HC Deb 23 May 2002 vol 386 cc417-28

(1) On making an initial claim to state pension credit, all claimants shall be asked to list the date of birth of any natural children and any other children for whom they had primary caring responsibilities in any year prior to the introduction of Home Responsibilities Protection. (2) The definition of primary caring responsibilities shall be set out in regulations. (3) For the purposes of calculation of entitlement to the guarantee credit and the savings credit, any individual may substitute for his actual rate of retirement pension an amount equal to the rate of retirement pension that he would have received if he had been entitled to a year of Home Responsibilities Protection for each year in which he was the primary carer for a child up to the age of 16 prior to the introduction of Home Responsibilities Protection.'.—[Mr. Webb.]

Brought up, and read the First time.

2.25 pm
Mr. Steve Webb (Northavon)

I beg to move, That the clause be read a Second time.

In pensions, women have been second-class citizens for generations. Of today's elderly pensioners, women are the poorest, and make up the bulk of the group of people approaching pension age with poor pension entitlements. With increasing reliance on private sector pensions, there is a danger that in future women will be less likely to have private sector pensions or take out stakeholder pensions; once again, they will be the poor relations in pension provision.

New clause 1 tries to correct a feature of the Bill which is prejudicial to the interests of a particular group of women. We touched on that issue in Committee, which was constructive and non-partisan; I hope that we can carry that over to today's deliberations, and it is certainly the spirit in which the new clause has been moved. We are seeking to deal with the danger that the values of the 1940s, when bringing up children was seen as women's work, will be carried over into the 21st century in the Bill. We cannot rewrite the system of the 1940s, but we can try to make sure that those values are not enshrined in new legislation and advanced for decades to come.

There has been confusion about the categories of women affected. There has been discussion—I have raised the matter myself—about the position of women who pay the married women's stamp, but that is not my primary focus now. I wish to focus on women whose state pension entitlement has been substantially reduced because of years spent out of the labour market bringing up children. Leaving aside the millions of women who have already retired, I wish to talk about women who are coming up to state pension age with poor pension entitlements. Recently, I received a written answer that suggested that typically women reaching 60 have a basic state pension entitlement of £58 a week, excluding the state earnings-related pension scheme and so on, compared with the full basic pension of £75 a week. That is roughly 75 per cent. of the average figure.

Despite the growth in women's work and the introduction of home responsibilities protection in the late 1970s, women are still reaching pension age with poor basic state pension entitlements. We are not proposing to rewrite the history of the basic state pension entitlement, and are leaving alone the fact that women will typically retire with £58 a week. However, in new clause 1, we query the carry-through of that poor basic state pension entitlement into state pension credit entitlement. Society was right in the late 1970s to value the work of bringing up children, which was predominantly undertaken by women, in home responsibilities protection and similar measures that protected women's pension entitlements during the years when they were raising their family.

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The problem is that women now reaching 60 brought up their children, by and large, in the years before home responsibilities protection was introduced. To take a simple example, if a woman who is 60 this year—in other words, who was born in 1942—had her children in her 20s, which is common, or early 30s, most of the time that she spent bringing up those children was in the 1960s and early 1970s, before home responsibilities protection came in. That woman suffers the consequences in the form of a poor basic pension, and the state pension credit system doubles the penalty. It says to the woman who has managed to do some saving—which, let us face it, was doubly difficult because of all the years that she spent bringing up the children—"You don't get a reward for that saving until you have built up from the pension that you are getting to the full basic pension, and we reward private pensions or other saving only beyond that point." Of two women, one with a full basic pension and a little saving, and one with a partial basic pension and a little saving, one gets a reward for her saving and the other does not—the infamous double whammy. A poor basic pension is the penalty for having brought up children, and a reduced savings credit is the second penalty.

The question is how we can best respond to that. We have considered various ways in which that might be done. In Committee we proposed that home responsibilities protection on the post-1977 model might be imputed for years before 1977. The Minister responding said that one of the problems with that is that the benefits that trigger entitlement to home responsibilities protection—child benefit, invalid care and so on—did not exist at all or did not exist in the same form before 1977, so there was no simple read-over from the post-1977 to the pre-1977 system. One could not apply the new rules to the old period.

In the new clause we propose a different way of imputing a value to the caring that those women did, for the purposes of calculating their entitlement to the state pension credit, with particular reference to the savings credit. Nothing that we propose would affect their basic pension entitlement, but it would help them with their savings credit.

We are proposing that when a woman fills in her state pension credit form, she is asked about the children that she has ever cared for. The new clause refers to natural children and others for whom she had caring responsibilities. We have left to regulations a specific decision about the definition of caring responsibilities. We are aiming at women who spent time out of the labour market because they were looking after their own children. We would like to include adopted children, foster children and so on, but those cases are on the margins of the issue that we are raising. The key point is that women should not be penalised for caring.

When the issue has been raised in the House in the past, the Government have conflated the position—not wilfully, I am sure—of women who paid the married women's stamp and therefore saved some money and therefore had a poor pension, with women who simply brought up their own children. I shall give one instance of that.

On Second Reading, the hon. Member for Stafford (Mr. Kidney) intervened on the Secretary of State and pointed out that the savings credit will cut in only once the full basic state pension has been reached, and that those with a lesser entitlement—often women—will lose the first bit of their savings in reaching that level. That is the point that I have been making. The Secretary of State said in response: We believe that it is right that people should first use their money to pay contributions to the basic state pension. Now, the women in question did not have any money. They were at home bringing up the children, so they were not making pension contributions in their own right—not by choice, not because they had the money but were not putting it into a pension, but because they had no money coming in to put into a pension. The Secretary of State went on to say: It would be curious if somebody who had chosen not to pay all such contributions then asked us to apply those they had paid to a pension credit, rather than in the first instance to the basic state pension."—[Official Report, 25 March 2002; Vol. 382, c. 602.] But those women had not chosen not to pay contributions. The women under discussion are not the women on the married women's stamp—or rather, they may also be, but that is not the reason why, for the periods of home responsibility, they were messing up their pension record. It is because they were caring—bringing up a child. We recognise that we cannot rewrite their basic pension entitlement, but in a brand new Bill at the start of the 21st century the system should not penalise women a second time round for the fact that in the 1960s and 1970s society did not put a financial value on bringing up children.

I shall be happy to hear the Minister's comments on the logistics of our specific recommendation. Clearly, there are issues to do with providing evidence about children who were born 20 or 30 years ago and whether or not the woman was their full-time carer. Inevitably, there will have to be some broad-brush response to those issues. Unless there are extraordinarily detailed regulations defining primary caring responsibility, there might be one or two women who would not be entitled to credits, but in general, if a mother could show that she was the natural mother of a child and if she stated on the form that she was responsible for that child—in the sense that the present child benefit system works, which is the trigger for home responsibilities protection—that should be enough. There might be the odd case where the husband challenged that, but the House would probably accept that the claim by a mother that she had cared for the children listed should be enough to trigger entitlement to the credits.

Speaking specifically about home responsibilities protection and about caring makes a distinction between women who did something that society now values, but did not value financially in the past—bringing up children—and women who had some financial benefit from paying the married women's stamp. That is not the issue that we are raising here. We are dealing not with women who saved some money by opting out, but with women who did not have money and whose work was not recognised then. It is time that the House valued such work.

For too long women have been the poor relations in state pension provision. There is a danger that we carry over that relative poverty into the Bill. New clause 1 provides the House with the opportunity to make sure that we do not redouble that injustice.

Mr. Tim Boswell (Daventry)

The hon. Member for Northavon (Mr. Webb) introduced his new clause with precision and moderation. He rightly said that the Committee stage had been conducted in that spirit. We even found ourselves in agreement on a number of issues, to which I may have occasion to refer this afternoon. I support the hon. Gentleman's attempt to probe the Government's intentions. There is no need to rehearse his arguments at length.

On the technical side, it had occurred to me, and I am sure that Ministers will also say—anyone who has ever had ministerial responsibility is conscious of these things—that evidence is important. Even if Ministers wished to make a concession—we may hypothesise about that—I see the dilemma that they might face in deciding what the evidence should be. A proxy benefit that could be read back and then enhanced or treated as a credit for the present purpose would be much easier, but that is not the case.

The hon. Member for Northavon emphasised that his new clause essentially related to the position of women, but he did not cover himself as fully as he might have done. The drafting is unisex. Indeed, at one point the legal term "he" is used, to include both men and women, but realistically, the majority of people who have an incomplete entitlement to a full state pension and therefore, by extension, under the new arrangements in the Bill, an incomplete entitlement to the state pension credit, because they have to fill up their pension first, are likely to be women. That in no sense detracts from the validity of the hon. Gentleman's argument. We share that view.

I draw the attention of the House to the Select Committee report on the pension credit. Paragraph 29 points out that 17 per cent. of female pensioners (over one million women) will potentially have any private or occupational income unrewarded, compared to only 8 per cent. of male pensioners. There is a much greater shortfall among women. In Committee we analysed figures suggested by the Select Committee relating to around 50,000 pensioner 'benefit units' who have private income for which they will see no benefit. The Select Committee report goes on: Another 2–300,000 will be 'rewarded' for only some of their private savings. Those figures give the lie to the Government's assumption, which they have frequently asserted, that it always pays to save, and that the arrangements set out in the Bill are uniquely favourable to women. There is still something of a black hole for a number of women. The category was rightly identified by the hon. Member for Northavon. Attempts to deal with the matter will be neither free of cost nor without difficulty. Of course, women who had home responsibility before the new arrangements were introduced in the late 1970s are not the only category of people for whom there is a shortfall.

The Select Committee report indicated that there will always be some who have fallen short as some of their earnings were below the contribution level, while others may go abroad or break their service because of illness or whatever else. A number of people will miss out. The hon. Gentleman is not seeking to remedy all the ills of the pension system, but he is trying to tackle the problems and it is important that the Government make a substantive response.

The position of guardians was also discussed in Committee. I am especially sorry in that respect—but not only in that respect—that the hon. Member for Stalybridge and Hyde (James Purnell) cannot be present.

The Minister for Pensions (Mr. Ian McCartney)

My hon. Friend wrote me a letter to apologise for his non-attendance, which is due to a commitment that he cannot get out of.

Mr. Boswell

I entirely accept that; my remarks were genuine and not meant to be sarcastic. The hon. Member for Stalybridge and Hyde made some serious points in Committee and it would be nice if he could be present. As he is not here, no doubt he will read what we have said. Indeed, he may want to return to some of the issues that we are discussing. It is a tribute to the respect that I have for him and his contributions in Committee that I wanted to say that he made a perfectly fair point about people who were caring for children as foster carers and so on, but were not in receipt of child benefit and could not be in receipt of home responsibility protection. Even if such people were looking after children full time and were unable to work, they would be racking up a potential shortfall in their future pension credit because they could not contribute.

The Minister spoke entirely in accordance with the general flavour of the Committee proceedings by responding sympathetically to that issue and saying that he would think about it. The two categories that arise are older cases involving people who had children in their care before home responsibility protection cut in or those whose contribution had been severely impaired by it, and those who currently have children in their care but are not in receipt of child benefit and therefore cannot get home responsibility protection to add to their eventual pension. Of course, the Minister may wish also to refer to other categories.

I do not want to make any mistake on the position of the Select Committee, but I am aware that it was concerned about some wider issues relating to shortfall on the pension credit. It summed up the passage from which I have already quoted by stating: We recommend that the Government should inquire into the immediate and long-term costs, benefits and affordability of extending the Pension Credit in this way and make public the results. I think that that is a reasonable request. Equally, I would understand if the Government were to say that those issues were not cost-free and that we cannot simply do everything that we want to do and must set priorities. For example, those who are currently caring for children may be a higher priority than those in some of the other categories that have been mentioned.

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It would be useful if the Minister could tell us how much the various difficulties exposed by the new clause would cost to remedy and explain the policy read-across, possibly including other benefits, and the administrability of any concessions. He would help the House by taking some of those matters forward. We understand that there are difficulties and that it is not always possible to rewrite the past, but as the hon. Member for Northavon said, as we move into the new century, we would like to secure a basis for the assessment of entitlement to pensions that is as principled, constructive and modern as possible.

Andrew Selous (South-West Bedfordshire)

I express my wholehearted support for the new clause of the hon. Member for Northavon (Mr. Webb) and I am pleased that it has been supported by my hon. Friend the Member for Daventry (Mr. Boswell) from the Opposition Front Bench.

Women who choose to look after their children at home do not currently have a genuine choice in terms of the income that they forgo and the benefits to which they are entitled. Some of the Scandinavian countries such as Finland and Norway have excellent schemes in that regard. It would be easy for the Government to draw a line in the sand and say that the new clause seeks to rectify problems that arose a long time ago, that we should move on and that if we do anything it should be to rectify problems affecting women who currently have children. It would be enormously to their credit, however, if they were seriously to consider the new clause. That would send a powerful signal to the country that the value that the House and the Government place on women—and, indeed, on any parent who chooses to stay at home and look after their children—is the same as that which they place on parents who choose to go out to work.

I commend the hon. Member for Northavon for tabling the new clause, I am delighted to see that it has the support of Her Majesty's official Opposition and I hope that the Minister's response will be favourable.

Mr. McCartney

I thank the hon. Member for Northavon (Mr. Webb) for the way in which he spoke to his new clause and the hon. Members for Daventry (Mr. Boswell) and for South-West Bedfordshire (Andrew Selous) for their contributions.

The hon. Member for Northavon said from the outset that he wanted our approach to be non-partisan, and the Committee proceedings were non-partisan in the sense that everyone put their view in a very fair and effective way. On occasions., the debate became very passionate, as there are significant differences, not least between the official Opposition and the hon. Member for Northavon, some of which may emerge in this debate. I shall be non-partisan to that extent, but it is important to be aware of all the issues. For example, the hon. Gentleman could have referred to his article in the Sunday Mirror, which we shall come to. That is what he was talking about; his remarks contained little reference to the new clause and related more to his legitimate campaigning on other issues.

The overriding issue for hon. Members in speaking to the new clause was fairness to women. We are attempting in the Bill to do a number of things. Some of them involve trying to right past wrongs and to do so effectively. The truth of the matter is that when the basic state pension was established, wonderful as it was, it had a number of flaws. Every pension system is a compromise, and one of the flaws was that the system undermined in a range of ways the position of a variety of different women in different circumstances, as the hon. Member for Northavon said.

We are, therefore, dealing with a legacy as well as trying to establish the pension credit, the state second pension and the other changes that we are making to ensure that the mistakes of the past are not visited on women in future. There must be a balance and we must have regard to what is feasible and can practically be done in establishing arrangements for the future and designing a system that should be non-discriminatory in dealing with gender and access on retirement to income from the state.

The hon. Member for Daventry—I am paraphrasing, so I apologise if I get anything wrong—suggested that the Bill did not extensively help women, but that is not the case.

Mr. Boswell

We do not need to get into a silly semantic argument about it. I was merely implying, first, that some Ministers' claims that the measure helps all women went somewhat beyond what they were entitled to say and, secondly, that in a number of cases, which we sought to identify in explaining the new clause, women will not benefit at all.

Mr. McCartney

I thank the hon. Gentleman for his volte face—I was not expecting a total U-turn. I have never said that every single woman who reaches retirement age will benefit from pension credit. We said from the outset that 5.1 million pensioners will benefit. Of those, 53 per cent. of single women and 31 per cent. of couples will benefit from pension credit, so 84 per cent. of women will experience a positive impact on their retirement income. It is nonsense to suggest that this is not a significant step forward for women—of course it is. It is not only about righting the wrongs of the past, but about being able to put in place for the future a system that is non-discriminatory towards women.

I want to refer to the Sunday Mirror article that quoted the hon. Member for Northavon, which is entitled "The Unfairer Sex: Poverty trap for women pensioners". It is unfortunate that in a debate about the unfairer sex, as the article terms them, the only Members who have participated so far are grizzly middle-aged men. I think that we all agree, on a non-partisan basis, that we are sympathetic to the unfair way in which women have been treated in the past, but it is important to correct some of what was said in the Sunday Mirror article so that people are not misled either about a lack of entitlement to minimum income guarantee or the current level of the basic state pension.

The hon. Member for Northavon may say that he was misquoted or that the article was edited to give average figures. I shall be kind and say that it must be the latter, because the Sunday Mirror never misquotes anyone of substance. [Interruption.] I heard an hon. Member say, "That leaves the hon. Gentleman out." I was not intending to feed Labour Back Benchers; I shall not give them any red meat just yet. I want to clear this up. The last time the basic state pension was £58 was in 1984. The current basic state pension is £75.50 for single people and £120.70 for couples. More importantly, for the women to whom the hon. Member for Northavon referred the minimum income guarantee is £98.15. For couples it is £149.80. That is a significant improvement on the figures cited in last Sunday's article, and that should be acknowledged by all concerned.

I turn to the debate in Standing Committee on 18 April this year. I want to give two short quotes that set the tone for what I am going to say next. The quotes come from columns 121 and 122 of the Official Report. That is not so much a reference for Hansard as for the Gallery writer from The Times, who unfortunately seems not to understand Glaswegian. [HON. MEMBERS: "Shame."' He wrote an article in which he did not spell anything right. He thought that I was asking for a pint of heavy, but I was talking about the pension credit. Just for the record, I shall say that it was the pension credit, not a pint of heavy—although at this moment I would prefer a pint of heavy.

I said in Committee, in response to my hon. Friend the Member for Stalybridge and Hyde (James Purnell): We appreciate the work that foster carers do and sympathise with those who, having chosen to be full-time carers, receive poorer pensions as a result. I went on to say: I do not wish to over-egg the pudding and suggest with nods and winks that a solution is just around the corner; I am telling him openly and honestly that this is another issue that I looked at when I first became a Minister, and I decided that something must be done. We are reviewing the matter. I cannot say any more, but I hope that hon. Members will understand that I recognise the problem and that it must be resolved in an effective way".—[Official Report, Standing Committee A, 18 April 2002; c. 121–122.] I repeat that now to re-emphasise that that is my position as Minister. It was not said to create discussion in Committee—it is a genuinely held position. I am not surprised that the hon. Member for Northavon has returned to the matter—he has been trying to champion this lost cause, as he would call it, for some time—but I hope that he recognises the truth of what I said to my hon. Friend in Committee.

New clause 1 would have the effect of deeming a notional amount of basic retirement pension, so that a group of pensioners—in this case, those caring for children before 1978—could make the most of the savings credit. It would increase the amount of basic state pension they have in the calculation of the savings credit, so that they have to use less of, or none of, their own savings to get their income up to the savings credit threshold of £77. It might help if I give an example. A single pensioner has a reduced basic state pension of, say, £50 because they have a deficient national insurance record. They have a second pension of £25 and no other income. Their total income of £75 would immediately be topped up to the guarantee credit of £100, but they would receive no reward for their saving because their income was below the savings threshold of £77. In other words, they would not receive any savings credit because their income was below the level of the full state pension. If they could take advantage of home responsibility protection, they might qualify for the savings credit.

The new clause as drafted would have two peculiar outcomes. First, it would require people to list any natural children they have ever had, regardless of whether they have ever had any caring responsibilities for them. I am not sure that the Department for Work and Pensions needs that information, nor that people would want to share it with us—nor, in some cases, with their current partners. That matters, because at this stage of parliamentary scrutiny there is no further opportunity to correct drafting.

Mr. Webb

I do not quite understand what the Minister is saying. New clause 1 states that claimants would be asked to list the date of birth of any natural children and any other children for whom they had primary caring responsibilities". The Minister said that they would have to list children irrespective of whether they had cared for them, but the new clause explicitly covers the matter.

Mr. McCartney

My interpretation of the new clause is based on the advice on its wording that I have received from parliamentary counsel and our officers. It would be a legal minefield to go back for such a long period in relation to natural children who were cared for initially, but later not cared for after those looking after them had given up their caring responsibilities. It is also a potential minefield in terms of relationships with current partners.

Secondly, the new clause would allow a person the option of replacing their actual rate of basic pension with a higher amount in the calculation of the guarantee credit. I am unclear whether this was intentional, but if a person did exercise that option, their income would decrease, not increase. That said, I think that what the new clause tries to achieve is an increase in basic state pension so that more people come nearer to the £77 threshold. It would do that in a notional way by imagining that this group of pensioners was entitled to the home responsibility protection in a time before it was invented. One cannot make law on that basis. One cannot dream up or invent a situation, then develop proposals on that basis which go back, not for two or three years or for one or two decades, but beyond even that.

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Home responsibility protection has been available since 1978. It covers two distinct groups of people. Those in the first group have been awarded child benefit for children under 16; those in the second have been regularly engaged for at least 35 hours a week in caring for someone who receives attendance allowance or the highest middle rates of disability living allowance for a minimum of 48 weeks a year. Entitlement to home responsibility protection depends on people undertaking the caring activities for complete tax years.

The protection offers a reduction in the number of qualifying years for a full basic pension. For example, a woman needs 39 qualifying years of contributions or credits for a full pension. Every year of the protection reduces that number, and there is a maximum number of years that can count towards home responsibility protection: 19 for women and 24 for men. The different periods reflect the current arrangements whereby men need five more qualifying years to earn a full basic state pension.

The new clause tries to provide home responsibility protection as if it existed before 1978 to those who would have been entitled to child benefit if it had existed before then. The new clause would achieve that by asking all new claimants for the pension credit to list the dates of birth of their children if they cared for them before the introduction of home responsibility protection. The hon. Member for Northa von wisely does not try to apply the new clause to carers of the sick and disabled. The provision is confined to parents; he does not propose its extension because he knows that that would be unworkable. Trying to prove a caring relationship that fulfilled the criteria for home responsibility protection would be impossible after so many years. He nods, so I am right about his intentions.

The new clause would be impossible to put into effect. We could be stretching back as far as the 1920s. That is at the heart of the problem, and why in practice and in principle, Governments cannot generally go back that far. We cannot replicate current provisions with ease or certainty. If we try to do that, we create a form of injustice for someone else. For those reasons, we must reject the new clause. However, I do not want hon. Members to be left with the impression that refusal to accept it means a significant gap in provision. It does not.

Those who are disadvantaged because they do not have access to home responsibility protection are likely to be few. Many of them and the larger group of carers who are already covered by the protection will be married women. Most will have the benefit of a full married woman's pension. Any pension in excess of that, private or state, will be rewarded. Many of the women will now be widows. On widowhood, the combination of their national insurance contributions and those of their late husbands will have brought the income of most of them up to the basic state pension.

Andrew Selous

Are not the Government correctly righting a wrong through considering the underpayment of women who worked in colliery canteens in the 1950s? I know from one of my constituents that that is happening. That is absolutely just, but does not that mean that the Government have already established the principle of righting past wrongs?

Mr. McCartney

The hon. Gentleman is not technically correct. The issue not only involves the former National Coal Board, but applies to employers in the public and private sectors who took contributions for women but treated them in a discriminatory way within the rules of their pension funds. A European ruling has been made, and the tribunal system is now considering its implementation so that it can make good that discrimination. It is an entirely different proposition from new clause 1.

I understand the hon. Gentleman's point, but we are acknowledging that discrimination occurred by introducing the minimum income guarantee and modernising the pension credit through the Bill. We are already ensuring that women against whom the state system discriminated benefit significantly. We are therefore able to go back in an effective, honest and transparent way to establish incomes for those women. Without those arrangements, they would fall foul of their backgrounds and languish below the basic state pension line. The Bill will bring their incomes up to it, and in many cases, above it.

Those who are not in that position will continue to be entitled to the guaranteed credit. Our investment in MIG and other measures such as winter fuel payments mean that all MIG households are at least £20 a week or £1,000 a year better off than in 1997. That is a real terms increase in living standards of 23 per cent. Pensioners who have, until now, been the most disadvantaged can depend on a decent income in retirement.

We do not know about the whereabouts of the hon. Member for Northavon since 1984. The Sunday Mirror article finishes by stating: The Liberal Democrat plan is to raise pensions by targeting the money at those who need it most. I accept the hon. Gentleman's flattery; he is obviously trying to imitate what the Government are already doing in the Bill, which reflects our achievements with MIG. Since coming to power in 1997, we have gone out of our way to right the wrongs of the past and to ensure that those pensioners in poverty are taken out of it, not only now but in the future through the pension credit. I therefore ask the hon. Gentleman to withdraw the new clause.

Mr. Webb

I am grateful to the hon. Members for Daventry (Mr. Boswell) and for South-West Bedfordshire (Andrew Selous) for their support for the principle of the new clause and disappointed with the Government's response. It was argued that there are drafting problems, and although I do not understand them, I would happily withdraw the new clause if the Government accepted its substance. We can argue about the drafting and if there is a problem, I am happy not to pursue the new clause as long as the Government accept the principle.

The Minister rightly said that we have not tried to recreate the rules for people who care for the long-term sick and disabled. Trying to do that for 20 or 30 years ago would probably be unworkable. However, trying to establish whether someone had a child and would, under current rules, be entitled to something akin to child benefit is straightforward.

I am sure that the Minister was not implying that those who apply for pension credit would wilfully mislead. There would be no penalty in those few cases in which people did not want to reveal that they had had a child. It is not like missing something off a benefit form, for which people are penalised; it is an option. If it is embarrassing for a woman to reveal that she has had a child because, for example, the husband does not know about it, there is no obligation to do that. However, most mothers would like the opportunity that the new clause would provide.

The Minister said that we could be considering events in the 1920s. He also said that when husbands die, many women move on to the full basic pension through widows' pensions rules. However, most of the women whom we are considering have yet to retire or have recently retired. In most cases, their husbands have not reached 65 or died. Although I do not regard myself as gnarled or middle aged, the period that we are discussing—the 1960s and 1970s—is in living memory. It is not therefore implausible to ask people whether they were looking after children in the 1960s and 1970s. I believe that we could take their word for it. That is not an unreasonable basis on which to proceed.

In the benefits system, we impute all sorts of things that are not so. If people blow all their money to reduce their income to get more benefit, the benefits system treats them as though they still had the money. If people defer a pension and do not draw it when they are 65, the system means-tests them as if they had drawn it because they should not be rewarded for not drawing it. The benefits system uses the "as if" principle all the time. All we want is for people to be treated as if current values attached to bringing up children applied before 1977.

The Minister kindly drew attention to the press coverage for our campaign for justice in women's pensions. Every time I open my mail, more women throughout the country are joining the campaign because of their sense of injustice about issues such as the subject of our debate. Nothing that the Minister said this afternoon implies that the Government will respond to that. He said that not many people were affected, but the £58 figure is a Government figure. It is the average for newly retired women. We are not considering 90-year-old women who lived and worked in a previous generation, but those who are approaching pension age. If they only have private savings on top of the £58, they do not get rewarded up to £75. We can argue about the number of people who are affected, but we support the principle that they should not be penalised a second time.

We are not simply considering rules that will apply next year. When the system is up and running, it will apply to a 60-year-old woman for the rest of her life. In other words, we are talking about the rate that she will get not only next year but in 2020, and perhaps 2030. Would it not be extraordinary if, in 2030, we were still paying a lower rate to someone because of caring that they did in the 1960s? It seems extraordinary to perpetuate this discrimination against women.

I have one more response to the points that the Minister made. If we were to use the imputation system for the guaranteed credit, there would be an issue about reducing entitlement, because we would be imputing a higher basic pension. A better version of new clause 1 might remove references to the guaranteed credit altogether. I take that point, because we are primarily concerned about the savings credit.

For the avoidance of doubt on the drafting, and because new clause 1 is primarily concerned with the savings credit, as the Minister understood, while observing that I do not feel that the principle of this matter has been addressed by the Government, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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