas the number of men in such households is 961,000. That makes a Government point about the importance of pension credit and makes her point about the inequalities that have faced women, which make them rely on the pension credit proposals.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Does the Minister have the estimated figures for the number of women contained in the nearly 2 million people who are not claiming pension credit and the 1.4 million who, his Department assumes, will never get round to claiming it, although entitled to do so? What proportion of those does he think are women?

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

I do not have those figures, but of course the difference between us is that I want those people to get pension credit, whereas the hon. Gentleman is trying to create a climate of confusion to prevent those people from claiming pension credit. In that dubious quest he is joined by the Liberal Democrats.

The state second pension is also important. Almost 2.5 million carers are helped by it and they are mostly women, as are around 70 per cent. of the 5 million low-earners who benefit from the state second pension. That is another example of a proposal in place to help redress the debilitating inequalities that have historically faced women in this regard.

Photo of Sally Keeble Sally Keeble Labour, Northampton North

My hon. Friend is absolutely right that pension credit benefits such as those he mentioned have increased women's incomes. They have, however, made women reliant on the state, instead of on their husbands as was the case in the past. The points that my hon. and learned Friend the Member for Redcar made were about making sure that women had independent pension entitlement.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions 4:30 pm, 27th April 2004

I was agreeing that the pension credit data support both the Government argument and that of my hon. and learned Friend the Member for Redcar. Whether one wants to be dependent on one's husband or on the state must depend on the characteristics of both at any particular point in time.

Stakeholder pensions are also relevant. Forty per cent. of stakeholder pensions sold so far have been bought by women. That is another indication. As I said, I do not want to go through the Government's record on that, but I thought it important to make those points in answer to colleagues' questions.

Let me address the issue differently. I fully recognise that our society, economy and welfare state are based on views about gender. The welfare state—even the parts added since the 1940s—is based on certain assumptions, which were conventional at the time, about the roles of men and women. For example, the Beveridge report shows that Beveridge had clear views about married women's dependence on their husbands. I fully understand that issues of income in

working life and in retirement reflect what I have described as the debilitating consequences of gender inequalities, which are still with us today despite the many advances that have been made.

I remember reading a book some years ago by a New Zealand academic and one-time politician—for the National party, I believe—called Marilyn Waring. The book, ''Counting for Nothing,'' is an analysis of how much of women's economic activity, such as child care, voluntary activity and care for elderly relatives, is invisible to Government statisticians and is not in public accounts because it is outside the formal economy. It is interesting that Governments in this country, and in others no doubt, have started to recognise that kind of activity, which is not in the formal labour market. The way in which responsibilities such as caring for young children have been recognised by different Governments in social security policies, home responsibility payments and, more recently, in the state second pension, recognises the difficulties faced by women who are carers—of course, not all carers are women, but the majority are—and says that that sort of caring activity, which is a growing feature of our kind of society, should be recognised in state pension arrangements. It is a moving picture, but I can tell from the arguments advanced by my hon. and learned Friend the Member for Redcar that it is moving at a slower pace than she would like.

At this stage, I am not convinced that we need an annual report. However, the forceful speech of my hon. and learned Friend and the supporting speech of my hon. Friend the Member for Burton (Mrs. Dean) have convinced me that a report would be helpful. Therefore, I undertake that my Department will publish a report on women and pensions, probably in the next calendar year. We will then assess its impact, and the contribution that it makes to the debate—or its worth—to see whether it should be followed by a periodic report, but not an annual report.

I congratulate my hon. and learned Friend for putting her argument so forcefully, as she made me reconsider the usefulness of a report. I have given a clear pledge, so I hope that she will consider removing her new clause in light of that commitment.

Photo of Vera Baird Vera Baird Labour, Redcar

I thank everybody for their support for this modest proposal, as it has been called. I am also thankful for the consideration that both sides of the Committee have genuinely given to my arguments. I hope that Opposition Members are serious in their support for the proposal, and that they are not crying crocodile tears for some political advantage in the Committee. If so, I expect their manifestos to contain serious proposals to increase the quality of women's pension provision soon. Although none of them has a prospect of forming a Government, it helps to keep the issue on the agenda if it is addressed in other parties' manifestos. I am sure that there will be such measures in our own.

I am grateful to the Minister for his positive response and his obvious appreciation of the moving picture, as he put it, of the role of women and the need to acknowledge those changes and to ensure that the

role of women is appreciated both as they emerge into the labour market and as they retain their residual primary caring role. He also properly acknowledged, as was only to be expected, that it is important to give financial credit to both roles that women inevitably play and to ensure that both roles help women to contribute to a richer retirement than they are able to have currently.

I am very pleased that my hon. Friend has been moved, as he professes himself to have been by the calibre of the arguments, to announce a report next calendar year. I think that the Bill is intended to come into force next calendar year, so the next calendar year would have seen the first annual report that could have resulted from the Bill.

Sitting suspended for a Division in the House.

On resuming—

Photo of Vera Baird Vera Baird Labour, Redcar 4:51 pm, 27th April 2004

With one more round of thanks for everyone's help and support on the issue, my hon. Friend the Minister talked about being able to publish such a report probably in the next calendar year; did he mean definitely by the end of 2005?

Photo of Vera Baird Vera Baird Labour, Redcar

I am grateful to my hon. Friend. That is the first year in which there would have been an annual report anyway, because the Bill will not come into force until 2005. When one reflects on the matter, it appears that annual reports may not be the perfect model, because pension provision takes a while to filter through. Perhaps one report per Parliament would have been more satisfactory and as my hon. Friend has handsomely offered, we would be able to discuss the impact of the first annual report, perhaps with a view to ensuring that there is one per Parliament, which might be more satisfactory. Obviously, it will be debated, at the very least in Westminster Hall, if we put it on the agenda. It is an important concession for which I am hugely grateful. I hesitate for only a moment.

Photo of Gregory Barker Gregory Barker Opposition Whip (Commons)

Given that we know that the Government are capable of reversing clear manifesto commitments, let alone promises offered in Committee, I urge the hon. and learned Lady to stick to her guns, rather than falling over so easily.

Photo of Vera Baird Vera Baird Labour, Redcar

This shows up my worst fears. I asked whether hon. Members were crying crocodile tears; I am now satisfied that they were, and they are playing silly games. Of course I will not doubt my hon. Friend when he tells me that there will be a report and that we will seriously discuss the possibility of having one per Parliament. I beg to ask leave to withdraw the motion.

Hon. Members:


Photo of Vera Baird Vera Baird Labour, Redcar

On a point of information, Mr. Cran. Are we to vote on whether the motion may be withdrawn, or on the substance?

Photo of Mr James Cran Mr James Cran Conservative, Beverley and Holderness

The Division is on the second reading of the new clause. So that everyone is clear, I have to put the question that the clause be read a second time.

Question put, That the clause be read a Second time:—

The Committee divided: Ayes 7, Noes 14.

Division number 9 Adults Abused in Childhood — New Clause 29 - Pension position of women

Aye: 7 MPs

No: 14 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of George Osborne George Osborne Shadow Minister (Treasury)

On a point of order, Mr. Cran. Is there any way of putting on the record—into Hansard—that the hon. and learned Member for Redcar, and the hon. Members for Burton, for Northampton, North (Ms Keeble), for Coventry, South (Mr. Cunningham), and for North Durham (Mr. Jones) all voted against an amendment to which they had put their names?

Photo of Mr James Cran Mr James Cran Conservative, Beverley and Holderness

Of course—the hon. Gentleman has already done so.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

Further to that point of order, Mr. Cran. Is there any way of getting into Hansard the fact that that point of order was spurious and had nothing to do with the debate?

Photo of Mr James Cran Mr James Cran Conservative, Beverley and Holderness

The hon. Gentleman has also achieved his aim. I shall take no more points of order.New Schedule 1 Reviewable matters