Gordon Brown and Tony Blair have reached an agreement on pensions after months of debate, Downing Street has confirmed today.
The deal will restore the link between the state pension and earnings, although this will now happen in 2012 instead of 2010 as suggested in Lord Turner’s proposals.
The pair also agreed to increase the pensionable age to 68 in 2050 as a means to pay for the added cost to the Treasury.
Reports emerged this morning that the prime minister and the chancellor held talks late into the night in an attempt to resolve their differences.
The announcement was originally leaked to the press by a source at the Treasury. It was later confirmed by Downing Street.
The debate between Gordon Brown and Tony Blair had become public over recent months. It is thought the prime minister acknowledged the Treasury’s concerns about linking pensions and earnings by adding the caveat that the pensionable age should be increased to finance the change.
As some minor details are still to be agreed by the pair, it is thought the agreement will be announced when the White Paper on pensions is presented to parliament at the end of the month.
Shadow chancellor George Osborne welcomed the link between pensions and earnings being restored. It was originally broken by Margaret Thatcher’s Conservative government in 1980.
It’s thought the link will be restored quickly in 2012, rather than being eased in.
© Crimson Business Ltd. 2006
