Cameron says Budget has hit pensioners

Tory leader David Cameron renewed his criticism of this week's Budget package yesterday as he made a play for the important "grey vote".

He pledged to keep the winter fuel allowance, pension credits, free bus travel and free TV licences and to restore the pensions link to earnings if he were to win power.

Mr Darling had used "tricksy" methods to cut pensioners' income in this week's Budget, without making it clear in his statement to MPs, according to Mr Cameron.

The Tories calculated that next year's 2.5 per cent rise in the basic state pension will be 59 less than if it had been increased in line with inflation – currently 3.7 per cent. Pensioners will also pay more tax because of Mr Darling's decision to freeze income tax allowances.

A single male pensioner on average income of 13,884 – including 5,007 in basic state pension – will be left with 13,005 after tax, rather than the 13,123 he would have received if tax allowances and pensions had risen in line with inflation, the party claimed.

In a speech in Birmingham, Shadow Chancellor George Osborne denounced the Budget as "a big con" and said pensioners were "the victims of the biggest con of all".

And Mr Cameron said: "Labour aren't being straight with you about what they're doing. And they're not being straight with you about what we plan either.

"They're going around scaring pensioners, telling you that the Conservatives are going to cut the winter fuel allowance, cut pension credit and end free bus travel and TV licences for over-75s. You must not believe them. I can promise you, these are lies, lies, lies."

Mr Cameron said that, by bringing forward the increase in the retirement age to 66, a Conservative administration would have the resources to get rid of means-testing by restoring the pensions link with earnings.

Tories would also get rid of the rule which effectively forces the elderly to buy an annuity, raise inheritance tax thresholds to 1m million and offer an insurance scheme to help people avoid having to sell their homes to pay for care in their old age.