Amendment of the Law

Penny Mordaunt Excerpts

Monday 26th March 2012 Commons Chamber

[Penny Mordaunt (Portsmouth North) (Con)]

My constituents welcome many measures in the Budget, particularly the raising of the personal allowance. The average wage in my city is less than the benefit cap, and it is the very people who were clobbered by Labour’s abolition of the 10p rate who will benefit most from that measure. The news of £100 million for service accommodation improvements and other welfare measures for armed forces personnel in theatre is especially welcome in the home of the Royal Navy. Today, however—with my hat as co-chairman of the all-party parliamentary group for ageing and older people firmly on—I want to focus on the Budget measures that relate specifically to that demographic.

This April, pensioners will receive the largest ever cash increase in the basic state pension, and the complex means-testing system will be reformed to create a new single-tier system set above the means test for future pensioners. That is great news. Many of us have campaigned for such a reform for a long time. I was a critic of pension credit because of the massive “under-take-up” caused by its obscurity and bureaucracy, as a result of which thousands of pensioners in my city are living in poverty. It is better to have a bigger state pension for all.

The second measure that I welcomed was the move towards a simple single-person allowance regardless of age. Half of those pensioners pay no tax, and a high proportion of those who do, do not make use of this allowance. In that respect, the situation is like that of the flawed pension credit. This move will ultimately mean 150,000 pensioners no longer have to fill in self-assessment forms. The Institute for Fiscal Studies argued that this was reasonable and that pensioners had been protected from benefits cuts and tax increases and had lost considerably less than any other demographic group. I accept that.

What I have found harder to swallow is the inter-generational comparisons drawn in the media. We cannot expect younger generations to bear the burden of the economic crisis into which Labour spent us. That burden has to be shared, of course, but the notion that pensioners’ incomes are excessive because they exceed those of younger workers is bizarre. Our attitude towards pensioners is critical, not just in how we deal with the current crisis, but in how we inspire younger generations to make provision for their older age. I think we are also sometimes in danger of missing the opportunities that a greater focus on the aspirations of older people could bring. Historically, the Treasury and many other Departments have been guilty of that.

Local authorities, too, have not protected budgets for older people. They have not been focused on unmet need, and they have not been smart about advising people to pre-empt the exhaustion of older people’s assets by helping them to plan for the costs of care.

It is not just in these more obvious areas that older people are disadvantaged, however. Let us consider, for example, the everyday frustrations of ordinary businesses applying for credit in the current straitened times, and then imagine how much more difficult it is for a grey entrepreneur with a brilliant idea for a second career, but who encounters ageism from the local bank manager. Meeting older people’s unmet needs and aspirations will not just benefit today’s senior citizens: it will make a contribution to getting UK plc back on its feet, lessen the burden on the public purse, and lighten the load for younger generations.

So how can we ensure that the Treasury is firmly focused on these opportunities? Earlier this Session, I helped the Grey Pride campaign deliver a petition with 140,000 signatures to Downing street. It asked for a Minister for older people. In my opinion, that should be not another name on the Government payroll, but a new responsibility allocated to a Minister already enjoying the view both from the Treasury and the Cabinet table. I appreciate that the Chancellor has quite enough to do clearing up after his predecessor but one, so I think that the Chief Secretary to the Treasury should assume this additional role. He might relish the savings for the national health service from a reduction in hospital admissions, the increase in capital mobility through targeted equity release schemes, and the substantial additional tax receipts from successful older workers.

We are used to hearing about sending for the men in grey suits, but now is the time for us all to listen more closely to the people with grey, or greying, hair, and there is a delicious irony in the fact that the current Chief Secretary is both the youngest Cabinet Minister and certainly the least grey-haired. I shall propose this for debate at the next Backbench Business Committee meeting.