Saturday, 10 October 2009

The Tory pension policy 'cock-up'

Southport is a town here lots of pensioners live. It always has been. So we are always interested in the impact on the retired of new policies.



I was particularly pleased to see Vince Cable's policy initiative which would take many of our pensioners out of tax entirely by raising the threshold to £10,000 pa. This will also directly help low paid workers -there are lots in Southport working in the tourism, care and agricultural sectors. I like Vince's emphasis on fair taxes and personally I have no problem with his mansion tax. Under Blair and Thatcher we have moved too far away from effective taxation on the 'super rich' whilst poorer folk have landed up with eye boggling level of marginal tax. You can read the Lib Dem plans for fairer tax by here



I have never been comfortable with Labour's complex tax credit scheme. Too many eligible elderly people have not claimed (as with council tax rebate) My first job -back in the early 70's- was with Age Concern and I spent a large part of my time helping people claim benefits. I remember tackling the Labour Leader of the council about how fiendishly complicated pensioners found the system. Their reply was the State was the pensioners friend. Look how much money they were prepared to spend on 'hand outs' to them. Ok you can take the view that you should tug your forelock and be grateful. I don't. Taking all the folk out of tax who earn less than £10k is a dramatically less bureaucratic policy and will have none of the problems of 'take up'.



It strikes me that another unintended cock-up that will hit those approaching retirement is contained in the Tory plans announced last week. At their conference the Tories missed the opportunity of making their taxation policy fairer. They could have scrapped the big tax rebate they have promised to many of the richest people in Britain. They did not. They have stuck with a pledge to give £3billion away to the richest 3000 people. On top of that their policy of making women retire at 66 will also hit many poorer people hard. Steve Webb has done the arithmetic:



''Bringing forward the rise in the pension age by a decade will hit hardest those who have no pension other than the state pension. It is typical of Tory policy to hit the poorest the hardest. Under the Tories top civil servants will go on being able to draw generous pensions at sixty whilst low-paid workers will have to wait until they are sixty six.

"There are big issues to address in pension policy but they need to be taken as a whole, not picking out one part in isolation to get a quick headline. Women's pension ages are already rising between 2010 and 2020 but the Tories don't seem to have thought through what their announcement will mean for women."






Steve Webb goes into further detail on his blog showing that the £13billion the Tories claim they will save is very suspect. Whichever way you cut it it does mean that low paid folk will suffer whilst the richest folk get a hand out of billions.

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