The Government has paved the way for reimbursing the estimated £2.4 billion in pension repayments it owes to public sector workers, in yet another U-turn.
Since 2015, 4.1 million people working across the NHS, the civil service and in local government have been effectively overcharged for their pensions, GMB – Britain’s general union – said.
Under a deal negotiated by unions, including GMB, on how to draw benefits due to the cost cap mechanism the £2.4 billion was going to be paid back to the workers by reducing their future pension contributions, and improving benefits.
But the Government tried to use the cash to pay for the aftermath of a legal challenge it faced to its botched plan to raise the retirement age for public sector workers, known as the McCloud judgment.
Under a Government scheme, people close to retirement were protected from the changes and allowed to stay in their existing pension schemes – a move which the courts found to be age discriminatory.
But, in a statement to Parliament yesterday, Treasury Minister Steve Barclay said that the Government would lift the 2019 pause on the cost cap mechanism – and announced a consultation on addressing pensions discrimination.
Rehana Azam, GMB National Secretary said: “It’s welcome that Ministers have in the face of sustained pressure finally U-turned on the pause they imposed on the drawing down of pension benefits. Their indefensible decision has left public sector workers facing financial hardship.
“GMB has long campaigned for the lifting of the benefits pause the Government unilaterally imposed on our members without consultation. Hard-working public sector workers should now get what they’re owed.
“The Government has had to make a U-turn because they knew they were in the wrong and were poised to lose the Judicial Review GMB and others had brought against them.
“Any suggestion that it should now be public sector workers who now bear the costs of Ministers’ discriminatory errors will be fiercely resisted.
“GMB will not stand by if the Government intends to break its word and force public servants to pick up the bill for its own mistakes.”