Monday, 10 September 2007

Tories rowing back from earning link?

Not sure what is going on here, it looks like Michael Gove might have just got his policy wires crossed and said the wrong thing. Hence the immediate rebuttal. But remember he is very close to Cameron. Still seems a bit odd though. Of all the bits of the current pensions "consensus" I thought the restoration of the earnings link was pretty safe, with most fire directed at Personal Accounts.

Pension link commitment questioned
Last Updated: Wednesday, 05 September 2007, 12:36 GMT

The Government has called on the Conservative Party to clarify whether it remained committed to restoring the link between the state pension and earnings.

The move follows comments by shadow schools secretary Michael Grove that restoring the link was no longer a Conservative election commitment.

Work and Pensions Secretary Peter Hain has written to his opposite number Chris Grayling seeking assurances that the Conservatives still supported the cross-party consensus on the new pensions settlement.

He said: "As Secretary of State, I am determined to maintain the political consensus that has been forged on pensions, because I believe it is essential to entrench a new and lasting pensions settlement.

"Until recently, the Conservative frontbench has publicly committed itself to such a consensus, of which restoration of the earnings link is a crucial part.

"In the interests of pensioners, it is essential that you now clarify your position, making clear whether Mr Gove was correct in his remarks and guaranteeing that you will not undermine the consensus that has been built."

The commitment to increase the basic state pension in line with earnings rather than inflation is viewed by the Government as being a "crucial pillar" of its pensions settlement, which will see the age at which people can receive their state pension increase to 68 by 2046.

The number of years it takes to build a full basic state pension will also be reduced from 44 years for men and 39 years for women to 30 years for everyone.

But the Conservatives later said they were still committed to maintaining the link between earnings and the basic state pension.

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