Cicero Policy Briefer

Issue 9, February 2007

The Limits of Consensus:
new procedures first point of controversy for Pensions Bill Committee

By John Rowland

On 23 January the 17 members of the Pensions Public Bill Committee met for the first of 12 sessions in the imposing surroundings of Committee Room XIV. They were there to scrutinise a piece of legislation that looks towards Britain in 2050, when over-65s will represent 25 per cent of the population, up from 16 per cent in 2004.1

This stark demographic reality means that the case for reform is accepted on both sides of the house, and indeed the Conservatives even agree with the fundamental shape of the Government’s plans. But this doesn’t mean that there is agreement on everything—and debate during the proceedings brought into sharp relief the limits of the consensus.

The first point of controversy was the change in parliamentary rules that allows Bill Committees to call for evidence in a similar manner to Select Committees. The fact that the rule change only applies to bills laid from this year did not deter shadow pensions minister Nigel Waterson MP from making the case for the Committee to call for further evidence from the Pensions Policy Institute (PPI) on the impact of means-testing on the sustainability of state reform.

The Conservatives remain concerned that the Department of Work and Pensions and PPI projections on the impact of means-testing on state pensions do not agree. There is a strong political dimension to this debate, given that means-testing is the Chancellor’s preferred method for targeting benefits at those with low incomes. But the independent Turner Commission also observed that means-testing will need to be sharply reduced if reforms are to be sustainable—which means that disagreement over the extent to which means-testing will impact on reforms is no small matter.

Waterson’s call for new evidence to be given in public was ultimately unsuccessful, given the 2006 vintage of the Pensions Bill. Nevertheless, Pensions Minister James Purnell MP did offer a seminar with officials and PPI experts present to discuss these issues. As such we can expect to see means testing as a key issue to watch as the Bill is marshaled through Parliament, particularly as Gordon Brown gets closer to No 10.

1. Government Actuaries Department projections

John Rowland can be contacted on +44 (0)20 7665 9530 or click here to email.

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