State Pension Reform

Eilidh Whiteford Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

I had the great pleasure of joining my right hon. Friend the Secretary of State at Asda this morning—when he caught up on a bit of his shopping—and meeting shop workers who had just been automatically enrolled by Asda. It was fascinating talking to them, because some were in the scheme already, but many were not. Those who had been auto-enrolled were going to stay in, and one said, “It’s not that much money. To be honest, I drink more than that in the pub over a month.” People are being brought into workplace pensions. We do not want them opening their newspapers and being told, “Don’t bother saving, because you’re just going to be means-tested.” We believe that we have dealt with that problem today, which will make auto-enrolment work as well as state pension reform.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

The Institute for Fiscal Studies has said today that the proposals will mean

“a cut in pension entitlements for most people in the long run.”

I am also concerned that they touch on public sector pensions and other areas of devolved competence. Will the Minister ensure that his Department engages in constructive technical discussions with the Scottish Government on the transitional process?

[Steve Webb]

I have written to the devolved Assemblies and the Scottish Parliament about our announcement today. On the hon. Lady’s question about costings, let me say that for the next couple of decades or so we will be spending pretty much the same as now—it is within the same cost envelope—but we will be getting the bill down for younger workers by the middle of the century. It will not be down relative to today—the share of national income going on pensions will be substantially bigger than today—but it will not be rising quite as fast. We are ensuring that workers in their 20s will be automatically enrolled so that they have a savings culture as well as state pension.