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Brown 'to shelve' pensions plan |
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Thursday, 24 November 2005Gordon Brown believes pensions proposals to be published next week are unaffordable, the BBC has learned.
BBC political editor Nick Robinson says a source has told him the chancellor plans to "shelve" the Turner report.
Mr Brown is believed to oppose its suggestion the state pension age be raised to 67 to pay for restoration of a link between pensions and earnings.
But Pensions Secretary John Hutton said the report would be treated seriously, and promised a "grown-up debate".
Targeting
The Turner commission, headed by former Confederation of British Industry (CBI) boss Lord Turner, was meant to provide a long-term solution to Britain's looming pensions crisis.
But Mr Brown - who received an advance copy a few days ago - is understood to be angry about its proposal to restore the link between the basic state pension and rises in earnings - rather than prices as now.
He has consistently opposed restoring the earnings link when proposed by Labour's left or, more recently, the Conservatives and the Liberal Democrats.
He has favoured instead targeting resources on the means-tested pension credit.
Mr Brown has written to Lord Turner to correct one of the financial assumptions made in his calculations, saying he "should not assume" the link between the pension credit and earnings "will continue beyond 2008".
'Discipline'
The implication is that Lord Turner has got his figures wrong and that his proposals will be much more expensive than his report suggests.
Ed Balls, the Chancellor's close ally and former Chief Economic Adviser, told BBC Radio 4's Today programme "our approach has always been based on fiscal discipline...the key issue is - is it affordable and do the sums add up".
Mr Hutton has also stressed any long-term settlement on pensions must be "affordable".
He told Today: "We have made it very clear, Gordon has made it very clear, that we will take absolutely no risks with the public finances of this country."
Five tests
He said any "long term pensions settlement" had to "strike the right balance between "promoting personal responsibility" and "the job of the state to provide a decent floor below which nobody should be allowed to fall".
Later, in his first major speech since taking the job, Mr Hutton will say any changes must meet five tests - to promote "personal responsibility" and be fair, affordable, simple and sustainable.
Liberal Democrat work and pensions secretary David Laws said Mr Brown should not be allowed to "veto what sounds like a very sensible report".
"This is a scandalous intervention by the chancellor of the exchequer, an attempt to strangle the independent Turner Commission report before it's even been born.
"After all the Turner Commission has been reporting for three years, it's been trying to build a consensus right across the country to reform our pensions system.
"And on the week before it comes out, and on the very day that the new secretary of state for work and pensions is making his first speech on the issue of pensions, the chancellor of the exchequer chooses this day to leak his views that this report is not sustainable and affordable and tries to kill this whole thing off."
He said it would be a "huge tragedy" if Mr Brown was "allowed to undermine and destroy" the Turner proposals.
"There is a massive division in the government and in the country between one man, Gordon Brown, who wants to keep the system he has designed since 1997, and everybody else," he told BBC News 24.
BBC News
November 24, 2005 |
Thursday, 24 November 2005
BBC News
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