Finance (No. 4) Bill

Debate between Baroness Clark of Kilwinning and Ian Swales

Thursday 19th April 2012 Commons Chamber

[Katy Clark]

The hon. Lady is attempting to rewrite history. She will know that the previous Labour Government brought in a whole range of reforms to take account of the increase in the living age. My hon. Friend the Member for Wirral South (Alison McGovern) highlighted the fact that that increase is far from uniform, owing to health inequalities. Life expectancy has not increased so much among people on lower incomes and from lower socio-economic groups, for example.

[Ian Swales]

The hon. Lady mentions the need to give notice of the changes. Does she know how much notice was given of the freezing of the age-related allowance in 2010-11?

[Katy Clark]

Government Members keep trying to return to that point. As I have said, the freeze applied to all allowances, and it is not comparable to what we are debating. This is a specific debate about long-term Government policy towards pensioners and the long-term cumulative effect that this change will have.

As I say, this is the wrong time to come forward with changes of this nature. We heard a well-informed contribution from the hon. Member for Banff and Buchan (Dr Whiteford) on the situation faced by pensioners who rely on private savings. I suspect that many of us as constituency MPs have had a considerable number of representations from individuals who have planned their pension and retirement savings over many years on the assumption that higher rates of interest would apply, enabling them to live off the savings they had made over a long period. I very much hope that in 2013, when these changes come into force, the economic situation will be different, but I suspect that those pensioners will be in a similar position. That is another powerful reason why now is an incredibly bad time to make changes of this kind. In my view, they should have been introduced with far greater notice.

The Government should know that pensioners are being disproportionately affected by the policies they are pursuing. We hear a great deal from Government Members about their ambitious deficit reduction plan—so far, of course, we have only seen the deficit increase. What we are seeing locally, and I suspect they will be seeing it, too—[Interruption.] Government Members are well aware that they are borrowing more and that the deficit is going up. In their constituencies as well as mine, however, local people will be experiencing the start of draconian cuts in public services, which will have and are already having a disproportionate effect on those in retirement. Even before the current economic difficulties, we were all aware of the struggle councils were having in trying to provide the social services required for our changing demographic and our ageing population.