Lansley attacks public sector pension reforms

Health secretary Andrew Lansley has criticised public sector pension reforms, warning that they may encourage GPs to opt out of the NHS scheme.

In Mr Lansley's letter he warned that the opt out of lower paid staff would ‘increase pressure on the social security budget’.
In Mr Lansley's letter he warned that the opt out of lower paid staff would ‘increase pressure on the social security budget’.

In a private letter to Danny Alexander, the chief secretary of the Treasury, the health secretary attacked public sector pension reforms.

Mr Lansley said it was difficult to see how the reforms would meet the ‘commitment to maintain gold standard pensions’. 

In the private letter, obtained by the Daily Telegraph, Mr Lansley warned that reforms may encourage GPs to opt-out of the NHS pension scheme.

‘In the NHS, if it appears that we intend to significantly reduce the value of future accrual we also face the risk of opt out from higher paid groups as well as the lower paid.

‘GPs for instance pay both employer and employee contributions and can choose to invest them elsewhere or take them as pay.’

Mr Lansley warned that if GPs opted out of the scheme it would cause ‘significant fiscal pressure in the short to medium term’.

Mr Lansley also warned that the opt out of lower paid staff would ‘increase pressure on the social security budget’.

The letter went on to argue that proposals would unfairly affect female NHS workers.

‘In the NHS currently, the average full time career for those taking a pension is only 18 years and it seems unrealistic to suggest that pension scheme design should be based on the assumption that a predominantly female workforce would need to work full-time 48-year careers in future to receive a full pension,' Mr Lansley said.

Mr Lansley warned that proposals would make negotiations with trade unions increasing difficult.

He said: ‘it is difficult to see how a negotiated agreement could be reached with the trade unions’.

This comes after news that the GPC has demanded further negotiations on pensions after the announcement that GPs may be hit by a 6% increase in contributions.

A spokesperson for the DoH said: ‘Things have moved on since this was written.’

‘The government is committed to public service pensions remaining among the very best available. But people are living longer which means pensions are costing taxpayers more. So it is only fair that public service workers pay more towards them.’

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