The U.K. has the advantage of being the fourth largest economy in the world. The Labour Government promised that pensioners would share in increased prosperity. This has not happened. The Government will not accept that pensions are in crisis. The facts are somewhat different.
Many pensioners live in poverty. On average 20,000 older people die each winter from cold related illnesses. This despite the fact that the U.K. does not suffer from the harsher climate of some other countries with lower comparable death rates.
There are many reasons why pensioners are treated so badly. Pensions are not as high on the governments agenda as Education, Transportand the National Health Service. Of course, improvements in these areas would benefit pensioners. Pensioners have traditionally been slow to complain. Although a number of organisations representing pensioners have emerged, the problem has been that until recently they have not been co-ordinated. The government has been able to fob off pensioner unrest but this is about to change. In addition the trade union movement has shown little interest in pensioners, being more concerned with pension provision for current workers. This also is about to change. The Trade Union Congress (TUC) is holding a mass rally in London demanding, amongst other pensions issues, that pensions be linked to average earnings instead of the Retail Price Increase (RPI). The National Pensioners Convention (NPC) is making the same demand. The NPC held their Pensioners Parliament over 3 days in Blackpool. This was preceded with a protest march along the promenade. Over 2000 took part in the largest pensioners demonstration ever held in the U.K. Many of the banners paraded contrasted the fact that the Government claims that they cannot afford to pay pensioners more, with the vast amount of money found at the drop of a hat to pay for the war in Iraq.
The NPC has produced a manifesto after long debate which
will be presented to every member of Parliament following a mass lobby of the House of Commons. In effect they are saying “Address pensioner demands or lose our vote”. They are very aware that there are over 11 million pensioners over the age of 60, and they are 4 times more likely to vote than younger people. The manifesto covers many items other than demanding a considerable increase in pensions and the restoring of the link with average earnings. In many ways it is a “Wish List” but for the first time it states what we want. Piece by piece if necessary but a firm demand nevertheless.
The main thing that has made this a matter of urgency is Council Tax. As well as National Income Tax, local authorities produce a tax demand known as the Council Tax. Recently these tax increases have rocketed. For those on fixed incomes, Council Tax, far in excess of the cost of living increases cannot be sustained. This has led to many pensioners refusing to pay increases in excess of the increase they have received. They are threatening to go to prison rather than pay the full demand. In fact prison is unlikely because Bailiffs will remove goods from pensioners homes to the value of the amount required. As can be imagined, media publicity of, say, a television being removed from an 80 year old can only inflame the situation. The Governments answer to this is to pay an additional £100 to those over 70. A pathetic response.
There are two main issues that infuriate UK pensioners. Linking state pensions to the RPI and not average earnings has seriously affected the amount received. The RPI is based on a “Shopping Basket” of goods and the increase/decrease in the cost of the items measures inflation and produces the index. There are two problems with this. Firstly the “basket” does not reflect the spending pattern of an older person. For instance, it includes such things as digital cameras and manicures. 0lder people spend the bulk of their money on food and heating. Average earnings always exceed the RPI and was the traditional link. This was severed in 1980 by Mrs Thatcher’s Conservative Government and the Labour party promised to restore the link, but never did. It is ironic that the Conservative Shadow Minister for Pensions told the Pensioners Parliament that if elected they would restore the link. Given they broke it in the first place this met with an angry response from the pensioner delegates.
The second major problem is that the Labour Government, rather than restore the link, has targeted the poorest pensioners. This seems admirable on the face of it but it doesn’t work. This brings into play means testing which is detested. To qualify for a Pensions Credit requires a 20- minute phone call, disclosing the pensioners financial means. The government expects
75% of those entitled to be in benefit by 206. In other words, by their own
estimate they accept that 25% of the poorest pensioners will miss out. In fact
the take-up is even worse then that. Many pensioners simply cannot understand
what they have to do to claim and others regard having to parade their poverty
as stigmatising or charity.What pensioners want in monetary terms is simple. An adequate universal pension linked to average earnings. This would require an initial lift in pensions because of the amounts lost with the severing of the link in 1980. This way every one would get the same pension without means testing. For those with higher incomes some of this would be clawed back in general taxation.
Daily, pension problems are featured in the media. Too many issues to include in this article. The government have had to back down to public demands on two recent issues and pensioners are beginning to realise that they have to campaign. Normally they just put up with what is thrown at them and, indeed, have taken pride in not complaining. This is changing. There is too much insecurity in the field of pensions and too much inequality. As final salary schemes close and inferior money purchase replace them the bosses retain them for themselves. There are many advantages in the bosses being in the same pension scheme as the workforce. Also as many firms remove final salary schemes, and inflation proofing, Central and Local Government employees and Members of Parliament, retain them, paid for by the taxpayer.
I am quite excited that at last we pensioners are getting our act together and believe that the NPC is the vehicle for change. Just as in the rest of Europe, which clearly is not without it’s own pension problems, which needs to be addressed at European level through AGE, to which we are affiliated.
Living in a democracy is only an advantage if we use our freedom and exercise our power. This is happening. Watching 2000 angry pensioners verbally attacking spokespersons for all the major UK political parties was an exhilarating experience. For sure they will return to the House of Commons knowing that U.K. pensioners mean business. About time! Barry Ingham (Liverpool).
President of TSB Bank Retired Staff Association.