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Baroness Hollis of Heigham: My Lords, I, too, congratulate the maiden speakers; their speeches were immaculate, interesting, challenging and entertaining—and to be all of those is a considerable triumph. So congratulations, indeed. On a personal note, I thank the noble Lord, Lord Oakeshott, for his remarks today and the noble Lord, Lord Higgins, for his the day before yesterday, which I have appreciated.

Consensus seems to be breaking out because I, too, shall talk about pensions—women's pensions. Many of us will remember that graffiti of the 1960s and its TV resonances: "Do not adjust your vision, there is a fault in reality". Comments have been made this weekend about Adair Turner. He talked about pensions, graduates, workers and savers. One word that I did not pick up in any of his press releases was "women". Yet two-thirds of all pensioners are women. We need to adjust our vision to respect reality—to see the world as it is, not as Beveridge left it 60 years ago. Pensioners are women and pensions are for women, but for far too long, pensions policy has been designed for men.

We shall assume for pension purposes the life narrative of Joe. We will rightly—as the noble Lord, Lord Oakeshott, and other maiden speakers said—urge him to work longer and save harder. Joe may not like it but, subject to his health, he can probably do that, working 40 or so hours a week for 40 or so years. But if Joe is Joanne, as most pensioners are and will be, she can do neither. She can neither save nor work harder.

Why not? There are a few reasons. First, pensions are attached to the labour market. Women work for fewer hours, for fewer years and for lower pay. They still have only three-quarters or so of the full-time earnings of men, half their income and a third or less of their pension. The average, median, pensioner couple has an income of £250 per week. His share is £184 and hers is £66.

That is due to women's caring responsibilities for children and then for elderly parents. A quarter of all women between 45 and 64 are carers and a quarter of those simultaneously are caring for their own dependent children. Any job that a woman holds must fit around her caring responsibilities. So, she works part time, often below the NI qualifying level—as do nearly half of all working women—doing what we as a society want her to do, putting her family first in a manner that is decent. Then we punish her for that, for doing what we and she believe is right.
 
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That is compounded by the fact that we are all living longer. She will remain a part-time, rather than a full-time, worker for longer, because her parents are living longer by a month or two a year and a year or two a decade. In turn, she is their carer. But her pension, which has been reduced by caring for them, also must sustain her own increased life expectancy. A quarter of all women will now live to 93. Yet half of all women over 65 are single, mostly widowed and the longer they live, the poorer they become.

The other reason why women cannot save is family structure. Most wives—and most policy makers from Beveridge and after—expect the husband to provide the pension for the two of them; hence the couple's basic state pension, with its 60 per cent addition for the dependent wife. Yet, the marriage rate is falling—in 1976 it was 400,000, but in 2001 it was 286,000. Half of current marriages end in divorce. In the next 15 years, nearly 40 per cent of all women between 55 and 64 will not be married and, therefore, not protected by a husband's pension, as in the past.

Even when they remain married and the husband annuitises his increasing money purchase pot, it almost always relies on a single-life level annuity and it dies with him. She is left with no occupational pension. If she has been a lone parent, divorced or a co-habitee, she has no rights to his basic state pension. As the noble Lord, Lord Oakeshott, said, the consequence is that over 92 per cent of men retire with a full basic state pension in their own right. Only 13 per cent of women do that. Caring for children, caring for the elderly, the breakdown of marriage and conventional family forms produce a triple hit for women's pension rights.

So, whereas men's pension problems, which are real and will be examined by Adair Turner, hinge on the adequacy and security of their private pensions, that would be a nice problem for women to have. Their problem is the lack of a decent state pension in their own right. They have a faux de mieux reliance on amenable husbands, if they have them, or on means-tested benefits if they draw them.

What message can we draw from this? We need to read women's lives as a narrative—as parents, as workers, as carers and as pensioners. Whatever happens to Joe's private life, whether he marries, has children or divorces, that, apart from making him miserable, will not affect his work and pension. Whereas, almost every similar change in Joanne's life would give her a pension hit.

I am proud that we have, as a government, developed structural connections between women as parents and women as workers. There are maternity rights, flexible working, child care tax credits and so on. We have helped women back into the labour market with the New Deal, the minimum wage and tax credits to ensure that work pays—a lone parent who earns £5 an hour will take home £12 an hour. Therefore, for the first time, a woman is paid a man's rate.
 
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But the more that we encourage labour flexibility to help women as parents, the more we damage their capacity as workers to build their own pensions later in life. The more that we expect and hope that middle-aged women will act as carers for their parents and their elders, the more likely it is that they will have no one to care for them in their old age. Nearly a half of all women will not be receiving a share of a couple's pension because they are not married, yet, due to their caring responsibilities, their part-time work and their low earnings, it will be difficult for them to build up their own pension. We encourage women to make decent choices that we as a society want—and then we punish them for it.

What are the conclusions? There is no way to weigh, compare or contrast women's waged work and their equally valuable unwaged work—their childcare and their elderly care. Yet only waged work counts towards their pensions. So what are our options?

We have three options. I am convinced, on the first of the options, that we cannot continue to tweak the national insurance system and the basic state pension through more and more credits to bring more women in. That is primarily because the complexity of caring arrangements does not lend itself to a formula that you can encompass by national insurance credit. I have tried to do that, and I cannot. If you care for one person on middle-rate DLA for 35 hours, you get national insurance; but what happens if it is two people for 20 hours each or two people with fluctuating hours of between 15 and 25 hours? How can you audit-trap those people to get them into the national insurance system? You cannot—it is not possible. It is already the case that the national insurance system is a patchwork of credits and contributions. Already only 60 per cent of national insurance years are actually paid for, yet we continue with the increasingly mythical notion of a contributory basic state pension.

Secondly, we can make it an issue of poverty rather than gender fairness, and extend income-related benefits, except that perhaps only 75 per cent of elderly people claim their benefits. I applaud the pension credit system for uniquely attacking the problem of poverty that elderly women experienced until the past few years. That has been wonderful. But the more generous means-tested or income-related benefits such as pension credit become, the harder it is to build a large enough pension to float you off them altogether. The noble Lord, Lord Oakeshott, was right in saying that modest saving becomes perceived to be less worth it. And in any case, employers have told me that they will not press on a middle-aged low-earning woman a pension proposal, for fear that the gains will be incomplete and they risk mis-selling. Pensions are sold in the market by employers—they are not bought by women at home from salesmen. If employers are not committed to pensions for their women employees, the women will go unpensioned.

There is a third option, which is the one that I favour, which is to develop a universal basic state pension for all citizens. I believe that the basic national insurance state pension was designed for husbands in 40-year jobs and wives in 40-year marriages, and that
 
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is the world that we have lost. I am not now arguing about its level—whether it should be £82 as now for a basic state pension or £109 for the pension credit level. I am arguing about its inclusivity on grounds of fairness. I am not arguing about its cost, which could range from £3 billion to double that in 2050, according to the precise assumptions that you make, nor about the exact nature of citizenship and residency. We can sort all that out; they are to a degree second-order issues.

The significant point, and the principle that I am stating, is that only a universal basic state pension is sufficiently broad-brush to encompass the changing situation of the world that we face—a platform of provision for all of us to build on. I am arguing that principle. A universal basic state pension would protect all women irrespective of their marital status. It would protect the poorest, because they would not be relying on imperfectly claimed income-related benefits. There would be no losers at all, because married couples would each have their own state pension—a gain of some £40 a week. Indeed, a married couple with two full basic state pensions would float off pension credit altogether. Cohabitees, lone parents, civil partners and all other forms of family would also gain. Individuals and not certain specified relationships would carry pension rights. It would allow people, especially women, to make decent choices about work-life balance, caring and earning, without taking a pension hit. It would encourage saving, be fair, simple and transparent and address poverty.

I believe that that is a proposal whose time has come and which has widespread support both in and outside Parliament, and I hope that tonight it will also gain the support in principle of my noble friend who is winding up tonight's debate, as far as he can go.

5.34 pm

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