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Last Updated: Wednesday, 8 December, 2004, 15:27 GMT
The battle for the grey vote
By Brian Wheeler
BBC News political reporter

A grandmother with her grandson
The race is on to win over older voters
Every politician knows they ignore the elderly at their peril.

The over-65s are twice as likely to vote as the under 25s - and there are twice as many of them.

According to Labour pensions guru Frank Field the next general election could be the first at which the majority of voters who turn out will be old age pensioners.

But research suggests it is not retired people the parties should be worried about when drafting their next manifestos.

The elderly tend to stick with the party they have supported all their lives. They are not, on the whole, swing voters.

A recent report by Age Concern identifies the next generation down, the 45-to-69-year olds, as the group who truly hold the keys to Number 10.

Higher taxes?

The children of the post-war baby boom are a fickle and demanding bunch, it suggests, and their concerns - on health, education, crime and pensions - are likely to dominate the next election campaign.

"The baby boomers are a key swing cohort. They swung to Thatcher in 1979, Blair in 1997 and many are undecided about who to vote for at the next general election," says Gordon Lishman, Age Concern's director general.

PENSIONS - THE FACTS
By 2050 the average 65-year-old male will live another 27.7 years
The average male retirement age fell from 67.2 in 1950 to 63.1 in 1995, only 53% of women are employed at age 59
Private or state provision will have to rise by 57bn if the average retirement age doesn't increase
In total, 11.3 million people in work are not making contributions to any private pension scheme
Only 29% of employees of small and medium sized firms are members of an employer-sponsored scheme
Membership of final salary schemes has halved since 2000
Source: Pension Commission report

One of the biggest concerns for this group is how they are going to afford to live - and pay for residential care - in their retirement.

Since Labour came to power in 1997 it has tried to hold down spending on pensions to free up cash for health and education.

Apart from the occasional one-off increase to keep the pensioner lobby at bay, it has refused to re-link the value of the basic state pension to earnings.

Instead it has focused the available money on the poorest.

But falling stock market returns have decimated the value of many occupational pensions and an ageing population means many more people than previously thought may be forced to rely on the state in their old age.

Tony Blair has said there are "tough choices" ahead - normally New Labour code for higher taxes.

Means-testing

Labour's Pensions Commission has already said a mix of higher taxes, more saving and a higher average retirement age is needed to solve the pensions crisis.

Labour's policy of targeting money to the poorest pensioners has also meant a big extension of means-testing.

In opposition, Labour attacked the Conservatives for increasing means-testing, but since Tony Blair came to power, the proportion of pensioners on means-tested benefits has risen from 40% to 59%. It is projected to reach 73% by 2025 on current trends.

Critics claim this policy reduces incentives for people to provide for themselves.

People know they will receive fewer benefits from government if they have private income, so why bother saving, the argument goes.

Many also object to the endless form-filling and the intrusion into their private finances.

Earnings link

The Conservatives have pledged to phase out means testing by increasing the basic state pension.

Life expectancy chart
They would also restore the link with earnings, which they originally abolished in 1980.

This would be worth an extra 7 a week to single pensioners and 11 a week to couples by the end of a Tory government's first four year term of office.

Shadow Work and Pensions Secretary David Willetts is writing to every pensioner in a target seat to tell them how much better off he thinks they will be under a Tory government.

But he could find himself being trumped by the Liberal Democrats, who have also set their sights firmly on the grey vote.

'Grab-a-granny'

The Lib Dems are offering free personal care - help with washing, eating and dressing - to people in long-term residential homes, with no one forced to sell their home to foot the bill.

The party would also give 25 more a week to pensioners over 75.

And it would replace the council tax - which hits pensioners on fixed incomes - with a local income tax, which pensioners would not have to pay.

It is also throwing in free off-peak transport for all pensioners and disabled people.

Not for nothing has the party's draft policy document been dubbed a "grab-a-granny" manifesto.

Tide turning?

Labour election strategists are also painfully aware of the importance of older voters.

One idea being floated is to automatically cut council tax bills of the 1.5 million pensioners who currently fail to claim a rebate.

Another, less attractive, option - increasing the retirement age to 70 - has already been ruled out by Alan Johnson.

The battle goes to the heart of Labour's next election manifesto - and could even tip the balance of power in the eternal struggle between Number 10 and 11 Downing Street.

Until now, pensions policy has largely been run from the Treasury.

But with Blairite Mr Johnson replacing Andrew Smith at the Department of Work and Pensions, the tide could be turning for Chancellor Gordon Brown in an area of policy he has traditionally considered his personal fiefdom.




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