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Monday, 17 January, 2000, 22:02 GMT
Pensioners 'insulted' by 75p rise
The government has "insulted" pensioners by offering them a 75p increase in the basic state pension, MPs have heard. Liberal Democrat social security spokesman Steve Webb condemned the 1.1% rise, taking the single pension to £67.50, as "inadequate". In an opposition day debate on pensioners' needs, Mr Webb told MPs a "sentence of death is hanging over the basic state pension". He said: "Pensioners I talk to are insulted by being offered 75p next April. "They are also resigned because they have come to the point where they expected nothing better. "Successive governments have left pensioners feeling they cannot trust any politicians and this is no more than they could have expected." The Liberal Democrat motion condemning the increase was defeated by 300 votes to 41.
Mr Webb said 83 Labour MPs, including former ministers, were among those who had signed an early day motion condemning the rise.
Labour's former social security minister, Frank Field, said he was one of those who had willingly signed the early day motion. He said: "I'm probably not the only person on this side who signed it because while one is pleased and proud with what the government has done up to now - I think many of us hope the government will be doing even more by the time of the general election. That's why we signed your motion." Mr Webb said the debate was not just about the size of the pension increase but also whether the basic state pension had any future at all. "If we don't stop the rot now there will be no pension left to save," he warned. He pointed out that state pensions had risen from 13% of average earnings just after World War II to 20% in the early 1980s, but had now fallen back to about 15% - after the link between earnings and pensions was broken. 'Myth' Social Security Minister Jeff Rooker said the average pensioner couple was living on £248 net a week, using 1996/97 figures. The average income for a single pensioner was £129. Couples where the male was over 75 received an average income of £226 a week. Where the male was below 75, the average income was £259 a week. Mr Rooker said the idea that most pensioners were living on £66.75 a week was a myth and pensioner incomes had in fact gone up over the last 20 years. He said: "It is true there is a gap between the poorest pensioners and those who are the most well off - and that has actually significantly widened. "The incomes of the least well off 20% of single pensioners have only risen by 28% in real terms. The incomes of the richest 20% of pensioners have increased by 76% in real terms." Mr Rooker said there were many years when, under a Tory government, the basic state pension had not gone up. "It wasn't the norm even for an annual increase," he said. "The myth was that pensions had risen every year, that they've always been linked to earnings and that the basic state pension has always been enough to live on - all of those are untrue." Jacqui Lait, for the Tories, said the government was adding to the plight of pensioners by "heaping stealth taxes" on local authorities who in turn passed on the costs to the pensioners in the form of council taxes. Mrs Lait said pensioners would be unable to pay the increases in the cost of living out of the extra 75p. "Doubtless many of them will take these increased costs out of their £100 heating allowance, is that really what the government wanted?" she asked. |
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