Mr. Paul Johnson:

Again, different views on this may be taken. It may be thought that there is a different case for incapacity benefits, for example. It may or may not be thought that issues around work incentives and so on are less important than unemployment benefits. One might want to do those differently. It may be thought that some benefits are at relatively the wrong level at the moment. Broadly speaking, I agree with the thought behind what the Deputy says, that quite a good reason is needed for doing this differently between different benefits. Over the past 30 years, one consequence of a series of policy changes, including, importantly, the increase in the state pension considerably faster than prices or earnings and the fact that welfare benefits for people under pension age have gone up if anything a little less quickly than prices, is that the gap between those has grown dramatically from about 30%. Thirty years or so ago, the state pension was about 30% higher than unemployment benefit for a single person; it is now about 130% higher. That has changed dramatically the relationship between the generosity of benefits for those below and above state pension age. Obviously, that matters very much if someone is out of work. At the point at which people hit state pension age their income goes up a lot but at the point below that they are very badly off. That is seen replicated exactly in the income statistics such that even the poorest pensioners over state pension age have seen their incomes rise reasonably significantly over the past 30 years but the poorest people in their early 60s have not seen that increase. The gap between the poor just below pension age and the poor just above pension age is open, and that is significantly though not entirely down to indexation policy.