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EDITIONS
Wednesday, 20 September, 2000, 13:25 GMT 14:25 UK
Lib Dem pension revolt fails
Pensioners
Should pensioners share in country's prosperity?
The Liberal Democrat leadership has survived a challenge over its pension policy.

Delegates rejected a rebel motion calling for the restoration of the link between pensions and earnings, though only after a compromise was agreed to set up an independent pensions authority.


This issue is less about money, it's more about giving dignity back to a generation that has paid its dues

Archie Kirkwood
Party policy to increase state pensions by at least 5 a week and up to 15 a week for older pensioners was backed by the conference - a move which was welcomed by Liberal Democrat social security spokesman Steve Webb.

The decision to reject restoring the link between pensions and earnings will come as a blow for campaigners who hoped victory would encourage Labour rebels like Baroness Castle to increase pressure on the government over the issue.

Party leader Charles Kennedy played down the importance of the vote, saying the cost of the two policies and their benefits for pensioners would be very similar during the first term of a Liberal Democrat Government.

"If we restore the earnings link we are looking at a very similar sum over a five year parliament," he said. "Beyond that it would be idle to talk about.

Restoring dignity

But Archie Kirkwood MP - the chair of the Commons' select committee on social security - had argued that the link should be restored.

"This issue is less about money, it's more about giving dignity back to a generation that has paid its dues," he said.

Mr Kirkwood argued for the restoration of the link with earnings - which was scrapped by the first Thatcher government in 1980 - although he acknowledged it would prove more expensive than the leadership's policy.

He said: "We will have to pay more but from an expanding national cake."

Mr Kirkwood was opposed by the Liberal Democrat social security spokesman in the Lords.

Lord Goodhart said: "I do not think that restoring the link is the best way."

Resist 'siren call' of restoring link

He urged the delegates to "resist the siren call" of restoring the link, saying that pension increases should be made on an annual basis.

Speaker after speaker at the conference attacked Labour's record on pensions.

Party pensions spokesman Paul Burstow MP said: "Tony Blair [is] still living in a country where... more pensioners are living in poverty."

Manchester delegate Viv Bingham quoted Dylan Thomas urging the conference to "rage about the meaness of Gordon Brown, to rage against the inadequate services too many of our old people have".

'Government must listen'

Liz Lynne MEP urged the government to listen to pensioners warning "they didn't listen to the haulier and it was too late".

Pensioners were "asking for a decent standard of living, " she added.

Delegate Alex Wilcox, 28, from Tower Hamlets said he had already been paying into a pension scheme for four years. He opposed restoring the link because he did not want the pension system to 'go bust' before he was old enough to draw from it.

Earl Russell, a social security spokesman in the Lords, to restore the link regardless of economic circumstances would be to make the same "mistake" as William Hague's tax pledge.

"We can afford it now. But for how long? It would cost 8.4 billion in 2010," he warned.

Before the vote Liberal Democrat social security spokesman Steve Webb said he was "relaxed" about the issue, arguing that his policy would get money into pensioners' pockets faster.

He said that linking pensions to earnings would see increases of a pound or so a year - it would take the lifetime of a parliament to reach the level proposed by Lib Dem official policy.

Professor Webb added that people had become disillusioned with Labour after the 75p pension rise and had stopped trusting the Tories on pensions a long time ago.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Laura Trevelyan
"There is an apparent contradiction at the heart of the Liberal Democrat position"
Lib Dem Party Leader, Charles Kennedy
"We are the most honest party about tax"

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See also:

08 Sep 00 | UK Politics
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28 May 00 | UK Politics
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