Pensions Reform

I welcome the opportunity to speak in this important debate. I also welcome many aspects of the Government’s response to the Turner report. However, I want to deal with concerns that have been expressed by a number of Members about the Government’s woefully inadequate, indeed scandalous, response to the parliamentary ombudsman’s report on workers who have effectively been robbed of their pensions through no fault of their own. There are more positive aspects. I join the hon. Member for Colne Valley (Kali Mountford) in welcoming the White Paper’s proposals for women and carers. A number of Members have drawn attention to the disgraceful circumstances in which many retired women find themselves. Those women, who have given years to caring for disabled relatives and others, have fragmented work records, and on retirement are utterly dependent on the work records of husbands or partners. Many who have no husbands or partners find themselves in dire poverty. I am glad that the Government intend to alter the contributory principle to take account of paid contributions, and that far less will be necessary from now on. I am also glad that it will be altered to reward social contributions. Pensioners, many of them women, come to my surgeries and ask ““What is in it for me?”” The sad fact is that there is not a great deal in the report for many of today’s female pensioners. I shall say more about what the Government might do to assist the pensioners of today. I am also glad that, at long last, the basic state pension will again be linked to earnings. Many people have campaigned for that for a long time, and the Labour party was vociferous when the link was abolished. However, I share the reservations expressed by others about the fact that the link will not be restored until 2012, rather than 2010, the date suggested by Turner. If the current situation continues, by 2012 the value of pensions will still be falling, especially for the poorest pensioners. That is unacceptable. We need to end dependence on means-testing. As has been said by the hon. Member for Angus (Mr. Weir) and others, there is far too much means-testing. Many older people are deterred from applying for means-tested benefits because of the stigma attached to it, and it is also a disincentive to saving. I recognise the contribution made by pension credit to the alleviation of pensioner poverty. As a Minister in the Department for Social Development, which was responsible for the Social Security Agency in the former Northern Ireland Assembly, I can testify at first hand to the impact of pension credit in Northern Ireland. Nevertheless, we must end that dependence on means-testing. The best way of doing it would be to set the basic state pension at a decent level, lifting pensioners out of poverty and establishing a link with rises in earnings. As for the qualifying age for the state pension, I entirely understood the arguments of the hon. Member for Aberdeen, South (Miss Begg). She said that despite reservations, she had come round to the view that the proposals were acceptable. Having talked to many of my constituents, I find that many accept that some of the changes must be paid for, and this may be one of the least offensive ways of doing that. However, the Government will have to deal with the issue of inequalities in life expectancy between people in different parts of the country, and between different types of worker. Problems will be stored up if manual workers are expected to work until they are in their late sixties, although they have a shorter life expectancy than others. The Government must think about today’s pensioners as well. They must tackle the question of why so many pensioners do not claim pension credit and other benefits to which they are entitled. A recent report in Northern Ireland turned a spotlight on the tens of millions of pounds being paid to people wrongly through error, fraud and the like. I am sure that the same applies in other parts of the country. It was right to identify that problem, and everything possible should be done to tackle it. Nevertheless, more attention should be paid to the hundreds of millions of pounds that are not claimed by the poorest members of society, including pensioners, who are entitled to that money. The Government must do more to ensure that entitlement to benefits is taken up, especially by pensioners. Members have mentioned the winter fuel allowance, which was raised from £75 to £200 in 2000 but has remained static ever since. Given the enormous increases in fuel prices—which have also been mentioned—it is incredible that the winter fuel allowance is the one payment that has not risen in line with inflation. The Government could do something for today’s pensioners very easily by raising that allowance. A number of Members in all parts of the House rightly mentioned the parliamentary ombudsman’s report and the Government’s response. Along with others, I have constituents who have suffered greatly as a result of shortfalls in their pension funds. Having contributed for many years, they face a future devoid of the standard of living that they expected. Indeed, many have no hope of a decent standard of living. Those people are devastated: they feel that they have been robbed. Some workers travelled from Northern Ireland today to attend the debate. I am sure that they were heartened by some of the speeches made by Members throughout the House. I pay tribute to the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), who spoke eloquently on behalf of her constituents. She voiced many of my concerns, and those of other Members, about what the Government have failed to do. Although the Government have introduced a pension protection fund and a financial assistance scheme, I do not think that they have done enough to compensate workers properly. They have not done enough to return their expectations to them, and enable them to look forward to a retirement involving a degree of dignity and decency and the standard of living to which they are entitled. The workers in my constituency who were employed in the Richardson’s IFI plant paid into a fund, as they had been advised to do. They did that on the basis of the best advice, believing that their retirement income was secure. They had every reason to believe that as 49 per cent. of the company was owned by ICI and 51 per cent. by, believe it or not, the Irish Government. Two plants were located south of the border and one was in Belfast, in my constituency. The workers in the Irish Republic have rightly had their pension rights sorted out and have been compensated, but the workers in Belfast have been left bereft of their pension entitlement and have to rely on the financial assistance scheme. We all want to see better relations between Northern Ireland and the Irish Republic, so I ask that the Irish Government treat those workers in the same way as they have treated their workers, as a tangible example of better north-south co-operation. We hope to put those points directly to Bertie Ahern, the Irish Prime Minister, when we meet him on Thursday. Such fair treatment would go a long way to proving that he means what he says about treating people on either side of the border the same. It seems that fair treatment is all right as long as it does not cost anything, but when it is time to divvy up millions of euros, it is a different matter.