Pensions Bill

I think that the figures are set out in a document that we published when we produced the second pensions White Paper, but I am afraid that I do not have them to hand. If they are not in the document, perhaps we can return to the matter in Committee. We believe that the vast majority of people will be able to look forward with some confidence to receiving £2 back for every £1 put in. Clause 4 will abolish adult dependency increases. The existing dependency increase provisions are a hangover from the immediate post-war period when single breadwinner households were the norm. We live in a very different world today. There is no justification for the taxpayer subsidising couples when only one member has reached pension age, no matter how young the other member of the couple may be. Furthermore, entitlement to adult dependency increases is based on an all-or-nothing earnings limit that creates a disincentive for younger women who are married to men drawing a state pension. If those women earn over that amount, the state pension of their husbands is automatically reduced. The money that we are saving by scrapping ADIs is being reinvested, under the reforms, to provide more generous eligibility criteria for state pensions, so that women, in particular, can qualify for a full state pension in their own right. There is no adverse impact on those with low or modest incomes, as the increases are taken into account on a pound-for-pound basis in calculating pension credit. Clause 9 provides that people can accrue entitlement to the state second pension, based on new crediting arrangements. That means that about 180,000 more people, including 110,000 women, could accrue entitlement to the state second pension in 2010 through the new carer’s credit. As the Pensions Commission recommended, we are phasing out the earnings relation, through provisions in clauses 10 to 12, to create a clear space for personal accounts. However, we are going one step further by replacing the complexity of the current system with a flat-rate amount of £1.40 a week on top of the basic state pension for each qualifying year spent either working, caring or doing a combination of both. Let me be clear: no one loses out because of the withdrawal of the earnings relation. The earnings uprating of the basic state pension more than makes up for the changes. Even the highest earners are better off—a high earner who worked from age 25 would get £102 from state pensions in 2053 under the current system, but under the proposals in the Bill, they would get £139, so the measure is not a stealth tax, as some have suggested. There are no overall losers under our reforms to the state pension system.