There was a very interesting exchange as first business in the House of Lords earlier today - so interesting that I reproduce it in full:
Baroness Hollis of Heigham asked Her Majesty’s Government:
When they will report on their commitment, made during the passage of the Pensions Act 2007 through Parliament, to help women to buy back additional national insurance years.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My Lords, the Government committed to look at a range of options to help individuals who have gaps in their national insurance contribution records to purchase additional voluntary contributions. This work is now complete. The options were analysed in terms of fairness, affordability and simplicity. The Government have concluded that none of the options considered passes these assessment criteria and none is particularly well targeted, and therefore have decided to make no changes to the current rules to allow individuals to buy additional national insurance contributions. (So, as per standard NuLabour practice, the commitment we made wasn't the one anybody else thought it was and, even if it was, we're not going to honour it anyway - so there!)
Baroness Hollis of Heigham: My Lords, I am profoundly dismayed by that Answer. In my view, it will not do. (And I'm mightily pissed off that the Government of which I was once a (reasonably) prominent member is behaving in such a shabby way.) Does my noble friend accept that there are coming before the Commons, and therefore to your Lordships’ House in due course, the National Insurance Contributions Bill and the personal accounts Pensions Bill and that, if this House agrees, we will continue to fight to ensure that women who have been carers do not find themselves penalised by going into retirement with an incomplete, poor pension? (And there will be blood on the Government carpet once we've cobbled together a cross-party alliance to defeat them on the issue.)
Lord McKenzie of Luton: My Lords, I well understand the disappointment of my noble friend and others in the House, particularly as she has campaigned so effectively on this issue, but the position is as I have outlined. We should not lose sight of what has happened under this Government in improvements to pensions, particularly for women. For example, the reduction in the number of qualifying years needed for a full basic state pension is 30—a key measure—and, for the first time, paid and credited contributions for caring will be recognised equally for basic state pension and state second pension. (We've done our bit and thrown money at just about everything under the sun; the only trouble is we're beginning to run out of the stuff so we can't afford to pay for this. And frankly we've made such a mess of the economy that it's all going belly up in the next few months.) Those are important developments, but I am well aware that this debate is quite likely to continue with those two pieces of legislation. (And I'm not looking forward to it.)
Lord Fowler: My Lords, does the Minister not remember that when the proposal of the noble Baroness, Lady Hollis, was put to this House it was agreed to by a margin of 179 votes to 86? Surely it is a sensible measure; it gives flexibility and it particularly helps women in retirement. Frankly, the sooner it is done, the better. (The Conservatives will stand four square behind any proposals Baroness Holls may bring forward.)
Lord McKenzie of Luton: My Lords, I am not sure that we on this side should take any lessons from the pensions record of the Conservatives. (I'm getting a bit tetchy so better use this default response; and if things continue to be a bit tricky, I'll have to resort to giving ourselves a glowing report on our record in Government too.) The challenge for the measures was to reach those people whom my noble friend most wanted to reach but not to have to bear the cost of the others. That has been the difficulty. For example, if this is a policy commitment that the Opposition want to take on, let me explain that the option of an extra nine years pre-2010 and six years post-2010 would cost in cash terms a bit short of £5 billion to 2050—net present value, in prices terms, £1.3 billion. (As I've said, we've made such a mess of the economy - and got all our spending priorities wrong - so we can't afford it.) That is the analysis and that is the issue before us.
Lord Davies of Coity: My Lords, is my noble friend aware that, when I became general-secretary of my trade union in 1986, I inherited a situation in which part-time women workers were ineligible for the pension scheme? I not only provided for them to become members of the scheme but I backdated the years of service to ensure that they paid money for those years that they had already completed. (Gizzajob!) I hope that the Government do the same with the national insurance contributions.
Lord McKenzie of Luton: My Lords, pensioners have been well served by this Government. Let us look at the facts of what has happened since 1997. (Phew, a soft ball that I can bat back by bleating about our record.) Currently, only around 35 per cent of women reaching state pension age are entitled to a full basic state pension. When the 2010 changes come in, that figure will be three-quarters and, in 2025, 90 per cent, which will be equality with men. Because of the changes that we have made to the state second pension, 2.1 million carers, more than 90 per cent of them women, and 6.1 million low earners, almost 60 per cent of them women, are included in the scheme, which did not provide for them before.
Lord Oakeshott of Seagrove Bay: My Lords, does the Minister accept that, today of all days, when the Government have finally run up the white flag after their appalling treatment of the 125,000 robbed pensioners, this is the last day to try to defend the indefensible on this issue? I give notice that, along with the noble Baroness, Lady Hollis, we on these Benches will be fighting as hard as we can during consideration of the upcoming Pensions Bill to ensure that people get justice. (Can we join in - in a squeaky voice - and clobber the Government too with our tickling sticks?) Does the Minister not accept that what is happening here is a Labour Government spending billions to help rich people by giving them top-rate tax relief and preventing poor women, with broken work records, from saving for a modest pension?
Lord McKenzie of Luton: My Lords, it must be easy being a Liberal Democrat: you are responsible for nothing and it does not matter what spending commitments you make, as we see far too often. (I'm definitely getting very tetchy now especially as those fluffy LibDems are having a go at me too. Leave me alone. I didn't make the mess we're in and, anyway, this lark of 'defending the indefensible' is above my pay grade. Just leave me alone.) If one looks at who would not benefit from the proposals, one sees that it would be the poorest women, because the poorest women headed for pension credit would lose pound for pound if they were asked to cough up for additional class 3 contributions. The proposals would not help those women who could not get beyond 60 per cent of their spouse’s pension; they would simply be paying in money to no avail. It is not right to characterise it as the noble Lord has done.
Baroness Greengross: My Lords—
Baroness O'Cathain: My Lords—
Baroness Dean of Thornton-le-Fylde: My Lords—
When they will report on their commitment, made during the passage of the Pensions Act 2007 through Parliament, to help women to buy back additional national insurance years.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My Lords, the Government committed to look at a range of options to help individuals who have gaps in their national insurance contribution records to purchase additional voluntary contributions. This work is now complete. The options were analysed in terms of fairness, affordability and simplicity. The Government have concluded that none of the options considered passes these assessment criteria and none is particularly well targeted, and therefore have decided to make no changes to the current rules to allow individuals to buy additional national insurance contributions. (So, as per standard NuLabour practice, the commitment we made wasn't the one anybody else thought it was and, even if it was, we're not going to honour it anyway - so there!)
Baroness Hollis of Heigham: My Lords, I am profoundly dismayed by that Answer. In my view, it will not do. (And I'm mightily pissed off that the Government of which I was once a (reasonably) prominent member is behaving in such a shabby way.) Does my noble friend accept that there are coming before the Commons, and therefore to your Lordships’ House in due course, the National Insurance Contributions Bill and the personal accounts Pensions Bill and that, if this House agrees, we will continue to fight to ensure that women who have been carers do not find themselves penalised by going into retirement with an incomplete, poor pension? (And there will be blood on the Government carpet once we've cobbled together a cross-party alliance to defeat them on the issue.)
Lord McKenzie of Luton: My Lords, I well understand the disappointment of my noble friend and others in the House, particularly as she has campaigned so effectively on this issue, but the position is as I have outlined. We should not lose sight of what has happened under this Government in improvements to pensions, particularly for women. For example, the reduction in the number of qualifying years needed for a full basic state pension is 30—a key measure—and, for the first time, paid and credited contributions for caring will be recognised equally for basic state pension and state second pension. (We've done our bit and thrown money at just about everything under the sun; the only trouble is we're beginning to run out of the stuff so we can't afford to pay for this. And frankly we've made such a mess of the economy that it's all going belly up in the next few months.) Those are important developments, but I am well aware that this debate is quite likely to continue with those two pieces of legislation. (And I'm not looking forward to it.)
Lord Fowler: My Lords, does the Minister not remember that when the proposal of the noble Baroness, Lady Hollis, was put to this House it was agreed to by a margin of 179 votes to 86? Surely it is a sensible measure; it gives flexibility and it particularly helps women in retirement. Frankly, the sooner it is done, the better. (The Conservatives will stand four square behind any proposals Baroness Holls may bring forward.)
Lord McKenzie of Luton: My Lords, I am not sure that we on this side should take any lessons from the pensions record of the Conservatives. (I'm getting a bit tetchy so better use this default response; and if things continue to be a bit tricky, I'll have to resort to giving ourselves a glowing report on our record in Government too.) The challenge for the measures was to reach those people whom my noble friend most wanted to reach but not to have to bear the cost of the others. That has been the difficulty. For example, if this is a policy commitment that the Opposition want to take on, let me explain that the option of an extra nine years pre-2010 and six years post-2010 would cost in cash terms a bit short of £5 billion to 2050—net present value, in prices terms, £1.3 billion. (As I've said, we've made such a mess of the economy - and got all our spending priorities wrong - so we can't afford it.) That is the analysis and that is the issue before us.
Lord Davies of Coity: My Lords, is my noble friend aware that, when I became general-secretary of my trade union in 1986, I inherited a situation in which part-time women workers were ineligible for the pension scheme? I not only provided for them to become members of the scheme but I backdated the years of service to ensure that they paid money for those years that they had already completed. (Gizzajob!) I hope that the Government do the same with the national insurance contributions.
Lord McKenzie of Luton: My Lords, pensioners have been well served by this Government. Let us look at the facts of what has happened since 1997. (Phew, a soft ball that I can bat back by bleating about our record.) Currently, only around 35 per cent of women reaching state pension age are entitled to a full basic state pension. When the 2010 changes come in, that figure will be three-quarters and, in 2025, 90 per cent, which will be equality with men. Because of the changes that we have made to the state second pension, 2.1 million carers, more than 90 per cent of them women, and 6.1 million low earners, almost 60 per cent of them women, are included in the scheme, which did not provide for them before.
Lord Oakeshott of Seagrove Bay: My Lords, does the Minister accept that, today of all days, when the Government have finally run up the white flag after their appalling treatment of the 125,000 robbed pensioners, this is the last day to try to defend the indefensible on this issue? I give notice that, along with the noble Baroness, Lady Hollis, we on these Benches will be fighting as hard as we can during consideration of the upcoming Pensions Bill to ensure that people get justice. (Can we join in - in a squeaky voice - and clobber the Government too with our tickling sticks?) Does the Minister not accept that what is happening here is a Labour Government spending billions to help rich people by giving them top-rate tax relief and preventing poor women, with broken work records, from saving for a modest pension?
Lord McKenzie of Luton: My Lords, it must be easy being a Liberal Democrat: you are responsible for nothing and it does not matter what spending commitments you make, as we see far too often. (I'm definitely getting very tetchy now especially as those fluffy LibDems are having a go at me too. Leave me alone. I didn't make the mess we're in and, anyway, this lark of 'defending the indefensible' is above my pay grade. Just leave me alone.) If one looks at who would not benefit from the proposals, one sees that it would be the poorest women, because the poorest women headed for pension credit would lose pound for pound if they were asked to cough up for additional class 3 contributions. The proposals would not help those women who could not get beyond 60 per cent of their spouse’s pension; they would simply be paying in money to no avail. It is not right to characterise it as the noble Lord has done.
Baroness Greengross: My Lords—
Baroness O'Cathain: My Lords—
Baroness Dean of Thornton-le-Fylde: My Lords—
(Can we all join in giving Lord Mackenzie a hard time?)
Noble Lords: The Cross Benches. (See ... self-regulation works!?!)
Baroness Greengross: My Lords, the Government are developing a strategy for carers across the board and I am pleased to be part of that work, but surely it is beyond belief that a group of carers and people who have had caring responsibilities are going to be discriminated against in recouping the pensions that they could have been entitled to if they not taken on that role. (I'm signing up to supporting Baroness Hollis.) Will the Government please reconsider, because this is extremely unfortunate?
Lord McKenzie of Luton: My Lords, I stress again that the challenge has been to reach the very people whom the noble Baroness describes. (They won't notice notice if I repeat the same old garbage; even if they do, time is nearly up so, if I can pad it out just a little bit more ....) That is not possible without great intricacies and complications, which is one of the criteria that we set our face against when we discuss these things in this House. The reality is that the role of carers going forward is significantly improved for the reasons that we gave when we debated the Pensions Bill earlier this year. (Thank God that's over!)
Noble Lords: The Cross Benches. (See ... self-regulation works!?!)
Baroness Greengross: My Lords, the Government are developing a strategy for carers across the board and I am pleased to be part of that work, but surely it is beyond belief that a group of carers and people who have had caring responsibilities are going to be discriminated against in recouping the pensions that they could have been entitled to if they not taken on that role. (I'm signing up to supporting Baroness Hollis.) Will the Government please reconsider, because this is extremely unfortunate?
Lord McKenzie of Luton: My Lords, I stress again that the challenge has been to reach the very people whom the noble Baroness describes. (They won't notice notice if I repeat the same old garbage; even if they do, time is nearly up so, if I can pad it out just a little bit more ....) That is not possible without great intricacies and complications, which is one of the criteria that we set our face against when we discuss these things in this House. The reality is that the role of carers going forward is significantly improved for the reasons that we gave when we debated the Pensions Bill earlier this year. (Thank God that's over!)
I add only one thought. It is passing strange that, following hard on the heels of trying to make friends of their enemies by enlisting GOATs (for the uninitiated, Government Of All the Talents), the Great Bottler's government cavalierly makes enemies of its erstwhile friends. After all Baroness Hollis was not only a fairly senior Minister for Bliar - though not with an especially Bliar-ite reputation, just solid Labour - but she is also one of the most knowledgeable people on the subject of pensions in Parliament.
The words "trolley, "falling", "wheels" and "off" all come to mind.
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