Pensions Reform

If, when we are in government in three years’ time or later, the Secretary of State has not resolved the issue satisfactorily, we will make a decision on the issue, as he would expect. However, this is his watch, so he must address the issue that has been raised and deal with the questions that have been presented. On the issue of fairness, I should like to say something about the ongoing debate about public sector occupational pensions. Like the state pension, unfunded public sector occupational pensions are paid for by the general taxpayer, who will not take seriously the Government’s strictures about the need to work to the age of 68 to address the challenges of increased longevity while they cave in to pressure from public sector trade union paymasters to continue to allow pensionable retirement at 60. The then Trade and Industry Secretary was right last year when he said of the plans to raise the public sector pension age to 65:"““That argument is irrefutable. For us to say to the private sector you have to work longer and save more money, and to the public sector you stick with your retirement age is impossible””." Those words were spoken by a senior member of the Government, so the craven surrender to the vested interests of the Labour party’s paymasters in negotiations ranks as one of the Government’s low points. Let me make it clear: our public servants perform a vital task and are entitled to be treated fairly, just like their private sector counterparts. However, public servants, too, will benefit from greater life expectancy, so they must participate in the necessary adjustment of pension expectations to reflect that increased longevity. Anything less fundamentally undermines the credibility of the Government’s overall package. In the interests not only of protecting the interests of the taxpayer but of restoring the confidence of the man in the street in the fairness of the overall pensions system, it is essential that the Government revisit their wrong and unfair decision to allow retirement at 60 in the public sector for the next 40 years. I welcome the opportunity to place on the record our support for the ““direction of travel””—to use the Secretary of State’s words—of the White Paper. I welcome, too, the opportunity to set out the big issues that must be addressed to build the durable consensus which, I believe, all parties in the House seek. The system itself, however, must be demonstrably robust before the consensus built on it can be so. We must test the package of proposals that the Government have presented, and engage with them constructively—if the Government are willing to engage with us—to address what we perceive as potential areas of weakness. We remain optimistic, despite some unhelpful noises off, that a lasting consensus can be forged, and that on the back of it, a lasting solution to the looming pensions crisis can be built.