State Pension Reform

Malcolm Wicks Excerpts

Monday 4th April 2011 Commons Chamber

[Steve Webb]

My right hon. Friend puts me on the spot, but I am glad to respond positively. I have noted his comments down as being the first response to my consultation, making it 1-0 for the single-tier option—I will keep score as we go. He is right that the restoration of the earnings link after 30 years of breaking it is an historic event, although it has been rather overshadowed by other events in the world. We think someone retiring this year will, over the years, get an extra £15,000 in basic state pension through the restoration of the link. That is a real firm foundation for today’s pensioners as well as reform for tomorrow’s. I am grateful to my right hon. Friend in respect of the liberal heritage and to my right hon. Friends the Secretary of State and the Chancellor for their encouragement for the proposal to move forward.

[Malcolm Wicks (Croydon North) (Lab)]

It is humbling to follow a question from a “for ever” Member of Parliament.

May I ask about the mechanism for determining future changes to state pension age? Could this mechanism please allow for occupational and social class differences in terms of life expectancy? If we look at men who work in what are called routine occupations, such as van drivers, cleaners and labourers, we see that almost a fifth of them—19%, I believe—die before they receive the state pension at 65. If we keep raising the state pension age without allowing for those people who have been working since they were 15 or 16, we will certainly bring insensitivity into the system.

[Steve Webb]

I am grateful to the right hon. Gentleman, who brings great knowledge of these issues to the House. He raises a vital point. Although it is true that life expectancy across the social classes has been improving, which is entirely to be welcomed, there are still very significant differences. One suggested option in the Green Paper is that the review mechanism should take account of a wide range of factors of the very sort that he mentioned. It is possible to have a too formulaic or automatic approach, but the right hon. Gentleman will have noted that the Chancellor referred in the Budget to a “more automatic” approach, taking systematic account of increases in life expectancy, but potentially of other factors such as those that he mentioned.