e-mail Paul Lewis on paul@paullewis.co.uk
Alan Johnson gave up the music business at 17 after his precious guitar "A Hoffner, Sunburst Red, beautiful" was nicked from a pub in Islington where he was playing with his band, the In Betweens. His amplifier had already gone, stolen from a club in Edgware Road, when he was playing with another group called The Area. He hasn’t played professionally since. But when I visited him in his apartment-sized office in the wonderful Richmond House in Whitehall, the new Secretary of State for Work and Pensions wanted to tell me and Saga readers
"the fact I am 54 doesn’t mean I am never going to be top of the charts."
In his new job, which he took on after Andrew Smith resigned to ‘spend more time with his family’, he is at least top of the spending charts. He has the biggest budget – £117 billion of our money to redistribute – 120,000 staff, and a seat at the Cabinet table. And hardly a day goes by when one aspect of it – pensions – is not in the news. So I began by asking ‘Is there a pensions crisis?’ Before I could add ‘and if so what are you doing about it?’ his answer interrupted me.
‘No.’
‘Just that?’
‘There is not a pensions crisis. The Turner Commission doesn’t say there is. It says the problem, the crisis, would occur in 20, 25 years time if we ignore what’s happening out there – declining birth rate, increasing longevity. As we look at a world where the population over 65 will be twice the current proportion of the population, we need to plan ahead for that."
So there would be a crisis in future when fewer people in work pay taxes to keep a growing number of pensioners. But he was first he wanted to talk about the past and what Labour found when they came to power.
"There was a pensions crisis then. Poorer pensioners living in abject poverty. To come into government and find pensioners living on £68 a week. But the funny thing is, no-one was describing that as a crisis. Those people were virtually ignored. They didn’t influence the broadsheet newspapers. They didn’t have a voice anywhere. I think there our record has been remarkable, absolutely remarkable."
I felt a political speech coming on but Alan Johnson was not to be interrupted.
"Instead of putting £5 billion into helping the poorest we could have given every pensioner £11 a week more. We’d have got a lot of kudos I suppose. But poorer pensioners would have been £30 a week worse off."
He talks in the down to earth, confident tone of the union leader of old – he ran the Communication Workers Union from 1992 until he was elected Member of Parliament for Kingston upon Hull and Hessle in 1997. He took the familiar road to power when, in 1968, his guitar and amplifier gone, he became a postman. Less than three years later he was on strike.
"It was 1971, the big strike, seven weeks, all out, no strike pay. We didn’t mess around in those days, none of these 24 hour strikes. It was big time." He almost sounded as if he hankered after those days. "No, not at all. But it politicises you. When I was a postman you had to wait til you were 25 before you got your maximum pay. And if you were a telephonist it was 31. It was age based. Someone would join who was 35, and I was two years a postman, giving them training and they were paid more than me! These kind of things were unfair."
It is this sense of putting right unfairness that drives his latest policy plan – reform of the basic state pension which is still much as it was when Lord Beveridge devised it in the first half of the twentieth century when husbands worked and kept their wives and most people stayed married to the same person for life. Alan Johnson says this was a completely different environment then and as a result of these rules, which were devised in 1940s, even now "A single woman pensioner will have £24 a week less than a male. Whichever way you look at it there is inequity between men and women. I am committed to trying to tackle this problem."
His idea is radical.
"We’re talking about the basic state pension being paid to everybody on a universal basis on a residence test. We have to recognise there’s a different environment we are moving into for women. They are having their retirement age increased between 2010 and 2020 so I don’t think we should apply this to everyone out there. It would be newly retired people. Draw a line when women start having to work longer and say there will be a fairer system for how their pension is assessed which does not depend on them going through a bureaucratic nightmare to record when they are in and out of work, when they are caring and when they are not."
A citizen’s pension based on residence rather than work would cut through what Alan Johnson calls "a complex system of sticking plaster that’s been pasted across this pension system". The idea has been put forward before (see Saga Magazine April and November 2004) but never passionately and eloquently expressed by someone who could actually make it happen. So is he personally committed to paying a full single state pension to everyone, many now in their fifties, who retires from April 2010? He retreated into ministerial mode.
"I am looking at this as one possible component. I believe it is worthy of very serious consideration."
And he admits there is one big problem. Under his idea those who just lived here would get the same as those who had worked and paid contributions.
"There are arguments about the contributory principle that are perfectly valid arguments and we have to consider them but we are giving it very serious consideration."
If it does happen – and "very serious consideration" twice in a minute from a Minister makes that likely – it would be a radical change. For eight years Labour policy has been to ‘target’ resources, paying higher means-tested benefits to the poorest pensioners. Latest is the pension credit. A complex piece of arithmetical ingenuity that should guarantee an income of £105 a week to a single person over 60 and give up to £15.50 a week extra to those over 65 with a small personal or company pension or some savings or earnings. Pension credit has put a great deal more money into millions of older pockets since it began in October 2003. But it is hugely expensive to administer and to get it you have to claim it. And even on Government projections at least a quarter of those who could claim never will. Alan Johnson admits the number who do not claim is a worry.
"That is the one legitimate argument. The problem of take-up One thing I am convinced of is we are getting to the poorest pensioners, who didn’t even have a basic state pension. All the figures show that we are actually exceeding our expectation of paying out to the very poorest pensioners. The issue is those with more than £105 already – and you can have up to £144 as a single pensioner and still get some pension credit."
But what about the pensioners above that level, who can’t claim means-tested benefits? The Minister reels off what Labour has done for them.
"A pensioner who has no access to pension credit, who has an income that doesn’t require that assistance, through a combination of the basic state pension, which we’ve increased well above inflation since 2000; the winter fuel allowance, that’s universal; the free TV licence for the over 75s, that’s worth £125 a year a year, the pensioner who doesn’t warrant any help through pension credit is getting more from the state now than they would have if we’d simply gone for the earnings link."
I wondered how long it would be before we came to that mantra. Linking the pension to the rise in earnings rather than prices, a policy Labour espoused in opposition but rejected in government. Just as the Conservatives scrapped the earnings link in office but now in opposition say they would restore it in future. What was the anarchist election slogan? Ah yes. Whoever you vote for the Government will get in.
Alan is getting antsy. A secretary brings in a note. An old trick this but he has to go. A last question. What did he hope his legacy would be when he stops being Secretary of State?
"I hope that we will have begun to forge the consensus as to where we should be going on pensions over the next 25 to 30 years. And that we would have taken some big strides down that route. I hope there is time to carry that through. But that depends on the British people – and of course the Prime Minister."
He shakes my hand, grins "And my success or otherwise in the music world. Because I haven’t given up on that" and sweeps out.
February 2005
e-mail Paul Lewis on paul@paullewis.co.uk