[Mr. Roger Gale in the Chair] — Pensioner Poverty

Part of the debate – in Westminster Hall at 10:00 am on 23rd February 2010.

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Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 10:00 am, 23rd February 2010

After due consultation.

I accept the point made by the hon. Member for Northavon about the current uprating. To return to the link with earnings, we must place responsibility where it is due. The 1980 Conservative Government broke that link, which was a monstrous thing to do. They then moved on to the Social Security Act 1986, on whose Standing Committee I had the misfortune to sit. The Act put into law a continual reduction in the value of the state pension, abolished the state earnings-related pension scheme and set up the principle of a market for private pensions in this country, which is rather at variance with the European tradition and is still playing out today in the level of the state pension. Many people suffered grievously from the mis-selling of pensions and corrupt private pension schemes.

We are still in that bind and cannot seem to get the idea that in a welfare state it is the state's responsibility to ensure the elimination of poverty among everyone in retirement. That must be a primary responsibility. We accept the welfare state in terms of universal health care and education provision; we should also ensure that we accept the state's major responsibility to ensure the elimination of all poverty in retirement. However, it would be ridiculous to say that there have not been huge changes over the past 10 years. There was a big debate before the 1997 election, particularly in the Labour party, about whether we should re-link pensions to earnings and make the state pension the basic motor for the provision of income on retirement or go for what has turned out to be pension credits, pension top-ups or whatever nomenclature is put to them. Essentially, that debate was lost by those of us who wanted an immediate restoration of the link between pension and earnings and therefore a much higher basic state pension.

Of course I welcome pension credits in that they put money into the pockets and handbags of people who would not otherwise have it. I regularly attend meetings of the Islington Pensioners Forum, and I always say, "Claim every single thing you can." However, I recognise, as I am sure does everyone in this Chamber, that under a means-tested system involving a complicated application process, no matter how nice, supportive and helpful the people are on the other end of the phone line or in the local office, many people simply will not claim. Either they feel that they should not, or they are put off by the bureaucratic procedure involved. We must recognise that as one big problem.

The other-I will return to it in a moment-is that occupational pension schemes are disappearing quickly as company after company tries to close final salary schemes to new members and move to earned savings schemes, which are not as beneficial. Such schemes, of course, become less sustainable anyway. A pension system that relies heavily on stock market prices gives a pretty grim outlook for an awful lot of people in work at present. Although they would not thank me for saying so, many among the present pensioner generation are better off than those further down the line are likely to be under the current system. We must think seriously and carefully about that.