Friday 26 March 2010

Why pensioners now face a lower risk of poverty than other adults

Labour's record on redistribution is easily underestimated, perhaps especially on the liberal-left. A large part of that is because it has often been a case of 'running up the down escalator': I discuss this in a Progress magazine piece.

The Institute of Fiscal Studies report, covered on Left Foot Forward which rounds-up media coverage does clearly shows how government policy has had an important redistributive effect.

An major new book by Jane Waldfogel of Columbia University 'Britain's war on poverty' this week set out why the government's child poverty strategy is being increasingly championed by US anti-poverty campaigners because it shows that "policy works".


But among the greatest, unsung successes of this government is its record on pensioner poverty. Pensioner poverty has been reduced by a million. But the most striking change is this:

Pensioners are now less at risk of poverty than adults of working age, undoubtedly for the first time in British social history.

As The Solidarity Society's overview of both the successes and failures of Labour's record on poverty and inequality explained:

Throughout most of our history, living into old age was for most a passport into poverty. From the early 1960s to the late 1970s, the risk of poverty for a pensioner was around 40 per cent, compared to around 14 per cent for the population as a whole ... Pensioner poverty has fallen very dramatically since 1997 from 29 per cent of pensioners (2.9 million) to 18 per cent (2 million). The key driver of this has undoubtedly been huge increases in welfare benefits for pensioners. Today, the risk of pensioner poverty is 18 per cent, compared to 22 per cent for the population as a whole ... Poverty rates for single female pensioners halved from 41 per cent in 1997 to 20 per cent in 2005.

Conservative leader David Cameron was today announcing a pledge to pensioners. He used the occasion to attack the government's record - "Increase the value of the basic state pension for all pensioners and help to stop the spread of the means test by linking pensions to earnings. You won’t get a repeat of Labour’s mean 75p rise with us".

He might have more honestly praised the government's remarkably successful record on pensioner poverty, and so committed to maintain it. He could have made a virtue of the cross-party consensus on restoring the earnings link too (where the hyper-partisanship we have seen recently over funding social care was thankfully avoided, despite fears that reform would prove politically impossible).

It would be good to hear all parties commit to the principle that in tightening the public finances, every effort should be made to ensure the old, the vulnerable and the poor are not disproportionately affected. It is certainly a test which should and will be applied to every party which aspires to be progressive.

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