TORIES TO UP PENSION AGE TO SIXTY-SIX
A WAR of words is set to erupt between Labour and the Tories as both parties attempt to seize the initiative on spending cuts.
George Osborne will today announce that a Tory government would increase the state retirement age to 66 by 2016, ten years ahead of Labour’s deadline, in a bid to cut the deficit.
Millions of people that are currently under 58 will need to work one year extra under the Conservative plans, a move that the party says will reduce government spending by up to £130bn over a decade.
Under Labour, the age at which men could claim a state pension would increase to 66 in 2026, while the retirement age for women would rise to 61 next year and then, in increments, to 64 by 2016.
But Osborne will frame the controversial acceleration of these plans as a necessarily tough stance that will help reduce a deficit which is expected to rise to £175bn this year.
“This is another one of those trade-offs any honest government has to confront,” Osborne will tell delegates at the Tory party conference today.
But Labour last night launched its own initiative to address the deficit, saying it will today announce a pay freeze for public sector management.
In a move that some will view as an bid to sabotage Osborne’s announcements on spending, chancellor Alistair Darling will unveil his intention to demand a pay freeze for around 40,000 top earners in the public sector.
The freeze will apply to senior NHS managers, GPs and senior civil servants, while around 700,000 other public service workers will receive a pay increase of no more than one per cent. Army generals, nurses and teachers will not be affected.
A Tory spokesman last night said it was “surprising” that the Treasury would choose to make the announcement in the middle of the opposition’s party conference, saying that “people will question its motives”.
Meanwhile, London Mayor Boris Johnson said yesterday that he plans to slash £5bn from his budget.