Pensions Bill

My Lords, we have just heard a very significant speech, because the noble Lord has spent a great deal of time considering the pensions system in this country. He carried out a review of pensions and social security, as did I 20 years previously, and we have both come to the same conclusion about this amendment. I support the amendment in exactly the same way as the noble Lord supports it. I congratulate the noble Baroness, Lady Hollis, on persisting in putting this proposal forward. I cannot remember who said that he hoped the Minister would listen to the debate, but I think that the Minister would have to be deaf if he had not heard what has so far been an entirely unanimous argument in favour of the amendment. Dare I say it, I hope that those on my own Front Bench are also listening to the argument in the same way? I give three reasons for supporting this amendment. First, there is the argument that the noble Lord, Lord Turner, has just put—the argument of the cliff edge. The Government are reducing to 30 years the contributory years for a pension but, at the moment, there is a severe cliff edge. A woman who retires in February 2010 still needs 39 years’ contributions; if she retires in May 2010, she needs only 30 years. By allowing the first woman to buy back the nine years, that problem would be substantially overcome. Secondly, I give the reason also given by the noble Baroness on the Liberal Democrat Benches—that it is perfectly possible to do it. This Government have done it in allowing people to buy back not just nine but 12 years. That was because of a mistake in their computers, but if it can be done for 12 it can self-evidently be done for nine. Thirdly, the amendment would strengthen the contributory principle. As long as there is no other system—and there is no other system—surely that is what we want to do. We do not have an insurance system in this country; we have a pay-as-you-go system, which means that the contributions of today pay for the benefits of today. The people making those contributions rely on the assurance of the Government that in their turn they will be helped. There is nothing revolutionary or new in the idea of buying back. I dare say that quite a number of Members of this House have done exactly that—I certainly have, as a Member of Parliament. I know that people in the Civil Service have, too. As for cost, surely there is the offset of means-tested benefits that we will avoid by going down this road. I hope that that will be taken into account. I shall be perfectly frank—I do not trust the Treasury on pensions. All my past experience tells me that Treasury staff are the worst possible people under the sun to have charge of the nation’s pensions. I think that the noble Lord, Lord Barnett, was nodding; at least, he was smiling. He has more experience of that than most. Above all, this measure would quintessentially help women who have had their careers interrupted by the demands of family. Indeed, the latest figures show that of the 250,000 people who bought back years in 2004, almost 150,000 were women. The figures speak for themselves. Therefore, I see this as a measure of equality and common sense. I hope that the House will support it.