David Cameron speaks out on pensions and tax cuts

09 Jan

The British Prime Minister, in his first key pledge ahead of the 2015 general election, has appealed to older voters by guaranteeing an increase in the state pension should the Conservatives triumph at the polls.


In a BBC interview with Andrew Marr, David Cameron said that his party would maintain the ‘triple lock’ system if they form the next government.


This would promise that the basic state pension will rise by whichever is higher – wages, inflation or 2.5 per cent – until at least 2020.


However, he dodged questions on what would happen to other age-related benefits after the 2015 election.


Marr asked: “While we’re talking about benefits, what about pensioners being able to pick up benefits for free television licences, free travel, winter fuel and so forth.  Is that going to carry on forever?”


Cameron, after several failed deflection attempts, responded: “We will set our plans at the next election in our manifesto.  But I think, it is you know, just to make the point, you know, I made promises like delivering on our aid promises. We kept that promise.”


Perhaps this is the first real indication that the Conservatives would abandon their support for many age-related benefits?


To my mind, whatever happens to the benefits – and I’m convinced they will need to be gradually dropped by whichever party comes into power – politicians’ statements such as these on state pensions are ultimately misleading and, indeed, could be dangerous because they could be misconstrued.


Yes, Cameron’s statement on the so-called ‘triple lock’ is good news for current retirees, and those on the cusp of retirement, but there are bona fide concerns that such trumpet-blowing on pensions will lull the wider, younger population into a false sense of security on the issue.


The truth is that due to fundamental demographic shifts (ie there’s an ageing population and shrinking labour force), the state will not be able to financially look after future generations in the way it has done.  This means that funding retirement is increasingly a personal responsibility; we all need to make our provision for our older years, especially as we’re living longer – this is what needs to be drummed into the electorate!  Anyway, who wants to ‘scrape by’ in their retirement on just want the state is able to afford (very little) to pay out?


Cameron also answered questions on tax yesterday.  He said that his “priority” would be tax cuts for low-income families but that “we’ve set taxes to raise the revenue.  You should set taxes to raise revenue, not to make a political point.”

This wording suggests that there would also be tax cuts for top rate earners too.

The PM is right with what he said about tax: it absolutely should be a way of raising money for the government, and must NOT be used as a political weapon to beat those who some politicians (mainly on the far left) disapprove of – such as HNW individuals.


Let’s just hope that he is able to clearly set out the case – unlike he did following the disastrous 2012 budget – to the electorate for far-reaching tax cuts at all levels.


Tax cuts make everyone wealthier as they encourage economic activity – and contrary to what some ‘tax activists’ might claim, it is clear they do not damage public finances in the longer-term.

Nigel Green deVere Group

blog written 9th January




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