A Whitehall farce concealing a tragedy

George Osborne gets £5bn, select committee members get to help some women in the 60s and millions of poor workers lose up to a quarter of their pension. But where is the real debate, asks Teresa Hunter

Bungling political amateurs who mean well, but are ridiculously out of their depth, are familiar figures of fiction and fun from PG Wodehouse’s Aubrey Upjohn, MP for Market Snodsbury, to Jim Hacker in the “Yes Minister” series.

But watching pensions minister Steve Webb being grilled by MPs on the Work and Pensions Committee, I couldn’t help thinking how fact can be more absurd than fiction.

We are on the brink of the biggest change to the state pension system in most readers’ life-time. In the decades to come, this will impact on the lives of literally millions of our citizens.

I never expected too much from these parliamentarians, few of whom have the technical background to wrestle with such complex legislation. But even Webb seemed embarrassed by their inability to grasp the crucial issues about which they should have been questioning him.

Up to twenty million employees will receive a lower state pension in the future, because they will no longer accrue rights to an earnings-linked state second pension.

Lower-paid workers will be particularly badly hit, and are unlikely to be able to make good this shortfall through private savings.

If this isn’t clear enough, let me put it in words of one syllable. They will be much worse off in old age.

You and I might have thought this worth raising at the meeting. Indeed, had we been on the committee, Webb would have received a savaging any Rottweiler would have been proud of.

There has been no national conversation about whether this is what the Great British Workforce wants to see and has fully signed up for.

Indeed, most of those who get up at the crack of dawn for up to 50 years to get to work on time, have no idea this retirement cash is being taken away from them.

One MP did raise the question of lower-paid workers being worse off. When Webb responded that some people would be better off and some worse off, he seemed entirely satisfied.

Instead, various MPs whinged on about the plight of a group of women who will would have lost out because implementation had been delayed for a year to 2017.

The sob stories play well in some sections of the media. With so much in the Pensions Bill requiring a firm challenge, it was unworthy of honourable members to pretend this was the most contentious issue. One can only suspect they hoped for some easy and flattering headlines.

It seems their whining was not in vain. It handed the Treasury just the ammunition it needed to bring the introduction of the level pension forward to 2016.

No matter nearly 7m employees will see their National Insurance contributions soar a year earlier, when they are contracted back into the state pension scheme. No matter that more employers will pull the plug on final salary arrangements.

No matter even, that up to 20 million employees will see their pensions cut, because they will lose a year of earnings-linked S2P.

It will be worth it because the Chancellor will pocket a £5 billion NI windfall. Sorry, that should read, 85,000 women who would otherwise not have received a flat state pension of £145, will do so.

Wait a minute. Given you need a 35-year NI record, rather than 30 under the old system, how many women who started work in the late 1960s and early 1970s will have anything like that record? In which case, will the benefit to this group of introducing the measure a year early, outweigh the loss to millions elsewhere in the workforce?

What do you think? Indeed the more you smell it, the more it has the odour of a measure the Government realised would bring in an extra £5 billion, and cost very little while neutralising some negative headlines.

Steve Webb is an accomplished pensions minister. He answered every question before the committee honestly and fairly. He even fed them lines they should have pursued. They dropped every ball he threw them.

Many working people, particularly those on below average wages, do back-breaking jobs, which wreck their health. Yet no one spoke up for them, as this committee gave away their peaceful old age without a murmur.