Brown accused of pension sabotage

Mr Brown: Opposes pensions earnings link

Chancellor Gordon Brown has been accused of trying to scupper proposals for the future of pensions before they are even published.

The claims from the Conservatives and Lib Dems come after BBC News learned he believes the Pensions Commission's proposals are unaffordable.

Mr Brown is believed to oppose raising the state pension age to pay for restoring the pensions-earnings link.

On Thursday night, he said reforms must be "sustainable, fair and affordable".

'Scandalous'

BBC political editor Nick Robinson says the chancellor plans to "shelve" a key part of Lord Turner's pensions report.

Conservative shadow work and pensions secretary Sir Malcolm Rifkind accused Mr Brown of trying to undermine the report in advance.

"One must assume it is a deliberate act of sabotage," he told BBC Radio 4's World at One.

HAVE YOUR SAY Can anyone tell me what kind of jobs 67 to 70 year olds are going to be doing? Mike, West Sussex Send us your comments Questions answered

Liberal Democrat work and pensions spokesman David Laws said Mr Brown should not be allowed to "veto what sounds like a very sensible report".

Mr Laws said the issue was a test of Tony Blair's authority as prime minister.

"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," he said.

"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."

Earnings link

The Turner Commission, headed by former Confederation of British Industry boss Lord Turner, is intended to provide a long-term solution to Britain's looming pensions crisis.

Mr Brown received an advance copy of its report a few days ago.

He is understood to disagree with its plan to restore the link between the basic state pension and rises in earnings, rather than prices as now.

The issue is not reform versus the status quo; there must be continuing reform Gordon Brown Chancellor Analysis: Politics of pensions

He has consistently opposed restoring the earnings link when it has been proposed by Labour's left or, more recently, by the Conservatives and the Liberal Democrats.

He has favoured instead targeting resources on the means-tested pension credit.

Mr Brown has also 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.

Tony Blair said he had not seen the Turner report but promised it would form the basis of a national debate.

"I can assure you that we want to take this report and consider it very carefully and use that as a basis for future discussion to get the right pension provision for the country," said Mr Blair.

Labour MP Ed Balls, the chancellor's close ally and former chief economic adviser, told the BBC that people needed a "sense of perspective" and said it was not a case of rejecting the entire Turner Report.

The restoration of the pensions link to earnings had been rejected over the past decade, in favour of the more affordable system of targeting help at the poorest pensioners, he said.

Personal responsibility

On Thursday night, Mr Brown said the Turner report would start a national debate on getting a consensus on pensions changes.

"The issue is not reform versus the status quo; there must be continuing reform," he said.

"The issue is how we achieve the right reforms, reforms which are sustainable fair and affordable."

Work and Pensions Secretary John Hutton has also stressed any long-term settlement must "strike the right balance between promoting personal responsibility" and providing decent minimum support.