Pensions White Paper only provides half the solution- Bruce

3.19.04pm UTC (GMT +0000) Thu 25th May 2006

Responding to publication today of the Government's White Paper on Pension Reform, Gordon MP Malcolm Bruce said:

"I'm encouraged by this long over-due change of heart by the Government which will at last restore the link between pensions and earnings and sets out provisions for a national pension savings scheme. However, huge question marks over the timetable and the future sustainability of these reforms still loom large and must be addressed.

"This package only provides half the answers and does little for today's pensioners. It still leaves Britain with a complex state pension system, excessively reliant on means-testing. The 40% cap of pensioners who will continue to be means-tested, will undermine incentives to save, and will fail to provide a decent minimum income to keep all pensioners out of poverty. For current pensioners who have worked all lives, this offers pretty cold comfort.

"I am also concerned that Gordon Brown has given himself wriggle room by inserting a 'get out clause' in delaying the introduction of the earnings link by up to 5 years. The Government are also speeding up the introduction of higher state pension ages which is 5 years sooner than Lord Turner had proposed. There should be no increase in the state pension age without clear and bankable guarantees on the earnings link.

"The White Paper may temporarily solve some of the battles between No.10 and No.11, but I am sceptical that it will provide the long-term settlement for pensions that we so desperately need."

ENDS