Bryn Davies
The Budget promises us that there will “shortly” be a green paper on a “simple, contributory, flat-rate” state pension that is above the level of the means-tested Guarantee Credit. The appearance of the green paper has been rumoured for some months but this the first confirmed sighting, with the Chancellor suggesting that such a pension would be around £140 per week. We obviously need to wait for the green paper to see what is being proposed but the statement in the Budget Report that any changes would be “designed so as not to increase public spending dedicated to state pensions” means that we should not get our hopes up high. In particular, it is clear that the proposed changes will only apply to future retirees, which means it will do nothing for the millions of current pensioners who are already in poverty. And the only reason why even this limited measure will work is that the majority of new pensioners already get at least £140 per week from their state pension, simply because most have build up a second earnings-related pension since 1978 on top of the basic pension. In other words, the Government’s plans are only feasible because of the changes to state pensions that Barbara Castle and the Labour government introduced more than 30 years ago.
