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Citizens’ Pension

Volume 489: debated on Monday 16 March 2009

7. If he will consider the merits of introducing a pensions system in the UK based on the principles of the citizens’ pension system in New Zealand. (263320)

We did consider it, but, like the Pensions Commission, concluded that because of the complexity and expense that its introduction would involve, it was not the right approach for the United Kingdom.

Given that the Minister has ruled out the citizens’ pension on the grounds of its extraordinary cost, does she agree that it is pure fantasy politics for the Liberal Democrats to pretend that it is a feasible alternative?

I thought it was the Conservatives’ policies that were fantasy, but I am happy to describe all the Opposition parties’ policies as fantasy land.

The obvious problem with the Liberal Democrats’ policy is that it rules out the possibility of conveying help to the most vulnerable people. Without any element of means-testing, it is very difficult to help those people. I agree with the hon. Gentleman that, once again, the Liberal Democrats have come up with an idea that is no solution. It represents, perhaps, the same level of thinking as that of their leader, who believed that the basic state pension was £30 a week.

Even given the introduction of personal accounts, a fair amount of evidence is emerging to suggest that in the next generation and the generation after that, significant numbers of retired people will be living in poverty. Is my right hon. Friend aware of that, and has any research been carried out that might lead to action that ensures that future generations can live in dignity?

I am sure my hon. Friend will know that as a result of the pension reforms that we are introducing, some 9 million people who have not been able to gain access to second pensions will have that access because of automatic enrolment. Let me also draw his attention to a European Commission report published last week, which stated that while in 1997 pensioner incomes in this country were 15 per cent. below the European average, they are now 9 per cent. above it.