Recession 'could trigger unrest'

Former Labour minister Frank Field has told the BBC the financial crisis is so severe that if not properly handled it could trigger civil unrest, even riots.

"I can't underestimate how terrible the financial crisis is even if it doesn't get a penny worse," he said in an interview with Panorama.

"No sensible person would sit in front of this camera and tell you there is no possibility whatsoever of disorder."

Mr Field spoke to Panorama for Monday's programme on Britain's pensions crisis.

In Who Will Save the Savers? Panorama looks at how the credit crunch is pushing Britain's long-running pensions and savings timebomb to a critical new stage.

Massive change

Mr Field, a senior backbench Labour MP who served as welfare reform minister under former prime minister Tony Blair, told Panorama that "the pension crisis is part of a bigger crisis of public finance".

"We can either try and get in first by leading the way about getting out accounts into order or we'll be forced to do so by unrest"
Frank Field

On sharp end of pensions crisis

He said the situation was so severe that even if the government is correct in its handling of the overall crisis, "getting back into order now involves such change of such magnitude that for the first time for generations issues of public order will be a key part of the political process".

However, he added that if the government takes a lead, unrest can be avoided.

"If we are quick enough we will start to get the changes through and a commitment made to our voters before we have quite widespread disorder. There will be change, it's whether we lead the change or whether we're actually pushed into the change," he said.

"We can either try and get in first by leading the way about getting our accounts into order or we'll be forced to do so by unrest," he added.

Uncertain future

In Panorama's programme on Monday, Adam Shaw - an expert on finance who presents Working Lunch and the business reports on Radio 4's Today programme - examines what awaits people who, despite being prudent, face an uncertain retirement, and asks what can be done to help.

Many of Britain's biggest companies are abandoning their final-salary pension schemes, private pensions are drastically underperforming, and the state pension is still one of the lowest in Europe.

So for millions, the chances of being able to retire at 60 or 65 with a decent standard of living are very slim.

This raises questions about the government's ability to find the tens of billions of pounds needed to plug a gap which is set to widen further because of Britain's ageing population.

The government insists it can sort out the pensions crisis.

Three years ago Pensions Secretary John Hutton said the government would introduce a compulsory Savings Scheme on top of the state pension - but only from 2012.

He also said it would restore the state pension earnings link which was removed 30 years ago by Sir Geoffrey Howe.

But as Panorama reports, maintaining the value of our pensions in the future is going to be a major headache.

Research conducted for Panorama by the Pensions Policy Institute suggests that by 2037 we will collectively have to spend an extra £34bn a year just to maintain the relative value of our pensions.

Panorama: Who Will Save the Savers? Monday 23 March 2009 on BBC One at 8.30pm

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