Elimination of Poverty in Retirement (Hansard, 1 March 1994)

§ Mr. Jeremy Corbyn (Islington, North)

I beg to move, That leave be given to bring in a Bill to require local authorities and health authorities to monitor the condition of their retired population, to eliminate standing charges on gas, electricity and water, to exempt pensioners from licence charges and telephone rental, to extend pensioners' concessionary fare schemes, to make provision for the calculation of old age pensions by reference to average earnings, and to appoint a Minister with responsibility for retired people. We are in the throes of a debate on the future of the welfare state. Day by day, various Ministers pluck out of the air yet more and new statistics to claim that this country can no longer afford universal benefits or a universal welfare state. But, since 1979, that very same Government have presided over an economic strategy in which the richest fifth of the population has increased its share of national income from 35 to 43 per cent., while the share of the poorest fifth has dropped to a mere 6 per cent. of national income—from 10 per cent. in 1979, even then an inadequate figure. In Britain, welfare spending as a proportion of both national income and Government expenditure is considerably and significantly lower than in other European countries.

Yesterday, the Under-Secretary of State for Social Security, in an answer to my hon. Friend the Member for Carmarthen (Mr. Williams) let the cat out of the bag. He was finally brought to the Dispatch Box to admit that, since 1979, average earnings in this country have risen by 35 per cent., and the average state old-age pension has risen by 3.2 per cent. Yet the same Minister claimed that pensioners' average income has risen by 39 per cent. during that period.

What the Minister fails to discuss or admit is that the supposed 39 per cent. increase in the average income of pensioners hides a multitude of sins. It disregards the fact that many older pensioners, particularly older women pensioners, have no access to occupational pension schemes, savings or investments. They are not the people who read the Financial Times to see how their shares are going: they are the people who wonder how they will be able to pay their gas or electricity bills at the end of each quarter.

The use of global average figures is a dangerous trend. Groups that we used to refer to as on the lunatic right and now just think of as completely loopy—such as the No Turning Back group and the Adam Smith Institute—seem to be trying to join in the debate.

The No Turning Back group proposes the abolition of the state earnings-related pension scheme and offers the opt-out of state pensions in return for bribery in the form of national insurance payments. The same Government now pay more and more money into the national insurance fund as a means of promoting the private pension industry. I believe that the Government's pension strategy is largely about promoting the private pension industry, at the expense of the welfare state and the principles of a state scheme.

Yesterday, the Adam Smith Institute came out in its true colours and went even further: it proposed the wholesale abolition of the welfare state. Some Conservative Members propose the destruction of the welfare state in its entirety. The Secretary of State claims that he is the great defender of the welfare state, but, under questioning, he admits that, if the Government stay in office until the end of the 799 century, the state old-age pension will be reduced to a mere 10 per cent. of average earnings, from a high of 26 per cent. when the last Labour Government left office. Inadequate though it was, the pension then was considerably better than it is now.

This is not the first time that I have introduced such a Bill. In fact, it is the 11 th time that I have introduced the same or a similar Bill designed to set out a comprehensive programme to improve the lot of the elderly in this country. The way in which the elderly are treated is a measure of a society's civilisation. The way that we in this country treat our elderly population is a standing disgrace. Too many of them live in poverty, too many die of hypothermia and too many live in fear of their gas, electricity and telephone bills, and having to pay for their television licence.

The Bill is a comprehensive measure. It would require the appointment of a Minister to co-ordinate all aspects of policies for the elderly. They are concerned not simply about pensions, but about education, recreation, culture and a variety of subjects, including housing.

It would also require both local authorities and local health authorities to produce an annual report explaining what they do for their elderly population, what services they provide, how they provide them, what the life expectancy is, and how effective the services are, because too many housebound, bedridden elderly people are suffering from enormous cuts in social services expenditure. They are not in a position to lobby, either here or at town halls. They are the victims of Government spending cuts in respect of local health authorities and local councils.

In addition, value added tax is a wholly regressive form of taxation. The compensation measures proposed by the Government, which they plan to introduce in April, are wholly inadequate. They take no account of the regional differences in fuel bills. Fuel bills tend to be higher where it is colder. Scottish bills tend to be higher than English bills, and so forth.

Likewise, the standing charges for gas, electricity and water, the telephone rental and the television licence fee are like another poll tax for low-income households. In the Bill, I propose that the vast profits being made by the privatised gas, electricity and water companies should instead be put to good use by being channelled into abolishing the standing charges for pensioner households, both to save them money and to protect them from having supplies being cut off.

The right to be able to get about is crucial. In London, we are very proud of the travel permit scheme for pensioners. Its introduction was a great achievement by the Labour-controlled Greater London council, and it has been a mighty struggle to maintain it. Similar schemes have been introduced in many other cities. I believe, however, 800 that it should be extended to the whole country. If the Republic of Ireland can provide a national travel scheme for its retired people, why can this country not do it?

I come now to the crucial part of the Bill. Too many elderly people live in great poverty. Too many are unable to make ends meet. Too many have no savings, and those who have them find that the savings are often eaten up because of the rules on the use of savings before housing benefit and the like are paid.

I therefore propose that the first thing to be done is the recalculation of the state old-age pension to restore the link that was so cruelly and brutally broken in 1980. Until 1975, the basis of the calculation of the pension each April was the link between it and average earnings. The basis is now the average price rise, which means that, as a proportion of average earnings, the state old-age pension has fallen and fallen. As I said earlier, it is due to fall to a mere 10 per cent.

I propose that the link be restored, and that we aim to be able to pay a state old-age pension of half average earnings. It could be achieved, although it would require considerable expenditure, and it would bring us somewhere near the European average in countries where they are trying to protect and look after their elderly.

Those who campaigned a century ago for the principle of a welfare state and for a state old-age pension to banish for ever the fear of the workhouse and of poverty in old age would be appalled if they could have foreseen that, in 1994, we would live in a society which, having achieved a universal welfare state, was prepared to preside over its destruction in favour of greed and private profit.

My Bill seeks to do something different. It seeks to recognise that the richest in the country have done very well over the past 15 years. We spend far too much money on arms; we could be spending it on socially useful things. We are allowing too many hospitals and social services to be destroyed. The Bill goes some way towards redressing the balance, and eliminating once and for all the fear and misery of poverty in retirement.