Iain Duncan Smith makes a statement to the House of Commons on the Government’s review of the state pension age to help ensure the state pension remains sustainable for generations to come.
2nd March 2016: Iain Duncan Smith makes a statement to the House of Commons on the Government’s review of the state pension age to help ensure the state pension remains sustainable for generations to come.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Yesterday we announced the appointment of John Cridland to lead an independent review of the state pension age. The review will make recommendations for the Government to consider, to ensure the future state pension age is fair and affordable in the long term.
The review will report by May 2017. I want to stress that the review is independently led and evidence led. Evidence will be put forward for Sir John to consider in his important considerations about the future of the state pension. The review will consider changes in life expectancy, as well as wider changes in society.
It is useful at this point to remind the House why this kind of review is necessary. In 1945, a man expecting to retire at 65 had a life expectancy of between 60 and 63. Men’s life expectancy rose from 14.27 years in retirement after their pension age to 27 years under the present forecast and existing timescales. Women have gone from 18 years in retirement after their pensionable age to 29.5 years in retirement.
Future generations, therefore, would rightly expect that we reflect those changes in how we set the pension. They would not thank us—we very rarely hear anybody talk about future generations—if we did not take the right decisions at the right time and did not have the courage to ensure pensions are sustainable, to avoid people having to pick up an increasing bill, which would make their lives even more difficult.
I want to make clear what this review is not about. It does not cover the existing state pension age timetable—it picks up from April 2028. We have already provided legislation for this, and the review will not look to change the state pension age up to that point.
It is worth reminding the Opposition at this point that when the Labour Government were last in power, they first legislated for state pension age rises beyond 65, but without any commitment to a special independent review, which we have undertaken. When we brought forward the Pensions Bill in 2013, the then Opposition seemed to have had a change of heart, and they—quite legitimately and reasonably, I thought at the time—agreed with us on the need for a regular independent review of the state pension age. Let me quote what the then shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), said during the course of the Bill’s passage:
“The Secretary of State and I have no difference of opinion on the need regularly to review the state pension age.”—[Official Report, 17 June 2013; Vol. 564, c. 661.]
It is worth reminding everybody that in that Bill was a statutory provision for a regular set of reviews of the pension age. Yesterday’s announcement is simply in line with that statutory requirement. That is what we are now doing, and that is what the then shadow Secretary of State said in agreement. I also remind the hon. Member for Pontypridd (Owen Smith) that at the time Labour made no amendment to change the nature or scope of the review; nor, I recall, did it have anything in its manifesto to do with that.
Under the legislation, we are required to appoint an independent reviewer who will make recommendations on future state pension age requirements. We have appointed Sir John Cridland to lead this work. The legislation also requires us to report on this in 2017. I can assure the House that we will report back to the House in an oral statement and a written statement on whatever comes forward from that review.
This review is part of the Government’s reforms to pensions to ensure that they are affordable for the long term. It is right that we recognise those who have reached their pension age and who have worked hard, done the right thing, and provided for their families. I believe that this Government are delivering for those very people. As a result of our triple lock, pensioners will receive a basic state pension over £1,000 a year higher than at the start of the previous Parliament and under the previous Government. We have provided greater security and more choice and dignity for people in retirement, while also ensuring that the system is sustainable for future generations.