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The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): It seems only last week that we debated pensions on an Opposition motion and, indeed, it was. We have heard many thoughtful speeches today from Members on both sides of the House and I am delighted to welcome those Liberal Democrat Back Benchers who have been able to join us for the last few minutes of the debate on their motion, but who were not able to be here earlier.
The constant theme of all the speeches was that women pensioners do not enjoy as comfortable a retirement as they deserve. The Government recognise that the majority of pensioners are women and we are committed to ensuring that pension reforms improve women's rights. That is why the Government's priority has been to tackle poverty among the poorest pensioners, many of them women. In the year before we took office, 35 per cent. of single female pensioners were living in relative poverty. As a result of the action we have taken to tackle pensioner poverty, that figure is down to 21 per cent., even before the pension credit comes into effect. But there is clearly more to do if we want all pensioners to share in the nation's rising prosperity.
As we heard from my hon. Friend the Minister for Pensions earlier, the root of the challenge lies in the uneven distribution of opportunities during working life and of caring responsibilities. That is a problem that has gradually gained importance as a result of the breakdown of the model Beveridge family. But we have come a long way since Beveridge's time. The Government have introduced a range of important measures to benefit women and we do not intend to stop.
Our measures to help women differ from the advice given by the hon. Member for Havant (Mr. Willetts) not so long ago, when he recommended that one way to respond to demographic challenges was for women to have more babies. Our measures do not expect today's women to have children so that they can enjoy a comfortable retirement. Instead, our most significant measure to benefit today's pensioners has been the introduction of the pension credit. Having sat through two debates this afternoon with the hon. Member for Northavon (Mr. Webb), I have to tell him that he is developing an unfortunate tendency to sneer. The pension credit has had a huge and immediate positive impact on the living standards of many women pensioners. Two thirds of those entitled to pension credit are women, and half are aged 75 and over. More than 2 million women are now receiving the pension credit and we abhor the Opposition proposals that would take that away from the poorest pensioners. I can tell the hon. Member for Chesterfield (Paul Holmes) that although we always envisaged that the number of people working in the Pension Service would decline once the pension credit had been launched, we are committed to maintaining the level of service to pensioners.
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Pension credit has not been our only response to pensioner poverty. The introduction of winter fuel payments has helped 11.5 million pensioners, more than half of them women. Those payments are worth £200 a year, or £300 for households with a person aged 80 or over. In addition, more than 5 million households will gain from the over-70s additional payment. Some 60 per cent. of those aged over 70 are women, as are 66 per cent. of those aged over 80.
The state second pension, which the Conservatives plan to scrap along with the new deal if they get the chance, will boost the pensions of low and moderately paid employees and, for the first time, provide an additional pension for carers and long-term disabled people. As we have heard in this debate, that is of particular benefit to women, many of whom work part time or as carers. In fact, some 70 per cent. of the 5 million low earners who will benefit from the state second pension are women, as are almost all of the 2.5 million carers who will benefit.
We have also done much to improve the pension position of tomorrow's female pensioners. We are ensuring that all pensioners have as fair as possible an environment in which to save. The hon. Member for Upminster (Angela Watkinson) referred to wartime and post-war outworkers.
By tackling poverty during working age, we are giving people the means to avoid poverty in old age; for example, the minimum wage and the working tax credit overwhelmingly benefit women, thereby increasing their savings potential. The Government have also made a substantial investment in additional resources for child care to enable many of those caring for children to return to work.
We recognise that women are under-represented among those with private sector occupational pensions; in particular, women who work part-time are less likely to be offered and to take up employer-based pensions than men or women who work full-time. Nevertheless, more than 2 million working-age women are members of private sector occupational pension schemes, so the measures in the Pensions Bill to improve the security and simplify the structure of existing occupational pension provision are relevant to women. The House will remember that the Conservatives declined to support that Bill on Second Reading.
Stakeholder pensions, introduced by the Government, are beneficial to women in the modern labour market who move regularly between employers, who take a break from workto raise a family, for exampleor who have family who can pay into a pension for them. We are committed to improving pension information for everyone to ensure that they are aware of their pension position and the choices they face, which is especially important for women.
As I said, the Government have done much to help women. Today, the hon. Member for Northavon set out his plans for a citizens pension, which he says will help
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many women; but it will not be targeted at the poorest women. Taking account of the offsetting losses in pension credit, tax and national insurance, the poorest pensioners will gain nothing from the hon. Gentleman's proposals. The biggest gainers will be those in the top income deciles.
At a stroke, the Liberals plan to scrap the national insurance scheme, which is the bedrock of pensions as they operate today and was established in 1911 by another great Liberalas he was at the timeWinston Churchill. People who have contributed, in many cases for an entire working life, towards their national insurance pension would find that it was swept away.
I have great respect for pressure groups. I used to run one, as did my right hon. Friend the Member for Birkenhead (Mr. Field) and my hon. Friend the Minister for Pensions. The hon. Member for Northavon used to work for one, too. The problem is that he thinks he still does. Instead of representing a national political party, serious about its potential to run the country, he still wheels out the latest wheeze he comes acrossill-thought-out, uncosted and half-baked. As we pointed out last week and my hon. and learned Friend the Member for Redcar (Vera Baird) pointed out earlier, those plans will be paid for by scrapping the DTI, the £2 billion that supports the post office network, the mechanisms for the minimum wage and protection for consumers and employees.
In a move described by the hon. Member for Havant as a "triumphant success", the Conservatives, who scrapped the earnings link in 1980 at the earliest opportunity, now plan to reintroduce it. They are calling for an increase in the basic state pension in line with earnings, but we know that the vast majority of women would not gain from that increase. They would lose from the abolition of the state second pension and, indeed, of pension credit, with which the Conservatives plan to pay for the increase.
"the average woman will lose".
"Those who are entitled to the pension credit and do claim . . . will not be better off.
We are not complacent; we want to do everything that we can to help women to build up a decent income in retirement. That is why we are committed to producing a report on women and pensions by the end of next year, and I pay tribute to my hon. and learned Friend the Member for Redcar for introducing those proposals and to my hon. Friend the Minister for Pensions for accepting them.
Taken together, the measures that I have described to the House today are significant in meeting the challenges that many women in this country face in respect of pensions. They demonstrate that we have a coherent, sustainable long-term
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