Public Service Pensions

Phillip Lee Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

Those two things do remain in place. I understood from a previous debate that the Opposition supported the switch from RPI to CPI. We are going ahead with the increase in member contributions, which, as Lord Hutton said in his interim report, is necessary to rebalance the substantial increase in costs over the past few decades, which have been borne almost entirely by the taxpayer. Around the table with the trade union negotiators, the main issues raised in recent weeks have been the accrual rate, the transitional arrangements and the guarantee that we are reaching a long-term settlement.

[Dr Phillip Lee (Bracknell) (Con)]

I welcome the Chief Secretary’s statement. On many occasions in Bracknell and Finchampstead, I have met people in their 30s and 40s employed in the private sector—the majority of people in my constituency are employed in the private sector. Can he confirm that many in the public sector would have to contribute a third of their salary and pension contributions in order to get similar pensions in the private sector?

[Danny Alexander]

The hon. Gentleman is absolutely right: I can confirm that that would be the case. In some cases the figure would be more, depending on how the scheme-by-scheme talks that will go forward resolve the issue. In order to acquire a pension of the sort that we are rightly talking about for public sector workers, people in the private sector would need to acquire a pension pot of £500,000 or more, which would require a substantial salary contribution, of the order of a third.