AGEUK: Older people to be 8 billion worse off

A Labour MP has called for the VAT rise to be deferred, claiming that older people on lower incomes will be left £8 billion worse off once the state pension is linked to earnings next year.

Chancellor George Osborne announced the 2.5% VAT rise in his first budget, a move that Labour MP John Robertson claims will laden older people with billions of debt until 2015.

Pensions Minister Steve Webb was urged by Mr Robertson at Commons question time to persuade the Chancellor to defer the VAT rise that will be introduced in January 2011.

Mr Robertson, MP for Glasgow North West, said: "That earnings link will not help older people as of January when they start to pay their VAT. It amounts to nearly £8 billion over the life of the Parliament."

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