Clause 15 - Income and Capital
State Pension Credit Bill [Lords]
6:00 pm
Mr James Clappison (Hertsmere, Conservative)
My hon. Friend is absolutely right about that. Earlier, Baroness Hollis had said much the same thing in the House of Lords by taking the example of Alfred, aged 68, who was married to Vera, aged 65. Vera's age seemed convenient for the Baroness' purposes because the incentives to work, the effect of the minimum income guarantee and the withdrawals from MIG—which would be the same for
earnings as for occupational pensions or savings—would have an interesting impact for any lady aged between 60 and 65 who wanted to take on part-time work having retired at 60.
The Veras of this world who wanted to work a morning or a day a week would keep the first £5 of their earnings, but if they were entitled only to the basic state pension, the remainder of their income would be withdrawn from their MIG at a 100 per cent. rate pound for pound. I believe that that is what will follow if the two systems are to work in the same way. One wonders what effect that would have on the incentive to go out to work. How would people feel about having their income withdrawn at a 100 per cent. rate for the first £5?