Howard attacks ‘humiliating’ pensions system
Michael Howard has today attacked the current pension system, claiming that the older generation had been humiliated and “airbrushed out of Blair’s Britain”.
Mr Howard promised that a future Conservative government would restore their dignity by scrapping means testing for pension benefits.
Labour though claim that means testing has allowed them to help the poorest pensioners – and claim the Tories plans would leave the poorest worst off.
At a press conference this morning, the Tory leader said means testing was “wrong” and said the current system was humiliating and complicated.
He claimed that pensioners would be better off under the Conservatives as he outlined plans to restore the earnings link, scrap means-testing and award households over 65 with a 50 per cent Council Tax rebate up to the value of £500.
The earnings link was ended by Margaret Thatcher. Pensions now rise in line with prices.
Mr Blair, he charged, was not interested in making pensioners’ lives better, only interested in their vote.
Shadow Work and Pensions Secretary David Willetts though admitted that the current pensions crisis was not the Government’s sole fault, but claimed they had “made things worse”.
He suggested that the current pensions system is overcomplicated and discouraged savings, and demonstrated his point graphically by revealing two piles of paper. The first, he explained, represented 76 years of pensions legislation up until 1997.
The second, identically sized pile, David Willetts continued, was Labour’s contribution to pensions regulation in the last two Parliaments. This was without the statutory instruments required to implement the latest Pensions Act, he added. A Conservative government would simplify these rules, the Shadow Pensions Secretary promised, while maintaining the same level of protection.
Mr Willetts added that the Tories would strengthen company pension schemes, proposing that there should be no upper limit on tax relief provided that schemes offered the same terms to all. “I don’t mind fat cats as long as there are fat kittens”, he said.
However, while suggesting that the abolition of dividend tax relief was one of the “crucial factors” in the pensions crisis, he refused to pledge that the Conservatives would restore it.
