This morning George Osbourne has taken the opportunity to remind us that any enthusiasm we might have generated from his upbeat autumn statement should be tempered by the prospect of austerity to come. Osborne points to China , to political turbulence in the Middle East and must have in mind the impact of the coming debate on Brexit. Now is not the time for irrational optimism.
Today is also the day when Parliament’s youngest member will debate whether the increases in the state pension ages for women introduced in 2011 are fair. This is how the debate is characterised in the House of commons Library
The Pensions Act 1995 provided for the State Pension age (SPA) for women to increase from 60 to 65 over the period April 2010 to 2020. The Coalition Government legislated in the Pensions Act 2011 to accelerate the latter part of this timetable, so that women’s SPA will now reach 65 in November 2018.
The reason was increases in life expectancy since the timetable was last revised. It had initially intended that the equalised SPA would then rise to 66 by April 2020. However, because of concerns expressed about the impact on women born in March 1954 who would see their SPA increase by as much as two years as a result, it decided that this should happen over a longer period, with the SPA reaching 66 in October 2020.
Some women born in the 1950s argue they have been hit particularly hard, with significant changes to their SPA imposed with a lack of appropriate notification. However, the Government has said it will not revisit the 2011 Act timetable.
This is not a debate on the WASPI petition, if that debate happens, it will happen because there is sufficient energy in the debate at the end of the day. The parliamentary petitions committee will be the judge of that.
The cold fact of an empty purse
The Government’s position, articulated by the Pension Minister Ros Altmann is that there simply isn’t any money for a change to the transitional arrangements announced in 2011, let alone for the wholesale rollback called for by WASPI. The argument is grounded in fact. The National Insurance kitty is pretty well empty, denuded by several years where the Government has paid out under the triple lock, an arrangement where pensioners and future pensioners see increases in the state pension in line with the highest of 2.5%, inflation or wage increases.
This triple lock has been a positive bonanza for the state pension seeing it rise well ahead of wages and inflation for the first time in decades. The quinquennial review of the National Insurance Fund, published by the Government Actuary 18 months ago made it clear that we are overspending on pensions and that the Fund would be bust by 2020 if we didn’t rein in these real increases soon.
The Government’s reluctance to roll back the years to meet WASPI’s demands should be seen in this light.
A problem of engaging, learning and understanding
I am not a zealot for austerity, but I recognise that we cannot have cakes and eat them quite as we would like (post Christmas waistlines testify).
Ros Altmann knows this too. The Treasury has a limited budget and the DWP are getting a smaller slice of the departmental cake as other budgets are ring-fenced.
Against this is the real and very poignant plight of many women who’s life goals have been turned on the prospect of a pension at 60. It is a magic number with emotional as well as financial significance. The attachment to 60 as a fulcrum of change is not fanciful.
This is where the problem lies. The Government’s failure to engage both women and men in the “why” as well as the “how” things have to change is a big issue. It is understandable. If you run a departmental budget, you run it agains the KPIs you are given and those KPIs, in a highly politically charged environment, are as short-term as the politician’s horizons.
Typically the horizon is no longer than the perceived tenure of office of the Minister and- till the heady hegemony of Steve Webb, that was – for the Pensions Minster- typically a couple of years.
It is extremely unfortunate that the weight of all the failures of the past are loaded on the shoulders of the current pension minister but there it is. I consider Ros Altmann to have the broad shoulders to accept the responsibility to take wise decisions. She must balance the cause of WASPI against the wider issues of the Treasury and determine accordingly.
A Middle Way?
There is a middle way, one which Labour’s shadow minister Nick Thomas-Symonds can safely hunker down. He’s articulated it properly in the Daily Mirror.
It focuses on the women most affected, those born in 1953 and 1954 and accepts that the rest of the WASPI women simply have to sit down and shut up.
I very much doubt that the WASPI women will, nor do I suspect that the Government will be much interested even in this “middle way”. I expect that we will see this debate ending in a testy stalemate with the WASPI debate to come.
Whether that second debate happens depends on a range of powerful undercurrents that we, not being in the river, cannot feel. I sincerely hope that the Minister can stand firm on the ground she chooses to take and is not swept off her feet.
If that ground is where she has stood so far so be it, if there is room for concession, as their was on the credits issue, let that happen. What we cannot let happen is a polarisation of positions which leads to a breakdown of trust in Government and the way it treats its citizens.
I very much hope that we will find a sensible way through to a settlement and believe this can best be achieved by the debate(s) we are about to have. Most importantly, we need to raise awareness of the issues surrounding old age and financing the needs and wants of older people.
This is an ongoing debate and I hope neither “austerity” or “WASPI” will have the final word. The final word will follow the creation of a consensus and we are very far from that right now.
I was born 1957..i have this to say..it isnt just about the loss of a sum of money you thought you earned it is about quality of life. I cant get work for many reasons now at 58 and have been semi disabled all my life with no significant employement. I have the prospect of 8 years of no personal income at all for 8 years and having to rely on my older retired husband for everything- even prescriptions at the moment whihc is daft as he is exempt himself! We dont qualify for any help and at present live solely on his one private pension. I dont drive and he is becoming a bit reticent to drive long journeys and it would be so helpful if i could have my bus pass at 60 too.
Yvonne, I don’t think your buss pass is at risk. You should get that at 60. I hope that you are getting some disability allowance if it’s stopping you from working but I take your point – 60 is a magic number.
I agree with most of your views Henry but at the end of the day is it right to penelise one group of Women with the burden of mis management of the countries wealth . The fact that the dwp funds are depleted should not justify stealing the pensions from this group of women. The goverment can find billions of pounds for foreign aid,and arms they should look after the people of Britain as a priority in particular the poorer population rather than cream off the countries wealth for the wealthy. An perfect example Ross Altmann a champion of women’s pensions equality until she became Baroness, who now as Pension minister has completely changed her loyalties and morals to line her own pockets.
Rita – strong stuff and it’s the argument I’d be making in an otherwise perfect world. But there are others with claims on the NI fund -including men – and there are generations of young people who could argue that they have been disenfranchised from property ownership by the generation we represent. Things are rarely black and white and I very much doubt that Ros Atlmann was motivated to become minister to line her own pockets
Yes magic wand comes to mind. As parent and grandmother I fear for our youth, but still believe this goverment steal from the poor of this country to feed the rich and I can only really effect things with my vote.