Rachel Reeves
MP for Leeds West and Pudsey · Labour · United Kingdom
“I thank my hon. Friend for his question and his work on the Treasury Committee. On pensions reform, through the Mansion House accord and Sterling 20, we have got pension funds to commit to investing more in British businesses, both through British venture schemes and in British infrastructure.”
“I thank my hon. Friend for her question. As Members will know, this Government are working on plans with our NATO allies for a multilateral defence mechanism. We have already signed a treaty agreement with Finland and the Netherlands, and we are working closely with Scandinavian, Baltic and eastern European countries.”
“At a time of great global uncertainty, it is more important than ever that we deepen ties with our closest allies and biggest trading partners, whose values we share, and whose interests are bound to ours.”
“Today the Government have responded to the covid counter-fraud commissioner’s recommendations in a report that I commissioned, which confirms that the Conservative Government left the door open to more than £10 billion of pandemic fraud.”
“As I just said, the DIP will be published before the summit. It will involve more money spent more effectively, and it will meet the scale of the challenges we face. Frankly, I will take no lectures from the Conservatives, who left our armed forces, in the words of their former Defence Secretary, “hollowed out”.”
“I thank my hon. Friend for bringing the story of Darren and Nicole to this House. I hope that they and their children will benefit from the change I made to the two-child limit for universal credit, as well as from the rolling out of free breakfast clubs to all primary schools, and the introduction of free school meals for all children wh…”
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“As I have said, the Labour Government did not get everything right in relation to post offices. The Labour party is using the period of our policy review process to look at a large number of our policies. I return to the point, however, that both the Liberal Democrat and Conservative manifestos made it clear that those parties were committed to giving more services to post offices, not to removing them. That is why the decision on the green giro was so disappointing, because it went against those commitments. To return to another point that I made earlier in response to the Minister’s question, although POCA was put out to tender, the previous Labour Government recognised the public concern, ended that process and gave POCA to the Post Office. That decision was welcomed by our constituents and by post offices up and down the country.”
“Member for Truro and Falmouth again on securing it—as an opportunity to lend support to POCA and post offices, and to emphasise that decisions about POCA should be made with the intention of making sure that the post office is a viable and vibrant part of our communities in both urban and rural areas, offering services that pensioners, families and the most vulnerable in society rely on.”
“People who rely on the post office are keen to know what is happening now that those two parties are in government. They are keen to hear whether the coalition partners are making POCA part of realising their pre-election promises, both up to and beyond 2015. The post office is at the heart of communities up and down the country. In an era of falling trust in financial services, the Post Office remains a beacon of hope for restoring trust. I welcome this debate—I congratulate the hon.”
“I have admitted that Labour did not always get things right, and it would be good to hear other Members say that not everything that their parties are doing is right in representing the people whom we are here to serve—our constituents. In conclusion, we have heard useful and interesting contributions from Members who represent both urban and rural areas, who know first hand how important post offices are in their communities. I have set out what I think are the key questions surrounding POCA and some wider questions that the Government must answer on the future of postal services. I have already quoted the Conservative manifesto, but the Lib Dems also promised a post bank as a central plank of their efforts to keep post offices open.”
“The Conservative manifesto said: “Nothing underlines the powerlessness that many communities feel more than the loss of essential services, like post offices”. We all know, however, that removing services such as the green giro from post offices makes it harder for them to be viable in the long term. The Government may be giving money in one way, but they are taking money away from post offices by removing from them services such as the green giro. Today’s debate has been consensual, with representatives from all parties saying that they want to support their local post offices. We should welcome that consensus and try to work together to support post offices and the people who use them in all our communities. That has been the tone of my remarks.”
“Good businesses in all our constituencies are being denied bank lending, and new data show that bank lending to small businesses is £2 billion short of the Government’s targets. When will the Government show some backbone and take robust action on the banks?”
“The Minister told the Education Committee last week that she thinks there will be resources for special educational needs. Children and parents deserve more than guesswork. Can she guarantee now that the Government will make sure that all children with additional learning needs have the support that they need to succeed at school?”
“Today hundreds of women in their 50s, supported by Age UK, have come to Parliament to protest against unfair changes to their pensions. The coalition agreement says that there will be no increase in women’s state pension age before 2020, yet under the Pensions Bill that increase will start in 2018. Why the U-turn?”
“There have also been supportive articles in the Daily Mail and The Guardian. There is a broad coalition against the proposal, and we hope that the Government will take on board some of criticisms of the Pensions Bill, especially of clause 1 and the increase in the state pension age. People who are approaching retirement say, “This is a bit like a horizon. You can always see it in the distance, but you can never quite get to it.” As my hon. Friends the Members for Sunderland Central (Julie Elliott) and for Blaenau Gwent (Nick Smith) have said, the goalposts just keep moving, and that does not seem fair, especially when people are trying to make the right decisions. They plan, contribute, bring up families and care for relatives, yet they are being penalised.”
“I congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing this debate on such an important and unjust matter and on her early-day motion 1402, which has secured 138 signatures from across all the main parties. I also congratulate Age UK on the campaign that it has been running. Those of us who get the tube to work in the morning and come up the escalators and into Portcullis house will have seen the posters that adorn the walls. They tell the stories of some of the women who will be affected by these changes. Some of those stories have been related by hon. Members from all parties this morning. My hon. Friend spoke about some of the organisations that have provided support on this matter, such as Age UK, which I have already mentioned, and Saga.”
“The Minister’s own Department estimates that women are entitled to receive £30 less in their basic state pension than men. All those points show that these women are more reliant on the state pension than their male equivalents, first because they have much lower private occupational pension savings and secondly because they are in not such a good position as men to increase their savings in the next five years.”
“The gender pay gap has been closing since 1980 and it is now about 16%, but the point is that these women have suffered inequality throughout their working lives. They now face a double whammy and are paying the price for getting us there too quickly. In addition, a lot of these women have worked part-time at some point in their life, particularly when they were bringing up children. In fact, many of them are also working part-time now, to help to care for elderly parents or grandchildren. As other Members have said already, these women are the big society. They are doing the caring work that we value as much as their work in the workplace. Of course, many of them have also had interrupted careers and have not paid full national insurance contributions.”
“There is something particularly perverse about targeting that specific group, because those women who are 56 or 57 now have average pension savings of £9,100, compared to the average pension savings of men of the same age of £52,800. At retirement, pension savings of £9,100 work out at £564 a year or £11 a week. The reasons for the difference in the average pension savings of men and women are varied, but the key point is that these women I am talking about are not in a financial position to absorb the changes being proposed at such short notice. These women have earned far less during their lives than men of the same age. In 1980, the gender pay gap was 28.5%. When these women were in their 20s, they were earning on average almost 30% less than men of the same age.”
“Indeed, the recently published Green Paper on the flat rate pension consults on reasoned mechanisms for increasing the state pension age, which is a recognition of the unfairness that is being imposed on women by the Pensions Bill, which is just about to come to the House. That Green Paper does not include consultation on arbitrary changes with five years’ notice. The reason that it does not consult on those types of changes is because the Minister, his Department and the Government know that they are unfair. So why is he forcing them upon women who are 56 or 57 years old? My hon. Friend the Member for Sunderland Central talked about the savings of women who are 56 or 57.”
“That does not take into account the passported benefits that come along with a pension. Longevity is increasing and Members from all parts of the House welcome that, but we cannot move the goalposts every time an actuary changes his forecast. Six months before the election, the Minister himself said: “Pension policy needs to be stable and predictable years ahead, not made up on the back of a cigarette packet.” I agree with the Minister. Although his words are still on his website, he is now making policy up on the back of that cigarette packet and it is hitting women particularly hard.”
“She very much hopes that the Minister will be listening to every word that I say today. There is fewer than five years’ notice before these changes take effect. The Turner report says that people should be given at least 15 years’ notice, and the Pensions Policy Institute believes that these changes do not give enough notice. Women need longer to prepare for changes in the state pension age because they tend to become part-time workers sooner than men of the same age. As of April 2011, the basic state pension is worth £102.15 a week. Pension credit is worth £137.35 a week. Those women who are seeing a delay in their state pension age of two years face a loss of pension income of more than £10,000. For those in receipt of pension credit, that loss is closer to £15,000.”
“We have heard a great deal from Liberal Democrat Members today. I hope that that means that people who are approaching retirement can feel that their MPs will not support these proposals. To reiterate points that have already been made, 2.6 million women and 2.3 million men will have to wait longer for their state pension than they previously had been told. Some 500,000 women will have a delay of a year before they get their pensions and about 300,000 women will have a delay of 18 months or more. Unfortunately, 33,000 women who were born between early March and early April 1954 will have to wait another two years before they receive their state pension. I have been lobbied by a huge number of women on these issues, not least by my own mother who was born on 30 March 1954.”
“The proposals go against the coalition agreement, which states: “The parties agree to…hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.” These changes bring forward the equalisation of the state pension age to 2018, which is not mentioned in the coalition agreement, and they raise the state pension age for women to 66 in 2018—two years earlier than promised in the agreement. Although there is increasing pressure on the Liberal Democrats to stick with the coalition agreement, there is no obligation on the Minister to support this breach or for coalition MPs to vote for it. No one in the country voted for this at the general election a year ago, and it is not what coalition MPs signed up to when they made their promises in the rose garden.”
“I could not agree more. That is a big issue and one that I will address later. For a number of reasons, this group of women are particularly ill-equipped to deal with the changes that the Government are trying to force upon them. I want to pick up on a couple of points raised by the hon. Members for Argyll and Bute (Mr Reid) and for Mid Dorset and North Poole (Annette Brooke).”
“As I said earlier, the loss of pension income for someone who has to wait two more years for their state pension is about £10,000, or it can be up to £15,000 if they are on pension credit. It is not feasible that that group of people can make up that difference in a five-year period, yet that is what the Minister is asking them to do.”
“The point is that these women will have time to prepare for changes if they happen in 2026. Changes in 2026 were legislated for in 2008, which meant that the people we are talking about today had 18 years’ notice of any changes. That is very different from the changes that the Government are introducing because they will start in 2016, giving people just five years’ notice. That is the point that Members are making today. We are not saying that we do not think that there should be any changes to the state pension age, because with increasing longevity it is right that people should work longer, but it is not right to move the goalposts and leave people so little time to prepare for changes.”
“So they are making changes now—as I said before, many of them are moving to part-time work so that they can care for elderly parents or young grandchildren—unaware that these additional changes are coming down the line. I think that people will be particularly worried or scared about what the future holds for them.”
“Yes. That is another point that my hon. Friend the Member for Erith and Thamesmead made earlier. Many of the women who will be affected by this change have written to us, but even more women have not done so. The reason they have not written to us is not because they are happy and fine with these changes. By and large, it is because they are not aware of them. They are aware that they will have to work for longer than they had previously thought, because of the changes made in 1995 that will equalise the state pension age for men and women by 2020, but they do not know that those additional changes are coming down the line.”
“It would give people nine years—not just five—to adjust to the changes, and no one would have to wait more than a year longer than expected to claim their state pension, to which they had contributed throughout their lives. We will not let this matter go and nor, do not think, will the women affected. We must hold the coalition to account on its agreement.”
“Labour accepts and celebrates increasing longevity and therefore we accept that there is a need to increase the state pension age, as we did when we implemented the recommendations of the Turner report. However, making changes to pensions must be done in a fair way, giving people enough time to prepare for them. What Labour now proposes is no more changes before 2020 and, if the Government accept the amendment to the Pensions Bill that they rejected in the House of Lords, we will support the state pension age increasing from 65 to 66 between 2020 and 2022. That would achieve a £20 billion reduction in expenditure, would affect equal numbers of men and women and, crucially, would affect 1.2 million fewer people than the Government’s current plans.”
“My plan was to greatly reduce my hours when I received my pension and return to part-time work. Now I estimate that I would need to save at least £12,000 just to be able to work part-time from the age of 64. Saving anything is impossible. I will not be able to continue working these demanding hours until the age of 66 and I am deeply worried about my future.” It is people such as Linda and Barbara who I think most of us went into politics to serve, yet the Minister, who in opposition campaigned so much for women, is now hitting them hard, as I said earlier. These are stories, not numbers, and they hit home hard. It is wrong to hurt a group of women disproportionately, by giving them such little notice of a change when they have such little chance of making up the difference in income that they will lose.”
“I have osteoarthritis in my thumbs and wrists now, which makes the lifting and cleaning work in my job harder: I’m not sure how I’ll manage to the age of 66.” I will read out another story, from Linda Murray: “I started working at 16 and have worked full-time ever since, apart from a brief period of part-time work when I was caring for my mother. I work in a very physically demanding job, at a dry cleaners, for 46 hours each week just to make ends meet. I have never had the means to save for a private pension. When I started work, private pensions were not readily available for ordinary workers. We paid our contributions and assumed that we would draw a state pension and that it would be sufficient. Due to my circumstances, I know that full retirement is no longer an option.”
“I want to tell Members two stories that I have heard that I think are particularly powerful. The first is from Barbara Bates, who says: “From the age of 15, I have worked every day of my life, apart from a few years when I stayed at home to care for my disabled husband until his death in 2003. Since 1995, I have thought that I would retire in 2018, when I will be 64. I have based all my plans for the future on this. I now have to wait an extra two years to retire—in April 2020, when I will be 66. I feel robbed—robbed of two years of freedom, and robbed of more than £10,000 that I would have received as my state pension. The basic state pension will be my only retirement income, and I have no extra means of coping financially. I will have no option but to try and carry on working.”
“Talking about JSA is an insult to those who have worked their entire lives, especially because JSA only provides about half the income that the pension credit provides and about two thirds of the income that the basic state pension provides. These women do not want a handout. They legitimately want to receive the pension that they have contributed to on the date that they were promised it. Again, that brings us back to the issue of trust. It is so important that people have trust in the pensions system. We have heard a lot of stories today about how these changes will affect great numbers of women, because every one of those 500,000 women who will have to wait an additional year before they receive their state pension has a personal story. We have heard some of those stories already.”
“Member for Mid Dorset and North Poole said earlier, women have been consistently badly served by the pensions system, both occupational and state. In opposition, the Minister campaigned for women pensioners, but now that he is in government he is hurting them hard. I wonder why he is doing that, when he is under no obligation to do so. I repeat that these changes were not in the coalition agreement, so he has no reason to support them. Of course, the Minister has claimed that these women have jobseeker’s allowance to fall back on. But as hon. Members have already said, that does not seem to be the point.”
“Yes. The hon. Gentleman’s intervention also touches on a point that my hon. Friend the Member for Wirral South (Alison McGovern) made earlier when she talked about the importance of people having trust in the pensions system. Unless we trust the pensions system and can have some certainty about what the future holds for us, it is very difficult for people—both men and women—to prepare for the future. I want to quote something else that the Minister has said. In October 2009, he said: “The Tories still seem to think that as long as women have husbands they don’t need to worry about their pensions.” I wonder whether he has changed his views now that he is in government with the Conservatives. As the hon.”
“It is particularly unfair and disproportionate to harm a group of women who have five years to prepare for the changes and have so little chance of making up the difference in lost income, which is what the women who have been writing to all of us are saying. My final quote from the Minister is: “a pension promise made should be a pension promise kept.” He and his colleagues should heed that, and we are not alone in our thinking. Age UK, the unions, Saga, The Guardian and the Daily Mail are all arguing for the Government to think again, and Age UK has organised a mass lobby of Parliament for a week today.”
“We will hear from the Minister in a moment, but we heard the arguments being rehearsed when the Pensions Bill was debated in the House of Lords. We are told that we first need to reduce the budget deficit but, as other Members have said, these provisions will not change that deficit in this Parliament and if the Government’s plans to eliminate the structural deficit in this Parliament come true, I do not see why changes on this scale will be needed in the next Parliament. The Government’s other claim is about longevity, but longevity is not especially increasing for women aged 57, so why are we particularly targeting women of that age? If the Government wanted to look more broadly at longevity and increases in the state pension age, they would, I think, get cross-party support for that.”
“I once again urge the Minister to honour the coalition agreement to which he signed up, to admit that the impact of the proposals is unacceptable, and to revise the timetable so that no one has their pension delayed by more than a year and trust can be restored in the pension system, a system which the Minister, in his heart, believes is so important.”
“I agree, but I would also go a bit further: not only was the change not in the coalition agreement—reached just a year ago—but it contradicts it. The agreement states that the state pension age for women will not start to rise to 66 before 2020, but under these proposals that rise will start in 2018. For that simple reason, coalition MPs from both the Liberal Democrat and the Conservative parties are under no obligation to support the changes. The lobby of Parliament organised by Age UK for a week today will give a voice to those who are adversely and unfairly affected, and I hope that the Minister will spare some time to meet some of the women who are hit by the changes and are coming down to Westminster to oppose them. The Bill has had its First Reading in the Commons and we are awaiting its Second Reading.”
“Is there any evidence that 56 and 57-year-old women’s longevity is going up particularly fast compared with everyone else’s? If not, why is the Minister disproportionately affecting that group of women?”
“I fear that, at this rate, the Minister will start sending pensioners back to work if they live too long. Returning to the review, would it not have been better to have done it and find out what the right trade-off is before increasing the state pension age for 57-year-old women with such little notice? The Minister says that Labour is saying that we have to find another £10 billion or £30 billion for these changes. This is about cutting spending—the Government are cutting £30 billion of spending. I do not want additional spending. First, Labour wants to halve the budget deficit in this Parliament. Secondly, our proposals would cut £20 billion-worth of spending, so we are not asking for additional spending. I would like that put on the record.”
“In the final chapter of the review, the Government suggested that a crude formula could be used for uprating the state pension age. They have already hit women in their late 50s with a two-year increase in their state pension age; now they want to use a formula that pays no attention to health in later life, so we will all be waiting longer and longer to get our pensions. We welcome the intent behind today’s Green Paper. We want a more progressive and less complicated system, but I am yet to be convinced that today’s Green Paper will achieve that.”
“To conclude, the Green Paper does nothing for today’s pensioners, because a flat-rate pension will be for only new pensioners. Today’s pensioners are suffering at the hands of this Government, with an increase in VAT to 20%, which sees pensioners worse off by £200 a year, low savings rates and a £100 cut in the winter fuel allowance. Although a flat-rate pension of £140 sounds good in theory, the Chancellor says that there is no new money, so who will lose out? It is quite likely to be families on average earnings, or just a bit more, who have worked hard and brought up a family, paying their full national insurance contributions. Some people will be worse off under the reforms, yet the Government want to talk about only the winners.”
“Will he also give a reassurance that taxes will not go up for pensioners, who of course do not pay national insurance? The other, less briefed elements of today’s Green Paper include the automatic mechanism for increasing the state pension age to make future increases fair and smooth, with time for people to plan. The move comes too late for the 500,000 women who will have to wait a year longer before they receive their state pension and the 33,000 women who will have to wait exactly two years before receiving their state pension. Does the Minister now recognise that the accelerated timetable for the state pension age for women in their 50s does not spread the cost fairly or, with just five years’ notice, leave enough time to prepare?”
“Given the importance of occupational savings for retirement income, as the Minister said, what are his estimates of the generosity of DB schemes—and, indeed, their overall survival—given the changes? The changes in contracting-out touch on a wider point. The post-world war welfare state is based on the contributory principle. We welcome the news that any new flat-rate system will keep contributions at their core, and that anyone with 30 years’ national insurance contributions will be entitled to the newly formulated pension. However, given the Chancellor’s announcement that the Government intend to merge tax and national insurance, will the Minister explain how the contributory principle will work in practice if that merger takes place?”
“If not, does he think it fair that those contracting out and getting defined benefit pensions in retirement could receive the same state pension as their counterparts who have paid full national insurance contributions throughout their careers? If those who have paid in get more than £140, will the change really be cost-neutral? If some will get less than £140 based on lower contributions, will the Minister ensure that no one falls below the guaranteed credit level? In what way can that be called a flat-rate pension? The Government’s proposals could have serious implications for the future of defined benefit schemes, because they will end the rebate for those on DB schemes.”
“The Minister has spoken eloquently about the potential winners, but the distributional impacts are critical, so will he confirm who will be worse off under the new proposed system? On fairness, the Minister has said that accrued rights will be protected. Forgive me for being a bit sceptical, but he said the same about the switch in uprating from the retail prices index to the consumer prices index. However, in this instance I will give him the benefit of the doubt. Can he guarantee that someone in their 50s who has worked all their life on average earnings and has never contracted out of the state second pension will still be entitled to a more generous state pension than someone who has not paid in?”
“In the Budget we saw a cut in the winter fuel allowance, despite rising energy prices and two successive cold winters. Will the Minister explain how he will account for those benefits in the new system, or say whether we will see further cuts, by stealth or otherwise? I have a few brief questions about affordability and fairness. The Chancellor announced in his Budget that the reforms would cost no more than the current system, yet the Pensions Policy Institute estimates that a flat-rate pension at a guaranteed credit level will cost almost 1% of GDP after 13 years. That must imply that although some will be better off under the Government’s plans, some will also be worse off.”
“Previous changes to the state pension mean that, based on new accrual rates and assuming 30 years of national insurance contributions or caring credits, a low-paid woman or someone in a caring role would be entitled to a basic state pension of £102.15 a week, plus £43.50 in the state second pension, totalling £145.65 a week, or more if she had 40 years of contributions. The figure of £140 a week that the Minister set out must be seen in that context. Pensioners and families must assess the proposals carefully to ensure that they are not worse off than they would have been under Labour’s plans. Can the Minister give some reassurances about the other benefits that pensioners receive, including free TV licences, prescriptions, eye tests, support with council tax, bus passes, the winter fuel allowance and cold weather payments?”
“The Labour Government reduced the number of years needed to qualify for a basic state pension to 30, helping women, while more generous credits for carers have ensured that more people are now entitled to a higher level of the state second pension. Labour also introduced automatic enrolment, helping the up to 8 million people who previously did not put money aside for their pensions to save. Although we welcome the fact that the Government are continuing with automatic enrolment, we disagree with the watering down of some of those proposals.”
“I thank the Minister for advance sight of his statement—half an hour before he got to his feet. Given that the pensions Minister and the Secretary of State chose to announce the most positive elements of the Green Paper to the media over the weekend, I cannot help feeling that I am the only person who still has not seen it. Today we have heard proposals that include a universal flat-rate pension and further increases in the state pension age. Although in principle the move to a more simplified system is welcome, it raises a number of important questions. The Labour Government recognised the importance of pension reform. Labour made great inroads, particularly in lifting more than 1 million pensioners out of poverty and in recognising the vital role that people—mainly women—play as carers.”
“I could not agree more with the points made by the hon. Member for Torbay (Mr Sanders), because the Government’s proposals mean 500,000 women will have to wait for more than a year longer before they receive their state pension, while 33,000 women will have to wait for exactly two years longer. With 10,000 signatures now on a petition calling for a rethink, and full-page letters in today’s Times and Telegraph asking the Government to think again, will the Minister now accept that the strength of opposition both in this House and outside is too great for the Government not to think again?”
“Another warning can be found in last week’s unemployment figures, which showed that unemployment is the highest it has been for 17 years and that youth unemployment is the highest on record. The OBR today showed that unemployment is set to rise to 8.2% this year and 8.1% next year—higher than it was even at the height of the recession. House prices continue to fall and yesterday we learned that the consumer prices index has increased to 4.4% and the retail prices index to 5.5%. There are many warnings that the Government’s policies are not working.”
“It is a privilege to speak in the same debate as my hon. Friend the Member for Barnsley Central (Dan Jarvis)—the new Member for that constituency—who will be a credit both to his constituents and to this House. We should listen carefully to his words and his warnings. Today’s Budget is equally noticeable for what it does and does not include, because the Chancellor has not heeded the many warnings showing that the Government’s economic policies are not working. Gross domestic product figures for the last quarter of 2010 showed that our economy contracted by 0.6%. Government Members blamed the snow, but it snowed in Germany, yet its economy grew by 0.4%, and it snowed in the United States of America, yet its economy grew by 0.7%. The difference is that we are cutting too fast and too deep and they are not.”