Backbenchers rebel over pensions rise

A Labour-dominated committee of MPs has embarrassed ministers by calling for a substantial increase in the state pension by linking it to rises in average earnings.

A Labour-dominated committee of MPs has embarrassed ministers by calling for a substantial increase in the state pension by linking it to rises in average earnings.

The MPs also endorsed policies proposed by the Liberal Democrats and Frank Field, the dissident former welfare minister, for giving older pensioners a rise of up to £15 a week.

Both policies have already been rejected by ministers, but the Scottish Affairs Select Committee, chaired by the Labour MP David Marshall, said the Government had failed to address the poverty suffered by the oldest and poorest pensioners.

Its conclusions were applauded by Mr Field and Steve Webb, the Liberal Democrat social security spokesman. Mr Webb said the failure of Gordon Brown, the Chancellor of the Exchequer, to increase pensions in Tuesday's £43bn spending plan was incredible.

He added: "What Gordon Brown was doing yesterday was carving up the rise in national prosperity, but pensioners didn't get a sniff."

The MPs said they sympathised with complaints by pensioners' groups that "to be old is to be at risk and vulnerable" and that many old people are the UK's "unwanted generation".

The committee said: "Most would have taken to heart the cradle-to-the-grave care guarantee. Now, many pensioners find themselves either struggling on a miserable income or living in the shadow of uncertainty about long-term care. ... the elderly population should receive unfailing support from the Government."

While admitting there was no easy solution to pensioner poverty, the MPs said ministers "should now ensure that the state pension is linked to changes in national average earnings" and continue to raise the "minimum income guarantee" for pensioners. The committee said raising pensions by £5 a week for under-75s, by £10 for under-80s and by £15 for the over-80s would cost £3bn. Although this increase would benefit wealthier pensioners as well, it would be clawed back in taxation.

The Department of Social Security insists directing benefits to the most needy through winter fuel payments, guaranteeing a minimum income for the two million poorest pensioners, free TV licences for over-75s, and cuts in VAT on domestic fuel are more effective.