Speeches recovered from the Conservative party’s online archive More…

Howard: Rewarding people who save

Speech at Conservative Campaign Headquarters

"Encouraging people who help themselves; rewarding families who do the right thing; helping tomorrow's pensioners today - that is what a Conservative Government will do.

We all know that we should start putting money aside for our retirement in our twenties and thirties.

But when you are in your late twenties or thirties just paying the bills - your mortgage, the cost of bringing up kids, your car - can be a real struggle on its own.

And anyway when you're in your thirties, retirement still seems a very long way off, something you can worry about later once your children have grown up.

That's why it is so important that government actively encourages the younger generation to put money aside for their retirement; that it rewards families who do the right thing and save; that it recognises people who help themselves.

But for the last eight years Britain has had a government that does not share these values; a government that has penalised people who do the right thing and save for their retirement; a government that is obsessed with short term head lines.

In their first budget Mr. Blair and Mr. Brown imposed a £5 billion annual stealth tax on British pensions. And we've all been paying the price ever since.

That's why Mr. Blair's first pensions minister Frank Field said Labour took one of the best pensions systems in Europe and turned it into one of the worst.

Britain today faces a "Pensions Time Bomb" - a time bomb that threatens people's sense of security.

Just consider these two facts.

• Nearly half of Britain's workforce are not putting any money aside for their retirement.

• By 2050 there will be only half as many workers to support each pensioner than there are today.

No wonder so many people in their forties and fifties worry that their pensions won't be enough to support them in retirement.

For too long this issue has been swept under the carpet.

It's been too difficult - and for some just too frightening - even to think about.

But doing nothing is not an option - Britain needs a government that will act to reward families who help themselves; a government that will act to encourage people to save; a government that will act in the long term interests of our country.

The announcement I am about to make tells you a great deal about the differences between the Conservative Party and the other political parties.

Everyone knows the country faces a Pensions Time Bomb.

Mr. Blair's response is to set up a Commission, ask it to report after the election and hide the problem from the British people.

The Liberal Democrats simply have nothing to say at all.

But I believe in facing up to the challenges Britain faces and explaining to people what action we could take to address them after the election.

In our first budget, a Conservative Government will act to boost savings by giving people extra tax relief on their pension contributions.

For every £100 people put into their pension, whether it's a personal or company scheme, a Conservative Government will put in an extra £10.

So if you are in your late twenties, you're on average earnings and you work until you're sixty five, our savings boost could increase your pension by as much as £500 a year when you retire.

I believe in rewarding people who do the right thing and help themselves.

So under our scheme people won't get something for nothing - they'll only get something out, if they put something in.

Initially around 10 million working people will benefit.

This savings boost will come into effect from April 2006 and it will apply to starting rate and basic rate income taxpayers.

So to people paying basic rate tax in their late twenties, thirties and forties - our message is simple: 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.

When I meet people they often say to me "too many politicians are interested in the short term - tomorrow and next week, rather than ten years time".

Today, we're announcing a detailed, carefully considered and fully costed proposal to repair the long term damage done by Mr. Brown's pension tax.

Only by encouraging more people to save can we address their anxieties about their long term future and give our economy a brighter, better future.

So the choice on May the fifth is clear.

Support Labour and vote for five more years of higher taxes, more waste and pensions insecurity under Mr Blair.

Support the Liberal Democrats, who also want higher taxes - and send Mr. Blair a message "Carry on, you're doing just fine".

Or support the Conservative Party and vote for lower taxes, reward for hard work and more secure pensions.

And there's another choice: it's a choice between my party which is committed to taking action for the long term good of our country or Mr. Blair's that has no answers to Britain's pensions crisis - just the prospect of five more years of taxes and talk."

Keyboard shortcuts

j previous speech k next speech