News story

21st March 2002

All-Party Opposition to Pension Credit

Steve Webb MP, Liberal Democrat Shadow Work and Pensions Secretary, today joins in all-party opposition to the Government’s proposals for the Pension Credit.

The Pension Credit will be introduced in 2003 and will bring 5.5 million of Britain’s 11 million pensioners within the scope of means-testing. The State Pension Credit Bill has its second reading in the House of Commons on Monday 25 March.

Steve Webb said:

“The Pension Credit takes us even further down the road of mass means-testing for pensioners. This is a completely misguided strategy.

“The answer to the present pensions crisis is not more means-testing but a decent basic state pension on which people can build their savings.

“We believe that targeting poorer pensioners is best achieved by pension rises for older pensioners, many of whom are elderly widows on meagre incomes. This is targeting without means-testing and is a better long-term basis for pension reform.”

ENDS


Notes to Editors:

· The Pension Credit is due to be introduced in 2003. It will be made up of two elements: 1) A “guarantee credit” which will ensure a minimum income level to those aged 60 and over. This is effectively the continuation of the Minimum Income Guarantee. 2) A “savings credit” which will, for those aged 65 and over, provide an additional income for pensioners who have low or modest incomes in addition to the basic state pension.

· The State Pension Credit Bill has its second reading in the House of Commons on Monday 25th March. Labour backbenchers are also known to be unhappy with the bill. The following joint statement has been agreed between Steve Webb and David Willetts:

“That this House declines to give the State Pension Credit Bill (Lords) a Second Reading because it involves a further move towards the mass means-testing of the pensioner population, will greatly increase the complexity of the pension system both for today's pensioners and for future generations, will result in many pensioners missing out on their entitlements, will erode incentives to save, and believes that the additional expenditure would have been better directed towards the basic state pension, particularly for older pensioners.”