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Today’s pension deal unfair for the next generation of taxpayers


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Prof Philip Booth comments on the government's latest pensions announcement

Commenting on the public sector pensions deal announced by the government today, Prof Philip Booth, Editorial Director at the Institute of Economic Affairs, said:

“Danny Alexander has suggested that the public sector pensions deal announced today was a ‘deal for a generation’. It may be a good deal for the current generation of public sector workers – especially those near retirement –but it is certainly not a good deal for the next generation of taxpayers.

“The government has improved its offer to trades unions in such a way that all the increase in costs are deferred until after the coalition has left office. The government should not be adding to implicit public sector debt, it should be trying to deal with the problem.

“Unfortunately, the government has put itself in a position where it can be held to ransom by the trades unions because it has decided to centralise these negotiations. A better outcome could have been obtained by ensuring that public sector employers and employees paid the full cost of their pension arrangements out of overall budgets set by the Treasury. Different parts of the public sector could then have chosen different pensions arrangements to suit local conditions.”

Notes to editors

To arrange an interview with Prof Philip Booth, IEA Editorial Director, please contact Stephanie Lis, Communications Director, 077 5171 7781, 020 7799 8900, [email protected].

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.