State Pension Reform

Luciana Berger Excerpts

Monday 4th April 2011 Commons Chamber

[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.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

May I give the Minister a final opportunity to tell us who the losers will be from his plans for flat-rate pensions?

[Steve Webb]

I will have another go. We have made it clear that we are not spending more money overall, that there are significant gainers among women, the low paid and the self-employed, and that therefore, inevitably, some people who would have received higher state pensions under the current system will receive flat-rate pensions. Because the current system is earnings-related, the highest earners will tend to receive lower state pensions under this system. The Labour party used to support that sort of thing.