The Tories would use money lying unclaimed in bank accounts to pay for the restoration of the link between pensions and earnings, David Willetts has said.

The shadow work and pensions secretary has said he will use the cash to fund an increase in the basic state pension by £7 a week for single people and £11 for couples.

He told delegates at the party’s conference in Bournemouth on Wednesday that the pensions system is in crisis and that urgent action is needed.

The Conservatives originally broke the link between pensions and earnings in 1980, pegging them instead to inflation, but Willetts now says the time has come to restore it.

"People are living longer and staying more active than ever before. Retirement is becoming a more and more important part of our lives," he said.

"Labour is stuck in the past. They don't think they can be independent.

"They do want to help pensioners, but they want pensioners to depend on them for that help. That is why we have got more pensioners on means-tested benefits than ever before."

There is £46 billion languishing in forgotten bank accounts that Willetts says he will use to fund his changes.

"We will use the unclaimed assets of banks and building societies to rebuild the pension funds of people who have lost out through no fault of their own," he said.

'Work first'

Willetts also repeated details of his plan to scrap Labour's New Deal programme and replace it with a scheme called "work first".

"There will be no place for so-called training schemes which play such a cruel trick on the young unemployed by raising their hopes of a job only to dash them again," he said.

"We will seep away the cumbersome bureaucracy of job centres.

"Instead we will work with charities and commercial providers to transform the opportunities facing our young people."