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MPs slam ‘cavalier’ Govt attitude to state pension reform

Anne Begg

The work and pensions select committee has slammed the Government’s “cavalier” and “unacceptable” approach to state pension reform following the chancellor’s decision to bring forward the new regime by a year.

In a report scrutinising the draft state pension reform bill, published today, the MPs say the decision to bring the date forward to April 2016 at a “very late stage” has damaged the scrutiny of the bill and would hit providers’ plans to deal with contracting-out.

In January the Government published plans to introduce a single-tier, flat-rate state pension worth £144 a week.

The original implementation date was April 2017 but last month chancellor George Osborne brought it forward by one year. The committee had already finished taking evidence by this stage and was close to producing its final report.

The report is now demanding the Government sets the new date in statute, produces a further impact assessment in line with the new timetable and brings forward detailed regulations on contracting-out.

WPSC chair Anne Begg says: “This process is a vital mechanism in ensuring that significant reforms receive rigorous and effective scrutiny.

“I am disappointed that the Government has hampered us in carrying out this task, by giving us very little time to do it, due to the delays in its own timetable for publishing the proposals, and then making a major change to the policy at a very late stage. Such a cavalier attitude to the scrutiny role of select committees is unacceptable.”

The WPSC broadly welcomed the reforms for bringing greater certainty to the benefits of a private pension but warned the transition would be “long and complex”.

The report states: “This is a major reform which will affect all 40 million people of working age. Although the end result will be simplification, the transition period will be long and complex.

“Individuals will be affected in different ways depending on a number of factors, including their age, and their previous pension and National Insurance contributions.

“There are already misconceptions about who stands to gain and who might lose. People closest to retirement understandably have the most immediate concerns.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. If they carry on like this, other than the initial tax relief which is covered at the back end on retirement by taxing income from PPs, there seems little merit in investing in PPs or any other form of pension plan for anyone other than those fortunate enough to be in the public sector with gold plated pensions.

    I say let all those who wish to, retire fully at age 60, pay a proper living pension and free up jobs for the younger generation.

  2. Getting rid of some workers doesn’t mean more jobs for others. It’s not a zero sum game. If it were, all those women joining the workforce in the last 40 years would have meant 25% male unemployment.

    Of course, it doesn’t work like that….activity leads to more activity.

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