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Michael Howard this morning joined those accusing Gordon Brown of attempting to sabotage a report on plans to tackle the looming pensions crisis.
The long-awaited proposals were in disarray last night after the Chancellor of the Exchequer rejected in advance a central measure of the blueprint for reform.
Mr Brown was accused by Whitehall aides and political opponents of sabotaging the report by Lord Turner of Ecchinswell after it became known that he was opposing its plan for a more generous state pension as a sweetener for raising the retirement age to 67.
"We are told Lord Turner is livid, " Mr Howard told Radio 4's Today programme. "I’m not surprised he is livid. This is no way of tacking one of most serious problems the country faces ... You only have to look at the embarrassed gibberish which Mr Blair was forced to utter at his press conference with Angela Merkel [the German Chancellor] yesterday to see what a mess the Government’s in."
The Conservative leader said there was a "growing consensus" building up around proposals, promoted by the Conservatives in May’s General Election, to get rid of means-testing and restore the link between the basic state pension and average earnings. "That is what Lord Turner and the Government’s own Pension Commission are going to recommend next week," he said. "The only man out of step is Gordon Brown."
A behind-the-scenes Whitehall battle broke into the open yesterday as allies of Mr Brown accused Blairites of leaking a letter from him to the Pensions Commission to show that he was “an obstacle to reform”. Then ministers and MPs accused Mr Brown of trying to kill the report, to be published next week, by allowing his friends to suggest that it would be shelved. The Brown camp denied this but there was clearly irritation in No 10 at what appeared to be a pre-emptive strike at elements of the report.
An unrepentant Chancellor again hinted at his objections to parts of the report in a speech last night. He told the Institute of Directors that when tackling “all long-term pressures from pensions and welfare to the public services” the Government would spend only what it could afford and maintain fiscal discipline. Reforms must be “right and affordable”. Mr Brown went out of his way to thank Lord Turner of Ecchinswell for his work and said that his report would “usher in an important debate about the future of pensions”.
Lord Turner himself was said to be livid that his report had been holed so badly in advance. A letter to his commission from Mr Brown noting that it should not assume that the current link between the pension credit, which helps poorer pensioners, and earnings would persist beyond 2008 was described by one official as a deliberate attempt to undermine his report.
Mr Brown’s allies claimed they had established that the leak had come from a government aide but had not been authorised by Downing Street. “Gordon is now judged to be anti-reform because he does not want to go back to the old Labour policy of restoring the earnings link. It is bizarre,” one aide said.
Mr Blair was trying to rescue the credibility of the Turner report. It is understood that he has reservations about certain proposals, including new employee savings schemes, but feels that the plans should at least be looked at in the round.
Using language similar to Mr Brown’s, Mr Blair said that the report would form the basis for a national debate on reform. Mr Blair emphasised that changes must be “affordable” and said: “I can assure you that we want to take this report and consider it very carefully and use that as a basis for discussion to get the right pension provision. It has to be done in a way that is fair, that provides a decent income in retirement but is also fair to the taxpayer.”
It appeared that Lord Turner had surprised No 10 and the Treasury by producing a prescriptive plan. Mr Brown’s friends said it had been expected that he would analyse the scale of the problem and then set out the options in detail, leaving the decisions to the Government. They added that by putting forward a firm plan for restoration of the earnings link, to which Mr Brown and Mr Blair had objected in the past, Lord Turner had made a reasoned debate more difficult.
George Osborne, the Shadow Chancellor, said: “To sabotage the Turner report in this way is disgraceful. Why has the Government promised a serious, grown-up debate on pension provision only for the Chancellor to throw his toys out of the pram? It is extraordinarily arrogant of Gordon Brown to try to shut down the much-needed public debate on a crisis of his own making.”
The Liberal Democrats accused Mr Brown of rejecting a more generous pension in favour of keeping the current means-tested system.
Ed Balls, formerly a key aide to Mr Brown and now MP for Normanton, West Yorkshire, said that the Chancellor would not be throwing out the “whole thing” but added that the Government had consistently seen the cost of a rise in pensions linked to earnings as “very large”. Mr Balls said: “It is much better to target resources on poorer pensioners while helping all pensioners.”
Meanwhile, it emerged that the controversial deal to allow existing public sector workers to continue to retire at 60 could be reopened in the future.
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