LETTER: Two-tier pension is planned

In March, the Chancellor, George Osborne, reiterated these proposals, but warned it would not apply to current pensioners, and it would “take years to come into effect”.’

So a two-tier state pension is planned!

Linking pensions with earnings. I think Gordon Lishman means the percentage increase in earnings would be applied to state pensions. Currently, there is very little increase in earnings. So what the coalition did was use the Retail Price Index inflation figure for the basic pension. This increased to £102.15 in April. The rest of the pension that is Serps etc and all other benefits, went up by the Consumer Price Index, which is usually lower.

In September RPI was 5.6% and the CPI 5.2%. So it doesn’t take a genius to realise we pensioners will receive less of an increase when in the past increases were all based on the RPI. It could be many years before increases in the average earnings exceed the inflation rates.

Where does that leave the winter fuel allowance?

Mr Lishman’s letter got even more bizarre when he referred to Ed Millaband as the previous Labour Chancellor (we all missed that) and Labour was going to put up VAT. That was never announced.

What this coalition did was stifle the growth with not only putting up VAT but talking the economy down by saying we were bankrupt, and by making large cuts to councils which were unprecedented. Even “Thatcherism” never went this far.

The only way to start to reduce the deficit is to have growth. Instead of blaming Europe the UK has to look within its own shores. Labour’s proposal was to bring forward capital infrastructure spending. This is what the Chancellor will now try to do. Unfortunately it will be “Too little and too late”. What we need to remember is that it was the financial crisis which caused the deficit. This was a global crisis. It was easy just to blame the Labour Government. Were they to blame for what happened in The USA and Europe?

ELLEN STRINGER