British PM Andy Burnham to revamp pensions, vows greater control of services in economic overhaul

LONDON – British Prime Minister Andy Burnham promised “a new economy and new politics”, saying he would overhaul state pensions in a plan to make care for the elderly free at the point of use.“This is the deal: a state pension that rises every year, no care charges, and a high-quality national care service to give peace of mind in later life,” he said, explaining that his government would de-link the rise in pension increases from the rise in average earnings.“This change will generate significant savings, which we will use to build up our national care service,” Burnham said, vowing that the policy – which he plans to introduce after the next election if Labour is returned to power – would be fully funded and not increase borrowing. The triple lock has been in place since 2011, and guarantees that the state pension rises annually by the highest of inflation, wage growth or 2.5%. It is helped to reduce pensioner poverty, but many economists warn the policy is increasingly unaffordable given other pressures on the public purse.Burnham also pledged in his speech to the governing Labour Party to bring water, energy and housing under greater public control. He told Labour’s annual conference in Liverpool that he would “break the mould” and tackle issues his predecessors had failed to address. To that end he pledged to overturn the ban on public ownership of water companies instituted in the 1980s. “We rely on them, we pay for them, and once again we will have power over them,” he said. Burnham said he would introduce a Bill that would bring about “the repeal of Margaret Thatcher’s ideological ban on public ownership of water companies”. He added that regional mayors would have new powers to hold water companies to account, that loopholes used to pay bosses “excessive bonuses” would be closed, and that there would be “tougher consequences” for firms which “repeatedly fail”.“I would love to go quicker, but I have to be honest about what the country can afford. I will stick to our fiscal rules, to get our borrowing and debt down,” he said, a day after his Chancellor of the Exchequer John Healey vowed fiscal discipline. Burnham is seeking to move away from the cheaper, feel-good policies that have characterised his first two months in office and flesh out his longer-term vision for tackling some of the biggest challenges facing the UK, in a bid to turn the page on the country’s political instability. “It is always in my mind that I am the seventh prime minister in 10 years,” Burnham said. “It is why I want to underpin our plan for Britain with a new politics.”He said in his speech that he would not shy away from “the things politicians usually avoid”. Ahead of the address, he promised he would outline plans to reform social care and to take greater public control of industries such as water and energy. Burnham’s senior ministers, including Healey, have used their conference appearances this week to roll the pitch for more difficult decisions to come, including plans to cut spending on benefits. BLOOMBERG