Fears over pension reform dismissed

Government and Labour spokesmen yesterday denied any suggestion that welfare reform plans posed a threat to the middle classes' state pension.

They said Harriet Harman, Secretary of State for Social Security, had spoken of a possible "affluence test" in the context of disability benefits and statutory maternity pay, and not pensions.

One spokesman said that Tony Blair had spoken of the problem of helping the poorest pensioners - but that did not mean that the better-off were being targeted for pension cuts.

The Prime Minister said in a weekend interview: "You've got a million pensioners at the moment that aren't even claiming the income support to which they're entitled, and living sometimes in very considerable poverty indeed."

It was pointed out yesterday that one of the problems was that income support was a means-tested benefit, that testing was proving a deterrent, and ministers were trying to find ways of getting around this difficulty to ensure that the money went to those in need.

However, Sally Witcher, director of the Child Poverty Action Group, warned that extending means-testing to universal benefits would make it less likely that the benefit would reach those who needed it. "We hear a lot about cuts, but little about increases ... suggesting that the aim is not to redistribute but to reduce benefit expenditure. If redistribution is the intention, then why only within the social security budget, when a much wider redistribution of income and wealth is clearly called for?"

She said the Government could cut social security spending by tackling unemployment, low pay, lack of childcare and rent controls, which were largely the reasons for increased spending. Ministers say that is precisely what they are doing.