Conservatives call for pensions 'lifeboat'

17 April 2007
By calling time on tax breaks on retirement savings back in 1997, chancellor Gordon Brown committed a 'stealth raid' on pension funds, shadow foreign secretary William Hague has claimed.

Accusing the man most commentators hail as the future prime minister of "robbing" pensioners of their financial security, Mr Hague said the chancellor had taken £100 billion from pension funds over the last decade.

He called for the creation of what the Conservative party is calling a 'lifeboat fund', "to deliver a better package to those worst affected by occupational pension scheme failures".

The fund would top up the pensions of people whose savings have, according to Conservative calculations, been depleted since the tax breaks ended.

Although shadow work and pensions secretary Philip Hammond claimed there was "no quick fix" to the damage inflicted, he called for a cross-party consensus to bring in the lifeboat fund immediately.

But when challenged earlier this month, the chancellor defended his decision of 1997.

"It was the right decision to make for investment, for pensions and for the future of the British economy,'' he said, adding that getting rid of the tax on dividends had stimulated investment in pensions.

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