17 June 2008

In 1980 the Thatcher government broke the link between the state retirement pension and earnings and since then the pension has been uprated by the rate of inflation. Overall earnings generally run ahead of inflation and, although the Labour government has redistributed millions of pounds to targeted pensioners, the state pension is now worth less than if it had remained linked to earnings.

How much less?

A parliamentary answer says about £43 a week less.

The average state pension is now £97 and week and had it remained linked to earnings would be £140 a week. The current pension is 44 percent less than it would have been. The details are at Hansard for 16 June 2008 column 742W.

Cornwall has a disproportionate number of pensioners many of whom – but not all of course – have only or are primarily dependent upon a state pension.

Labour aims to restore the link in the next parliament and by 2012 if possible. I am unsure whether the Conservatives, the current favourites to form the next government, have signed up to this. It would be a handbrake turn for them.

Nor do I know why Labour in Cornwall isn’t shouting all this from the rooftops.