I agree with that point. It is an important consideration, especially for people who, because of family connections and so forth, after a period of
unemployment decide to take the option of self-employment as a means of staying within their community. They will value greatly the certainty that there will be a basic level of support in the future. A divide exists between those working in the public sector in parts of rural Wales and those working in a self-employed capacity. The change will not make it a level playing field, but it will reduce the inequalities.
There are a few other points that I would like to make. There has been some comment about the increase from 30 to 35 in the number of years of contributions required. That must be seen in the context of the significant increase in the state retirement age that has been accepted reluctantly by hon. Members on both sides of the House. Somebody starting work at 21 would be expected to work for the next 44, 45 or 46 years, depending on their age. Therefore to expect 35 years of contribution is not unreasonable and should be considered.
Another issue that I would like to touch on is the fact that, despite the changes being comparatively cost-neutral, the savings implied may not be as significant as stated by the right hon. Member for Birkenhead. We are moving from 8.5% to 8.1%. It is a reduction, but not a huge one. In that context, to come up with a system that is better for the worse off or the less well paid in society, and which is better for women and carers than the current system, is not a bad record for the Government. The Bill is moving in the right direction. It tries to protect and enhance the support for those who are less well treated by the system, and that should be welcomed.
On the subject of transition, there has been some discussion about the issue of women born between 6 April 1951 and 5 April 1953. When I started receiving e-mails on the issue—I have now received a couple of dozen—it appears on the face of it to be a very unfair situation. But we need to bear it in mind that this could be an issue of communication rather than of the change in the legislation. Making a comparison between a woman born between those two dates and a man born between those two dates takes out of the equation the fact that they will be retiring at different times.
If women born between those two dates decided to defer their retirement, about 85% of the women affected should be able to retire with a level of pension support equivalent to that enjoyed by a man born during the same period. There is therefore a message to be conveyed. Does somebody retire before the age of 65, which is the relevant age for men at that point, or do they opt to retire a couple of years earlier and accept a slight reduction in their pension? We need to ensure that the DWP takes that type of communication into account so that when people see what they perceive to be an unfairness, they see the issue in context rather than on the basis of a campaigning e-mail.
The Bill is a huge step forward in ensuring that people understand that the state is there to support them, not to be responsible for them. That is a crucial difference. People need to be aware that the state will ensure that they have the basic level of protection. More importantly, the state should make sure that it provides the focus for an individual to make decisions that will allow them to help themselves. That is what we are doing throughout our welfare changes, and I am glad to say that it is what the Bill does. Yes, there are some
details that need to be looked at in due course, but in general the House should welcome this brave and ambitious proposal to make sure that the state’s pension system is fair to the vast majority of the people who pay their national insurance contributions.
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