Frank Field, the former Welfare Reform minister, demanded more debate on stakeholder pensions and highlighted "an apparent contradiction" between a stakeholder pension policy and the introduction of a minimum earnings guarantee .
The MP for Birkenhead argued that stakeholder pensions, which relied on voluntary saving, would make it "impossible for many workers to save enough to be better off than that minimum income guarantee will give them". Alistair Darling, the Social Security Secretary, was also pressed to look at the abolished reduced earnings allowance as he announced a wide-ranging welfare review. Ann Clwyd, Labour MP for Cynon Valley, had told him there was a "a real sense of grievance" among her constituents who were pounds 30 to pounds 40 worse off after the allowance was abolished under the Tories.
Mr Darling said: "The difficulty is that benefit was meant to be there to replace people's income when they were in work, but clearly for people who entered into commitments that is difficult. It is something I am prepared to look at, but I do not want to get into the situation of raising your expectations or raising those of your constituents."
He added: "As with all parts of the benefits system, I will look at it, but that does not necessarily mean we will be able to resolve it to everybody's satisfaction."
Meanwhile, Gordon Brown, the Chancellor, warned Labour traditionalists there could be no going back to welfare policies that "failed in the past". Speaking to the Transport and General Workers' Union conference in Bournemouth, Mr Brown insisted the Government had to make difficult decisions despite agreeing this weekend to rethink its welfare strategy. "Our themes are work for those who can do it, security for those who need it, opportunity for those denied it," he said.
"These are the issues on which the debate on the reform of our welfare state must focus - not trying to master the challenges of the futures by clinging blindly to policies that failed in the past, not debating what policies were in place in years gone by, but debating what solutions will work in years to come."
The transport union had pressed for the review, which ministers hope will avert an embarrassing defeat at Labour's annual conference in October.
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