Hague promises to trump Labour with bigger rise in pensions

William Hague promised yesterday to trump any increase in the basic state pension announced by Labour as he sought to prolong the Government's problems on the issue.

William Hague promised yesterday to trump any increase in the basic state pension announced by Labour as he sought to prolong the Government's problems on the issue.

Under proposals published by the Tories on the eve of their conference in Bournemouth, single over-75s would receive an extra £5.50 a week on their state pension and couples over 75 an extra £7 a week. Single pensioners aged 60 to 75 would receive an extra £3.50 a week and couples an extra £4.

Although the £2bn package would come on top of any rise announced next month by Gordon Brown, the Chancellor, it would be funded partly by scrapping such measures as the £150-a-year winter fuel allowance, the Christmas bonus and free television licences for over-75s.

The Tories believe most of Britain's 11 million old people would prefer to see the money spent on the basic state pension, saying Labour had paid a heavy price for its 75p-a-week increase this April. Yesterday Mr Hague said he wanted to put all the Government's one-off payments and "gimmicks" on to the state pension. "Everybody would be a little better off and everybody would have dignity and choice. There would be more money in total going to the pensioners of this country."

The Tories also gave details of how they would allow the seven million workers now under 30 to opt out of the basic state pension. The £500 a year they put into the National Insurance Fund for their state pension would instead be invested in a private scheme. The Tories said a young person would build up a pension worth £130 a week, double the basic state pension of £67.50.

Mr Hague, dismissing Labour claims that the Tories would cut spending by £16bn to finance tax cuts, said Labour's spending on health would be matched by the Tories.

He stopped short of making a similar promise on education, saying spending would rise "within what the country can afford". He added: "We don't think you can go on year after year squeezing people harder with increased taxes."

Alistair Darling, Secretary of State for Social Security, said the Tories had not costed their plans properly. "Far from helping pensioners and giving them more money, the Tories will privatise the basic state pension and cut the National Insurance Fund by billions of pounds."