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Page last updated at 08:03 GMT, Wednesday, 26 September 2012 09:03 UK

'We need a new contract with voters'

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The Liberal Democrat leader Nick Clegg has suggested that wealthy pensioners should be stripped of some of the state benefits they all get now, regardless of how well-off they are.

But how much money would this save? And should the government spread the net wider.

"We are going to protect these pensioners' benefits and it is crucial we keep that promise," Conservative MP Mark Reckless told Today presenter John Humphrys.

"The cost of what (Nick Clegg) is suggesting, of having a great new bureaucracy to administer in effect a wealth tax on pensioners... the costs of that would be enormous, far, far greater than anything which would be raised.

"Pensioners have really suffered. Their income from investments and annuities are sharply down. The key issue is we don't want to be means-testing pensioners in this way."

The government's "poverty czar", the Labour MP Frank Field, argued that "we need a new contract with voters" with entry to the welfare and health system coming through contributions"If we don't do anything at all, the cost of the NHS and the payment of current pensions will double as a proportion of our national income.

"I think we need a new contract with voters to say this is where the expenditure you want is going to take us. Can we do a new tax deal with you to ensure the bills will be paid? They are clearly not going to do it through income tax," he added.

"For most of the post-war years, we have wanted governments that spent money we have not been prepared to give them in taxation. The long-term trend, as we age... our health bills and pension bills will totally distort public expenditure."


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