Blog: Webb’s state pension 'bombshell' is designed to divide

Author: Rachel Dalton
IFAonline | 12 Sep 2011 | 11:00

Categories: Regulation

Topics: state pension| pension reform| Steve Webb| TUC| blog

steve-webb1

The pensions minister this weekend showed he is no fool when it comes to political posturing.

Yesterday's interview with the Observer told us nothing most pensionistas didn't know already; the state pension age rise will not stop at 66 in 2020. We all knew a rise to 67, probably by 2026, was on the cards.

Drawing attention to this fact again looks initially like an own goal, but scratch deeper and it is clear Webb is playing a long game.

The Observer's front page headline about "the new pension bombshell" made everyone who read it, despite their political leanings, feel a little sorrier for themselves.

This will stand the Coalition in good stead, Tom McPhail, head of pensions reseach at Hargreaves Lansdown said. 

It will be especially useful when the unions attempt to take the government to task this week over public sector pension reform.

As the Trades Union Congress (TUC) kicks off today, the unions will focus on reforms of public sector pension schemes, and the Public and Commercial Services (PCS) union has already mooted industrial action in November.

Webb understands there might be some sympathy for public sector workers.

He also understands when people have something taken from them, like a state pension from age 65, it is easier to demand others are punished as well rather than fight to get it back.

Webb will also want a distraction from the women's state pension issue, with further wrangling over the Pensions Bill likely this month.

In the summer, the unions and Labour mounted a successful campaign over the emotive issue of the 500,000 women who face a longer wait for their state pensions.

However, by throwing another age increase at everyone, Webb has made any potential transitory support for women coping with their particular increase look generous.

In one fell swoop, Webb has focused people's attention on the loss of their own state pensions, undermining any sympathy for others' losses.

He is attempting to convince them everyone has to lose, and that, as per the government's mantra: "we are all in this together".

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