Pensions Bill

I assure the hon. Lady that we accept the pension credit regime put in place by the Government, including the statutory uprating of pension credit to which the Secretary of State referred. I will deal with her point in a moment. The Department for Work and Pensions and the Secretary of State have said today that means-testing will be limited to less than 30 per cent. of the pensioner population by 2050. However, the Pensions Policy Institute, a respected independent think tank, believes that 45 to 50 per cent. of pensioners could be affected. That is an important difference and, on balance, most people in the pensions sector appear to trust the PPI’s modelling more than the DWP’s. Confidence in the DWP statistics is perhaps not enhanced by, for example, the use of one figure to project the growth of state second pension income in the means-testing model, and a lower figure to project state second pension income in the model for the future cost of Government spending programmes. Since September, we have been urging the Government to try to reach an agreed position with the PPI so that Parliament and the country can understand the nature of the platform that the changes in the state pension system will provide as a base for the personal accounts savings system. It is hugely disappointing that the Bill should come to Parliament today with such a large discrepancy between the different projections of the future level of means-testing unresolved. We recognise that whichever figures are right, there is no quick or easy way of reducing means-testing. Having introduced extensive means-testing of benefits for pensioners, neither this nor any other Government would be prepared to see an increase in the number of pensioners in poverty. That is the answer to the question from the hon. Member for Birmingham, Selly Oak (Lynne Jones). No Government would be prepared to see a de-linking from earnings of the pension credit threshold, which, as it is defined, would push more pensioners into poverty. Nor is it possible for any fiscally responsible party to promise to erode means-testing by massive increases in basic state entitlements, as some have been tempted to do. Conservative Members, however, have a long-term aspiration to see the level of pensioners means-testing gradually reduced. I invite the Minister to commit the Government to the same long-term aspiration, so that collectively we can send a clear signal to potential young savers that the major political parties are committed to a long-term reduction in disincentives to save that might otherwise deter those savers from seeking to provide for their own well-being in retirement.