Clause 5 - Transitional rate of state pension

Pensions Bill – in a Public Bill Committee at 3:00 pm on 2nd July 2013.

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Question proposed, That the clause stand part of the Bill.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I hope I can deal with the clause relatively briefly, because it follows naturally from our debate on clause 4.

Clause 5 links to schedule 1, and simply provides either that the amount someone gets will be the sum of what they got under pre-commencement and post-commencement qualifying years capped at the full single-tier rate; or, if they would have got more under the old system only, that is the figure that they will get. That seems to us to provide proper protection. Changes will be possible through measures under clause 6, which I shall explain when we reach that point, or in the case of people who paid the married woman’s stamp, which is dealt with in clause 11.

Clause 5 simply stresses the concept of the foundation amount: a person will get the higher of either the pre-qualifying and post-qualifying years added together, or the amount already accrued under the old system. That seems a very fair transition method to us.

Photo of Gregg McClymont Gregg McClymont Shadow Minister (Work and Pensions) 3:15 pm, 2nd July 2013

I do not have much to add to that. The Minister has set out the situation clearly, and it follows logically from the Government’s position on the previous clauses.

More generally, I understand that the Minister takes the view that some of the issues being raised are perceived rather than real. However, I dare say that it is a question of how people think. If we believe that those around us are getting a better deal than we are, that creates a feeling of unfairness. Even if our position is no worse, or it is better, than it would have been if the change had not occurred, as human beings we tend to focus on the  relative position. Having put that point on the record, I will simply say that clause 5 is acceptable from our point of view.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.