Public sector pensions still unaffordable

Danny Alexander, the Chief Secretary to the Treasury, told Parliament yesterday:

I have made the commitment that these reforms will be sustained for at least 25 years. The Government intend to include provisions on the face of the forthcoming public service pensions Bill to ensure that a high bar is set for future Governments to change the design of the schemes.

What does this deal really mean? For our work force, it means that they will continue to receive the best-quality pensions available in this country—and rightly so. In the private sector, these pensions could be bought only at a cost of one third of salary. This is a proper reward for a lifetime’s commitment to serving the public. The new scheme is fairer to women too. By moving to career average, we will give a better pension in future to those, mainly women, who have low or steady salaries throughout their careers.

This doesn't seem a very democratic approach. We are likely to have a General Election within the next 25 years. It might even result in a Conservative Government. Such a Government might conclude that rigging the system against the wealth creating private sector was unfair. Nor is such discrimination economically realistic given the massive size of the National Debt - which continues to escalate at such an alarming rate. Such a Government might conclude that the changes agreed yesterday, while representing some progress, do not go nearly far enough. Changes which mean that the annual £32 billion taxpayer subsidy for public sector pensions escalates a bit more slowly than it otherwise would have done are not sufficient.