Pensions finally become an election issue
Well, I was beginning to think we’d get all the way to May the 5th with pensions hardly coming up at all in the great political contest to see who sits where in the Mother of all Parliaments for the next four or five years. I don’t want to make any political points myself, except to say that I find it amazing that such an important issue as pensions that has spawned the most far-reaching legislative changes in the last year than we have seen for nearly half a century (and more consultation than you can poke a stick at) seems to be being almost completely ignored in the run up to the General Election. I mean, is it just me that thinks that’s strange or what?
The General Election campaign has been underway for four years, of course, but this time it’s official! We know the date of the Election will be May the 5th. The Economist, on 9th April, argued that “the real debate about pensions will be held after the Election.” That’s because the big issues relating to the reform of the State Pension system have really been pushed into the long grass by pinning everything material on the outcome of the Pensions Commission report which is not due to be completed until October this year.
I thought it would be a good idea to cover anything that comes up related to pensions during the Election campaign on the BeeHive and I was beginning to think that nothing would until pensions took centre stage at one of Labour’s Election press conferences on Monday, and then at the Conservatives’ press conference this morning. I’ll go through the details of those here as some of the issues raised look to me to be central to our so-called pension crisis at last, and I will do the same for anything that happens on pensions with all of the parties during the rest of the Election campaign.
Labour Party Election Press Conference on Pensions
On Monday afternoon (11th April 2005), on the first day proper of the Election campaign, a Labour press conference was hijacked by questions from the assembled hacks on pensions. Responding to a question on compulsory pensions, one of the highest profile Prospective Parliamentary Candidates of the Elections, the Chancellor’s former right-hand man Ed Balls, said:
“We will wait to see what Turner proposes and…future elections will occur before any of those changes get implemented in pensions policy…Any changes in pensions policy will be fully debated and won’t come in for many years.”
This was widely picked up in the media as, just ten days earlier, in the Financial Times of 1st April 2005, Rt Hon Peter Hain MP - the Leader of the House of Commons - had said that Labour would introduce “sooner rather than later... major legislation” on pensions if they won a third term. This led to the Financial Times reporting that “a bill, which is mentioned in a draft of the Queen's Speech setting out the Government's programme for the next legislative session, would be expected to get its second reading within a year of a Labour Election victory.”
These two comments were, of course, mutually exclusive and led to a number of newspaper pieces on the subject, highlighting the apparent differences in policy or interpretation. Typical of the headlines spawned by these statements were:
Labour rules out extending compulsory pension saving - Financial Times, 12th April 2005.
Blair backs off pensions revamp - Independent, 12th April 2005.
Tax to save pensions ruled out - The Times, 12th April 2005.
Conservative Party Election Press Conference on Pensions*
Conservative leader Michael Howard opened a press conference this morning (Friday 15th April) focused on pensions. He promised "dignity and respect" for pensioners and criticised Tony Blair of “destroying the value of people's pensions”. He also described means-testing as wrong and said that it sent a clear signal to younger savers and was humiliating and complicated for older people. He outlined the Conservatives’ pensions proposals, saying that under a Conservative Government pensions would increase in line with earnings, there would be an increase in the basic pensions, and for the over 65s a 50 per cent discount on their council tax bill.
David Willetts, the Conservative Work and Pensions spokesman accused Labour of not mentioning pensions despite putting the economy at the heart of their campaign. He was critical of the way that he said Labour had glossed over the pensions and savings issue, and accused them of creating a society where it was "easy to borrow and hard to save". Attempting to illustrate his argument that the burden of pension regulation had increased under Labour, he claimed that it would require 100 statutory instruments to implement the 2004 Pensions Act, calling it a "missed opportunity" to reform a failing system. He also invited key representatives of the pensions industry to take the leading role in delivering an “easing of the burden”.
To sum up he claimed that the Conservatives would deliver reform of State Benefits, reform of pension contributions, reform of savings and would strengthen company pensions. On company pensions, he said: "I don't mind the fat cats as long as there are fat kittens as well".
In response to a question on pension shortfalls, Willetts accepted that there were a range of reasons for shortfalls and it was not only the fault of the Government. But, he argued, they had made it worse, not better. He admitted that mis-selling was a problem but that the regulations could still be simplified.
He was also asked a question on Adair Turner’s Pensions Commission - replying that he felt Labour should put the issue of pensions upfront at this election and not try to hide behind the report.
15 April 2005
*Source: Conservative Party Press Conference - 15 April 2005
All information included has been produced by us for our own purposes and the results of it are being made available only incidentally.