Tories 'alarmist' on pensions

Labour says Government proposals to help old people are panic measures
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Political Correspondent

Dire Conservative warnings of a "retirement time-bomb" caused by an ageing population were dismissed by Labour yesterday as a "softening up" exercise for "vote-buying, panic measures" expected to be announced by the Prime Minister at next month's Conservative conference.

John Major has signalled the introduction of measures to help old people who are forced to sell their homes to pay for nursing and residential care.

John MacGregor, MP for Norfolk South and a former Cabinet minister, warned on Wednesday in a speech to Tories in his constituency that the Government faced an "explosive cocktail" as the number of pensioners grows in relation to the number of workers supporting them. He said the Government needed to take action to encourage people to save for their old age.

Adam Ingram, Labour social security spokesman, said: "It is odd that Mr MacGregor is now wearing his heart on his sleeve. It's all to do with the preconditioning of the political scene - clearly the Government is going to announce something."

He described Mr MacGregor's speech as "strange", claiming that, because Britain has the largest funded pensions sector in Europe, the burden of growing numbers of the elderly would not fall primarily on the taxpayer. "If problems exist, then he and his government colleagues have helped to create them. The pension changes to which Mr MacGregor was party have resulted in millions of future pensioners being robbed of their due entitlement as a result of the mis-selling of pensions." Independent observers also accused Mr MacGregor of "exaggerating" the demographic time-bomb for political reasons. Andrew Dilnot, director of the Institute for Fiscal Studies, said: "The Government seems to be doing enough for people who can provide but has less to say about people who can't provide for themselves because of unemployment or ill health or caring responsibilities."

Mr Major has asked Kenneth Clarke, the Chancellor, to announce measures in his November Budget to allow people to take a reduced pension in return for a higher pay-out if they need nursing care. The Prime Minister said at last year's Conservative conference: "People who inherit the fruits of a lifetime's work are not the undeserving rich."

Mr MacGregor said in his speech: "It is a natural human wish for parents to want to pass something on to their children and grandchildren, and we want to encourage the family way of life." He said he had been contacted yesterday by "many worried pensioners". Proposals he has trailed include exempting the family home from the assets used to calculate individual's contributions to their long-term care.

Yesterday's exchanges came as John Bowis, a health minister, sent out guidance on the review procedure that patients and relatives will be able to demand if they believe they are entitled to continuing National Health Service care rather than means-tested care outside the NHS.

From next April, health authorities will set their own criteria for who is eligible for long-term NHS care. Patients who believe these criteria have been breached will have resort to an independent panel. Authorities have to produce their draft criteria for public consultation at the end of next month.

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