Question: What's your reaction to news that councils are free to "cap" council tax rises for pensioners?

Don Steele: Its self evident really that council tax is rising much faster than the state pension and we still have three million people in this country who are entirely dependant on the state pension.

This means that if they have a 2.5 per cent increase which next year will amount to £1.93, then its obvious that if they live in an area where council tax is going up by 10 to 20 per cent then they won't be able to cover this out of their pension.

So Nick Raynsford has floated the idea that they will try to cap council tax in one way or another. Kent has led the way on this and said they will cap the rise for older people by imposing a small additional burden on other council tax payers.

This is ok for a place like Kent where they have a small number of people in the A band. But the further north you go, you'll find that up to 80 per cent are in this band. This means that you will have to a higher increase on people in the higher band in order to cover that.

So its not an easy one. The fact is that on the ground local authorities have got to try and meet this problem without any help from the government.

In Devon people are refusing to pay. In the north east, there is a tremendous rebellion beginning to build up and the government is going to be faced with state retirement pensioners effectively refusing to pay.

Question: How can young people be persuaded to start investing in pensions?

Don Steele: The trouble with pensions is that there is no simple answer. I know its trite to say that but there really isn't.

I don't think younger people can be persuaded. I think that the government needs to do much better than they are at the moment.

At the present time, the average wage is just over £20,000. A young person needs to invest £300 per month in their pension in order to get two thirds of final salary on retirement.

Now not a lot of people either want or can afford to do that. Many of them are just starting their first mortgage and have student loans to pay back. The last thing they are thinking of is pensions.

The government is trying to bring about what I think is quite an incredible switch. The position now is that 60 per cent of income in retirement is paid for by the state and 40 per cent from other sources. Ministers want to switch this and have 60 per cent provided by private pension and 40 per cent from the state.

There are some of us who think this is impossible to achieve. Occupational pensions are decreasing in number rapidly and people are being switched to personal payment schemes where they take the risk rather than the company.

As far as private pensions are concerned, I have described this industry as a 'one armed bandit.' Others have described it more politely. I read the other day someone talking of the 'economics of the casino'.

But we are talking about a gamble. If you're lucky, you'll get a good return and if you're unlucky - as many people are - you'll be very lucky to get your money back.

So people can be encouraged but they are not stupid. They see that the end product is simply not there.

In our view the only answer to this is to completely rethink the state pension. We need the most radical reform of state pension that we've ever had in this country.

It began with a national insurance scheme - which at the moment has a surplus of £31 billion and is being redirected towards the NHS. But instead of just having this fund, we think that there should be some sort of twin scheme between the private sector and the state.

To have a properly funded pension scheme which the state underwrites. I know this sounds a bit ambiguous but it is an ideal to which we could aim.

Then people could be sure that when they do come to retire, they will have a set amount of money that they know about. It will be a guaranteed income. At the moment people do not know what their income in retirement will be.

Question: Do you agree with means testing?

Don Steele: Means testing is an anathema to anyone over the age of 50. People can remember what means testing originally meant what it meant in the 1920s and 30s.

People remember how their homes were stripped and their clothes were virtually taken off their back. It's less than one hundred years ago that workhouses operated in this country.

We do not want a return to that kind of principle.

The government will argue that this is a test of income but it is means testing and the new pension credit has introduced for the first time ever in the history of this country more than 50 per cent of retired people to means testing.

This in our view is wrong. People who are entitled to these benefits will not apply for them - they just don't like means testing.

Even the government has admitted that after four years, only 73 per cent of people are likely to apply for pension credit. It means that a million and a half people will not have taken their entitlement. This is outrageous.

It is also vastly expensive. Administering the state pension for an ordinary pensioner costs £5.40 per head. If you add to this a means tested element, it is immediately multiplied ten times.

Any economist will tell you that this is utter nonsense. There is only one way to pay a pension. This is to pay a universal pension across the board and those of us who are fortunate who are better off and continue working will have it clawed back in income tax.

This is common sense but the government refuses to listen due for what appears to be ideological and political reasons.

This battle is very much on. We think means testing is morally wrong and is an economic and a social failure which we will combat at every turn.

Question: The government must implement age discrimination legislation by 2006 to cover age discrimination in the workplace. What's your views on this?

Don Steele: I've been saying for years that age discrimination is kind of welded into society.

It's automatic that when someone passes a certain age, they are almost considered to be a different species.

This has been evident in all of western society but is particularly bad in the United Kingdom. Here, when people get older they begin to be marginalised.

Age discrimination is something that this organisation has been combating for a very long time.

The government is moving extremely slowly on this. In our view it has been dragged kicking and screaming into a position where it actually had to abide by a European Directive.

The European Directive is only about employment and nothing else. We are concerned about the NHS, the new agreement for doctors which might affect the annual test for people over 75 and so on - but the Directive covers nothing of this.

We are also concerned that insurance premiums increase dramatically when you get older. We're concerned about a whole raft of things but little is being done.

The government is not interested in implementing legislation to help older people with these issues.

Now this wouldn't be so bad if it was consistent but it isn't. Because it has introduced goods and services legislation in relation to disability, race and gender.

So we're very concerned. Under the new legislation coming into force in 2006, we're only dealing with employment and it won't even be covered by primary legislation - just regulations. This is simply not good enough.

Alongside this, the government is introducing a single equality body which is going to draw together all the existing strands and add to them the new strands contained in the Directive.

Drawing together these strands without legislation is a recipe for disaster. You will have seven different strands in one body with 30 different types of legislation.

The government is making gestures towards equality for older people. It is nothing more than a gesture and we want much more.

Question: You're staging a conference in Southport on Tuesday and Wednesday next week and Malcolm Wicks, the pensions minister, will be speaking. In an ideal world, what would you like him to announce?

Don Steele: We would like him to come along to our conference and say that the pension credit is just the first step towards a total reform of pensions in this country.

We'd like him to say that the announcement by the Tories that they will restore the link with earnings is something that the government will more than equal and surpass.

And if there is a third, it would be of course to abolish means testing. Not just talk about it like Gordon Brown did before the 1997 election when he said his 'greatest ambition is to eliminate means testing among the poor and pensioners in this country.'