State Pension Reform

Lord Dodds of Duncairn Excerpts

Monday 4th April 2011 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend and I know of the expertise she brings to the Select Committee on these issues. We propose that bringing up the next generation or caring for an elderly relative will be valued by society just as much as a high-paid job. A year will be a year will be a year. If someone is contributing to society in that way or in paid work or in other ways, it will bring them one thirtieth of a single state pension. We think that is a big step in the right direction, which will be widely welcomed around the House.

[Mr Nigel Dodds (Belfast North) (DUP)]

We welcome the Green Paper and the consultation that will ensue. We agree that moving away from means-testing and complexity towards a universal flat-rate pension is greatly to be welcomed. The Minister says that this will not entail spending any more money. Given that so many pensioners today do not claim all the means-tested benefits to which they are entitled—this is a big factor in these reforms and should again be welcomed—does it not mean that more money will need to be spent to make up for the fact that people do not claim? If so, will the Minister guarantee that that money will be provided?

[Steve Webb]

The right hon. Gentleman has made an important point, namely that under the current system many people are entitled to top-ups and do not claim them, whereas pretty much everyone claims the state pension. The new system will guarantee that a great many people will live clear of the poverty line for the first time. As the right hon. Gentleman says, a price tag is attached, and we have factored that into our costings. Although the prospective state pensions of the very highest earners will be lower than they would otherwise have been, many lower earners and people who would not otherwise have taken up their entitlement to pension credit will be in a better position, and we consider that to be a fairer system overall.