Lord Hutton blasts Labour's 'bonkers' pension pledges

Stephanie Baxter
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Lord Hutton: Manifesto has '1920s agenda' that fails to speak to Labour's traditional supporters
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Lord Hutton: Manifesto has '1920s agenda' that fails to speak to Labour's traditional supporters

Labour peer Lord Hutton has said there is nothing positive to say about his party's manifesto, which makes a "delusional" pledge to freeze increases in the state pension age.

Giving a speech at the Pensions and Lifetime Savings Association's local authority conference today - just weeks before the general election - he criticised the manifesto's "1920s agenda" that fails to speak to the party's traditional supporters.

The former chairman of the Independent Public Service Pension Commission was particularly negative about the party's pledge to scrap planned increases to the state pension age, freezing it at 66.

Hutton said: "It's completely bonkers to kid the country that we can go on with the state pension age that doesn't reflect improving life expectancies."

He added it was a "complete delusion and cop out" to say to people that "we can just ignore that and carry on just as our grandparents would have had done in 1900".

Hutton also called for an end to the "unsustainable" triple lock on the state pension, which both Labour and the Liberal Democrats have pledged to keep if they win the election on June 8 - noting that a better way forward would be an earnings or inflation index to track increases, as that would preserve its value.

However, he defended the concept of defined benefit (DB) provision, of which he is a big supporter, such as the Local Government Pension Scheme (LGPS).

He said: "My argument is that DB is perfectly sustainable as long as we do all we can to reassure taxpayers that we're managing the costs and improving performance. Most importantly we're giving people the reasonable prospect of secure retirement with the money they need to live."

This is particularly poignant at a time when the country is facing huge uncertainty due to Brexit, "which might go well or go horribly wrong".

"There is a strong case for politicians to ensure families are better prepared for the future than they are today." He pointed towards data showing half of UK households have no savings at all, while the average value of an individual's pension pot when they retire is just £30,000.

"The purpose of pensions and savings policy must be to help Britain become a nation of savers."

However, the problem is that Treasury and Department for Work and Pensions (DWP) have been taking pensions policy in very different directions.

"The Treasury has been focused on short-term tax receipts as we're in dire straits, while DWP is looking at pensions in retirement. They are focusing on pensions policy from two different perspectives."

He said a big chunk of this problem is being caused by "dysfunctionality" in government, and that the solution is to have a minister for saving who would look at both tax and issues around retirement saving.

"The first mantra every new minister has to learn is that tax is only a matter for the Treasury and the chancellor. It's extraordinary as tax affects every department in government."

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