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Last Updated: Thursday, 24 November 2005, 17:26 GMT
Brown 'rejects key pension plan'
Gordon Brown
Mr Brown: Opposes pensions earnings link
Gordon Brown believes pensions proposals to be published next week are unaffordable, the BBC has learned.

BBC political editor Nick Robinson says the chancellor plans to "shelve" a key part of 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.

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

Targeting

Mr Blair emphasised any pension changes must be "done in a way that is fair, that provides a decent income in retirement but it is also fair to the taxpayer".
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Can anyone tell me what kind of jobs 67 to 70 year olds are going to be doing?
Mike, West Sussex

"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," he told reporters following talks in Downing Street with new German Chancellor Angela Merkel.

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.

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

He has consistently opposed restoring the earnings link when it has been 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 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.

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.

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
David Laws
Lib Dem spokesman

He said the report should spark a debate lasting months or years about how the UK can best provide a "fair and affordable" pensions system.

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.

Work and Pensions Secretary John Hutton has also stressed any long-term settlement on pensions must be "affordable" and "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".

In his first major speech since taking the work and pensions job, Mr Hutton said any changes must meet five tests - to promote "personal responsibility" and be fair, affordable, simple and sustainable.

He also insisted that "the government will approach this debate with a genuinely open mind".

'Huge tragedy'

Conservative shadow work and pensions secretary Sir Malcolm Rifkind accused Mr Brown and Mr Balls of trying to undermine the Turner report before it had even been published.

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

Liberal Democrat work and pensions spokesman David Laws Mr Brown should not be allowed to "veto what sounds like a very sensible report", adding the issue was a "test of Mr Blair's authority".

"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.

"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.


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