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Hague: Common Sense for Pensioners

A few weeks ago the Evening Standard published a story under the headline 'Trendy oldies join Cool Britannia'. It read: 'Ministers want to "rebrand" pensioners with a trendy name that will appeal to younger people. Some of Whitehall's finest minds are working on the problem, while the Government is also seeking outside help to try to come up with the new title … Ministers believe words like "pensioners" or "elderly" carry a grey image with deters young people from thinking ahead' (29th March 2000).

That story sums up this Government's attitude towards Britain's pensioners.

It sums up the attitude of Tony Blair when he talks about Britain becoming a 'young country' and has no time for those forces of conservatism who don't fit in it.

It sums up the attitude of Peter Mandelson, the man in charge of Labour's election plans, who says there is 'no mileage' in targeting elderly voters because they are not 'aspirational' (Sunday Times, 16 April 2000).

It sums up the attitude of the Chairman of the Labour Parliamentary Party, who recently came out with the breathtaking insult that pensioners are often 'racist'. Of course he also said they were 'predominantly Conservative' (Sunday Times, 16 April 2000) and we intend to prove him right at least about that.

It sums up the attitude of the Chancellor of the Exchequer, who has patronised older people by trying to buy them off with a series of badly targeted, bureaucratic gimmicks and then was only able to offer them a 75 pence increase in the basic state pension.

Britain's eleven million pensioners know that they are the unwanted, unwelcome, uncool guests at New Labour's banquet. And they know that they have paid the price through their pockets.

For three years pensioners have been at the sharp end of the Chancellor's policies.

At the sharp end of £150 average rises in Council Tax for Band D properties as Labour Councils and a Labour Government worked together to waste their money. The Government talks of a £150 winter fuel payment. Many pensioners have found that by the time they've paid their increased Council Tax the money has all gone.

At the sharp end of increases in petrol prices. Pensioners who depend on their cars to preserve their independence have seen prices driven close to the £4 a gallon mark.

At the sharp end too, when this Chancellor scrapped dividend tax credits, leaving 300,000 pensioners whose income is below the income tax threshold, having to pay an average of £75 a year more to the exchequer.

In the same £5bn a year raid on pension funds, Gordon Brown set a timebomb for future pensioners by forcing working people to put up to £200 a year extra into their pension funds. Last year he abolished the Married Couples Allowance for all future pensioners too.

He has also scrapped the Widows Bereavement Allowance without compensating all widowed pensioners properly, scrapped tax relief on medical insurance for the over 65s and abolished retirement relief for older people selling off their small businesses.

Pensioners remembered all these blows when they reacted so angrily to the 75p basic rate rise.

Gordon Brown hoped no one would notice. He hoped the anger of pensioners wouldn't matter. How wrong he was.

As anyone who campaigned in this year's local elections, who knocked on doors and listened to hard pressed pensioners, knows: boy, did they notice, and boy, are they angry.

Angry at a Labour Government that promised to be the pensioners' friend and has comprehensively betrayed them.

Angry at a Labour Government that used every low-down trick to win pensioners' votes at the general election and then forgot all about them the day after.

Angry at a Labour Government that has produced one gimmick after another, but doesn't trust pensioners with a decent weekly income they can spend as they see fit.

I have listened to their anger and their feelings of betrayal first-hand in hundreds of meetings around Britain.

I listened to the elderly man in Bolton who told me 'Labour's priorities are all wrong - look at Europe, the Dome, these asylum seekers - more should be done on health and for the pensioners'.

I listened to the lifelong Labour supporter in Plymouth who summed up what she thought of Tony Blair and his policies: 'He thinks people like me are old has-beens, who aren't important or glamorous, people who they think can simply go to the back of the queue'.

I listened to the pensioner in Leeds who could barely contain his anger when he said to me '75p was a joke, an insult … We don't want all these gestures and gimmicks - we just want a decent basic pension'.

And I listened also to another pensioner here in London who had a message for Conservatives. 'I voted Labour because they promised so much. I'm terribly disappointed but I wonder if there is any alternative'.

We've been busy listening to people while this Government has been busy forgetting them.

Now we are offering an alternative. Our Party has listened to all these people, and in all sorts of areas we are now offering an alternative to the failed polices and broken promises of this Government.

We offer a law and order policy that will back up the police, punish the criminal, and protect those, such as the elderly, who are particularly vulnerable to crime.

We offer a health policy that will build a stronger NHS that puts patients before politicians, and which doesn't treat older people as second class patients.

We offer a long term care policy that protects the assets of responsible people who save for their retirement.

Today, I want to build on those policies by tackling the central concern of millions of pensioners: the level of their weekly income and the basic state pension.

What pensioners say over and over again is that they would rather have a reliable weekly income which is theirs by right to spend as they think best, than a series of handouts and gimmicks.

Today we are setting out a carefully costed package based on a Conservative pension uprating in April 2001. It shows what we would do for pensioners in hard figures and in hard cash. We are calling it Common Sense for Pensioners.

We would start by putting the money used on the winter fuel payment and the free TV licence into the basic pension instead. This also brings a bureaucracy bonus as we can save £40 million currently being wasted on administering, often very incompetently, these new schemes. Many pensioners received their winter fuel payments as winter drew to a close. We're going to take that £40 million out of the budgets of bureaucrats and put it directly into the pockets of pensioners.

We have also identified extra social security savings. We would abolish the New Deal for Lone Parents which is a £90 million a year flop. On the Government's own figures, it is having zero impact on the employment prospects of lone parents. We have already announced separately our far more effective approach to lone parents. We would also recoup some money from the Social Fund, which has recently been increased substantially by the Government.

Taken together, these measures yield almost exactly £2 billion. We would then put all this money into helping pensioners in the most straight-forward, honest, and effective way - increases in the basic contributory state pension. We would add it to the expected increase in next year's pension uprating which, if awarded on the basis of current inflation forecasts, would be £2 to a single pensioner and £3 for a married couple.

On this basis, if the normal uprating followed inflation, the Conservative uprating in April 2001would be:

· £5.50 extra (£73 a week) for a single pensioner aged under 75.

· £7 extra (114.90 a week) for a pensioner couple aged under 75.

· £7.50 (£75.25 a week) for a single pensioner aged 75 or over.

· £10 (£118.15 a week) for a pensioner couple aged 75 or over.

We would also adjust tax allowances for older people to compensate pensioners for any extra that they might otherwise pay. And we would adjust means tested benefits to ensure that the poorest pensioners gain at least as much as other pensioners. I heard the Social Security Secretary on the radio this morning claiming that the poorest pensioners would lose out from our proposals. So let me make it absolutely clear that these increases will go to all pensioners, including those on means tested benefits. All pensioners will be entitled to these increases.

These, then, are big increases in the basic state pension.

In the main, we achieve these increases by consolidating all of the gimmicks into something which pensioners would far prefer - reliable increases in their weekly income. In other words, no more gimmicks means more on the basic pension.

But on top of that we are also adding the £40 million bureaucracy bonus, as well as adding money found elsewhere in the social security budget. In total, this amounts to £320 million of new money for pensioners. Our increase in basic state pension will leave all pensioners better off with the Conservatives than under Labour.

And to make sure pensioners can rely on it and that they will know that this is a promise that will be delivered, these increases in the basic state pension would be financed out of National Insurance. It would be a return on all those contributions pensioners have made through their working lives.

This reform means dignity and choice and respect for pensioners. It means a larger state pension as an entitlement rather than making pensioners depend on occasional handouts from Government.

By turning the handouts into entitlements, into a proper return on national insurance contributions, and by adding in the extra savings, all pensioners will be better off with the Conservatives. In other words, Common Sense for Pensioners means we are offering a real improvement in the income of all pensioners.

Unlike the Labour Party, I am not going to make exaggerated promises that unrealistically raise people's expectations only to shatter them later. I know that many pensioners find it difficult to make ends meet. I don't pretend that an extra £10 a week will solve all the problems of pensioners.

Let me tell you what I do promise.

First, Common Sense for Pensioners means dignity and respect for pensioners.

It rightly angers pensioners, who have paid national insurance contributions their entire lives, to have the government announce payments on budget day as if they were the charitable act of a merciful Chancellor. The basic state pension is not charity, it is a return on years of payments. Understanding this and reflecting this in pension policy is a matter of respect for pensioners. My Party is determined to show that respect.

Quite apart from the fact that the Chancellor's measures restrict pensioner choice and personal independence they are also patronising. They assume the Government knows better than pensioners how to budget for periods of greater expense and shouldn't give pensioners money until the Government thinks they should spend it. This patronising attitude, too, shows little respect and is accordingly resented.

Second, our policy simplifies a key part of the benefits system. This is true to another Tory principle that deplores government waste and inefficiency. Gordon Brown has deliberately made both our tax and benefits system more complicated. He prefers to act by stealth. In this way he is undermining confidence in politics and Government. With our reform pensioners will know exactly what they are getting and how much it is worth. That really is common sense.

But let me deal here in advance with some of the slurs and attacks which I expect from our political opponents.

Labour will claim that their policies are targeted on poorer pensioners, whereas we offer across the board increases. That is rubbish. Many of their schemes have been indiscriminate. The winter fuel payment goes to the 220,000 more affluent pensioners in residential accommodation or nursing homes who do not claim Income Support; but the payment is not available for the 280,000 in such accommodation who do claim Income Support. In other words better off pensioners get it and worse off ones don't.

What we are proposing is better targeted than Labour's measures. We guarantee that this increase in the basic pension will reach all pensioners including those on means-tested benefits, so that poorer pensioners getting at least as much from the package as others. Moreover, we know that poorer pensioners tend to be older and we have therefore put extra money particularly towards pensioners aged over 75.

Labour will also try to scare pensioners by claiming that the Tories are simply abolishing the winter fuel payment and the free TV licence.

To save them the effort, let me remind the Millbank spindoctors now of what their own former Minister, Peter Kilfoyle, says: 'pensioners believe that winter fuel payments and concessionary television licences are a diversionary measure … What pensioners want is an increase, week on week, in the basic pension. This is not just a matter of economics: it is a question too of pensioners' dignity' (Hansard, 27th March 2000).

The dignity of pensioners is what our package is all about. The key fact, that no amount of Labour lies can obscure, is that all pensioners, regardless of which gimmicks they currently receive, will be better off.

There will be others who say that our policy is no substitute for far-reaching welfare reform. I completely agree. This is not our last word on pensions policy. It is the beginning of presenting our vision for the future, one in which more and more pensioners enjoy rising living standards as a result of the savings and the funded pensions they have built up during their working lives.

We want to ensure that pensioners participate in the rising living standards of the country as a whole. We will be setting out further proposals to spread funded pensions still more widely to the next generation of pensioners.

But that is a policy for people of working age who have yet to become pensioners. It is too late for current pensioners. Many of the pensioners who are managing on such modest incomes retired without any entitlement to a funded pension. However strongly we push forward better funded pensions for the next generation, we still have a debt to the current generation of pensioners. That is what today's package is all about.

It gives pensioners a real choice, a choice which gets to the heart of the difference between our two parties.

They can choose New Labour's way. The way that treats pensioners as unfortunate misfits in their dreams of Cool Britannia. The way that patronises pensioners with handouts and treats them almost like charity cases.

Or they can vote for a genuine Conservative alternative, from a Party which has been listening - a reliable guaranteed increase in the contributory basic state pension.

It is quite simply a choice between being treated with contempt or being treated with respect.

Today's pensioners have contributed so much to building Britain into the great nation it is today. They have served in our armed forces and fought to keep our nation free; they have worked in our country's businesses and built up its economy; and have they raised our generation and bequeathed us a Britain that begins this new century free and proud and prosperous.

Yet despite all they've done their contribution isn't in the past. They are part of our nation's future too. For they are among our most active citizens. Among the most important contributors to voluntary organizations. Among the most important supports for family life. They support much which this country depends on.

Today's pensioners do not want sops or charity. They want to feel that they are getting benefits to which they have all their lives contributing to. They want the independence and respect that they have every right to deserve.

This year, the Conservative Party has been speaking for the great mainstream majority of the British people on crime, on asylum seekers, on tax and on Europe. That is why we won the local elections so convincingly.

Now we are moving on to new areas - areas which Labour have for too long regarded as their own. Today we are speaking for the great mainstream majority of pensioners who feel betrayed and neglected by this Government; today we offer substantial increases in the basic pension instead of gimmicks; today we offer a bold, common sense policy for pensioners.

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