Cost of Living Increases: Pensioners

Taiwo Owatemi Excerpts

Monday 21st March 2022 Commons Chamber

[Beth Winter (Cynon Valley) (Lab)]

I rise to speak in favour of the motion, which clearly highlights the fact that older people and pensioners are really at the sharp end of the Tory cost of living crisis, and that they urgently need Government assistance. There are 2.1 million pensioners living in poverty, and there has been an increase in older people’s poverty from 13% to 18%, according to most recent data.

We also know that pensioners are more likely to live in fuel poverty. Age UK reported that, by October of this year, pensioners could be using up to 20% of their income on fuel.

[Taiwo Owatemi (Coventry North West) (Lab)]

My hon. Friend is making an excellent point on the impact of energy bills on pensioners. Pensioners in my constituency of Coventry North West are having to spend twice as much on their energy bills compared with those under 30. Does she agree that this Conservative Government need to do much more to support pensioners to weather the storm of this horrible cost of living crisis?

[Beth Winter]

I fully agree with my hon. Friend. Indeed, this Government have an absolutely appalling record. It is financial punishment for older people. I never cease to make reference to the fact that behind these statistics are real people. In my constituency in Cynon Valley, older people are disproportionately affected by the cost of living crisis. We have an older housing stock—terraced housing—and high levels of health inequality.

To add insult to injury, two of the campaigns I am involved with in my constituency show that older people are being short-changed by billions of pounds. I refer to the Women Against State Pension Inequality campaign and the Mineworkers Pension Scheme. I thank in particular Mi Morgan and her husband in Cilfynydd in my constituency, who work tirelessly on the Mineworkers Pension Scheme campaign, and Dilys Jouvenat, who leads the WASPI campaign back home in Cynon Valley.

People who have helped all their lives to build this country and their communities are suffering, and this Government are not responding to their needs. The cost of living crisis is driven by the Tories’ betrayal of their manifesto pledge to maintain the triple lock and by the regressive tax increases on working pensioners. Perhaps most importantly, it is being driven by inflation outstripping salaries, social security and pension payments, and all that is happening on the Tory Government’s watch.

On national insurance, under the Chancellor’s plans, around 1.3 million working pensioners will be asked to pay the health and social care levy through national insurance. Labour is calling on the Government to halt their poorly-thought-through tax rises, particularly when there are people with broader shoulders who could take the burden that must be borne.

Worst of all, the Tories have chosen to impose a real-terms cut to state pensions this April by sticking to last September’s rate of inflation, which was 3.1%. We know the rate of inflation is likely to be much higher than that. That is why last month in this Chamber I warned that the proposed pensioner up-rating order would increase the level of pensioner poverty in this country, and supported the Child Poverty Action Group, the Joseph Rowntree Foundation and other organisations that called for a 6% increase—and indeed we need an even higher increase now, given the likely coming rise in inflation. The 3.1% increase in pensions is an absolute insult to older people in our country.

I will quicky refer to what is happening in Wales, where the Welsh Government are trying to take action. In their recent budget, they extended eligibility criteria for the winter fuel scheme to more people, which has been welcomed by groups such as the Bevan Foundation. The Older People’s Commissioner for Wales has announced an action plan: in addition to extending the eligibility criteria, she says we must maintain that for the second payment due later this year, and that we need a plan published for increasing the take-up of pension credit. Recently the Welsh Affairs Committee, on which I sit, published a report on the benefits system in Wales, noting that much greater awareness raising of people’s entitlements to benefits is needed, because a total of £1.7 billion in pension credit went unclaimed last year.

The UK Government must take urgent action. Some of the things they could do include increasing their financial offer to cushion the rise in energy bills through a windfall tax on those who can afford it, cutting VAT on energy bills and cutting the national insurance rise. The 3.1% rise in pensions, when the Bank of England is hinting that inflation may hit 10%, tells us all we need to know. The Chancellor must act this week. I urge hon. Members to support this motion.