Intergenerational Fairness

Debate between Lord Field of Birkenhead and Lord Jackson of Peterborough

1st reading: House of Commons
Tuesday 28th February 2017 Commons Chamber

[Frank Field]

Again, I could not agree more. I did not want to fan out the debate—I wanted to keep it as tight as possible so that we might get some agreement—but these are proper options that have to be considered. There is no way, sadly, that we as pensioners can get all the goodies and expect other people to pay for them. The issue of how we integrate care into the NHS will grow in importance as each month of this Parliament passes.

The fourth and last way in which we could keep the triple lock would be to raise the retirement age continually. Again, I make a plea to Front-Bench and Back-Bench colleagues, because such a policy would adversely affect our constituents almost more than any other. The Select Committee has published the names of the constituencies where the average life expectancy for males is such that they simply will not reach retirement age if we say that we will square the books by increasing the retirement age from 68, which is the figure that it is expected to rise to, to 70 or 71.

There is a commonality between the constituents of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who leads for the Opposition on these matters, and my constituents. We do not say that no male in our constituencies will on average receive a pension if we raise the retirement age to 70 or 71, thank God, but we know that swathes of our poorer, older and frailer constituents will not actually reach the retirement line—the point at which they pick up the state retirement pension—at the age of 70 or 71, because they will simply have died.

[Mr Stewart Jackson (Peterborough) (Con)]

As usual, the right hon. Gentleman is making an excellent and well considered speech. Notwithstanding what he says, given that average life expectancy has increased from 71 in 1960 to 81.5 now, and that 9.9 million people over 50 are working, people surely want to work longer—I know that the situation is different for those who work in heavy industry, which has killed a lot of people shortly after their retirement—and to be able to exercise their choice to do so.

[Frank Field]

I would not for a moment—look at me—say that people over the state retirement age should not be allowed to work; far from it. However, there is a difference when people have had jobs such as those in factories—I have not had such a job—and are simply worn out by the cost of such jobs, meaning that they will not make it to the finishing line if we keep extending that line. I am therefore making a plea that we do not go down the route of keeping the triple lock by just continuing to raise the retirement age, saying, “With fewer of you drawing the state retirement pension, we will balance the books.”

That approach was one of the alternatives, and I will go through the others again. One was just to continue putting all the cost on people of working age, and I have made a plea about why we should not do so. Another is to think we can just tax and tax again, but I simply do not think that Governments can get elected on that basis. They cannot put up income tax by 50% over a number of Parliaments and expect to be elected—and thanked in the process. Finally, I do not think that any party that wishes to be elected can let borrowing rip to the extent that would be needed to balance the books while keeping the triple lock.

I therefore make a plea to both the Government and the Opposition that they look carefully at the Select Committee’s proposal for a double lock-plus. Pension credit and the coalition Government’s triple lock have already—this will continue—raised the value of the state retirement pension compared with average earnings to a historical high. The Select Committee report says that by 2020, we should peg the state pension against earnings at the level at that time. The double lock-plus would ensure that the state pension would never from that day forward fall relative to average earnings. As there will be—perhaps in the very short term—periods during which price inflation exceeds earnings, we should honour the prices link at those times, albeit coming back to the earnings link as soon as possible. In that way, we would not actually have to face many of the terrible scenarios I have painted.

As my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) said, the cost of the existing policy has been borne by people of working age. We should not pursue a policy of continuing to take money from that group, especially those who already find it difficult to put food on the table for their children for every meal in the way that our parents fed us when we were growing up.

This is not about begging both sides. If people came here with a script saying that they were going to reject the Select Committee’s report, I ask them not to read that passage, but perhaps instead to enter into discussions more widely with the House of Commons about how we can guarantee standards of living against pensioners’ earnings in 2020. We must ensure that they are never eroded, but we must also ensure that this policy of making increases at the expense of the working population ceases. We should all put such a programme to the electorate when the general election comes.

Finance Bill

Debate between Lord Field of Birkenhead and Lord Jackson of Peterborough

Tuesday 2nd July 2013 Commons Chamber

[Mr Frank Field (Birkenhead) (Lab)]

Had we voted on the new clause tonight, I would have voted for it. I encourage the Government to be much more ambitious in the review that they are undertaking. The new clause is about how we maintain greater tax equity between households with two earners and those with one earner, whichever sex those earners may be.

When the Government abolished child benefit for higher rate taxpayers, they did an injustice to the tax system. May I briefly recall why? The background to this, which you will remember, Madam Deputy Speaker, is that we used to have family allowances and child tax allowances. The tax allowance and the benefit were merged into the single payment of child benefit. Child benefit then had two functions: it was a cash payment to mothers but it also maintained tax equity between people further up the income scale who have children and those further up the tax scale who do not have children. By abolishing child benefit for higher-rate taxpayers, the Government forwent the one instrument at their disposal to maintain tax equity for higher-rate taxpayers between those who have no children and those who do have children.

Might I make a plea to the Minister? When the Government undertake the review about the workings of this measure, will they extend it and rectify the injustice whereby in abolishing child benefit for higher-rate taxpayers they abolished the tax-free income for higher-rate taxpayers if they had children and therefore put them on the same level as people who do not have children? We never had that in the tax system before; we have had it in the past couple of years.

[Mr Stewart Jackson (Peterborough) (Con)]

The House will know that I led a debate on this issue in Westminster Hall on 28 November last year. I, too, pay tribute to my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) and others who have been so stalwart in this campaign.

Perhaps the right hon. Member for Birkenhead (Mr Field) will have a word with his Front Benchers, because this is about social justice and redistribution. It is about a transferable allowance for married couples disproportionately benefiting those in the lower half of the income distribution much more than under the current policy of encouraging the personal income tax threshold. That is a fact.

The “make work pay” argument is very important too. Transferable amounts would help to make work more rewarding for many of the poorest in society. Moreover, we are out of line, on international comparisons, in not supporting the family.

Those are important issues and this is a big subject. I am sorry that the Minister’s speech was so short, but delighted that those on the Treasury Bench have seen fit to give us these assurances. We will hold them to their word.