Brown and Blunkett head for pensions clash

Gordon Brown and David Blunkett look to be on a collision course over the pensions system today after a warning by the Chancellor that radical change may not come before the next Parliament.

Tensions between the Chancellor and Work and Pensions Secretary emerged in the wake of a claim by pensions chief Adair Turner that the Treasury's means-testing of the elderly deterred people from saving for their retirement. Although some industry observers believe Mr Blunkett wants to push through speedy reforms, starting with a government summit next month, Mr Brown made clear that he saw no need for a rush.

Mr Brown said that the long-term nature of any reform meant consensus would have to be built between parties, business, unions and others in society. "Tony Blair and I said during the election campaign that if there were radical recommendations put forward there would have to be a period of consultation, and we would have thought that if there were the sort of changes that some people have talked about that would require another period of consultation that may lead into the next Parliament," he said.

But Mr Blunkett hit back, saying there appeared to be " confusion" over the timetable.

"The question is not whether we would bring in changes within this Parliament but whether we would make the decisions and if appropriate and necessary, legislate to implement those decisions," he said.

Mr Blunkett has already angered some in the Treasury with his claim within days of his appointment as Work and Pensions Secretary that no option was being ruled out of his review of the pensions system. That includes possible tax rises, compulsory saving and raising the retirement age.

The Chancellor has introduced means-tested credits which top up the basic pension for the poorest.

But Mr Turner, the head of Tony Blair's Pensions Commission, launched a scathing attack on them and the fact that the basic state pension was nowhere near enough to live on.

Mr Turner said: "We have to stop the spread of means testing. It is a disincentive to save. It arises from the fact that almost uniquely we have a basic pension below our poverty line."

Mr Turner also appeared to suggest that graduates could be forced to wait until 70 before they retired.

Both Mr Blunkett's aides and the Treasury said it was unlikely such a policy would be implemented.

Mr Brown told Breakfast With Frost: "I don't think anybody can talk about the Turner Commission report on pensions until it is published in the autumn."

Commenting on Mr Turner's ideas, Liberal Democrat work and pensions spokesman David Laws said: "Ministers are talking about the need for a cross-party consensus on pensions policy, but it is clear that there is a growing fault line between Gordon Brown on the one hand and Tony Blair and David Blunkett on the other."