Tories detail plans for later retirement
THE TORY party softened its stance on bringing forward planned rises to the state retirement age yesterday, while the City attacked the cost-cutting plan as insufficient.
Shadow chancellor George Osborne addressed the party faithful in Manchester, setting out his proposed measures to tackle what he calls “Labour’s debt crisis”.
He confirmed plans, leaked on Monday night, to raise the retirement age for men to 66 in 2016. But he fell short of saying that the pension age for women should fall into line at the same time, instead saying it would be 66 by 2020.
Moves to equalise the retirement ages in 2016 had been attacked by pensions secretary Yvette Cooper, who said that it was “deeply unfair” that women expecting to retire at 63 – which the state pension age for women will be in 2016 – should have to work for another three years.
Osborne also reiterated that a Conservative government would link state pension increases to the rise in earnings and not the rise in inflation, meaning “a more generous state pension for all”.
But pensions industry veteran Ros Altmann likened Osborne’s plans to “rearranging deckchairs on the Titanic”, and called for an overhaul of a pension system that is “not fit for purpose”.
The former government adviser on pensions said that the initiative is not the best way to save money, and that measures such as changing the age allowance or tax reliefs would bring immediate savings.
“The pension system needs to be radically redesigned, not tweaked a bit here or there,” she said. “We need a radical rethink, not headline initiatives.”
Hargreaves Lansdown welcomed the announcement, but said that wider measures were still needed to address the flaws in the pension system.
AT-A-GLANCE
l Reducing red tape
Shadow business secretary KenClarke addressed the conference, promising to reduce red tape on firms. He said he would act as a “bouncer” against unnecessary regulation, unveiling a nightclub-style “one in, one out” policy. “We will introduce a system of regulatory budgets across government, that means no new red tape will be introduced without a compensating cut in the costs and burden somewhere else,” he said.
l Bonfire of the quangos
He also promised that any quango or regulator that could not prove its usefulness would be automatically scrapped. “We will give each regulator and quango a sunset clause. That means they will automatically cease to exist after a set period unless they can prove their continuing usefulness,” Clarke said.
l Small businesses
Clarke was at pains to point out that a Tory government would be on the side of the small businessman. He said his main aim would be “to make it easier for the small businessman in the Midlands to make his living, to produce a bit of prosperity and create some jobs”.
l Massive deficit
In a forerunner to George Osborne’s spending cuts speech, shadow chief secretary to the Treasury Philip Hammond said the country could have to deal with a public deficit as high as £200bn – “a debt our children and grandchildren will be paying off in a generation’s time”. But the self-styled “enforcer” of public spending cuts sounded a brighter note by saying that the recession – along with Gordon Brown’s rule – would end.