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IPE special report May 2018

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UK pensions reform hit by political row

UK – Chancellor Gordon Brown is at the centre of a political row having been accused of trying to stifle the pensions debate ahead of the release next week of the much-anticipated Turner report.

A war of media leaks has developed with both Brown and Pensions Commission chairman Lord Turner apparently firing broadsides in the pages of the financial press.

Brown has been criticised following a leaked letter of warning he sent to questioning the report’s figures and the affordability of the proposed reforms.

The report will reportedly call for the state pension age to increase to 67 and propose linking future pensions rises to earnings.

Brown has consistently opposed this link, apparently labeling it as “unaffordable”. He also reiterated that any reforms must comply with notions of affordability, sustainability and fairness.

Opposition leader Michael Howard, speaking on BBC Radio, accused Brown of being a spoke in the wheel of vital pension reforms, and of sabotaging the Turner report before its release on November 30.

Meanwhile, Brown has also reportedly come under fire from new work and pensions secretary John Hutton, who believes the Treasury is attempting to undermine the report and shut down the pensions debate.

Turner is expected to argue that the report’s proposals will provide a more generous state pension at an initially marginally higher cost than what government would spend on the existing system up to 2020. This would eventually level off.

A report this week suggested that Turner’s call to upgrade the basic state pension runs contrary to Brown’s target of focusing “resources on the poorest pensioners through the means-tested Pension Credit”.

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