|Previous Section||Back to Table of Contents||Lords Hansard Home Page|
Lord Higgins: As the noble Baroness said, this is a relatively simple amendment compared with many before us. There is always argument as to whether it is best for mothers to stay at home or go out to work. The government provision seems to say that carers should go out to work after the child is six; they will no longer receive their deemed benefit contributions if they do not do so. On the other hand, it is probably true that if they go out to work at that stage, it may well be part-time rather than full-time work. Carers are more likely to work full time when their children are over the age of 11. It seems to me, therefore, that the noble Baroness's amendment has something to be said for it.
Baroness Hollis of Heigham: Will the noble Lord accept that in part-time work someone needs to work only 18 hours at the minimum wage in order to qualify under the lower earnings limit? The assumption my noble friend Lady Castle made, echoed by the noble Lord, is that the carer either stays at home or goes into full-time work. But he or she qualifies by working 18 hours at the minimum wage and for considerably fewer hours if he or she has a higher rate of pay.
Lord Higgins: Clearly for carers with children between the lower and higher age, the work is more likely to be part time than full time. However, I am happy to listen to the Minister's reply to the amendment.
Lord Goodhart: I speak to Amendment No. 114, grouped with the amendment. It differs from the noble Lord's amendment in only one respect. We propose that the crediting should extend to a carer who has care of a child under the age of 12, whereas in the noble Lord's amendment the age referred to is 11 years.
I have a great deal of sympathy with the view of the noble Baroness, Lady Castle. Any mother who decides to stay at home to look after her child makes a sacrifice in terms of the potential income that she forgoes. It is not right that on top of that she should also be asked to forgo her right to a pension. The idea of crediting as regards people with those responsibilities seems to us right. The question is where to draw the line.
The Government's view, here and elsewhere, seems to be that women should be given an incentive to go back to work as soon as possible. It seems perfectly legitimate for a woman with a child of six, seven or eight to decide to stay at home and concentrate on looking after her child or children. A child at primary school cannot be left to look after himself at home. In most cases, the child will have to be taken to school and picked up at three or half-past three in the afternoon. He will have to be looked after during the holidays. There are childcare facilities, but I do not think that mothers of primary school children should be required to make use of them or forgo their rights to the state second pension.
Once the youngest child reaches secondary school age, there seems a case for saying that a mother can take at least a part-time job without regarding herself as not handling her children properly. But up to that age it seems to me wholly legitimate for a mother to be able to say, "I wish to be a full-time mother. I do not wish to take even a part-time job, and my pension rights should not suffer because of it".
We have put the age at under 12 rather than under 11 because the child's first few weeks or months at secondary school may be a period of particular stress and difficulty for him or her, and it is appropriate that the mother, without loss of pension, should be able to stay at home as a full-time mother for that period. Nothing I have said is intended to indicate that mothers who prefer to go out to work are acting wrongly. But up to the age of 12 it should be for the mother to make the decision and she should not be put under any pressure by the threat of loss of pension rights.
Baroness Hollis of Heigham: Under our proposals, a person who earns less that the annual lower earnings limit (LEL) in a given year but who is looking after a child under the age of six and receiving child benefit will accrue entitlement to the state second pension in respect of that year. In effect, we are targeting extra help on people looking after children up to early primary school age. These amendments would extend that help to people looking after a child up to but less than age 11, 12 or 16 respectively.
Under SERPS, every year that someone was out of work and looking after a child meant they got a smaller pension when they retired. That is one of the reasons why women, who are most often affected, get less from SERPS on average than men. Our proposals for the state second pension will help to address that problem. Almost 1.5 million women will benefit under these proposals. Five years out of work looking after a
With the state second pension we are seeking to give help to those who are least able to make their own provision for a second tier pension; that is, people who either cannot work or who are in work but on low wages. The first group includes carers and often mothers of children below school age, who have the least opportunity to work and to earn above the lower earnings limit. That is why they are a key target group for our help.
As Members of the Committee will know, many mothers of school-age children--that is, children from the age of five--choose to combine their caring duties with part-time work. Many of those parents will benefit from the S2P low earner's boost, even though they earn as little as £3,500 a year. As a result of the minimum wage, someone will be required to work just over 18 hours a week in order to gain access to the state second pension boost. Those who earn above the minimum wage will, of course, gain access by working even fewer hours.
Some mothers may choose to stay at home, even when their children are older. Some may have no choice because of family or other circumstances. Our intention is certainly not to criticise or punish them for that, and we are not doing so. Indeed, we are doing a great deal to help those mothers who choose to stay at home. That help includes big increases in child benefit--£15 for the first child; £10 for the second--and income-related benefits for children under the age of 11. As I say, we shall have virtually doubled their allowances between April 1997 and October this year.
However, it is the case that three-quarters of all married women are in work and approximately two-thirds of all couple mothers are in work. My noble friend Lady Castle and other noble Lords are correct in saying that the employment rate of mothers who have a child under the age of six is lower than that of those who have children over the age of six. The employment rate of couple mothers who are in work, both part and full-time, with a youngest child below the age of six is about 54 per cent, whereas it is approximately 70 per cent when the child is aged six or older.
Therefore, leaving aside the amendment moved by my noble friend Lady Castle, who would not qualify under the government scheme? So far as I can see, women with a youngest child over the age of six may not be in the labour market for one of three reasons. First, they may be women who would like to work but who have low employment prospects or other difficulties with finding employment; for example, they may have low skills. Certainly, the evidence from our New Deal is that that is the biggest obstacle to women--particularly lone parents--who want to enter the work market. We have developed the New Deal and its training facilities precisely to help people who wish to work but who currently cannot to join the labour market.
The second group of mothers with children over the age of six who may choose or wish to stay at home when their children are older, unlike the vast majority of couple mothers, are those who have a sick or disabled child. Of course, they would be entitled to the state second pension if they claimed ICA or HRP.
The third group of mothers who would not normally be in the labour market if their child is over six may be those from an affluent family who choose for the mother to remain at home until the children are older. Of course, where that degree of resource exists in the family, she could decide to maintain her second pension by means of a stakeholder pension scheme. In the case of a stakeholder pension, it will be necessary to save approximately £9 a week--that is all--in today's earning terms to provide the equivalent of the 10 years' cover, until the child is aged 16, that would be granted under S2P.
Therefore, we are focusing the state second pension on those who care for children under school age in a way which matches the choices that most mothers make. Those who choose not to do what most mothers do--that is, they stay at home because they can afford to--can receive coverage through a stakeholder pension. If they stay at home because they need to due to disability or dependency of a child, they are entitled to receive credits for the state second pension through other routes.
Most mothers take career breaks or periods away from work when their children are very young. Most mothers--70 per cent--return to work once their child goes to school. Such a decision is always a matter of individual choice. Entitlement to the state second pension would simply be one more factor for them to consider. As a result, we believe that we have the balance about right.
As I said, there is the basic pension, which covers all contingencies; the state second pension, which is work- related; and there are alternatives for those whose children are older than six where either the child is needy by virtue of disability or where the income is such that there is no financial pressure. If mothers want to return to work but are impeded by virtue of their relatively poor employment prospects, we can help them through the New Deal. We believe that that is working with the grain of people's choices while respecting the situation for the taxpayer. In the light of that, I hope that Members of the Committee will not pursue their amendments.
Back to Table of Contents
Lords Hansard Home Page