Hands Off Our Perks

Saga readers have delivered a surprising blow to the Conservative Party’s plans to boost the weekly state retirement pension by abolishing the £150 Winter Fuel Payment for people over 60 and free TV licences for the over 75s.

More than 5000 of you voted almost three to one to reject the Conservative plans and support what the Labour Government is doing for pensioners. Barely one in four voted for the Conservative plans to abolish four special payments, and take money from job schemes for single parents, to boost the state pension by £5.50 a week.

Of course, since the vote, politics has moved on and the Government has come up with more money for pensioners (see box). The Conservatives have said they will go ahead with their plans but they will be on top of any rise which the Government implements. The Liberal Democrats have also revealed their plans for an extra £5 a week on the pension on top of inflation, with a further £5 a week at 75 and £10 a week at 85. What all this says of course is that at last – at long long last – the votes of Britain’s 12.2 million people over the age of 60 – and 19.3 million over 50 – are being taken seriously. Grey power has arrived.

The Saga vote is the first time that older people have been asked directly whether they want such things as the Winter Fuel Payment and free TV licences rather than a rise in the money they are paid each week. Of course, there has been no shortage of politicians and pundits telling us ‘what pensioners want’. And most of them have been saying older people want a higher state pension instead of the annual payments for fuel or television. But those people have now been confounded. Here is what we asked, and how more than 5000 of you voted.

YES to the Tory plans. Scrap all the special payments and put up the basic pension by £3.50 a week (and 50p on the married woman’s pension) and by £5.50 a week for over 75s (with £1.50 on the married woman’s pension) ON TOP of a rise to cover inflation.

NO to the Tory plans. Keep the £150 winter fuel payment at 60, the free £104 television licence at 75, the £10 Christmas bonus, and the 25p a week age addition at 80. Just put up the pension in line with inflation.

Apart from voting, many of you wrote to explain why you had voted as you did. Many of these letters were very political – on both sides. Some readers were still very angry with the last Conservative government ‘I wouldn’t trust them an inch’ said one. ‘They were in power for 18 years and did absolutely nothing for pensioners’ said another. But even many Conservative supporters did not like the plans. ‘Mr Hague will have to think of something better than this’ wrote one reader from Reading who said she was a member of the Conservative Party. Another wrote from Shropshire ‘My husband and I are staunch Conservatives supporters. If William Hague suggests this scheme…he will never win the election.’

Those who did support the Conservative plans generally had one message – clearly expressed by this reader ‘Even if we were no better off financially we think it would be preferable to arrange the disposal of our income rather than receive hand-outs.’ Another thought it ‘allows people the dignity to organise their own lives.’ Others pointed out that they had no television so the free licence was of no value to them. Others were against Labour but wanted much more from the Tories – ‘raise the basic pension to £5000 and scrap all these special payments proposed by Labour’ said Mr C from Essex.

But such letters were a minority. Two thirds of correspondents voted ‘no’ to the Conservative plans and many were positive about the annual payments. One reader wrote ‘The fuel allowance and TV licence saves us a lot of worry’ and a widow from Birmingham wrote ‘I am writing to express my grateful thanks for the £150 a year for fuel and £104 for TV. How wonderful for old folk such as myself’. Mrs R from London was more specific ‘when the big winter fuel bills arrive a large lump sum will help overcome the fear of using adequate heating…many very old people hardly go out so a TV is a lifeline to the outside world.’

But mainly the ‘no’ voters were simply against the Conservative proposals. Many were suspicious that they would lead to people being worse off. Some of course would be. Men aged 60-64 would lose their winter fuel payment. And Peter from Cornwall had another fear. He gets only 69% of the full pension because he worked for some years in the far east. ‘If they add these various allowances to our pension, I fear they will be reduced to 69% of their value.’

Others were worried about the extra pension being taxed or coming straight off other help with rent or council tax. They did not believe Conservative assurances that those details would be sorted out. Mrs H from Hampshire ‘If my pension was increased by £3.50 a week, the council would take back £2.98 leaving me 52p.’ Another wrote ‘The Tory plan would mean more tax and affect benefits. The heating and TV licence is tax free and doesn’t affect benefits.’

Some voted ‘no’ simply because ‘Better the money in the hand from Labour than promises in the bush from the Tories’ - a reader in Chippenham echoing a saying many readers used.

Apart from ‘yes’ or ‘no’ many wrote to abstain. ‘The correct answer is NO to both their plans’, wrote George from Kent sending back a blank voting slip. A reader from Leeds summed up what many felt. He crossed out both questions and wrote ‘restore the link with earnings’. This call to raise the basic state pension in line with earnings rather than prices ran through many letters, those who voted ‘yes’ and ‘no’ as well as the abstainers. This Bournemouth reader voted ‘yes’ but said bluntly ‘I have chosen the lesser of two evils. I prefer a weekly increase in the basic pension as opposed to a once a year lump sum. But would have preferred the restoration of the link to average earnings.’

That link, raising pensions in line with earnings or prices whichever was the higher, was introduced in 1978 by Barbara Castle but stopped by the new Conservative administration in 1980. And since coming to power, Labour has also turned its back on the principle, preferring to concentrate money on the poorest pensioners. This campaign to link pensions to the rise in wages was certainly given a boost by the Government’s crass and insensitive decision to raise the basic state pension by just 75p a week last April. Even though that rise was dictated by the standard formula which puts pensions up in line with price inflation it was widely seen as insulting. A rise in line with average earnings would have added a much more acceptable £3 a week.

Our poll of more than 5200 people was not a scientifically designed random sample as used by pollsters such as Mori. We cannot say if it represents the views of all people over 60. But it is the first, independent survey of what a large cross-section of older people think. And the fact that it disagreed with the accepted view is thought-provoking. Age Concern, which has consistently campaigned for a higher pension rather than annual handouts, told Saga Magazine.

‘It’s an interesting result. I don’t think it’s going to change our policy. We have always said they welcome the payments but to safeguard their income we think it is best delivered through the basic state pension.’

Mervyn Kohler, Policy Director of Help the Aged, took a more positive line

‘I am surprised because the message we get is that they feel patronised by being given bits and pieces. But this vote of Saga readers will have to be taken into in our discussions on pensions policy. However, I remain convinced that the pensioner population would not want to have their income underpinned by a series of one off payments.’

David Willetts, the shadow Secretary of State for social security, told me he was also surprised by the result.

‘I meet a lot of pensioners and they pretty much universally tell me they would rather have money as part of the weekly state pension than as gimmicks. What I find at meetings is they like the idea and have two questions - Will I pay more tax and will I lose means-tested benefits? The answer to both is no. Many of your readers seem to have been confused about that. We have to redouble our efforts to get that message over.’

And he also gave a new commitment to Saga readers like Peter from Cornwall who have a reduced pension.

‘These are fixed sums of money going to all pensioners. So someone with a reduced pension would get the full amount. The only way you can buy out these special schemes is to ensure you don’t have losers. It is a simplification. The extra amounts will not be reduced for people who have reduced pensions.’

The response from the Labour Government is of course more positive. The Secretary of State for social security Alistair Darling told Saga Magazine

‘The poll confirms that the Government was right to make sure that pensioners get help when they need it most. We are determined to do more, much more, for pensioners including new measures to boost pensions and to reward saving.’

With politicians desperately vying for the votes of 19 million people over 50, Britain’s older citizens have never had more power.

· The minimum income guarantee will be raised from £78.45 a week to £90, probably from April 2001.

· A new ‘pensioner credit’ will reward some retired people by topping up small private pensions they have paid into.

· The way that savings affect minimum income guarantee and other benefits will be changed – instead of penalising you for the amount of the capital, the income it produces will be taken into account.

· Some ‘transitional arrangements’ will help all pensioners in April – this probably means an above inflation rise in the pension, possibly £5 a week or more.

 

 

 November 2000

e-mail Paul Lewis on paul@paullewis.co.uk