Alexander’s balancing act

Remember that merry dance between the government and the unions over public sector pensions, a few weeks ago? Expect a minor reprise today, and much more over the summer. The government today announces how much extra public sector workers will have to pay to maintain their pension levels, and already the Telegraph has the numbers. When it comes to the 40,000 best-paid public sectorees — all on considerably over £100,000 — their contributions will rise by around £3,000 a year. And then it’s a sliding scale all the way down to the 750,000 least well-paid workers, who will face no increase at all. The unions, who will rejoin the government in talks soon, are unlikely to respond kindly.

Danny Alexander is, as usual, the man left holding the shield ahead of the union onslaught. He has a short article in today’s Sun, and appeared on the Today programme earlier to defend the government’s plans. His defence is the same twofold one that we’ve heard before: that the new system is both a fiscal necessity and fair. Although it seems to me that more emphasis is now being placed on the latter. As Alexander puts it himself in the Sun, “we also have to be fair to all taxpayers, including those who don’t have such good pension deals and who can’t be expected to keep on working longer and paying more so public servants don’t have to.” Communicating this, and communicating the fact that the the lowest paid public sector workers will be protected from the changes, will no doubt be one of the government’s presentational priorities from now through until conference season.

There is a growing fear, though, that this is going to become an annual fandango for the coalition. The Today Programme also carried a sparky discussion which set out the problem: if public sector workers depart from their pensions schemes, as some are threatening to, then the burden on those remaining may have to increase. As the BBC’s Paul Lewis concluded, “It’s a good [pension] scheme, even at these new rates. But, of course, if people do pull out, there’ll be fewer paying in and less money to pay next year’s pensions.” So far, the government has been using the prospect of further pensions cuts mainly as a threat against militating union bosses. It may have to become a necessity.