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Turner Report chaos

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29th Nov 2005
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Days before publication of the Turner Report into pensions, a leaked letter indicated that the Chancellor had already ruled out part of its recommendations.

A Treasury spokesman refused to comment on leaks but in a speech to the Institute of Directors on Thursday night, Gordon Brown said: 'The Turner Commission will usher in an important debate about the future of pensions. The issue is not reform versus the status quo; there must be continuing reform. The issue is how we achieve the right reforms, reforms which are sustainable fair and affordable.'

According to press reports, the problem has arisen over the report's proposals that the retirement age should be raised to 67 with a consequential increase in the basic state pension which would be greater than the rate of inflation.

Not only does this follow on from the Government's agreement that current public sector workers should retire at 60 but it will also cost an extra £12 billion a year between 2020 and 2045.

While Lord Turner is reported as accepting that the extra cost should be the subject of a legitimate debate, his view is that the current system is unsustainable. The report also allegedly attacks the complexity of the current means-tested pension credit.

According to press reports of the leaked letter, the Chancellor has said Lord Turner should not 'assume' that the current linking of the pension credit with earnings will continue beyond 2008, a move which would cut its value and make the Turner Report's proposals more expensive.

In his first major speech as work and pensions secretary, John Hutton told the Institute for Public Policy Research that the Turner Report would be 'the start of the debate, not the end of it' and said the government was approaching the debate with 'a genuinely open mind'.

He also said that Britain needs a 'proper, decent state pension, a floor under which no-one should fall', which some have interpreted as support for the Turner Report and criticism of means-testing.

There is also speculation that the row has developed because the government was surprised by the prescriptive nature of the report.

The report, which has taken two years to complete, will be published on Wednesday.

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By John Savage
29th Nov 2005 15:19

How much has this cost us??
May I raise the question, please, as to how much this report (parts of which Brown seems to have already allocated to the bin) has cost us, the taxpayer??

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