Speaking at a Tax Incentivised Savings Association conference in London yesterday, Hammond attacked some of the promises made by ministers on the returns investors could hope to receive on personal accounts when they come into force in 2012.
Hammond said that while the Conservatives back personal accounts in principle they still have “serious concerns” about how they would work in practice.
Hammond 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 people will receive on their investment in personal accounts.
“I’m quite sure that if ministers were subject to the FSA some of them would be jailed by now.”
He said that as a result of the conflict between means-testing and personal accounts, the scheme has the potential to be “the biggest mis-selling scandal of all time.”
He said having left that portfolio responsibility 18 months ago, he was surprised by how little progress had been by the Government in addressing these matters.
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.”