Pensions clash on government horizon

Public sector pensions will be the main issue on the agenda today at the Labour Party conference in Brighton, as the CBI leader Sir Digby Jones will tell the conference that the system will be "totally unfair" without reform.

He believes it would not be right for workers in the private sector and tax-paying pensioners to "subsidise" public sector workers in retirement.

"The ‘I’m all right, Jack’ attitude of many public sector union officials really is showing itself. Just who is the public sector for, the people who it serves or the people who work in it?" he is expected to say.

Sir Digby will also say the public sector retirement age should be raised to 65 to help offset the future pension liability for the sector, which has increased to £500 billion in just over a decade, according to the CBI.

The government must balance this view against what some public sector unions are saying, including Unison general secretary Dave Prentis, who will also address the conference today.

It is anticipated that he will issue a threat of strike action if the government forces through reforms for local government employees, which he claims will cut many of their pension rights.

Mr Prentis is also expected to disagree with Sir Digby by saying that raising the age of retirement in the public sector will pose further health risks and increase NHS costs, as bad health causes 75 per cent of paramedics to retire before they reach 60.