Pensions Reform

I am grateful to the hon. Gentleman for his support. I fundamentally reject his analysis that this is anything other than a comprehensive and integrated series of reforms, which will benefit pensioners. Let me respond to some of his points. The hon. Gentleman was concerned about the spread of means-testing, and so are we. That is why I have announced these reforms, which will see means-testing fall considerably. He has mentioned the figure of a third, and it will be about a third. However, we expect only 6 per cent. of pensioners who are being means-tested in 2050 to be in receipt of the guarantee credit. The remainder will receive the savings credit, which, as he knows, is designed to reward savings. That is a good outcome, not a bad one. I ask him to reflect on that. The hon. Gentleman asked about increases in the state pension age. I need to remind him that those increases will not take place before 2024, and we intend to introduce the earnings link by 2012. There is therefore no question whatever of the link being broken as he suggested. We are absolutely not short-changing today’s pensioners. This is a comprehensive, full and positive endorsement of Lord Turner’s report, and we have responded in a way that, as he said at the beginning of his remarks, he did not expect us to. Having heard him, however, I am delighted that we responded as we did. I do not want to set up another quango, which is why I have decided not to set up a pensions commission as Lord Turner recommended. As for public sector pensions, let me remind the hon. Gentleman and the House that several negotiations are taking place now, scheme by scheme, to change the terms of those schemes. It is right to change those terms, and the negotiations will continue. I am grateful to the hon. Gentleman for his support. I am surprised that he did not refer more positively to his proposals, which, as I understand it, would cost the taxpayer an extra £11 billion in 2010, rising to £16 billion in 2015 and £90 billion in 2050.