UK Politics

Lord Hutton warns government over pensions plans

Lord Hutton of Furness
Image caption Lord Hutton's review has formed the basis of plans for public sector pensions reform

The government could force people out of pension schemes if reforms are too punitive, ministers have been warned.

The message came from Lord Hutton of Furness who advised the government on changes to public sector pensions.

In a speech, he warned of the dangers of raising pension contribution levels so high that scheme members have no alternative but to leave.

Downing Street said the government wanted to continue to have constructive conversations with the unions.

Significant exodus

The former Labour Work and Pensions Secretary urged ministers to have a "full and proper consultation and discussion with the trade unions".

In a speech on Thursday at the Institute for Public Policy Research, he reiterated that with average life expectancy increasing change is unavoidable.

But he warned there is a danger of a significant exodus from the local government pension scheme in particular if contributions are raised too high and no other compensation is provided.

The scheme, one of the largest in the public sector, has just over four-and-a-half million members.

Lord Hutton called for consultation with the unions to try to avoid what he will describe as "the confrontation and division that marked previous decades".

Strike looming

"If these reforms have any chance of succeeding then people need to know that they are being treated fairly," he said. "There should be full and proper consultation and discussion with the trade unions.

"That is how we do things in Britain - the public would take a very dim view of any government that fails to honour this basic requirement.

"We must try and avoid the confrontation and division that marked previous decades and must not turn the clock back."

About three-quarters of a million public sector workers are due to go on strike on Thursday next week over pension reforms.

Lord Hutton's independent review of the future of public sector pensions, which was published in March, has formed the basis of the government's plans for change.

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