Britain’s Tories promise pension reform

Britain’s opposition Conservatives, tipped by polls to take power next year, said yesterday they would raise the retirement age earlier than expected as they seek to tackle a record deficit.

The party led by David Cameron, who opinion polls put on course to oust Prime Minister Gordon Brown in an election due by June, sought to move past a row over Europe to say how they would tackle the economic crisis in government.

As Britain struggles to emerge from a deep recession and a forecast deficit this year of £175 billion, the economy is top of the agenda ahead of the next election due by June.

Conservative finance spokesman George Osborne was to announce plans to bring forward a rise in the state pension age from 65 to 66 by up to a decade, so it would come into effect in 2016, not 2026 as currently planned.

The move would save £13 billion a year, he was to say in a speech to the party’s annual conference in Manchester, northwest England.

According to pre-released extracts, Mr Osborne will say that raising the age at which people can claim the state pension will be matched with an increase in the amount paid.

“No one who is a pensioner today, or approaching retirement soon, will be affected. But this is how we can afford increasing the basic state pension for all,” he will say.

Mr Cameron said in a television interview that the pensions plan was part of a raft of measures Mr Osborne would announce about how a Tory government would deal with the economic crisis.

“If we are going to have a proper comprehensive approach, we have got to look at pay, you’ve got to look at pensions, you’ve got to look at benefits,” he told GMTV television.

On Monday, the party unveiled proposals for a new “back to work” scheme for the unemployed, funded by cutting some benefit payments.

Some 2.47 million people are currently out of work and the figure is expected to keep rising despite signs of economic recovery.

Mr Cameron wants to make jobs and the economy the focus of this week’s conference, but is struggling to keep a lid on a simmering row over his promise to hold a referendum on the European Union’s Lisbon treaty.