BRITAIN: Britain's Labour government has said it will seek a national consensus on a new pensions settlement fit for the 21st century, following the Pension Commission's proposal to gradually raise the state pension age to 68 or 69 by 2050.
The Conservatives and Liberal Democrats pledged themselves to the same goal yesterday in response to Lord Turner's eagerly awaited report which, as expected, also proposed that, in return for a longer working life, the basic state pension should be increased and subsequently rise in line with earnings rather than inflation. At the same time, however, both main opposition parties pitched the first round of a promised national debate in the context of Chancellor Gordon Brown's reported doubts about the affordability of some of the commission's proposals and his impatience, again perceived to be growing, to succeed Prime Minister Tony Blair.
Mr Brown sat alongside Mr Blair yesterday as the departing Conservative leader Michael Howard taunted the prime minister: "I know that retirement will be on both our minds today."
Making his last appearance at prime minister's questions before his successor is declared next Tuesday, Mr Howard pressed Mr Blair over the chancellor's alleged attempt last week to "sabotage" the conclusions of the Pensions Commission.
"Will you, just for once, stand up to your chancellor and, with our support, do what needs to be done to sort out one of the greatest challenges the country faces?" demanded Mr Howard.
After charging that "the only retirement the chancellor is planning" was that of the prime minister, Mr Howard then challenged Mr Blair to say that it remained his intention to serve "a full term" in office. In a still-more telling intervention, Liberal Democrat leader Charles Kennedy asked Mr Blair for an assurance that, in order that the chancellor should not have "a veto" over the pension proposals, Mr Blair would undertake to legislate and remain in office to see them through the present parliament.
Mr Blair had no such assurance for Mr Kennedy as pensions secretary John Hutton referred to Lord Turner's acknowledgment that the government had been right in its earlier years to specifically target the poorest pensioners, while echoing Number 10's insistence that "nothing should be ruled in or out" as they now looked to a future settlement.
Mr Hutton told MPs the government's response to yesterday's proposals would be based on five tests: would they promote personal responsibility, were they fair, were they affordable, would they simplify the system and would they be sustainable?
In addition to gradually raising the state pension age for men and women in response to rising life expectancy, the commission said the state pension should be more generous, with increases from 2010 linked to average wages. It also said the state system should be "as non-means tested as possible" and with a view to easing the plight of women pensioners.
It also proposed a new National Pensions Saving Scheme with employees contributing 4 per cent of salary, employers 3 per cent, and government 1 per cent.