Brown Abandons Pensioner Poverty Target . . . Labour MPs Outraged

The Chancellor of the Exchequer, Gordon Brown, has written to Lord Turner, Chair of the Pensions Commission, to state that he "should not assume the link between the pension credit and earnings will continue beyond 2008" - a view later reaffirmed by Ed Balls MP (a close Brown ally).

Many Labour MPs had previously accepted the Chancellor's strategy of targeting help to the poorest pensioners via the Tax Credit linked to earnings, rather than the full restoration of the earnings link. However, the breaking of that link will totally undermine the Chancellor's strategy for eliminating pensioner poverty.

An Early Day Motion (see text below) has already been tabled criticising the announcement and urging the Government to re-think as an immediate expression of opposition to the Government's proposals. The EDM has been tabled by John McDonnell MP in response to the disbelief being expressed among Labour MPs.

John McDonnell MP, Chair of the Socialist Campaign Group, said,

“Labour MPs this morning woke to the shock pronouncement from the Chancellor and Ed Balls that the earnings link with Pensioner Tax Credits is to be removed.

“MPs are angry that there has been no consultation on this proposal before it was made public. The Government must recognise that this flies in the face of all the assurances given about the targeting of benefits to the poorest in our community, and that it will result in a wave of anger in Parliament, in the labour movement and among Britain's pensioners.

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EDM: Pensioner Poverty and the Earnings Link to Tax Credits

That this House notes that the Chancellor of the Exchequer has based his strategy to eliminate pensioner poverty on targeting benefits to the poorest pensioners via the Tax Credit system by linking the level of Tax Credit to earnings, which has ensured that the poorest pensioners have shared in the growing prosperity of the country; is therefore perturbed to hear that this link with earnings may be broken; and calls upon the Government to reassure Britain's pensioners that the earnings link to Tax Credits will not be removed.