Tories demand answers on Labour’s pension plans
The Conservatives have called on Labour to reveal details on how it intends to reform the pensions system.
Shadow Work and Pensions Secretary David Willetts told a press conference this morning that “nobody knows” what Labour planned to do.
This, he claimed, was unfair on the electorate.
Mr Willetts comments came as he and party leader Michael Howard sought to highlight the party’s pension plans.
Mr Howard said the Conservatives would “defuse Britain’s pension time bomb” through increased tax relief on pension contributions – putting in £10 in for every £100 saved.
Other pledges include an end to means testing – which Mr Howard claimed “penalises people for doing the right thing” – linking future pensions increases to average earnings, council tax relief for over 65s and a cut in pension fund regulation. Most eye catching, was the proposal to use unclaimed assets held by banks to bail out workers whose occupational pension schemes collapsed.
Mr Willetts though focused his attention on Labour, calling for the party to reveal details of its draft Pensions Bill. He predicted that it contained “nasty” surprises that Labour did not want known before the election.
Secondly, Mr Willetts claimed there was growing support in the Cabinet for a citizen’s pension, and said Labour “simply cannot afford such a big pension commitment”. It would mean either higher taxes or means testing, and he called for the latter option to be definitively ruled out.
Finally, the Shadow Work and Pensions Secretary highlighted claims made by Gordon Brown’s former chief economic adviser turned parliamentary candidate Ed Balls.
Mr Balls had stated that Labour had increased tax relief on pensions from £8.9 billion to £11.4 billion, Mr Willetts observed. This figure was misleading as it did not take into account dividend tax relief.
The true figure was greater than claimed, Mr Willetts stated, remarking that “now Labour are giving us dodgy figures on pensions”.
Transport Secretary Alistair Darling yesterday dismissed the Conservative plans, claiming the Tories did not have the money to fund their proposals.
Speaking at a press conference in London, Mr Darling said: “They don’t have the money … their policy is worthless because of that.”
Mr Darling was accompanied at the press conference by Mr Balls, who said the Conservatives had a “black hole” in their spending plans and posed an “immediate short-term threat to our economic stability”.
Deconstructing the Tory plans, Mr Balls added: “The question we are asking today is simple: Where is the money coming from?”
He said the Conservative spending proposals for 2006/07 and 2007/08 “defy the laws of economic logic”.
The Liberal Democrats accused the Tories of backtracking on their pensions’ policy.
Work and pensions spokesman Steve Webb, said: “For the last year, the Tories have been promising that for every £100 an individual puts in, the government will match it. Now all they are offering is £10 for every £100.
“The Liberal Democrats believe that scrapping means testing is a much better way of encouraging people to save for their retirement.”
The Lib Dems claim the Conservatives’ plans will do nothing to reduce means testing, that their council tax rebate will help less than half of pensioners and that a system based around National Insurance contributions will mean women continue to receive lower pensions than men.
