'Secret' pensions shake-up attacked

Cabinet Minister Peter Hain revealed the proposals which could include raising the retirement age and forcing workers and their bosses to contribute to retirement savings.

Opposition parties immediately accused the Leader of the Commons of letting the cat out of the bag on Labour’s hidden agenda for the elderly.

Prime Minister Mr Blair is said to be planning to use his final years in 10 Downing Street to make radical reform to pensions, safe in the knowledge he will not face another election.

Mr Hain said a third-term Labour government would introduce "sooner rather than later major legislation" to tackle the looming pensions timebomb.

Downing Street wants to move swiftly to legislate on the issue after the final report of Adair Turner’s pension commission in the autumn.

A Bill has already been pencilled in to a draft of a packed Queen’s Speech setting out the new government’s programme for the next year at Westminster if Labour wins an election expected on May 5.

Mr Blair and Mr Hain would hope it would get its second reading within a year of the Prime Minister returning to Downing Street.

Mr Hain accepts that some of the reforms will be unpopular.

He said: "It’s going to involve, in my view, all sorts of consideration including people saving more themselves. We’re not saving enough as a society."

An interim report by the government-appointed Turner Commission last year warned that as life expectancy rises and people fail to save enough for retirement, plugging the pensions gap could cost taxpayers 57 billion more every year.

Labour does not wish to make pensions and the looming crisis an election issue. But Mr Hain’s admission that there is likely to be legislation on the issue has provoked claims that the Government is hiding its true intention over pensions from voters.

Tory shadow work and pensions secretary David Willetts said: "Why should people believe that Labour will solve the pensions crisis when they have created it.

"They have spread means testing to half of all pensioners and undermined the rewards to save.

"We are committed to reforming benefits for pensioners and boosting incomes for them.

"Why are Labour unwilling to reveal their true intentions regarding pensions? You can’t trust Tony Blair on pensions like you can’t trust him on anything else."

Mr Hain promised an ambitious programme of legislation if Labour is returned to power.

He said: "The first session is going to have about 40 Bills in it which are pretty well all ready. It will be a really strong, radical, fizzy first Queen’s Speech."