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Pensions Bill

1 August this year represents the centenary of the introduction of the state pension. I can think of nothing better that this Government could give people than for a Minister to be able to announce, when we go to the TUC national pensioners convention in Newcastle in June, that the Government are restoring the earnings link. That would only be a first stage in restoring the value of the pension to where it should be. However one looks at it—I quoted these figures in the debate on the National Insurance Contributions Bill last December—the value of the pension as a percentage of earnings has declined. In 1950 the pension was worth 18.4 per cent. of average earnings; today it is worth 15.9 per cent. When we look around Europe, as the hon. Member for Eastbourne (Mr. Waterson) said, we see that we are the poor relation. Why should we be compared with the likes of Cyprus and Latvia? We consider ourselves to be the fourth largest economy in the world, yet we are unable to give our pensioners a decent state pension. Our state pension is worth only 45 per cent. of pre-retirement earnings compared with 57 per cent. in Germany, 75 per cent. in Poland, and 105 per cent. in the Netherlands. It is high time that the Government restored the link and got the value of the pension back to what it should be. I know that the Minister will reiterate, because we hear it whenever we raise this issue, ““Well, there's pension credit,”” but as he knows, 40 per cent. of all eligible pensioners do not claim that. It is also far more expensive to administer. It is much easier to give people what they are entitled to, and have earned, without making them go through what many of them perceive to be a demeaning process of being means-tested to get what they have worked for all their lives. We should be doing this. We have had a commitment from the Government, but it is open-ended. We want to set a date. As the hon. Member for Eastbourne said, this provision was agreed in last year's Pensions Bill. The Minister will ask how it is to be paid for. National insurance contributions are in credit at the moment, and there is absolutely no reason why that surplus money cannot be used to restore the link. It can happen now, and I want the Government and the Minister to give a clear indication that it will. If we vote on nothing else tonight, we should divide the House on this new clause to see whether the Government's commitments and promises are more than warm words. I give notice that if neither new clause 7 nor new clause 16 is pressed to a vote, we will want to press our new clause 21, because we believe that the Government have had enough time to deliver on this commitment, and we want to see it implemented now. As I said, this would only be the first stage. We want a citizens pension. Instead of setting the bar at which pensioners can have an income at £30 below the poverty line, as is currently the case, that bar should be set at the poverty line. The Government have made a commitment on child poverty. It is a testing target, but in the last two Budgets they came forward with proposals showing that they are delivering. Why can the Minister not deliver on this promise? These people have worked all their lives for us; many of them fought during the second world war to ensure that we could be here now. They deserve that right. It is wrong to say that another 3 million of them are going to die before the promise is kept. It must be kept now, as is appropriate in the state pension's centenary year. The Minister could not deliver a better speech at the TUC national pensioners convention in the constituency of the hon. Member for Newcastle upon Tyne, Central (Jim Cousins) than to say, ““We've delivered on our promises.””