PM attacked over ‘biggest ever pension rise’ claim

 
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David Cameron came under fire today for claiming the elderly are getting “the biggest ever increase in the basic state pension” this year.

However, the Treasury confirmed that the £5.30 rise due in two weeks would simply keep the value of the pension in line with inflation.

Labour’s Ed Balls accused the Prime Minister of sleight of hand for portraying a zero real terms increase as a generous giveaway.

Speaking to Tories in Scotland, Mr Cameron said: “We said we’d give people dignity in old age — and yes, in just a couple of weeks we’ll have the biggest ever increase in the basic state pension.”

A Treasury spokesman said the 5.2 per cent rise was the inflation rate in September 2011 and benchmark for annual benefits upratings for many years. He confirmed that it was not a real terms increase.

Mr Balls said: “The reason they have put it up by this amount is because there was high inflation and the cost of living went up.”

Tory discontent over the Budget continued to surface. Backbencher Douglas Carswell criticised the fact that an extra 1.3 million people will be sucked into the higher 40p tax rate for the first time. “It now kicks in on earnings over £41,450 — pretty close to the £37,000 average full-time male earnings,” he said.

He said the “army of folk trying to do the right thing” by working hard now paid 42p to the Government out of every extra £1 they earn.

Mr Cameron used today’s speech to come out fighting for the Budget, especially the 50p tax rate cut to 45p. “This is about sending the world a message that if you want to invest, create, invent, locate, make money, make jobs, then come and do it right here,” he said.

He did not mention the so-called granny tax — a decision to phase out allowances for the over-65s which will cost some pensioners £323 a year. The move was condemned by Tory grandee Lord Tebbit as “unfair and lousy politics”.

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