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Last Updated: Tuesday, 4 April 2006, 16:46 GMT 17:46 UK
Pension plans '90 to 95% agreed'
Gordon Brown
Chancellor Gordon Brown says there is consensus on "90 to 95%" of the pension reforms put forward by Lord Turner.

He said he remains opposed to restoring the link between state pensions and earnings, on the grounds of cost.

He told the BBC he believed a consensus could be found on the issue, saying Tony Blair and he agreed on the need to tackle affordability of any changes.

Mr Brown's comments came after sources said Mr Blair was willing to over-ride Treasury objections to pension plans.

KEY PENSION PROPOSALS
Increase the state pension age for men and women to 68 by 2050
Make the state pension more generous and link future increases in it to earnings rather than prices
Automatically enrol people into a new low-cost government-administered savings scheme
Give people the chance to opt out if it's not suitable for them

In an interview with BBC Political Editor Nick Robinson, Mr Brown said there had "never been an issue about principle" over the link between pensions and earnings.

He said Lord Turner has "helped us resolve" some of the issues of concern over the future of the UK's pensions.

He said he and Mr Blair were "already 90-95% of the way there with Turner" but said there were still questions about the affordability of Lord Turner's plans.

'Tax rise'

"I always sought to avoid a tax consequence from any recommendation from this or any other report on pensions," he said.

"The issue of affordability is one that Tony Blair and I are at one. We know the country looks to us to manage the finances in a prudent way. I believe we are moving towards a consensus that will not just last for one Parliament but...for a generation."

Lord Turner, who published the final report of the government's Pensions Commission earlier on Tuesday, wants a more generous state pension paid at the age of 68 by the year 2050 and future increases linked to earnings rather than inflation.

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He said that taxes may have to rise to pay for higher pensions.

He proposes the introduction of a National Pensions Saving Scheme (NPSS).

This would allow people who were not part of an employer's pension scheme to take part in an occupational pension programme. They would automatically be enrolled in a scheme when they started a new job, unless they opted out.

They would contribute 5% of their salary, with their employer paying in an extra 3%. The BBC understands the government is considering phasing it in for large firms and providing assistance to smaller firms.

BBC Radio Five Live's chief political correspondent John Pienaar said it may be funded by cutting the national insurance discount currently offered to those who opt to have a private pension.

The BBC also understands the government has rejected as impractical Lord Turner's proposal to base women's pension rights on how long they have lived in the UK. Instead women would be able to qualify for a pension after a reduced period of paying national insurance.

The present system is regarded as unfair to women who break their period of employment, for example, to have children.

'Lowest state pension'

Lord Turner said his commission suggested that 2010 would be the time to restore the pensions link with earnings because there is already a commitment between then and 2020 to increase women's pension age from 60 to 65.

HAVE YOUR SAY
For those starting out now just don't bother with a pension
Liz, Leeds, UK

He said he believed the Treasury had "seen health expenditure as a much bigger priority than fixing pensions".

But he insisted the UK had to reach the same sort of far-reaching reforms on pensions as countries like the US and Sweden.

Tory leader David Cameron said his party wanted a "strong basic state pension linked to earnings and growing over time to get people off the means test in this country".

He accused Mr Brown of blocking reform, adding: "Tony Blair and Gordon Brown are fighting over who should run the country while there are big issues like pensions that need to be dealt with".

David Laws, the Liberal Democrat spokesman on work and pensions, said his party supported the key conclusions of Lord Turner's report.


pensions turner

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