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Willetts: Delivering a better pension for older people

Speech at election rally in Newquay

"Michael has made it clear what we have to do after Thursday. We must deliver a better pension for older people who have worked hard all their lives. We must tackle the pensions crisis. And we must get on with it.

By cutting out the waste, Conservatives will spend more on the things that matter. We will increase the basic state pension in line with earnings, not prices. And, as Caroline has said, we will give a 50 per cent discount on council tax to households where all the adults are over 65, up to a maximum of £500.

By the time of the next election, some pensioner households will be as much as £1,000 a year better off.

Better pensions and council tax discounts won't penalise pensioners who have saved for retirement. But they will help poorer pensioners who don't get benefits they're entitled to because the system is too complicated.

Mr Blair will say anything to win an election. So let me make it clear: we will keep the Winter Fuel Payment, the Pension Credit, and free TV licences.

A few years ago, a statement of pensions policy could have stopped there. But, as Frank Field - Mr Blair's first pensions minister - says: 'when Labour came to office we had one of the strongest pension provisions in Europe and now probably we have some of the weakest'.

As a nation, we are getting older and we're not saving enough.

For thousands of people facing retirement without the income they expected, the pension crisis is already very real. For others, it is still tomorrow's problem. But that's not an excuse to ignore it. The longer we wait before starting to save more, the harder it will be to catch up.

So instead of more stealth taxes making it more difficult to save, we'll cut taxes to make saving more attractive. We'll tell people: if you help yourself, we will help you.

From April next year, we will add £10 to every £100 that basic rate taxpayers save in a pension - whether it's a personal pension or a company pension. To get something out, you will have to put something in. But if you're in your 20s and save throughout your working life, this extra support could add £500 a year to your income in retirement.

And we will do more. We'll rewrite the law, so that pension funds don't have to wade through thousands of pages just to make sure that what they're doing is legal. We will scrap the regulations which stop companies with good pension schemes from telling staff about the benefits of joining. No one can defuse the pensions timebomb overnight. But we won't stand there with our fingers in our ears, pretending we can't hear it ticking.

Four more years of talk from Mr Blair won't give anyone security in retirement. Conservatives won't mess around. We'll take action to get Britain saving again."

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