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Employees to Have Greater Say on Pensions
Tom Happold, The Guardians
September 14, 2004
The work and pensions secretary, Alan Johnson, today promised the unions a major role in developing the government's pensions policy and workers a greater say in the running of their pension funds.
Giving his first speech since his appointment, Mr Johnson told the TUC conference he would amend the pensions bill, currently going through parliament, to include powers to ensure 50% of pension scheme trustees are member-nominated.
He also tried to quell union fears that workers will be forced to work longer in life by promising that the government would not to raise the state pension age to 70.
"This government will not raise the state pension age," he said. "This government will not force people to work to 70 years of age."
"Our approach is to give people greater flexibility to make decisions about when and how long to work."
Mr Johnson's pledge on pension scheme trustees was welcomed by the TUC general secretary, Brendan Barber, who described it as "another victory for people at work".
Like the prime minister before him, however, the majority of Mr Johnson's address was free of new policy detail but packed with warm words about the importance of the government's relationship with the unions.
He claimed he had insisted that his first speech as work and pensions secretary be to the TUC and frequently referred to his background as a trade unionist.
As a former leader of the Communication Workers' Union, Mr Johnson is the first union leader to make it to the cabinet since the T&G's Frank Cousins was appointed minister of technology by Harold Wilson in 1964.
The majority of his speech praised the record of his predecessor, Andrew Smith - who resigned from the government amid reports that he was exasperated about briefings against him - in tackling "pensioner policy".
The Tory leader, Michael Howard, meanwhile, unveiled plans today to prevent elderly people being forced to use up their savings or sell off property to pay for residential care.
Under his plans to foster partnership between families, the government and the insurance industry, people who take out an insurance plan that meets the cost of three years' long-term care would be guaranteed free long-term care by government beyond that initial period, regardless of their assets.
Speaking at his party's Older People's Summit in Westminster, Mr Howard said 40,000 people a year suffer the indignity of having to sell everything to pay for long-term care.
Launching a discussion paper on long-term care, he said the proposed three-year partnership scheme would be fairer, more transparent and would provide a vital safety net.
Mr Howard said: "For many people, the last few years of their lives can be spent in residential care.
"Without proper planning, that can end up meaning that someone's entire life savings and property are used to pay for that care. Forty thousand people suffer this indignity every year," he added.
"The current system is unfair. It encourages people to run down their assets. It penalises people who have saved."
While Mr Howard promised greater details about his plans shortly, the government is waiting for its pension commission, chaired by former CBI boss Adair Turner, to report next month.
Today, Mr Johnson said that it was a part of the government's efforts to "face up to the problems of many people not saving nearly enough for retirement".
Perhaps the most controversial issue it faces is compulsion. The unions believe that employers should be forced to provide employee pension schemes, while the CBI believes the emphasis should be on individual responsibility.
The chancellor Gordon Brown, meanwhile, has pulled out of speaking the TUC general council dinner this evening, as he has to remain at the bedside of his elderly mother, who is seriously sick in hospital.
The Labour party chairman, Ian McCartney, will instead address the union leaders.
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