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Tories outline five-point pensions plan
Michael Howard has outlined a five-point plan of action to tackle Britain's "pensions time bomb".
The plan builds on the commitments unveiled at the weekend for a £1.7bn tax incentive for people to save for their retirement and a pledge to cut up to £500 a year from the council tax bills of pensioner households.
The Conservative leader said other measures would include cutting back red tape, raising the basic state pension in line with earnings and using unclaimed assets in banks to help workers who lose pensions when their companies go bust.
At his press conference on Monday, Howard said: "Our message is simple: whatever your age, if you do the right thing, we will do the right thing by you.
"If you save, we will boost your savings. And if you help yourself, we will help you.
"I don't pretend to be able to defuse Britain's pension time bomb overnight but our five-point action plan will begin to reverse the damage done by Mr Brown's pension tax."
Howard has already announced that a Conservative government would give workers who pay basic or starting rate income tax £10 for every £100 they put into a pension fund.
The party says this could lead to a boost of up to £500 a year when someone retires.
Howard warned: "Nearly half of Britain's workforce are not putting any money aside for their retirement."
And he said that "doing nothing is not an option". It is time for a government which would "act to reward families who help themselves" he said.
Shadow work and pensions secretary David Willetts claimed Labour had pledged "virtually nothing" on pensions, other than ruling out compulsory saving.
He demanded to know how the government intended to resolve the issue.
"Our first challenge to Labour is what is in the draft pensions bill?" he said.
"Either they really don't know or they have proposals so nasty they don't want anyone to know about them before polling day."
"We're going to use a large amount of money to reward people for putting money into their pension schemes.
"I think that's the right thing to do. That's tackling one of the biggest long-term problems that our country faces."
But Labour campaign chief Alan Milburn has criticised the Conservative plans as "a recipe for the kind of economic disaster they gave us the last time they were in power".
And he warned that Tory policies were "a risk the country cannot afford to take".
But Willetts rejected Milburn's suggestions that the policy could prove unaffordable.
He argued the £1.7bn proposed was based on a "very reasonable assumption" about the increase in levels of pensions contributions it would spark.
Willetts said that at present, workers paying standard rate income tax saved around £10bn per year, a figure the tax break could raise by around 20 per cent.
"We think that a 20 per cent increase in savings is a very reasonable assumption," Willetts said.
However, Liberal Democrat Treasury spokesman Vincent Cable has also branded the Tory tax plans unworkable.
"The Tories say they will spend more on schools, hospitals and defence, cut taxes and balance budgets all at the same time. This is implausible and unachievable," he said.
"In fact under Tory plans the tax take will rise by £24bn and their policies will increase council tax by £200 per household."
And Liberal Democrat leader Charles Kennedy said it was "a bit rich" for Conservatives to claim they were the only party addressing the crisis when they had created "fragmentation" over the policy in the first place.
Kennedy said the three-party consensus on pensions in the 1980s was "shattered unilaterally by the Conservatives when they got rid of Serps - there was no discussion with anybody else".
And he said he felt the awaited Adair Turner review of the private pensions system will provide the best basis for restoring consensus in pensions policy.
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