Field slams pension reform

By DAILY MAIL REPORTER
Updated:

 

A former Labour minister yesterday condemned the Government's pension reforms as 'positively dangerous'.

Frank Field

Frank Field, who was responsible for welfare reform, launched a devastating attack on the flagship plans announced earlier this summer, comparing them to the discredited Dangerous Dogs Act introduced by the Tories.

Mr Field, a leading critic of Tony Blair's approach to welfare, castigated the main parties for failing to oppose the pensions White Paper.

And he challenged the heads of major pension firms to speak out against what he described as the 'emperor's new clothes' of the scheme.

Speaking to the Merseyside Life and Pensions Society, Mr Field said: 'The Government's pensions proposals are not only dangerous in themselves, they also, ominously, enjoy all-party consensus in the House.

'Rarely has legislation attracting such support resulted in suitable or advisable policies.

'One only has to think of the overwhelming support given to the Dangerous Dogs Bill, one of the worst thought through pieces of legislation ever to become law.'

He added: 'The Government's proposed pension reforms are not so much preposterous, as positively dangerous.

'Everyone in the pensions industry agrees that the basic state pension must be reformed before any other changes can take place. This first reform must be to ensure everyone receives a minimum pension lifting them off means testing. But under the Government's proposals this aim will never be met.'

In May, the Government announced a deal on pensions between Gordon Brown and Mr Blair which would see workers forced to wait until they reach 68 before they could claim a more generous state pension.

The retirement age will rise initially to 66 in the 2020s, climbing to 68 by 2050.

The Government said it wanted to increase personal saving and reduce the growing dependence of pensioners on means-testing.

Key planks were to raise the state pension age and to uprate the basic state pension in line with average earnings, not inflation.

The Government also announced plans for a national pensions savings scheme.

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Pot of gold

But the package was criticised by those who claimed public workers would get a better deal, after ministers caved in under pressure from the unions last year and dropped plans to raise the retirement age for millions of existing public sector workers from 60 to 65.

Mr Field, who is also is chairman of the Pensions Reform Group in the Commons, said last night that the value of the basic state pension was unlikely to rise by enough to get people off means-tested benefits, which have been massively extended under Labour.

'The Government will never be able to claim that it "pays to save". This should be the first and major goal of any serious pension reform,' he said.

The various funds set up by the Government to invest pension money could produce different returns, effectively short-changing some pensioners, he claimed.

'Why won't the pensions industry speak out against the Government's reforms? I've spoken to numerous companies whose business is selling pensions, and without exception they all agree that the Government's proposals are ludicrous.

'Which company chairman is going to be brave enough to tell the king he has no clothes - or, at least, no clothes worth wearing?'

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