Debate on the Address

My Lords, as with all public services, women are today’s clients of social security. This was not exactly what Beveridge anticipated. He devised national insurance in a world of working husbands and dependent wives. Providing that the husband held on to a 40-year job and the wife held on to him, she acquired her social security as his wife. But today one marriage in two ends in divorce, one child in two is born outside wedlock, the years post-retirement have doubled and the need for carers has grown accordingly. Women, as in Beveridge’s day, continue to do the caring which inhibits waged work, but now without a husband to support them in their turn. Beveridge’s society has become the world we have lost. We have sought to tweak the welfare state to fit today’s society, with credits such as HRP and the disability benefits supported by both Governments. The national insurance unemployment benefit has withered to just six months before JSA is means-tested. Effectively, we have weaned the welfare state off the insurance principle for almost all its benefits. They have become either category benefits, such as children’s or disability benefits, or means-tested benefits such as income support or JSA. We recognise that national insurance no longer fits our society. I am in favour of a National Insurance Fund but the conditions attached to its payment no longer work. Only the state pension continues to use the outdated jargon of national insurance. We have abandoned it elsewhere. Even within pensions, it is largely a myth. Only 60 per cent or so of national insurance years are paid for out of wages. The rest are credits. The contributory system is a fabrication. The ““something for something”” slogan is therefore perverse. Why? Because national insurance—the contributory system for the basic state pension—is designed to keep the unworthy out. That is why we have it. It ticks boxes and counts numbers; that is all very well for those it fits—the working men for whom Beveridge devised it. They start work after school or college and, apart from the risk of serious disability, whatever may befall them—marriage, children, divorce, caring for an elderly parent—men can expect to carry on working, paying in their NI and drawing out when appropriate. You, we, all of us, can audit-trail their work and count it. Those who do not tick and fit the boxes become the unworthy and, of course, they are mostly women. If I may use an ugly phrase, for which I hope the House will forgive me, the contributory system is institutionally gendered. I am not saying that people are misogynist, but too many of us fail to read the system fairly because women’s lives are essentially untidy. Much of what women do cannot be counted in a tick-box way, but I suggest—I am sure your Lordships would agree—that such lives are none the less equally valuable. Let me give some examples: 1.8 million women hold jobs which pay below the lower earnings limit, yet their part-time waged work is not recognised for national insurance. Around one woman in five is a carer for someone other than children, but much of that care is informal, fluctuating and does not count for NI. She may be looking after her grandchild so that her daughter can work, but that is not counted towards NI or for childcare tax credits. Accordingly, a woman in her late 40s or 50s can have a teenage child, a part-time job, look after a granddaughter, help out her pensioner parents and even the parents of her parents, as well as run a home. She works 60 hours a week with grace and stoicism, yet none of those jobs ticks the boxes of the contributory system, so none of it will count when it comes to a basic state pension—not one penny. How many of us think that that is fair or decent? I refuse to believe, and I hope that noble Lords agree, that what can be counted is automatically more valuable than what cannot—that his 40 hours in a garage should count but not her 60 hours of caring and coping. She is doing something; in fact, she is doing a lot of bits of ““something for something””; but she gets, of course, absolutely nothing, because she does not and cannot fit in with the contributory structure. Why? Because we cannot audit-trail all the things that she does and, in any case, the bits and balance of her working life are untidy and may well change from month to month and year to year. The Queen’s Speech includes two social security measures. The measure on child support, if it can bring more money to children, I welcome. I ask my noble friend whether it will do so and whether it will have Treasury support to do so—I hope very much it will. There is also a major Pensions Bill. I also welcome much of that Bill, but it still offers a better deal for men, who already have the stronger pension settlement, than it does for women. Those women who are outside the public sector have relatively little in the pensions stakes. The Bill continues to tweak the contributory system. I welcome the fact that there will be fewer years—I think that is great—but whereas men will come from 49 years to 30, women come down from their current 39 to 30 and as an offset lose four years of HRP. The average man would, at the moment—I appreciate that the retirement age for women is rising—gain 14 years of contribution, while the average woman gains five. I welcome the earnings link to hold the pensions value, but it benefits most those who have complete pensions, which is currently 90 per cent of men and around 30 per cent of women. There is help for carers. But tying the proposals still to the very high hurdle of middle and higher-rate DLA would exclude much of the caring undertaken by women. The Bill proposes a national pensions savings scheme, which again I welcome, as it should benefit the lower paid, among whom are women; but, unless the interaction with the basic state pension and pension credit is sorted out—which is a crucial women’s issue—we could end up, although I hope that we do not, with serious problems of mis-selling. At the end we will still have a contributory framework, just a messier one. Yet we are told by the Government that by 2025 or so the same number of people, men and women, and at the same cost, will be covered by this reformed and revised system as we would gain from a universal basic state pension. I repeat—by around 2025 a non-contributory basic state pension would cost no more than what these reforms envisage. Instead, if we follow the route of the basic state pension as proposed in the White Paper and the Bill, we will have added complexity by adding credits and the need to track them, so the system will remain opaque and confusing. Why should someone caring 20 hours a week for someone on middle-rate DLA get the NI contribution, but not if they are caring20 hours a week for someone on incapacity benefit? Thousands of civil servants will track through the records to explain that caring for a disabled person on one benefit for 20 hours a week counts, and that the identical care for the identical hours for often the identical condition but subsumed under another benefit does not. We will continue too to disincentivise savings, because people, especially women, will still not know what pension they are going to get, because that will depend on the lottery of their care as it unfolds over the next 30 years, which they cannot predict at the time that they need to start to save. If they do not know what they are going to get at the end, they will not start to save at the beginning. All this will still require substantial means-testing. For exactly the same cost, we could have a universal non-contributory system which was clean, simple, predictable, encouraged saving and valued women’s lives and the way in which they lived them equally with men’s. We have a wonderful opportunity to clean up and clarify the benefit and pensions system, and I fear that we are going to fudge it again, because too many people still seem to think that ““something for something”” carries meaning, when it is vacuous. Company directors playing golf between the ages of 60 and 65 get a freebie NI—something for nothing. Yet women holding down three 15-hour jobs—that is, 45 hours a week—get nothing for really rather a lot of something. The unemployed lad gets freebie national insurance—something, perhaps, for nothing. The woman caring for three people for 40 hours a week who are on the ““wrong”” benefits gets nothing for really rather a lot of something. I am sure that my noble friend will not tell me that the contributory system is valuable because it represents something for something. It is not, it does not and it never has, and we should stop using it to count women out. I hope that when the time comes to debate this Bill, the Government will agree to look again. The Government have done wonderful things for women, of which I am immensely proud. In our first term we made work pay for women, with the minimum wage and tax credits; in our second term we made work possible through childcare, part-time work and maternity, paternity and parental leave. We must now hope that women entering retirement will be able to do so courtesy of a pensions Act that will free them from the worry of poverty—and that could crown our legacy for women in our society.