State Pension Reform

Anne Begg Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

My hon. Friend is right. In every interview I have done today, we have had to spend about 20 minutes explaining how the current system works before we deal with the change. I welcome the fact that consumer organisations such as Age UK, although it has questions about the details, has warmly welcomed the principles of our reform.

[Dame Anne Begg (Aberdeen South) (Lab)]

I thank the Minister for his statement and for listening to the most recent report on pensions by the Work and Pensions Committee. When we looked at auto-enrolment, we said that a flat-rate state pension was important. On behalf of the Committee, I accept his invitation to conduct pre-legislative scrutiny.

The final outcome of the pension reform will, we hope, be a simple and easy-to-understand state pension, but already, from this afternoon’s exchange, it sounds as though getting there will be incredibly complicated. Will the Minister give us an idea of how long the transitional arrangements will be in place? I suspect that the Committee will spend a great deal of time analysing those arrangements to ensure that they are fair.

[Steve Webb]

I am grateful to the hon. Lady both for her Committee’s report calling for the state pension to be sorted out and for her willingness to undertake the scrutiny. We will work closely with, and support, her Committee in doing that. She is absolutely right: transition is the messy bit. With pension reform, it would be lovely to start with no history and a blank sheet of paper, but we cannot do that. The straight answer to her question, however, is that transition is particularly important for those closest to pension age, who will have a complex history and rights built up. For younger workers, it is straightforward: they will do the 35 years and get the £144. Transition is complicated and messy in the early years, but it quickly works its way through the system, and we have worked hard on the statements we will send to people. They will be clear and say, as it were, “Under the bonnet, the workings might be complicated, but you’ve got this so far. Do this many years, and you’ll get £144.”