Pensioners 'will be worse off under Labour'

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Pensioners would lose out under Labour, compared with Conservative or Liberal Democrat policies, according to a leading independent think-tank.

Pensioners would lose out under Labour, compared with Conservative or Liberal Democrat policies, according to a leading independent think-tank.

Some households with children could also be worse off under Labour, the Institute for Fiscal Studies (IFS) found. But overall, families with children would gain under Labour's proposals, albeit by less than under the Conservative tax plans, the IFS said. They would also gain under Liberal Democrat plans, unless they were caught by the party's planned 50 per cent top rate of tax.

Both Conservatives and the Liberal Democrats hailed the report as vindication of their tax and benefit plans.

The IFS analysis of tax and benefit plans of all three parties found "pensioner households would lose slightly on average from Labour's proposed changes, but they would gain from the Conservatives' proposed changes, and they would gain substantially from the Liberal Democrats' proposed changes, unless they had an income of over £100,000 a year."

Figures produced by the IFS showed a retired couple would be £3 a week worse off under Labour , compared to £7.87 a week better off under the Tories, but £16.86 better off under the Liberal Democrats.

A working couple with children would be 13p a week worse off under Labour, but £4.09 better off under the Conservatives. The Liberal Democrats would also leave that group worse off, by £11.01 a week.

But a family with children and only one breadwinner would be 86p better off under Labour each week, and £1.97 a week better off under the Tories. The Liberal Democrats would leave them £12.02 worse off each week, unless they were under the proposed £100,000-a-year tax band.

The IFS said pensioners would be best off under Liberal Democrat plans to replace council tax with a local income tax and reform the state pension. Charles Kennedy, the party leader, will focus on pension plans today. He said yesterday: "Our Citizen's Pension for the over-75s will lift more than a million pensioners out of means testing with an extra £100 a month on the basic state pension."

Oliver Letwin, the shadow Chancellor, said: "Labour's policy of tax and spend will leave people worse off. The Conservative value for money action plan means that people will be better off. It is as simple as that."

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