Downing Street Says

Asked which of the four options set out by Adair Turner in his report today most attracted the Prime Minister, the PMOS pointed out that today’s report was an interim report. As Mr Turner had indicated, he would present his final conclusions next year. We had no intention of pre-empting them. The analysis of the pensions issue which had been published today was the most detailed to date. As Mr Turner had made clear, it was an issue which had been around for twenty years. The core of the problem was the change in demographics which was partly a consequence of the market not adapting to the reality of people living longer and the swings it had seen in recent years. This was a problem not only facing this country but all developed countries, and was clearly something we needed to address. As Mr Turner had also pointed out, while there were immediate pension problems to address in the short term which the Government was doing, it was important to consider the longer term issues which were not due to bite for another twenty years. This was the role of the Pensions Commission. It was therefore sensible to give Mr Turner and his team the time and space to carry out their work over the next twelve to eighteen months to allow them to come up with their recommendations. We did not deny the fact that the Pensions Secretary, Alan Johnson, had stated his belief that there was a role for voluntary pension schemes to play. However, the Pensions Commission would examine all the options over the next year or so. Mr Turner’s conclusions would be contained in his final report. In the meantime, it was important not to dismiss any of the recommendations.

Asked if the Government was really intending to hold an election without formulating its policy on pensions, the PMOS said that while the issue of elections was not a matter for him, the question implied that the Government had not done anything in this area. That presumption was wrong. The Government had addressed the short term issues, for example by setting aside £400m as well as establishing the Pension Protection Fund – a measure contained in the Pensions Bill currently going through Parliament – to help people who had already lost their pensions and to protect those whose pension schemes might get into trouble in the future. In addition, the Prime Minister had chosen to set up the Pensions Commission to look at the longer term issues relating to pensions. As Adair Turner had noted, this was an area in which a piecemeal approach had been taken in the past whereas what was needed was a comprehensive approach that would deliver solutions which were sustainable in the long term. In our view, it was worthwhile taking the time to think the issues through properly.

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» Tuesday, October 12, 2004

Pensions

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