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Last Updated: Monday, 28 November 2005, 17:17 GMT
Brown casts doubt on pension deal
pensioner woman
The Turner report will propose long-term pensions solutions
Chancellor Gordon Brown has said there is still "a lot of work to be done" on the "retire at 60" deal agreed by the government for public sector workers.

His comments came despite assurances from Downing Street that a deal reached last month would not be torn up.

Mr Brown was pressed by business chiefs who say private firms resent public sector staff being able to retire earlier than their employees.

Trade unions say there could be strikes if ministers backtrack on the deal.

Mr Brown was asked at the Confederation for British Industry conference in London about their fears over the pensions deal.

We believe it's better to stick to agreements rather than tear them up within a month."
Tony Blair's spokesman

Alan Wood, from Siemens, said private firms who faced huge challenges were "dismayed and demoralised" the government was leaving the pensions age at 60 for existing public service workers.

Mr Brown said the issue would be covered by the Turner Commission's report on pensions, which is published on Wednesday and expected to recommend raising the state pension age to 67.

But he appeared to suggest details of the deal on public sector pensions had not been finalised.

He said he wanted a debate on a "full range of options" after the Turner report.

'No revisiting'

Later, Work and Pensions Secretary John Hutton was asked if the public sector deal was "unbreakable".

Mr Hutton replied: "We have no plans to revisit that deal."

But Conservative shadow pensions secretary Sir Malcolm Rifkind said it was still unclear whether or not Mr Hutton was ruling out any revision of the agreement.

Stop giving money to those who cannot be bothered to work (or can't stop breeding), then there will be more to go around
JoJo Kavanagh, Essex

Trade and Industry Secretary Alan Johnson reached a deal last month for the retirement age for existing public sector workers to remain at 60.

But from next year the normal pension age for new staff in education, health and the civil service will be 65.

At the time of the agreement, ministers and unions said some details had yet to be fixed.

Business leaders argue the Turner Commission's report this week should reopen the issue, especially if the state pension age is to rise to 67.

'No walking away'

David Frost, director of the British Chambers of Commerce, told BBC News: "What we are going to end up with here is two nations. That will create real resentment in the workforce."

Brendan Barber, general secretary of the Trades Union Congress, said it would be "ludicrous" for ministers to use the Turner report to unpick the public sector pensions deal.

Mark Serwotka, general secretary of the Public and Commercial Services Union, warned: "Any suggestion of renegotiating that agreement would reopen the possibility of industrial action across the public sector."

And Labour MP John McDonnell said any attempt to rewrite the deal would face "coordinated resistance" across the trade union and labour movement.

Fact check

Downing Street moved to quell those concerns.

Tony Blair's official spokesman said: "We reached an agreement a month ago and believe it's better to stick to agreements rather than tear them up within a month."

He said 40% of private sector workers retired at 60 now, using occupational pensions.

New public sector staff would retire at 65 under the new deal.

And with 10% of public sector workers changing jobs every year, that meant within a decade 70% of public sector staff would be using the "retire at 65" deal, he added.

Those figures were challenged by Conservative shadow trade secretary David Willetts.

Only 40% of public sector employees would be covered by the new deal in 10 years' time, he said, citing a parliamentary answer.

And only 17% of truly private sector schemes had a retirement age of 60, he said, complaining that Downing Street was getting basic facts wrong.

Lib Dem pensions spokesman David Laws said a separate commission to examine public sector pensions was needed as existing plans were unaffordable.

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