Public Service Pensions

Debate between Julie Elliott and Danny Alexander

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

I agree. My hon. Friend is right to draw attention to the important role played by the Minister for the Cabinet Office and Paymaster General. If I may say so, we make a good team in these negotiations. These are very generous pension schemes, particularly for low and middle-income earners, and rightly so. We must make sure the funding of them is sustainable in both the short term and the long term. That is one of the reasons why I find the Opposition’s lack of welcome for the announcement so frustrating.

[Julie Elliott (Sunderland Central) (Lab)]

Although I welcome the Chief Secretary’s statement, I am disappointed that it has taken eight months to get any serious negotiation and any movement from the Government. I am particularly concerned about two issues. The first is to do with low-paid women workers in the pension scheme, and particularly those who work part time. Has any analysis been done of the possible impacts if they opt out of their pension scheme, therefore receiving less money when they retire from the benefits they then receive? On the firefighters’ pension scheme, we have heard conflicting answers from the Chief Secretary: he has said they will have actuarially reduced pensions, but he has also said they will be allowed to retire early. I am therefore a little confused as to where the Chief Secretary stands on that.

[Danny Alexander]

I am very grateful indeed for the first welcome for my statement from an Opposition Member. The hon. Lady is right that it is important to consider low-paid workers, which is why we are proposing to move to a career-average basis, under which low-paid workers will keep more of their own contributions, instead of subsidising the pensions of the highest earners. It is also why we have tiered the contributions increase in order to try to prevent opt-out. The negotiations on the firefighters’ scheme are ongoing, and I am told they are going well. We have delayed the publication of the cost ceiling to make sure we can take into account all the issues raised by firefighters in the discussions.