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The BBC's John Pienaar
"The pensioners could make a difference on election day"
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Monday, 12 February, 2001, 13:26 GMT
Tories up bid for pensioner vote
Pensioners protesting outside parliament
The 'grey' vote will be important in the election
The Conservatives have announced plans to boost the basic state pension and take one million over 65s out of the income tax system if they win the general election.

As well as announcing the tax break the party has pledged an above inflation rise in pensions for those over 75, promising an extra 4 per week for individuals and an extra 6.80 per week for couples from 2002.

The next government will create a responsible society that allows people to keep more of their own money

William Hague

The announcement is the latest part of what the Conservatives promise will be an 8bn package of tax cuts, and they say their plans to give pensioners an extra 2,000 in tax allowances will take one million people out of the income tax system.

However, the Labour Party has criticised this latest bid to secure the votes of the elderly saying the Tory sums do not add up.

A pound a week

The Conservative pledge would give the over 75s an extra 1 per week in their basic pension than under Labour.

The increases, which will cost 200m, would be funded by scrapping the New Deal for Lone Parents and taking a "small sum" from the Social Fund.

The decision to increase personal tax allowances is estimated to cost 950m.

'Responsible society'

Conservative leader William Hague said the measures were designed to give pensioners back more of their money.

He said the changes would also save pensioners from the "indignity, worry and confusion" of increasing means testing under Labour.

Michael Portillo
Mr Portillo said pensioners deserved tax breaks
"Independent estimates show that Gordon Brown is putting 56% of all pensioners on some form of means-tested benefit.

"The government has created a dependency society ... it takes money away from people, reduces them to dependency, then finds ever more bureaucratic and demeaning ways to give some of it back in handouts.

"The next government will create a responsible society that allows people to keep more of their own money so fewer have to look to the state for help in the first place."

'Morally right'

Shadow Chancellor Michael Portillo said taking pensioners out of the income tax system was "morally right".

"Everyone over the age of 65 will get an extra 2,000 tax allowance on top of what they are already allowed to earn without paying income tax.

"The effect of that is that one million pensioners will not have to pay any income tax at all. They will be taken out of income tax."

Speaking to BBC News, he added: "For the majority of the other 3.4m pensioners they will see a reduction in what they pay in income tax each week of about 8.50.

'Grey' vote

The tax proposals are the latest attempt by the Conservatives to woo the so-called "grey" vote.

The party was forced to backtrack on plans to scrap special payments for the elderly - such as the winter fuel payment - and include them in the weekly pension.

The Conservatives can only make this tax cut by cutting services like schools and hospitals

Matthew Taylor
That plan was criticised by pensioners and the Tories now say they would offer a choice between claiming the benefits separately or receiving them rolled into the pension.

But commenting on Monday's announcement Social Security Secretary Alistair Darling said: "Pensioners, of all groups of the electorate, actually know that you can't spend the same money twice.

"If the Conservatives can't identify where these tax cuts are going to come from, they are not going to be taken in by it."

He said the government had already taken almost 60% of pensioners out of income tax and would be helping more of them with the coming Pensioners' Credit.

Mr Darling added: "The difference between the two parties is that our programme is costed, prudent and credible, while the Conservative programme is not.

Matthew Taylor, the Liberal Democrats' economics spokesman, said: "The Conservatives can only make this tax cut by cutting services like schools and hospitals elsewhere and by cutting housing and other benefits for pensioners themselves."

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See also:

10 Feb 01 | UK Politics
Tories under fire on pensions
10 Feb 01 | UK Politics
Tories backtrack on pensions
09 Nov 00 | UK Politics
Brown fails to pacify protesters
08 Feb 01 | UK Politics
Tories pledge family tax changes
05 Feb 01 | UK Politics
Tories to abolish tax on savings
29 Jan 01 | UK Politics
Hague's 8bn tax giveaway
12 Feb 01 | UK Politics
Parties bow to grey power
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