On the Politics Show, Sunday 15 July 2007, Jon Sopel interviewed David Laws MP, Liberal Democrat Work and Pensions Spokesman.
JON SOPEL: I'm joined now by the author of the policy document, the Liberal Democrat, David Laws. David Laws, welcome to the Politics Show.
DAVID LAWS: Thank you Jon.
JON SOPEL: Thanks very much for coming... Let's talk about pensions first of all. You say you want to raise the universal state pension freeing millions of people from means testing, how are you going to do that.
DAVID LAWS: Well at the moment, the problem we've got with the basic state pension is its set thirty pounds below the means tested level, so anybody trying to save has a terrible disincentive to do so, cos they lose the means tested benefits. It's almost exactly the opposite of what Beveridge thought about when he envisaged the system, fifty or sixty years ago.
So what we've got to do is find the money to steadily increase the basic state pension to a much fairer level and one of the things that we've said that the government has got completely wrong in its pension reforms, the incomplete part of those reforms, is to look at public sector pensions because the amount of our national income that we're going to spend on public sector pensions, is going up very sharply over the next ten, twenty years. And I think many people will think that the priority ought to be getting the basic state pension right, that's the level that is the guarantee against poverty for all of us.
JON SOPEL: So if you're a teacher, a health service worker, and you've got that sort of pension, you're going to get less.
DAVID LAWS: No, not necessarily. What we've suggested is that there's...
DAVID LAWS: It depends on what type of employees in the public sector because public sector pensions are very different in their generosity. The scheme people like members of parliament and judges, are extremely generous but if you look at the schemes for low paid workers, particularly local government workers, people in the health service, they are far less generous and what we are therefore suggesting is that we have, just as we had a commission to look in to the state sector, there should also be one to look in to public sector pensions, and to suggest reform.
JON SOPEL: people watching will be thinking, hang on, well if the liberal democrats you know, get in to power, what is it going to mean for my pension. And if you're a teacher, if you're a middle ranking civil servant, you're going to get less.
DAVID LAWS: Well, it depends, not, probably not in the case of teachers because the teachers pension scheme is actually quite sustainable. We're not going to ourselves, come up with, on the back of a fag packet, particular figures for each and every public sector worker. What we're suggesting is, just as there was a commission set up by the government, a very successful one under Lord Turner, which looked at reforming all of the public sector, all of the state pension schemes, there should be one for the public sector as well, and that will be that instead of rehearsing our prejudices on this issue, because big business tends to say that public sector schemes are too generous and public sector employees say they're not, it will be fact based and those schemes that need reform, like the judges, MPs, other higher paid workers, may well have to be cut back. But those for lower paid workers, may well not be.
JON SOPEL: But the way it sounds like it, I mean you talk about the high paid workers, but there are going to be a lot of middle ranking, it sounds like you're taking from the poor to give to the poor. Is that... (overlaps)
DAVID LAWS: No we're certainly not going to be taking from the poor. If you actually look at a lot of the existing public sector schemes, it's almost invariably those on low incomes who lose out. They have the lowest contribution rates, they usually are workers who have the least generous schemes.
Often, the contribution rate is tied directly to whether you're a high paid or low paid worker and I think, when we look at the facts, and it must be fact based, we'll find actually that it's the highest paid people who are doing best and it would be fairer to reform those schemes and get the basic state pension right.
JON SOPEL: What about the public premium. Why not just be honest about it and have a voucher system, people understand that.
DAVID LAWS: Well in some ways, the pupil premium is going to be a voucher because what it will be is an additional amount of money that is...
JON SOPEL: In my pocket.
DAVID LAWS: No, that goes to the school itself for those pupils who have particular disadvantage and what they will do is it will mean that we know at the moment we've got one, two million pupils, from disadvantaged backgrounds, who are an enormous challenge for schools to deal with.
They're much more expensive to educate. They, many of them are leaving school with very low literacy and numeracy. So we want to give attached to each of those pupils and going to their schools, an additional amount of money, that will basically bring the funding of those pupils up to the private school level and give them a fair chance to succeed in education.
JON SOPEL: Won't that mean exactly the sort of means testing that you've said you don't like over the pensions.
DAVID LAWS: No, what it will mean is instead of the government's major policy on poverty being to ever expand means tested benefits, which can be a huge disincentive to employment and to people saving, we will actually be seeking to tackle poverty and disadvantage at its root.
Because what we want to give people is not simply a means tested benefit form, and means tested benefits for the rest of their life, but a chance, and you can only do that by tackling disadvantage in the early years and in education. And this is a policy that has been extremely successful in many other countries on the continent.
JON SOPEL: David Laws, thank you very much for joining us.
DAVID LAWS: Thanks very much.
END OF INTERVIEW WITH DAVID LAWS
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The Politics Show Sunday 15 July 2007 at 12:00 BST on BBC One.
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