State Pension Reform

Paul Uppal Excerpts

Monday 4th April 2011 Commons Chamber

[Steve Webb]

I thank the right hon. Gentleman for his welcome for the proposed system. It will be financed on a cost-neutral basis within the system: we will spend less money on means-testing and, for instance, savings credit, we will withdraw some of the very small payments that we currently make to people who do not even live in this country, and we will remove some of the highest accruals for the highest earners. We therefore do not need to involve tax relief. As the right hon. Gentleman will know, the Government have refined the previous Government’s plans, so tax relief will be less concentrated on the highest earners, but we have no further plans to change tax relief.

[Paul Uppal (Wolverhampton South West) (Con)]

It is always an honour to follow the right hon. Member for Birkenhead (Mr Field), who invariably speaks a great deal of common sense on these issues.

I thank the Minister for publishing the Green Paper, which, along with the introduction of universal credit, constitutes a seminal reform. We in the Government parties are sending the message that it always pays to work and it always pays to save. We are taking radical steps in regard to the choices that we give pensioners on annuities; may I ask the Minister to continue that work? After all, we are talking about the individual savings of pensioners who have worked all their lives.

[Steve Webb]

My hon. Friend is absolutely right. There is a clear link between the major reforms that the Department is introducing for people of working age and those that it is introducing for those who will reach pension age in the future. “It pays to work” and “it pays to save” must be the right combination.

My hon. Friend asked about pensioners’ savings. In a world in which we will enrol people in workplace savings, we need them to be confident that they will be better off when they save, and that is one of the specific purposes of the reforms. If my hon. Friend wishes to raise any further points, I will certainly respond to them.