CBI chief calls on government to stand firm on pensions reform

The government must face down the unions and “grasp the nettle” on public sector pensions reform, the CBI’s director general will tell trade and industry secretary Alan Johnson at the Labour Party Conference today.

Failure to reform public sector pensions and face up to the realities of longer living in the same way private companies have, will lead to an unacceptable and unfair tax burden on companies, their employees and pensioners, Sir Digby Jones will say.

“Without reform, we face the spectre of a ‘pensions underclass’, with private sector employees and companies struggling to fund pension benefits for themselves, while they – and even tax-paying pensioners – are forced to pay for a more generous and earlier retirement for government workers,” he will tell delegates.

“This time, the government must face down the unions and grasp the nettle on public sector pensions reform. It will not get away with publicly declaring its intentions for a second time and backing down at the first sign of trouble.”

Bringing the retirement age up to 65 in line with the private sector and reflecting longer active lives would be an important first step, Jones will say.

“It is totally unacceptable that private sector workers should subsidise civil servants and local authority employees in comfortable, early retirement.”

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