Magazine article Public Finance

Former Trade Minister Calls for Cuts to Public Pay and Pensions

Magazine article Public Finance

Former Trade Minister Calls for Cuts to Public Pay and Pensions

Article excerpt

Former trade minister and CBI director general Lord Digby Jones said cuts had to be made in public sector pay and pensions.

He warned delegates at CIPFA's Northern Ireland conference that failure to address the growing gap between public and private sector rewards would create social tension.

'We are heading towards an apartheid,' said Jones. 'If we are not careful we are going to get an ever-decreasing private sector to pay the tax in order to have an inefficient public sector.

'What will happen, fundamentally, is that it will come apart and we will get social division, which is not going to be very pleasant.'

Jones said that the traditional argument for better public sector pensions was that pay lagged behind that of the private sector - but median public sector pay was now £700 a year higher than In the private sector.

'The public sector has caught up. So where is the logic for them to have a significantly better pension, which the private sector has to pay for? …

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