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Raising of the Pension Age

The hon. Gentleman makes a good point, particularly about manual trades and people from lower income backgrounds. I agree with the Government's pension paper of December 2002, "Simplicity, security and choice: Working and saving for retirement", which said:""It is important that people have the choice to work beyond age 65, whereas raising the State Pension age would leave many of those on low incomes with no option but to continue working."" It continued:""An increase in State Pension age would also reduce long-term public expenditure"—" that is why it is attractive to the Tories. However, the paper continued to say that that""would disproportionately affect lower-income people who rely more on state benefits in retirement. The same people tend also to have lower life expectancies, and so, with fewer years in retirement, they would see a disproportionate reduction in their income. The effect might be particularly severe on those who have done manual work for long periods in heavy industries, in which there is a record of low life expectancy."" That is exactly why I believe that raising the pension age without addressing that structural unfairness would be one of the biggest boosts to inequality in this country for decades. Here is what the Marmot review, which was published last month, had to say:""More than three-quarters of the population do not have disability-free life expectancy as far as the age of 68. If society wishes to have a healthy population, working until 68 years, it is essential to take action to both raise the general level of health and flatten the social gradient."" I have no confidence that that will happen if the Tories get in. The Pensions Commission found that there was a major gap in life expectancy between socio-economic classes, affecting both men and women, and it is not narrowing. I believe that it will worsen with the raising of the pension age. There has also been change with the introduction of the employment and support allowance, which is what a working-age person who could not draw a pension would have to live on. That is less than the basic state pension, and considerably less than what used to be called the minimum income guarantee for pensioners. That, in my view, makes raising the pension age unacceptable for most workers, but especially those from poorer backgrounds, and I oppose it. Pensioner poverty is quite extensive. The Select Committee has discussed the fact that, despite a marked decline since 1997, there are still 2 million pensioners in poverty, and 1.1 million who live on less than 50 per cent. of median income, which it describes as unacceptable. The basic state pension is too low, and it falls too far short of removing poverty in retirement for all pensioners. The argument is that many people now have savings and private pensions to supplement their income, but I would add that many do not. The supplementary income argument is used to drive down the relative worth of the basic state pension. I believe that that will continue, especially with a Conservative Government, and that that argument will be used, in time, to break the link with earnings again, if it is ever brought in. I do not approve of that argument by which the basic state pension can be allowed to decline, as it inevitably means extensive pensioner poverty. Tax breaks and tax credits for the wealthy are enormous. Limiting them, as the TUC suggests, could save £10 billion, and such an approach would be reasonable. For example, the TUC says that""just 3.1 per cent. of the taxpayer population receive 31 per cent. of all tax relief, averaging £18,750 a year"." If it were capped to £5,000 for those earning more than £100,000, that would raise £10 billion a year, which could make a significant contribution to closing the deficit. The TUC points out:""People earning between £70,000 and £100,000 on average claim £4,500 in tax allowances, so a £5,000 limit for those earning more than £100,000 seems a fair limit"." I agree with that, and it seems to be the right way forward. The basic state pension could be raised over time to an above-poverty level, and tax could be properly applied to overall income so that it could be paid for, including by wealthy pensioners. I heard the Prime Minister say that the cost of the two wars that we have just had was £18 billion beyond the core defence budget. The Defence Secretary added yesterday on the radio that there is another £5 billion to come next year for Afghanistan. The approach was being described as "money no object". I believe that with no war, and with a degree of will, proper income for pensioners could be arranged without raising the pension age.