Minister denies u-turn on public sector pensions

The trade and industry secretary has denied the government had made a u-turn in a deal over civil servants’ pensions.

The government faced criticism after it dropped a demand for workers already in the civil service to push back their expected retirement date from 60 to 65.

Now only new entrants will be expected to work until the later date, which is the norm in the private sector.

The deal provoked a furious reaction from employers’ groups, with complaints the government had “caved in” to unions, which had threatened a national strike.

But, speaking on BBC’s Today programme, Alan Johnson said: “Our message right from the start has been that the normal pension age for civil servants – which has been age 60 for the last 200 years – needs to move to 65.

“We had different arrangements for existing staff. We recognised the argument that existing staff who signed their contracts on a normal pension age of 60 had certain rights to have that respected.

“So what we have ended up with is exactly where we wanted to be.”

David Frost, director general of the British Chambers of Commerce, said public sector pension costs would continue to balloon while the private sector picked up the tab.

“This places a tremendous strain on businesses and their employees at a time when many in the private sector are struggling to pay for their pensions and people are retiring later,” he said.

But Johnson insisted that the fact new entrants would work till 65 meant substantial savings would be made.

“What we have ended up with is exactly where we wanted to be for new entrants, which is 85% of the cost of the savings here, incidentally,” he said.

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