Work and pensions secretary Alan Johnston has contradicted an assurance from Tony Blair ruling out the inclusion of compulsory pension contribution schemes in a major review after the general election.
Johnston said Blair had expressed a personal view and that he was ‘not ruling it out as party policy’.
During an earlier radio phone-in which raised the topic of compulsory contributions, Blair said: ‘I don’t think that is the answer’.
Shadow work and pensions secretary David Willetts said this was further proof that Blair ‘cannot be trusted with pensions’.
All this comes on a day in which Tory Leader Michael Howard announced £1.7bn of his party’s proposed £4bn in tax cuts would be used to encourage saving for pensions by adding £10 in value to every £100 put into a pension fund by lower and middle income earners.
In doing so he effectively ruled out promising a major vote-winning tax cut in order to allay middle England’s fears of a pensions crisis – partly caused, say the Conservatives, by chancellor Gordon Brown’s £5bn increase in taxation on pension funds.
Howard admitted, however, that his plans would only add £3bn a year to pensions saving and would go only a small way towards raising the £27bn more in savings required each year to fully fund vital pensions and defuse the pensions ‘timebomb’.
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