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Fairness and Security in Old Age

Part of the debate – in the House of Commons at 1:14 pm on 10th September 2003.

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Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions 1:14 pm, 10th September 2003

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"welcomes that from 2004–05 Government will be spending £9.2 billion extra per year in real terms on pensioners compared with the 1997 system;
notes this is £5.7 billion more than if the basic state pension had been linked to earnings;
recognises that the poorest third of pensioners will be £1,600 a year better off in real terms compared with the 1997 system;
applauds Government action for older people on health and social care, fuel poverty, transport and lifelong learning;
approves of action to stabilise the care home sector by increasing resources available to councils to increase care home fees where required;
supports the Government's commitment to increase resources available for social services by on average six per cent. a year in real terms over the next three years, the expansion of intensive home care support, and the largest ever sustained increase in funding for the NHS;
welcomes the real terms increase of 25 per cent. in grant to local authorities since 1997, and the review of the balance of funding between central and local government;
further welcomes the successful introduction of universal banking services, giving Post Office access through a number of current accounts, basic bank accounts and the Post Office card account;
congratulates Government on its intention to bring in Pension Credit from October;
notes eligible households stand to gain on average £400 a year;
and applauds the actions of the Government which result in over 1 million people being ready to receive Pension Credit who will gain more money than they had before."

We very much welcome this debate on fairness and security in old age. Clearly, the ageing of the population is one of the major challenges for societies such as ours. Indeed, it is the major factor behind what I might term the rise of demographic politics, although low birth rates across Europe and much of the western world are another major factor behind demographic politics. We face serious challenges and there are some serious questions to be asked and answered.

Mr. Burstow raised many such questions, and many of them have huge resource implications. In debating these matters, however, we must avoid two dangers. The first is an excessive negativism and pessimism about the ageing of our population. Let me turn to the words of a former tutor of mine, Professor Richard Titmuss of the London School of Economics:

"Viewed historically, it is difficult to understand why the gradual emergence in Britain of a more balanced age structure should be regarded as a 'problem of ageing'".

I think that that is a text for our times, although the book was published in 1963. Let us avoid pessimism about ageing. The second danger is any temptation to suggest that there is some conflict between different generations or that they are in a battle for resources. Incidentally, I am not accusing the hon. Gentleman of falling into either of those traps, but trying to make two broad points.

In looking at the demography of ageing, we need to address two trends. First, there are many ways in which we can paint a statistical picture of the general ageing of our population. Back in 1901, a few years before Lloyd George introduced the old-age pension at the generous rate of five shillings, the 65-plus population represented some 5 per cent. of the overall population. Those aged 65 and over now represent approximately 16 per cent. By the middle of this century, 2051, that level will rise to 24 per cent. However, there is another trend that we need to understand—the ageing of the elderly population itself and the rise in the number of people in their 70s and 80s. Back in 1901, only 61,000 people were over 85, but the figure is now 1.1 million and it will be 3 million by 2051. The ageing of the population has major implications for pensions issues and the ageing of the elderly population has particular implications for the social and health care issues that the hon. Gentleman raised.

To give another bit of broad context, we also need to recognise the life cycle of the typical 21st century Briton. The Briton of the 21st century may well spend 20 or even 25 years in education and training, preparing for economic activity. That hugely contrasts with the situation of their grandparents and great grandparents, who would have left school at 14. Of course, although when people retire—we all hope that they will be able to retire later if they wish to do so—they may currently face retirements lasting 20 years, as the century progresses, they may last 25, 30 or more years.

I mention those facts because, in terms of such demography, we need to ask serious questions, as we are doing, about how we will afford education for a long period at the start of people's lives and decent retirements at the end. Although we often have separate debates about those issues, they are linked in terms of resources and life cycles.

We should also avoid generalisations about "the old". We all fall into that trap, and I shall probably do so today. However, when we consider groups of elderly people—some now talk about ageing starting at 50, which I can hardly believe—we are clearly talking, in the light of the fact that some people are now surviving as centenarians, about different cohorts of people with different needs, and about different financial and social circumstances. Such cohorts have different interests and may not agree with each other about the allocation of resources, and we should recognise that.

While much of our debate is perfectly properly about the rights of elderly people to decent health and social care, and decent retirement pensions, let us also remember and pay tribute to the fact that this generation takes very seriously not only its rights, but its duties and responsibilities. It takes its responsibilities seriously in terms of volunteering. Many of our volunteer army are the younger old, who are often looking after the older old. Many are carers of spouses with dementia or children with serious conditions. We need to recognise the responsibilities taken on by the old, as well as their rights, and obviously we need to combat age discrimination.