Kennedy demands urgent action from Blair on pensions reform

1.10.47pm GMT Fri 17th Jun 2005

Kennedy demands urgent action from Blair on pensions reform

The Liberal Democrats yesterday announced their plans for reform of the pensions system. The Liberal Democrats have written to Adair Turner, Chairman of the Pension Commission, setting out 10 key principles for pension reform.

The party is determined to end the complexities and unfairness of means testing, introduce a range of incentives for people to take out second pensions, resist calls for compulsory pensions, and to make pensions more "politician proof" by introducing an Independent Pensions Authority and by ensuring that second pensions are in private hands rather than owned by the state. No change in the state pension age should take place before 2030 at earliest.

The Liberal Democrats believe that pensions reform must proceed on a cross-party basis, and are playing a constructive role in seeking a consensus. Mr. Kennedy's intervention comes 5 days before the UK Pensions Experts Conference, called by Adair Turner, (Chairman of the Pensions Commission) - charged with bringing forward proposals for reform.

Liberal Democrat Leader, Charles Kennedy MP said "Means-testing has helped create a pensions system which is in a complete muddle - both complex and ineffective. Millions of our pensioners still live in poverty, many women end up with insultingly small pensions, and the system is now so complex that few people can understand it. People are losing confidence in the stability and security of pensions. They worry that the State will not honour its commitments. And they worry about the risks involved in investing heavily in a private pension."

Mr. Kennedy added "The Liberal Democrats, believe that a new and durable pensions settlement should create a firm foundation based on the universality of the Citizen's Pension that lifts pensioners out of poverty. But it should also encourage personal responsibility so that people actively plan and save for their retirement. Our vision is that as many people as possible should have their own additional pensions, on top of the Citizen's Pension, and not at the whim of the Government of the day."

Mr. Kennedy concluded by saying "The issue now is whether the Prime Minister is going to commit himself to urgent reform - and urgent must mean legislating for reform in this Parliament. At present, we are left to conclude that, in defence of his means-tested pensions system, Gordon Brown is digging in, and trying to string out consultation into the next Parliament. We cannot afford any further dithering and delay on fundamental pensions reform."

Liberal Democrat Shadow Work and Pensions Secretary, David Laws MP, added "The Government has said that it wants a national consensus on pensions, and I believe that is what is emerging. The consensus is that the Government's pension system is an unsustainable mess. The question now is whether the Government will be part of the consensus for change or whether they are irreconcilably split. The Liberal Democrats are determined to play a constructive role in pressing for reform, and we believe that there must be legislation in this parliament."