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1.5 pm

Colin Burgon (Elmet): I join in congratulating the hon. Members who made their maiden speeches today. The hon. Member for Billericay (Mr. Baron) has a hard job in following Teresa Gorman. Obviously, he will not step into her shoes—at least, I hope that he will not do so—although he has wrapped himself firmly in the Eurosceptic flag. The other maiden speech was made by my hon. Friend the Member for Birmingham, Erdington (Mr. Simon), who made an extremely witty contribution. He was also perceptive, as he described Birmingham as the second city of the country; obviously, he recognises that Leeds is the premier city. However, his contribution had one slightly depressing aspect: he bordered on ageism by telling us that the average age of Members of Parliament was 50.3. Unfortunately, I fall on the wrong side of that divide.

Jeremy Corbyn: Which is the wrong side?

Colin Burgon: I am not quite sure.

I welcome the opportunity to speak about a key Government objective: the introduction of measures to improve standards for pensioners. As about 50 per cent. of social security expenditure—approximately £100 billion—is spent on pensioners, it is clear that this subject is one of the major considerations that exercise the minds of those in government, as well as those who want to be in government one day.

Organisations representing pensioners have correctly told us that older people are not a special interest group with unique demands and interests. I agree entirely with that view. Older people share with others the hope of living in a stable society in a nation at peace. They want an economy that offers a high quality of life to all. Along with the rest of us, they are interested in education, health, transport and law and order. They are full citizens of this country and their voices must be heard whenever decisions are made that affect them. We must have structures for participation and the Government must be committed to listening to their concerns.

The achievement of independence and security for older people requires a basic pension that offers all of them, in all circumstances, an adequate and acceptable standard of living. The quest to deliver that desired outcome will be accompanied by even greater pressures as the years go by—my hon. Friend the Member for Birmingham, Erdington will share them—and our country grows older. There are now 12 million people over the age of 60 in the United Kingdom. By 2030, there will be 19 million, which represents about a third of the population. They will outnumber adults aged under 40.

In my experience, pensioners are very assertive in putting forward their views, especially in my patch in Yorkshire. They also show a greater tendency than other people to take part in social activity and what we class as civic society. The fact that they have a higher rate of participation in voting in elections is a point of interest

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for politicians, whether aspiring or otherwise. We are all aware of the phenomenon of grey power, which was first identified in the United States. Indeed, one or two of its proponents might be sitting in the Chamber now.

I am always glad, as I am sure my colleagues are, of the chance to meet pensioners in my constituency and to discuss the issues that concern them. I am very lucky, as I am always welcome at the pensioners' federation that meets at the King Edward VII working men's club in my home village of Allerton Bywater. Discussions with that group help me to keep my feet on the ground and understand the issues that they regard as important. To that end, I started meetings at the club to publicise the minimum income guarantee and encourage our local pensioners to opt into the big take-up campaign that the Government organised. I organised similar meetings in my constituency, in such exotic places as Swarcliffe, Swillington and Micklefield.

As hon. Members know, the minimum income guarantee is specifically aimed at the 2 million or so poorest pensioners who have missed out on the rising prosperity that the rest of the nation has experienced. It is right and proper that the Government's first significant action for pensioners was to concentrate on that poorer group. It is an excellent example of redistributive politics; some might call it socialism in action. Meetings, discussions and correspondence with pensioners showed that the Government's aim of targeting the poorest pensioners was not initially greeted with widespread enthusiasm. That resulted in a vigorous exchange, which became a learning process for us all.

We all had to study some history. I had to find out when pensions were first introduced. No doubt other hon. Members could say immediately that the first state pension was introduced in 1908. It was a means-tested scheme for those aged 70 and over. In the 1920s, pension provision was widened slightly. It is interesting to note that, when the state pension was first introduced, only one third of those born 65 years earlier were still alive. Today, the amount is three quarters, and by the middle of the century 90 per cent. will still be alive. Demography shows that we have a problem in future.

I do not want to go on for too long because several hon. Members wish to speak, but the next date in the history lesson is 5 July 1948, when a Labour Government introduced the Beveridge report. [Interruption.] I am told that that is also the birth date of my hon. Friend the Member for Ealing, North (Mr. Pound). A Labour Government introduced the basic state pension. It was a universal pension in return for flat-rate contribution paid by all workers, except married women who could opt out. Many people failed to grasp the key fact about that move. The state pension was intended to provide a minimum on top of which individuals were expected to save more for themselves.

The group considered changes in the 1950s and 1960s, and the growth of second-tier pensions. The state earnings-related pension scheme was introduced in 1978. We held a key debate about the Conservative Government's decision in 1980 to break the link with earnings whereby the pension had been uprated for some four years. I could go on but there is a limit to people's capacity to absorb historical facts and figures.

During our meetings we have had vigorous discussions about the relative value of flat-rate increases and means-tested or targeted support. I am pleased that many

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common assumptions in both arguments were challenged. I was made aware that many pensioners in what I would class as the middle third group—not the middle way—were aggrieved that a small occupational pension disqualified them from receiving additional state help. Many pensioners in my constituency have built up those small occupational pensions through mining, engineering and tailoring; reasonably regular employment and, I stress, good trade union organisation helped them to do that.

I would class those people not as being in the top 20 per cent. of well-to-do people, but as hard working and respectable. By building up a small occupational pension and saving, they have managed to provide a little extra for themselves on top of the state pension. Like many colleagues, I listened with sympathy to the case of those pensioners because I understand their point. I wrote to my right hon. Friend the Chancellor and various Ministers and asked them to take up the case. No doubt many other colleagues in the House did so as well. I am happy that, perhaps as a result of that pressure, the pension credit is to be introduced in 2003.

I welcome the introduction of the pension credit because it will clearly help to address the unfairness—perceived or otherwise—that the middle third group of pensioners feels that it experiences. It will address that unfairness in several ways. It will maintain guaranteed minimum incomes for pensioners, which will be raised in line with earnings over time. It will ensure that no pensioner will get less than the decent minimum that they need to live on. The pension credit will abolish the minimum income guarantee capital rules. Pensioners will have their entitlement to support assessed on their income, from whatever source—state pension, state second pension, building society interest earnings and so on—but not on their savings.

The pension credit will end what is often classed as the intrusive weekly means test. Pensioners' incomes tend to vary less than those of people of working age, so longer-term assessments of pension entitlements can be made—more like those made under the tax system. The pension credit will reward those who, because they have saved for their retirement, have a small or moderate income from savings or a private or state second pension in addition to the state pension. As things stand at the moment, it is projected that all single pensioners with an income below £135 a week, and all pensioner couples with an income below £200 a week, will benefit from the introduction of the pension credit.

Although I warmly welcome the pension credit, I would like to highlight three caveats that I hope will be taken on board, if one can take caveats on board. First, as the minimum income guarantee is, quite correctly, going to be uprated in line with average incomes, the differential between the guarantee and the pension credit will need to be maintained so that the guarantee remains a worthwhile addition to a pensioner's income.

Secondly, the pension credit policy needs to be explained in a simple and effective manner to ensure its success. Thirdly, many pensioners keep their savings in banks and building societies that do not yield as much income as they might. Could National Savings be encouraged to offer income bonds at advantageous rates to pensioners, so that those on pension credit could maximise their income from all sources? I hope that Ministers will consider those points carefully. Putting the

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pension credit in context, along with the minimum income guarantee, one can see that the Government have acted seriously and decisively to combat pensioner poverty, and to address the concerns of what I referred to earlier as the middle third group of pensioners.

When we consider that, in addition to those highly significant measures, the Government have raised the winter fuel payment, reduced VAT on heating bills, introduced free television licences for the over-75s, restored free eye tests and given one of the biggest-ever rises in the basic state pension, we can honestly say that we are making a real difference to pensioners. Anyone who talks to pensioners knows that. Several pensioners came up to me during the election campaign and told me that, for the first time ever, they had been able to start saving. It was wonderful to hear them making such a statement. I look forward to this Labour Government building on the excellent work that they have done for pensioners, and I hope that, in addition, they will consider three fairly simple measures that I would like to see introduced.

First, could we reduce the age at which pensioners qualify for free television licences? I would like that age to be brought down so that more pensioners could benefit from that extremely popular measure. Let us see whether it could come down to the age of, say, 70 at the next Budget.

Secondly, could we consider speaking to the public utility companies about abolishing the standing charges that pensioners have to pay? Many utility companies are offering a reduction in, or an abolition of, standing charges at the moment, in an attempt to win people over to their product. Let us get in touch with those very profitable public utility companies and see what their commitment to the public is.

Thirdly, we need actively to consider ways in which hip operations, knee operations and, particularly, cataract operations, the essential operations that our pensioners really need, can be speeded up. I know that the Government will listen, and I feel confident that they will retain the support of our pensioners in the years ahead. We have tried to ensure that our pensioners live not in poverty but in dignity, not on the margins of society but at its very centre and not resented as a burden on the state but treated as truly equal members of this society that we all enjoy. If we can commit ourselves to that ideal, we will do right by all our citizens.


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