Speaking at the Tax Incentivised Savings Association conference in London last week, Hammond attacked some of the promises made by ministers on returns that investors could hope to get through personal accounts. He said the Tories back personal accounts in principle but still have “serious concerns” over how they will work in practice.
He said: “The first concern we have is about means-testing and the potential in personal accounts for the biggest misselling scandal of all time, underpinned by some of the comments made by ministers about the returns that people will receive on their investment in personal accounts. I am quite sure that if ministers were subject to the FSA, some of them would be jailed by now.”
Hammond left the penson portfolio responsibility 18 months ago and said that he was surprised at how little progress had been made on means-testing. He said the Government’s only solution was to increase the trivial commutation threshold which is a very expensive option.
He also criticised the Government’s tax treatment of pension funds, saying. “It has cost pension funds a great deal – £5bn per year plus £100bn of capital value – but it has also helped to reinforce a story in the public’s mind about the lack of security in pension savings that started with Robert Maxwell, went on through misselling and Equitable Life and the people who lost out when their occupational schemes failed.”
A Labour spokesperson says: “This is truly pathetic. As they struggle to find a coherent economic policy, yet again we can see the Tories desperately trying to make headlines. Given the cross-party support for the Pensions Bill, it is disappointing to see George Osborne’s right-hand man make such childish comments.”