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Laws looks at pension costs

The LibDems will be scrutinising the economics of all their pension policies, including the citizen’s pension, in the coming months as they look to challenge the Government.

Shadow Work and Pensions secretary David Laws told Money Marketing at the conference in Blackpool that he would be taking a break to formulate future policy.

Laws says the difficulty is not just costing the party’s policies but benchmarking them against other proposals, especially when the Government has made unrealistic projections about not raising the percentage of GDP spent on pensions.

Challenged about the financial burden of a citizen’s pension, Laws says although the proposals may look expensive, the costs of an alternative could be higher.

He says he believes that the citizen’s pension should run alongside individuals having the opportunity and respon- sibility to save for themselves and share risk with the Government.

Laws says the LibDem pension message should be about empowerment and a liberal approach compared with Gordon Brown’s “clever people” in Whitehall and an “incredibly paternalistic Government”.

He is concerned that the Government will raise the pension age as an attempt to solve problems on the cheap and suggests that an independent body could be set up to assess when ages should rise, although the final decision must rest with politicians.

Laws also says the LibDem tax review will look at scrapping the 25 per cent tax-free lump sum benefit, as even some of the most free-market and low-tax organisations argue the rule is anomalous and a huge unjustified tax giveaway.

Laws says: “I am going to be going away with an entire stack of documents about the economics of pensions to think about this very complex issue and how to fund it.”


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