Clause 5
Pensions Bill
9:10 am
David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)
I welcome you back to the Chair, Mr. Taylor, for today’s debate on clause 5, which I think is probably the most exciting part of the Bill—if excitement is the right word to use. The hon. Member for Northampton, North has got us off to an interesting start by raising some important points about how the state second pension will be uprated in the future and what the implications will be.
Obviously, my party would prefer a better universal state pension at a higher level earnings link. We have not, therefore, put down a probing amendment like that of the hon. Lady. However, she has raised an important point that deserves discussion and a response from the Minister. Her point is that we will still have a very low basic state pension compared with other major developed countries and will be flat-rating the state second pension. At some stage there mightbe an aspiration to bring the two together. In the meantime, we are moving away, philosophically, from the idea that the state should provide a second pension related to earnings and towards the assumption that people will have personal accounts and be encouraged to save.