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State Pension

Volume 547: debated on Monday 25 June 2012

The Chancellor confirmed in Budget 2012 that the Government will introduce a simpler, single-tier pension for future pensioners set above the basic level of the means test to better support saving for retirement—and I am pleased to say that the Prime Minister has reiterated that commitment today.

Will the Minister assure the House that, were such a scheme to come in, existing pensioners would not be permanently disadvantaged relative to new pensioners? If that is the case, is it possible to explain it in plain and straightforward language so that everyone can understand it?

I am grateful to my hon. Friend. We need to explain what are often very complex matters in simple language. The simple truth is that today’s pensioners have got the best deal in a generation through the restoration of the earnings link, which will be real cash in their pockets year after year, and that the new system will cost no more than was going to be spent in any case. We are taking a planned budget, simplifying the system, but not treating anyone adversely.

I am grateful to the Minister for that answer, but there is real anxiety among current pensioners that with the introduction of the single-tier pension they will become second-class citizens. Will he give an assurance and take that point on board?

I do appreciate that point. It is often not well understood that pensioners coming down the track—tomorrow’s pensioners—are due to receive substantially higher pensions on average without our reform because the state system has been maturing. Our reforms are not doing that—it is in the system anyway—but our reforms do take the money and simplify so that today’s workers have a simpler system into which to retire.

Will the Minister give an undertaking that those coming down the track—[Interruption.] I am already there; I am one of those pensioners being discriminated against. Will he give an undertaking that those who would be entitled to a higher pension than his flat-rate pension would provide will get the entitlement that they have paid for and not his lower flat-rate pension?

I can reassure the right hon. Gentleman that the next generation of pensioners will be well looked after and specifically that the starting point for our calculation will be what people have in the bank—that is to say, rights already accrued—and specifically, therefore, if people are heading for a pension of more than £140 at the point we change it and have got that in the bank, it will be respected.

We are hearing from all sides today concern and anxiety about the move to a flat-rate, single-tier state pension. In order to end that anxiety and to answer these questions, will the Minister confirm that a White Paper will be published on this reform? Will he tell us when it will appear?

I am pleased to give the hon. Gentleman the assurance that a White Paper is under active preparation and will be produced.