State Pension Credit Bill [Lords]

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Mr. Boswell: Will the Under-Secretary also deal with the question of a deliberate evasion of the rules, when someone has gone abroad and is quite happy to continue receiving benefit but cannot easily be collared by United Kingdom authorities?

Maria Eagle: Yes, the benefit will be stopped after four weeks if we know that the person is abroad.

Mr. Boswell: If we know.

Maria Eagle: Yes, that is the problem with fraudulent claims. Obviously, there are safeguards in the Department to detect such claims, and fraud in respect of this benefit would be no different. We will try to ensure that there are no fraudulent claims. We do not want overpayments or fraudulent claims and there is no reason to believe that we would be any less vigilant in respect of this benefit.

I would be happy to send the hon. Gentleman a précis version of the brief on habitual residence tests. He would not want to see the full detail. If he wishes to discuss it in some other place, I will be more than happy to do so with him.

Mr. Boswell: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

12.30 pm

Mr. Boswell: I beg to move amendment No. 16, in page 2, line 4, at end add—

    '(c) in the case of a woman or a man, if the definition of pensionable age set out in the rules in Schedule 4 to the Pensions Act 1995 is amended or rescinded then such other age as the Secretary of State may determine by regulations'.

The Chairman: With this it will be convenient to take amendment No 17, in clause 19, page 13, line 26, at end insert—

( ) section 1(6)(c)'.

Mr. Boswell: The argument rehearsed under amendment No. 17, which is rather terse and is not

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worth reading out, and amendment No. 16, which is opaquely worthy, is that of what happens to the pension age. Change is being effected on an appropriately long-term time scale. The qualifying age for the state retirement pension for women will rise progressively from 60 to 65 over the decade beginning 2010. That has not started yet, and many of those still below retirement age will not be affected and will reach their pension entitlement at 60.

It is not the purpose of the amendment to allow us to discuss the wider issues that the hon. Member for Northavon has touched on. We will later come to what should happen to the saving credit for men under 65 and whether we should wait until the whole matter is swept up by the gradual raising of the female retirement age.

The amendment allows us to consider a world in which there is no formal retirement age. That is a speculative operation. The Institute for Public Policy Research, with which my hon. Friends and I do not always see eye to eye, has produced an interesting report. One of its recommendations was raising the retirement age to 67 in order to balance the books. One of the major social changes, as well as social policy changes, that has taken place since the inception of the modern national insurance system in 1948 is that males often retire before 65. The Secretary of State had something to say about that in Question Time yesterday.

Both males and females are incontestably living longer. I recently wrote that a mental pattern is developing whereby people stay at university and perhaps get an early postgraduate qualification, and start work at 25. They work for 30 years and then look forward to 30 years of retirement. That is a deliberate oversimplification, but the issue of what will happen to the retirement age is interesting. Ministers tend to shy away from the subject by saying that they do not want to make any changes.

There is also the issue of the Government's response to what is to happen in relation to age discrimination, in terms of the article 13 duties and their implementation in the United Kingdom. As the Minister for Pensions would undoubtedly acknowledge if he were here, there is also the question of employment law and whether it is reasonable for an employer to be able to discharge someone because they reach retirement age. The Under-Secretary, as a lawyer, will be familiar with such issues. These are probing amendments.

James Purnell: The hon. Gentleman accuses the Minister of shying away from the debate. He should not do the same; will he tell us whether he thinks that the retirement age should go up?

Mr. Boswell: That is a temptation that I shall resist, with great difficulty—I thought that it would amuse the Committee if I were to do so. With the greatest respect to the hon. Gentleman, he should remember first the Biblical injunction, ''Thou shalt not tempt'' and secondly, that it is his Minister who is meant to be answering the debate.

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A retirement age has been set in history. We have always thought that it should be 60 for women and 65 for men and, a few years ago—partly because of the equality agenda and partly to reflect the wider social changes to which I have referred—the then Conservative Government decided to start moving to one age. If the Under-Secretary regards that as the end of the story, our amendments are redundant. Is she willing to keep the issue under review? I do not expect a commitment either way. I am not giving one, and I do not expect that she should do so. Would it be sensible to have some flexibility so that, if the Government were to change the qualifying age after 2020 when the enacted changes had taken place, they could proceed to the next stage? I am conscious that we may want to wrap up matters in a reasonable time before lunch, so it may be appropriate for the Under-Secretary to start casting some interest and concern into such issues. We do not want to reach a final conclusion now, but we should like to see the colour of her thinking.

Maria Eagle: The hon. Gentleman has again said that the amendments are probing amendments, so I shall not assume that he wants them incorporated into the Bill. They would make slightly odd changes to it; they would not cause substantial problems if they were accepted. In fact, they would not be of much practical use at all. Amendment No. 16 would allow the Secretary of State flexibility to break the link between the state pension age and the qualifying age for pension credit. It is interesting that the hon. Gentleman should be so kind as to allow the Secretary of State such flexibility.

The hon. Gentleman rightly spotted—and, given that such action was taken under his Government, I would have expected him to—that we are moving gradually towards equalisation of the age at which basic state pension is received by men and women, which is 65 years. While that age is often referred to in common parlance on the street as the pension age, no one is obliged by the state to retire at 60 or 65. They are the ages at which basic state pension becomes payable. It is possible for people to defer taking basic state pension at those ages and consequently to receive a higher pension when they do retire.

I refer to when I was a lawyer. There is something known as the usual retirement age in most workplaces and many contracts of employment require people to retire at a certain age. However, there is no standardisation within industry, although terms may vary. There is nothing in law—in black and white—that says that a man must retire when he hits 65 or that a woman must retire when she hits 60. I accept the hon. Gentleman's point that we are moving towards equalisation in the age at which one receives a basic state pension, unless it is deferred.

Mr. Boswell: The Under-Secretary is being characteristically helpful on these important issues.

I wish to make a point that is genuinely intended to help the Under-Secretary, and on which she might wish to reflect instead of responding now. I understand that, from 2010, when the process of integration or consultation begins to take place, the deferring supplements for the retirement pension will be

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increased. She might like to reflect on—and comment on, either now or later—the fact that there has been a secular decline in those deferring their pension, partly because the earnings rule has run out. It might be interesting to look at how much one can encourage people to continue working, if they are fit and well.

I turn to the dismissal of people on account of their age. I think that we would all want to get away from that kind of concept. Although the Under-Secretary says that that is not set down by the state, it may be set down by contract. She might wish to reflect on the point that, if people are fit and genuinely able to do their duties, they should not be pushed out on account of their age.

Maria Eagle: I could not agree more with the hon. Gentleman on that point. The Government are committed to legislation to try to deal with age discrimination by 2006, but that is not in this Bill, so I will not discuss it now.

The Bill has arrangements within it to deal with equalisation. Equalisation is a good thing in itself. The hon. Gentleman asked whether equalisation was the end of the move to change the age at which one receives the basic state pension, or whether there was more to do, with regard to the contemplation of that. There is a discussion going on, which no doubt will continue, about whether the basic state pension should be received at 65, at 67—as the Institute for Public Policy Research suggested—or at any other age that one might choose. Personally, I would like to go on and on: I am not planning to stop at 67, and I am not contemplating retirement at the moment.

That debate will continue, but it is important to note that the positive effects of deferring the age at which the basic state pension is payable that are spotted by organisations such as the Institute for Public Policy Research are not always as obvious as they appear, because one of the problems that we face is that many people who are effectively in retirement now are well under the age at which they would normally be receiving their basic state pension. Currently, a third of people between the ages of 50 and their state retirement age of 60 or 65 are not economically active. It would be nice if we could get those people working.

With regard to that matter, there is a mix between employment policy and pensions policy; they are intertwined. Often opinions about the beneficial effects of deferring the payment of the basic state pension do not take into account the fact that many people who are well under that age are not working.

 
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