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Labour unveils four-point pensioners' pledge card

Citywire examines party's pledge to maintain state pension 'triple lock', offer some compensation to women hit by state pension age rises, protect UK pensioners living abroad and keep free bus passes.

by Charles Walmsley on Apr 12, 2017 at 12:15

Pension pledges

The Labour Party seems to have been somewhat revived in the last two weeks now the whole Article 50 issue has been sorted.

Policy pledges such as a £10 minimum wage and free school meals for state school children have clawed back some of its reputation as an opposition party, albeit without making much of a dent in opinion poll support.

Today Labour's shadow chancellor John McDonnell (pictured) and shadow work and pensions secretary Debbie Abrahams will unveil a pledge card setting out the party's four policy pledges for pensioners.

The card largely sets out what has been said before by the party, including promises to help the Women Against State Pension Inequality (Waspi) campaign and maintain the triple lock into the next millennium. Citywire looked in a bit more detail at what Labour is promising pensioners.

Triple lock

In a move described by many as an attempt to 'outflank' the Conservatives, Labour has consistently promised to keep the state pension triple lock in place.

The triple lock, which was introduced by the coalition government, increases state pension payments each year by the higher of earnings, prices or 2.5%.

It has proved a popular policy for the Conservatives, who have promised it will remain in place up to the end of this parliament in 2020.

However, recently a wide range of voices including former pensions ministers Ros Altmann and a government-backed review into the state pension by John Cridland have pointed out that keeping the triple lock forever would be a little bit expensive. The Conservatives have hinted that as a result they may drop the policy after 2020.

Seeing an opportunity, Labour has pledged to keep the triple lock all the way to 2025. Following the publication of Cridland's review, shadow pensions minister Alex Cunningham said: 'This is about political choices. Contrary to the review’s recommendations, Labour is also committed to maintaining the triple lock through the next parliament to ensure dignity and security in retirement for future generations.'

The promise has now made its way onto Labour's pledge card, with new House of Commons library research suggesting the basic state pension will increase by £652.60 more between 2021 and 2024 if the triple lock is maintained than if the state pension increases with inflation.

Help for Waspi

By now most people in pensions are familiar with the Waspi campaign, which aims to secure some form of compensation for women who have been affected by increases in the state pension age (SPA) following the 2011 Pensions Act.

While the Conservatives have made clear they will not offer anything more than measures announced in the previous government, Labour has offered some form of compensation to the women. In November last year it said it will extend pension credit to those worse hit by the changes, potentially giving half a million women £155 per week.

There's just one problem: the Waspi campaign dismissed the offer last year. Jane Cowley, a member of the Waspi interim management team, said in November: 'We are pleased that the Labour Party has recognised that there is a problem, and we are delighted to note that they say that this is only a first step. It is, however, not what the official Waspi campaign is asking for. We maintain that all 1950s women have been impacted by this discrimination and maladministration and, as such, they all deserve redress.'

Maybe it's back to the drawing board on this promise?

Brexit means no pension problems

The third promise on Labour's new card directly tackles the UK's departure from the EU.

Many UK pensioners living abroad are concerned they will lose out after Brexit as the government has not made any promises on uprating their state pension.

Labour has stepped in by promising to protect rights of pensioners abroad, whether it is a red, white or blue Brexit. It has also promised to help out those with frozen pensions.

If any party can actually offer this when the UK leaves is another matter entirely of course.

Bus-ting pensioner poverty

The final promise on Labour's new card is about protecting pensioner benefits.

While former party leader Ed Miliband once pledged to cut the deficit by cutting winter fuel allowances for the most wealthy, today's party has said it would keep the benefit for all. Not only that but free bus passes will also remain in place.

Announcing the new policy promises, Labour said the number of pensioners living in poverty rose from 1.6 million to 1.9 million between 2015 and 2016.

McDonnell said: 'I am delighted to be launching this pledge card that will inform many elderly people in our communities that Labour is not only promising to stand up for pensioners; but is determined to ensure they keep the hard-won entitlements they currently hold.

'It’s a national scandal that pensioner poverty is rising and the Tories are refusing to commit to keeping the triple lock or compensate women worst affected by the speeding up in the state pension age.'

Tories hit back

Obviously the Conservatives did not take these accusations lying down.

In a press statement Tory MP Kelly Tolhurst, who defeated UKIP defector Mark Reckless in 2015 in Rochester and Strood, used the time-honoured financial crisis response to hit back at Labour's words.

'Labour’s economic mismanagement hit older people hard when they were in government, and Jeremy Corbyn and John McDonnell’s reckless plans would do the same all over again,' she said.

'Our careful management of the economy, changes to help people save more for their retirement, and protections for pensioner benefits and the state pension are all helping people have dignity and security in retirement.'

The comment highlights Labour's problem winning over older people: the financial crisis still holds great sway over voters, and promises to spend more may not go down well even if they directly benefit the audience.

However, given the party is trailing by as much as 17 points in some opinion polls it may be worth a go. As AJ Bell senior analyst Tom Selby points out the older population hold a lot of influence over the outcome of elections.

'This is naked electioneering from Labour. The power of the grey vote has been well documented and Jeremy Corbyn now hopes this raft of promises will help turn the tide and deliver an unlikely election victory in 2020,' he said.

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