The Greater London Forum for the Elderly (GLF) is an "umbrella" organisation for Forums or equivalent organisations which have been set up in all the London boroughs. The GLF provides a support service to local Forums, as well as making representations on their behalf to relevant bodies on issues of concern to older people.

  The poverty facing many of London's pensioners, exacerbated by the declining value of the state pension, is high on our list of concerns, and we are pleased to have the opportunity to respond to the Social Security Committee Inquiry into Pensioner Poverty.

  Our paper is an amended version of a talk given recently to a borough Forum, and includes statistics about the various forms poverty takes as well as our perspectives and views on the subject.

  To summarise, the paper considers absolute and relative poverty among older people, and then looks more closely at other aspects of poverty, its effects on social exclusion, housing and fuel poverty, domiciliary and health care and learning opportunities.

  The Greater London Forum for the Elderly believes that targeting help on the poorest through means-testing is an inadequate response to the problem, and that the only way to tackle poverty affecting pensioners is by a substantial increase to the basic state pension and the eventual restoration of the link between the state pension and average earnings. Despite government concerns about its financial implications, we believe this is affordable as well as being justified.

  I hope your Committee will find our submission useful, and we will look forward to the publication of the Committee's Report.

Carole Newman

Director

PENSIONERS IN POVERTY

  1.1  Today's pensioners are those who lived through the Second World War, fighting for freedom. Many pensioners do not have much freedom. Freedom is about choice. The lack of a real choice is the poverty of opportunity.

  1.2  In its recent annual report, the UN concentrated on four measures of poverty:

—  life expectancy;

—  deprivation in knowledge;

—  deprivation in income;

—  social exclusion.

  It said that 15 per cent of the British population was living in poverty in 1995. 9 per cent of the UK population are not expected to reach 60. More than a fifth of adults are functionally illiterate. Education is seen as being for the under 50s.

POVERTY

  2.1  By their own standards almost a quarter (24 per cent) of single pensioners were living in absolute poverty. ( Bristol Poverty Line Survey Nov 1997.)

  2.2  ABSOLUTE POVERTY was developed by the UN as "a condition characterised by severe deprivation of basic human needs, including. food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services" (UN, 1995 p 57).

  2.3  OVERALL POVERTY was considered to take various forms, including "lack of income and productive resources to ensure sustainable livelihoods; hunger and malnutrition; ill health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments and social discrimination and exclusion. It is also characterised by lack of participation in decision making and in civil, social and cultural life. It occurs in all countries: as mass poverty in many developing countries, pockets of poverty amid wealth in developed countries, loss of livelihoods as a result of economic recession, sudden poverty as a result of disaster or conflict, the poverty of low-wage workers and the utter destitution of pensioners who fall outside family support systems, social institutions and safety nets" (UN, ibid. p 57).

  2.4  Absolute poverty means being so poor that you are deprived of basic human needs. In order to avoid ABSOLUTE poverty, you need enough money to cover all these things:

—  adequate diet;

—  housing costs/rent;

—  water bills;

—  adequate sanitation facilities (sewage disposal, flushing toilet, etc);

—  access to clean water;

—  access to basic health care;

—  access to education/schooling.

  2.5  As many as 40 per cent of single pensioners say their actual income falls a little or a lot below the income needed to surmount overall poverty and 29 per cent of pensionable couples say the same. In order to avoid OVERALL poverty, you need to have enough money not only to cover all things mentioned in the ABSOLUTE poverty list above, but enough money to ensure that you are able to:

—  live in a safe environment/area;

—  have a social life in your local area;

—  feel part of the local community;

—  carry out your duties/activities in the family and neighbourhood and at work;

—  meet essential costs of transport.

  2.6  The income per week, after tax, said to be needed to escape absolute poverty averages £175 for all households. Pensioners average income needed (1999) is, at £118, far higher than the income support rates that apply to them.

  2.7  Older pensioners (aged 75 or over) rely more on benefits as a source of income and get a smaller proportion of their income from occupational pensions and investments than younger pensioners. At all ages older women have a lower average gross income than men. In 1996-97 women in their fifties had an average gross personal income of £149 per week which was around two-fifths of the £353 per week received by men of the same age. However this gap reduces with age. The average gross income of women aged 80 or over, at £102 per week was nearly 3/4 that of the £139 per week received by men of this age. (DSS Pensioners" Incomes).

  2.8  The vast majority of people over 65 have total incomes below the poverty level. In May 1993 over 1.7 million people nationally were receiving lncome Support (IS) because of low income (John Denham said at a recent Blackpool Pensioners" Meeting that there are one million receiving l.S. Another I million not claiming benefit to which entitled). London has a total population of nearly 6.8 million people. Of these nearly 1.2 million (17.1 per cent) are retirement age. Nationally the total population is estimated as 58,395,000 of which 10,630,000 are pensioners, men over 65 and women over 60. Despite this, national figures show that 40 per cent of single pensioners and 28 per cent of pensioner couples have a net income below half the average for the whole population.

  2.9  Most of today's pensioners lived through the depression and the Second World War and have paid National Insurance contributions all their working lives. They did not expect to meet institutionalised ageism from a Labour Government. They need the support of the Trade Unions and younger members of society to help them in their fight for proper health care and enough money to live in dignity in their old age. The ageing process affects us all eventually.

  2.10  Barbara Castle has stated clearly what the GLF is asking for pensioners: a decent state pension as a right. Not means-tested and not poor-relief in the form of IS. We want the uprating of the basic pension linked to average earnings. This will lift pensioners out of the poverty trap The recent promised minimum incomes are for the poorest pensioners who claim Income Support. There is no benefit to the eight million pensioners who are not below the taxable threshold.

SOCIAL EXCLUSION

  3.1  You are excluded if you are not mobile, have no money, no help to get out, or if you are in poor health and the hospital makes you wait six months, one year, two years for a hip operation.

    You can be excluded from getting health treatment if you live say in a poor area in London as opposed to a better provided area of Somerset.

    You can be excluded from good health treatment by reason of age. There are incidents of people over 80 not being given more expensive drugs or more expensive treatment.

DOMICILIARY CARE

  4.1  Our poor elderly suffer from poverty in the way Community Care is delivered in many parts of our affluent Britain. Care that is needed in your own home is often a continuation of the medical care provided free in hospital, but is now means-tested. Those on Income Support may pay little or nothing; others with a bare minimum income have to pay charges £3 an hour in some areas, £7 in others. While welcoming the Royal Commission's Report on long term care outlining the principle that personal care should be free, we are worried about the Government's delay in implementing it.

  4.2  The GLF believes that all NHS primary care, community care and social care should be provided free in whatever way it is needed, wherever it is needed.

HOUSING

  5.1  Results from the 1996 English House Conditions Survey showed that, in general, 17 per cent of pensioners over 70 or over lived in "poor" housing compared with 11 per cent of pensioners in their 50's. "Poor" housing is an indicator combining unfitness, substantial disrepair and where essential modernisation is needed and is strongly related to tenure. A third of older pensioners aged 50 or over living in private rented accommodation live in "poor" housing compared with an eighth of owner-occupiers. Among owner-occupiers aged 70 or over, those who have been resident for more than 20 years are four times more likely to live in "poor" housing than those in the same age group who purchased their home within the last 20 years. Pensioners aged 75 and over who live alone are more likely to live in "poor" housing than couples of the same age. Of those who live alone, men are more likely to live in "poor" housing than women.

  5.2  Per cent with central heating

FUEL POVERTY

  6.1  While we do not know exactly how many people die from hypothermia (ie die from cold because their inner body temperature has become dangerously low), thousands of older people do die each winter from cold-related conditions. Over the decade to 1996, excess winter mortality has ranged from a low of 21,000 to a high of 55,000  a rate 3 times higher than in Germany or Sweden where winters are more severe but they do not have the poor housing that our poorer elderly people have to endure.

  6.2  Although the Government now recognises fuel poverty, the funding for the programme for those identified as being eligible for installations etc may mean a 25 year waiting list for some. If the Government see this as a health related matter, ie proper insulation etc. saving the NHS money, they might be persuaded to move faster on it.

  6.3  The Government puts much emphasis on its reduction of VAT on domestic fuel from 8 per cent to 5 per cent and its introduction of the £20 Winter Fuel Payments to pensioner households (now upgraded to £100). That it underlines these achievements is a measure of how the issues around heating, linked to the drive for energy efficiency and the promise to reduce fossil fuel consumption, have gone up the agenda.

  6.4  Background

(a) Cold Weather Payments have been with us for some years. Qualifying factors have varied over time, but they are now available at £8.50 per week for every week when the local weather station shows the average temperature to have been below Oc for seven consecutive days. It is paid automatically to recipients of Income Support. It costs the Government an average of £35 million per annum.

  6.5  (b)  The Home Energy Efficiency Scheme was introduced in 1991. It aims to provide basic insulation and draught-proofing to poorer households, such as loft insulation, hot water tank jackets and door and window draught-proofing. Recent changes to the scheme have reduced the range of basic measures, but included cavity wall insulation. It is available to people on Income Support, Housing Benefit or Council Tax Benefit, and at a reduced rate to other pensioner households. It currently provides nearly 400,000 improved houses each year at a Government cost of £75 million per annum. In personal terms, this amounts to an average spend of £160 on each house, to the benefit of the householder on £45 in fuel savings each year.

  6.6  (c)  There has been a revolution in the energy supply industry. New suppliers are offering gas or electricity, or both on a range of different tariffs and conditions. In addition, electricity suppliers have been obliged by the Regulator to offer money to a variety of energy efficiency schemes through the standards of Performance scheme—currently about £25 million per annum. Energy prices as a whole have fallen (relative to inflation) over recent years, and at the same time the drive to meet internationally agreed targets to reduce fuel consumption and C02 emissions has led the EU to propose the introduction of a stiff carbon tax.

  6.7  (d)  Winter Fuel Payments were announced in November 1997, and paid in January—March 1998 to pensioner households as a one-off £50 to those on Income Support and £20 for others. The scheme was confirmed for a second year, and in the March 99 budget, the payment was increased to £100 per pensioner household (payable from winter 1999-2000). This will cost the Government £700 million.

  6.8  Fuel Poverty

  The working definition of fuel poverty is where a household needs to spend more than 10 per cent of its income on keeping warm, meaning a mean house temperature of 18c. A spend of 10 to 20 per cent on fuel is classed as marginal or moderate fuel poverty, 20-30 per cent as severe fuel poverty, and 30 per cent + as extreme fuel poverty.

6.9

  6.10  Government ministers have recognised this definition and accept the challenge to address it, but (the former minister) Angela Eagle MP commented on the unmanageable scale of the problem if we do not prioritise a strategy. Hence the establishment of the DETR Fuel Poverty Review.

  6.11  Issues flagged by the Review

  The Review team has identified three reasons for fuel poverty:

—  People have low incomes and cannot afford to heat their homes adequately for their needs;

—  Houses are not energy efficient and need investment in heating systems, appliances and insulation;

—  People, especially older people, often live in houses "too big" for their means/needs.

  6.12  The team is working on two lines of thinking. One is to consider the way in which extra payments are made to people who have low incomes, and how best to support their ability to buy adequate amounts of fuel. The other is to look at the housing size, and determine the best way to persuade people to move into more appropriately sized houses, or to upgrade the energy related elements so that the house can be improved to a satisfactory standard.

  6.13  Our pensioners who live in poverty are not able to enjoy the rich cultural life on offer in cities such as London because they are just too concerned with stretching their pennies to provide heating and food.

DEPRIVATION IN KNOWLEDGE

  7.1  There was a time when educational courses throughout Greater London were available cheaply and in quantity to all pensioners. For £1 pensioners could attend as many courses as they wished anywhere in London! Those were the days. Now many older people are deprived of the opportunity to learn new skills or practise old ones purely for the sake of learning. Yes, there are courses available but often at too high a cost, at inaccessible venues and inconvenient times.

  7.2  Older people need to have courses accessible in terms of:

—  venues, which are near to them, preferably in their own borough;

—  bus routes, which are near to their homes and the venue;

—  buildings which should have a well-marked safe entrance, without stairs to climb, be well-lit and have a hearing loop;

—  times, which should be during the day and fit in with local bus times;

—  costs, which should be cheap £24 to £36 for a 12 week course is too expensive. Cheap course should be available to all over 60s, not just those on benefits.

  7.3  The latest White Paper encourages us to hope that new funding mechanisms will enable non-vocational courses to be funded. The GLF will continue to press for accessibility and opportunities for older people to learn.

IN CONCLUSION

  8.1  It is said that two can live as cheaply as one. But Pensioners find that living as one is as expensive as two. You can't buy 1/2 a loaf of bread. You often can't buy portions for one in supermarkets. Heating a room is the same whether one or two occupy it. So, as consumers, what real choice do those elderly people who live in poverty have? If democracy means having choices then we can say with confidence that many pensioners do not have freedom.

June 2000