Blunkett rules out 'citizen's pension', claims there will be influx of pensioners |
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Thu, 18 Aug 2005 09:05
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LONDON: U.K.'s work and pensions secretary David Blunkett has ruled out payment of an automatic pension to every citizen in the country, saying he is concerned that such a "citizen's pension" would cause an influx of pensioners from other European Union countries.
The erstwhile work and pensions secretary Alan Johnson had considered giving an increased flat rate state pension to all irrespective of contributions to National Insurance. Even prime minister Tony Blair, at the time of his election propaganda, had evinced interest in the scheme, which he felt would help women who lose out under the prevailing contributions-based system.
Blunkett said at a workers' meeting in Sheffield that it was a "scandal" that women received so little in old age but said a universal pension plan is not an answer to the problem. "We can't give people a pension automatically. I think people really would blow at that. We would have the reverse of the Costa del Sol. Instead of everybody going to Spain in retirement, they would all come to Britain."
He, however, said he is keen to look at how people can be given much more generous contributions for the years of caring.
Blunkett believes that a guaranteed pension level for all could discourage workers to save from their own incomes. His officials say that he is committed to a "something-for-something agenda" and is resistant to increasing "free" payments from the state as part of the new pensions structure.
But, Blunkett's contention that hordes of pensioners would land in Britain from other European countries has drawn flak. Dismissing the claim as "a travesty of truth", Lord Oakeshott, spokesman on pensions for the Liberal Democrats, said people would have to have lived in Britain for at least 20 years to receive the citizen's pension. "Less than one-sixth of British women retire today with a full state pension - Blunkett's plan to fiddle about with carers' credits and more
means-testing can't end that scandal."
However, Sir Malcolm Rifkind, spokesman for the Conservatives, said the Government seemed to be accepting the view that "citizen's pension" is not the answer to the country's pension problems. He said it is important to retain the principle that people earned the right to a state pension through contribution payments. "But our priority must be to make sure women get a fair deal."
The citizen's pension, supported by the Liberal Democrats and the National Association of Pension Funds, envisaged payment of a non-means-tested state pension, equivalent to the current minimum income guarantee of 109 pounds a week.
The government is currently reviewing the entire pension system and the Pension Commission appointed for the purpose is to submit its report in October.
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