Conservatives promise help for pensioners

The Conservative Party is proposing that, if elected into office, it will establish a scheme to compensate folks whose pensions were adversely affected when their retirement schemes collapsed.

The Fisherman is heartened to hear this, but feels that the plans do not go far enough. What about restoring the dividend tax credit abolished by Gordon Brown in his insatiable thirst for yet more money? That decision has done great harm to occupational pensions, and the Conservatives should think of reversing it.

Generally speaking, as far as occupational pensions are concerned, people do not want handouts. Far better for the Government to create a favourable tax environment in which to save, and then leave it to citizens, markets, employers etc to sort out pension provision.

The Conservatives are a bit cautious at the moment. Greedy Gordon's pension tax grab brings in about £5bn per annum. If the Conservatives reverse the abolition, that would mean £5bn less for the Treasury every year. The Conservatives are wary about promising to restore the tax credits because they have no way of knowing what the state of the public finances would be when they get into office, and thus whether a £5bn yearly shortfall would be easy to cope with. Very understandable, but The Fisherman still thinks that the Conservatives should be bolder. For starters, there is so much wastage of public funds, and one could easily achieve savings of £5bn per year by addressing that. (For example, tax credits have been overpaid by around £2bn per year for the past two years.) In addition, the Conservatives have already undertaken to abolish the identity cards scheme. That should free up a few billions.

Five billion pounds a year is a lot of money, but still affordable if someone takes the public finances in hand. The Conservative Party should make that pledge, and back it up with a promise that, on being elected to office, it will restore the dividend tax credit.