State Pension Reform

James Morris Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

Yes, the hon. Lady is right. We have talked to the CBI, the National Association of Pension Funds and major pension employers. They are clear that they do not simply want to take the national insurance rise on the chin; they want the freedom to adjust their private sector pension scheme in response. However, we have calculated that, even allowing for that, the bulk of people who are within 20 to 25 years of pension age will still get more back, from the extra national insurance and any reduction in their private pension, through the enhanced state pension than they have lost.

[James Morris (Halesowen and Rowley Regis) (Con)]

Does the Minister agree that a modern pension system needs to reflect the changes in a modern work force, and that what he is announcing today will help self-employed people, and women who have not been able to work and have a variable contribution record?

[Steve Webb]

Yes, the new system is designed to treat people as people, rather than as dependants. It removes the distinction between employee and self-employed, contracted in and contracted out. Given that these boundaries are somewhat permeable—people might be self-employed one year and part time the next and so on—this will streamline the system and make it easier for people to build up the 35 years they need.