Select Committee on Work and Pensions Appendices to the Minutes of Evidence


Letter to the Clerk of the Committee from the Rt Hon the Baroness Castle of Blackburn (PC 07)

  Dear Mr Moon,

  The points I wish to make on the dangers of the Pensioners' Credit were broadly set out in the second reading speech I made on the State Pension Credit Bill in the House of Lords on 18 December 2001. I can summarise as follows:

  1.  The Pension Credit is a recognition of the strength of the argument I and other Peers have made of the affects of means-testing in reducing incentives to save and/or earn. It is a complicated system which will further confuse pensioners but its broad effect is to extend substantially the number of pensioners on means-test.

  2.  The problem of take-up is even more severe than in the case of MIG. In spite of the recent Government campaign to improve the take-up of MIG, successful applications only increased by 120,000. The take-up of The Pension Credit is likely to be even less.

  3.  Nowhere are we told what is likely to be the administrative cost of pension credit and some of us suspect the reason is that it would be very high. It will certainly be higher than for State Pensions like SERPS.

  I and others will be tabling more detailed amendments to the Government's proposals during the Committee Stage of the Bill and we hope the Government will consider them very serious.

Barbara Castle

9 January 2002

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