[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

One of the most depressing experiences that I have had in the House was serving on the Select Committee on Social Security in the mid-1990s and investigating the Maxwell pension fund. Robert Maxwell appeared to be on a permanent holiday as far as pension contributions were concerned. Like all permanent holidays, it disappeared, taking the funds with it. My hon. Friend is absolutely right that inequity in the running of pension funds is crucial. I realise that things have moved on a lot since then, but there are still reasons for concern.

To quote some statistics on the current scale of pensioner poverty in Britain, the number of people living in severe poverty-on less than 40 per cent. of the median population income-has increased by 600,000. The incomes of the poorest quarter of pensioner households rose by less than 1 per cent. last year, and the real incomes of the poorest single pensioners dropped by 4 per cent. At least 15 per cent. of pensioners, or more than 1.5 million people, live in persistent poverty, having lived on less than 60 per cent. of the median population income for three of the last four years. We have to recognise that there are significant pockets of pensioner poverty and deprivation.

As a proportion of average working pay, the state pension in Greece is the highest in Europe at 95.7 per cent. and that in the UK is among the lowest at 30.8 per cent. Those are headline figures that do not necessarily include other sources of income from state benefits, but one can see the scale of the issue and the effectiveness and efficiency of a non-means-tested, high-value state pension, compared with any other form of benefit. I think everyone now recognises that means-tested benefits tend to end up with low take-up and with a lot of people missing out.

There are two huge areas of even worse poverty. The hon. Member for East Dunbartonshire rightly drew attention to the problem of the general low level of pensioner income among women. As a union organiser in the 1970s and 1980s, most of the members I represented were women working part time in school meal or school cleaning jobs. Unfortunately-I say unfortunately because of the consequences-they were offered the right to pay a lower rate of national insurance contributions. Understandably, offered the choice between paying A or B, where B is lower than A, most people chose to pay B without much thought for the long-term consequence of smaller pensions. That was a main contributory factor to poverty.

Another major contributory factor was the lack of job security for many women workers. Most men at the time tended to be in occupational pension schemes, whereas women did not. That was what the Barbara Castle legislation tried to fix and what the Conservative Government of the 1980s tried to destroy. The median income for women on retirement is only 57 per cent. of that of men. Only 30 per cent. of women who reach state pension age are entitled to a full basic state pension, compared with 85 per cent. of men. One in five single women pensioners risk being in poverty in retirement. Almost 63 per cent. of divorced and separated older women have no private pension income.