State Pension Reform

Jim Shannon Excerpts

Monday 4th April 2011 Commons Chamber

[Steve Webb]

I am grateful to the hon. Gentleman for expressing support for the proposal of the single tier on behalf of the Welsh nationalists. As for the issue of state pension ages, the Green Paper involves moves beyond the pension age of 66. The issue raised by the hon. Gentleman will be dealt with in the Pensions Bill, which will be presented to this House shortly, but, beyond that, we are trying to establish a more automatic mechanism that takes account of changes in life expectancy and, perhaps, of other factors as well, such as notice periods—which is, I think, the issue that he has raised—in a more systematic way than we or other Governments have done so far.

[Jim Shannon (Strangford) (DUP)]

There is some good stuff in what the Minister has said, but every week my office—and, probably, the office of every other Member of Parliament in the United Kingdom—receives queries about small works pensions. Although they amount to a pittance, they remove people’s eligibility for benefits. Will the Minister assure us that such people will not be disadvantaged?

[Steve Webb]

The hon. Gentleman is absolutely right. A small occupational pension can make the difference between living in poverty and living with a bit of dignity. Hitherto, given the low state pension of £97 a week, the first £35 or so of company pension has tended to offset £35 of guarantee credit, so people have been no better off. Then the savings credit has come along and given them a bit back, and it is all fiendishly complicated. The beauty of the single tier is that people are above the guarantee credit level from pound one, so the works pension is theirs to keep on top. There is still a housing benefit system and so on, but in principle the works pension will be worth more than it is under the current system.