Stephen Morgan MP has today warned that the future of the state pension is on the ballot paper at the next election, as a new Labour dossier exposes the risks to pensioners from the Tories’ £46 billion unfunded tax plan.
Last week, the Chancellor Jeremy Hunt announced the Conservatives’ £46 billion unfunded plan to abolish National Insurance Contributions (NICs). Since then, minister after minister has refused to say how it will be funded or the impact it will have on the state pension.
Entitlement to the state pension is based on people’s contributions during their working life, via their NICs. Under the Tories’ plan, employees will not make contributions, creating uncertainty about this entitlement and blowing a £46 billion hole in funding earmarked for the state pension and NHS.
A new dossier published by Labour reveals the serious threat of Tories’ plan on the future of the state pension that could leave working people and pensioners worse off.
New analysis from the Labour Party reveals that scrapping NICs could:
- Leave a £35 billion black hole in the funding of the state pension
- Sever the link between contributions and pension entitlement, creating huge uncertainty for working people about when and how they will be eligible for their pension
- Mean the average pensioner facing a £800 tax hike, more than wiping out gains from the triple lock over the last 14 years, through the merge of income tax and NICs as hinted at by the Chancellor.
Labour has urged Tory ministers to come clean about their plans by setting out the ten questions that need to be answered, including how the £46 billion plan will be paid for and what changes will be made to eligibility.
Commenting, Portsmouth South MP Stephen Morgan said:
”The Conservative Government’s economic failure has meant more over 55s needing to take their pension early. More pensioners renting on their savings to get by, and more older people renting into retirement.
“It no wonder why the Portsmouth pensioners I meet are so dismayed at the state of the country, or the state of their own finances.
“After 14 years of failure, the Conservatives have run out of road. They are no longer the Party for pensioners. Labour will be.”
Jonathan Ashworth MP, Labour’s Shadow Paymaster General, said:
“The future of the state pension is on the ballot paper at the next general election.
“The Tories’ £46 billion unfunded tax plan to abolish national insurance can only lead to higher borrowing, higher taxes on pensioners or the end of the state pension as we know it.
“Ministers need to come clean with the British people and start answering these basic questions.”
