History and Policy memorandum submitted to the House of Commons Work and Pensions Committee : Pension reform

The last major review of British pensions, the Beveridge Report (1942), established fundamental principles: subsistence level benefits; rational, uniform administration; universal compulsory cover; and uniform state pension rights. Contrary to a belief perpetuated by the Work and Pensions Secretary, the Attlee government largely ignored the central principles of the Beveridge Report, causing many of the current problems with the pensions system. The Turner Commission returned to many of Beveridge’s basic principles in its second report A New Pensions Settlement for the Twenty-first Century. In its 2006 Pensions White Paper, the government abandoned most of these, retaining many of the weaknesses in the present system, including: continuing poor levels of pension in Britain, not least for women; a lower state pension at 68 for claimants than would be the case today; means tested benefits for one-third of future pensioners; enhanced levels of individual consumer risk; administrative complexity, and elevated costs; no independent governing body or cross-party consensus The White Paper meets the government’s affordability test: the provisional commitment to restore the earnings link makes official priorities clear. But, it fails tests of simplicity, transparency, political viability and social justice. Under its proposals, British state pensions will remain among the worst in the western world.