Finance (No. 4) Bill

Debate between Baroness Clark of Kilwinning and Charlie Elphicke

Thursday 19th April 2012 Commons Chamber

[Katy Clark]

The word “dignity” has been used a number of times in this debate. It is an important word, particularly given the proposed change, which has been put forward at short notice. We have had debates about pensioner income over many years in this place. We have heard a number of proposals, from parties in all parts of the House, that would change the financial position of those reaching retirement. However, a common theme has been the importance of giving as much notice as possible of any change, particularly when dealing with people’s incomes in retirement, so that people can make the changes necessary to cope with the changing world.

One of the problems with the proposed change, which will come into effect in 2013-14, is that it represents not a minor or technical change, as many Government Members have said, but quite a substantial drop in income at short notice for people on modest or medium incomes. My hon. Friend the Member for Livingston (Graeme Morrice) highlighted the impact on those who turn 65 in 2013-14, who could lose £323 a year, which represents a significant amount, not a technical change. Therefore, to answer my hon. Friend the Member for Inverclyde (Mr McKenzie), people in those income brackets will be very disappointed by the change. That is one reason I have highlighted the fact that the measure was not in the manifesto. If the Government think that it is an important part of their long-term pension reform, it should have been in the manifesto. It should have been consulted on and thought through, and a great deal more notice should have been given to the individuals affected.

[Charlie Elphicke]

A key concern of mine is to understand why there should be a higher personal allowance for senior citizens than for hard-pressed families who are struggling to get by. Why does the hon. Lady think that that is justified?

[Katy Clark]

I mentioned this in an intervention. At the time of the allowance’s introduction, a number of reasons were given, one of which was pensioners’ higher heating costs. A full explanation was given during those debates of the higher and additional costs that are associated with retirement. Those higher costs of living have a disproportionate impact on pensioners. In the debates on pensions that we have had over the past few months, a great deal has been said about the higher costs that pensioners face, and about the possibility of having a different form of indexation for pensions, given that pensioners tend to have different living costs from the rest of the population.