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Tuesday, 17 December, 2002, 17:27 GMT
UK pensions in 'deep crisis', Tories say
A woman worker
Fewer employees can feel sure of a good pension
Pensions Secretary Andrew Smith was attacked by both major opposition parties for a "missed opportunity" in his shake up of the UK's pensions system.

David Willetts, for the Tories, pressed Mr Smith to apologise on behalf of the government for turning pensions, "one of our great post war successes into an economic and social disaster".

This time the government must get its pensions policy right

David Willetts
He said British pensions were in "deep crisis" with millions of citizens facing an "impoverished retirement".

He accused Mr Smith of bringing with him "rehashed and recycled" proposals when he made his statement on pensions in the House of Commons.

Steve Webb, for the Liberal Democrats, likened Mr Smith to the fictional rogue Arthur Daley, stressing that if there was an offence for mis-selling pensions' policies "you should have been banged to rights this afternoon".

'No solutions'

In his statement, Mr Smith outlined plans to scrap compulsory retirement ages and introduce a "radical simplification" of pension taxation rules.

But Mr Willetts reminded MPs that "what's at stake is nothing less than the prospect of a decent retirement for millions of citizens".

He insisted: "This time the government must get its pensions policy right."

The closure of work pensions schemes have doubled in the past year. Numbers of people retiring with occupational pensions are going down and those claiming means tested benefits are going up, he said.

David Willetts
'No recognition of the scale of the pensions crisis', says Mr Willetts
Mr Willetts accused Chancellor Gordon Brown, who was sitting next to Mr Smith, of making a "notorious 5bn a year grab on our pension funds".

Turning to the pensions secretary, he demanded: "Why didn't you come to this House of Commons this afternoon and apologise on behalf of the government for turning what was one of our great post war successes into an economic and social disaster?

"There wasn't any recognition of the scale of the crisis and there certainly wasn't any strategy for getting out of it.

"Because there wasn't a solution they pretend there isn't a problem."

'Too little, too late'

Mr Willetts said the Conservatives agreed there should be flexible retirement, but the government had announced this measure five times before.

He said Mr Smith's attempts to "some how reverse the pensions crisis" were "too little, too late".

People needed "better incentives" to save for their pensions and not cut backs on the incentives that already exist in the tax system.

Mr Willetts pressed the secretary of state to give a "cast iron guarantee" that the chancellor was not using the pensions simplification exercise as another excuse for a stealth tax.

"After this missed opportunity, millions of people will be facing a new era of financial insecurity," he added.

'Ducking' the issue

But Mr Smith said it was clear that his shadow had not been able to "grasp the sweep and the radicalism of our tax simplification."

Mr Webb said the pensions secretary had "failed to address the tough choices that needed to be addressed" and argued that there was nothing in the statement that would help women.

"What about the hoping that the people will save more? The government is ducking the tough choice," he said.

"It has set out a commission. The commission will consider ... It could be 10 years before we are making sure that people are saving."

 WATCH/LISTEN
 ON THIS STORY
The BBC's Jenny Scott
"We're simply not saving enough"
David Willetts, Conservative MP
"This could potentially affect the livelihoods of thousands of people when they retire"
Tom Ross, head of the Pensions Policy Institute
"The government seems reluctant to address the issues"

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17 Dec 02 | Business
17 Dec 02 | Business
06 Dec 02 | Business
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