Pensions Bill

Part of the debate – in the House of Lords at 5:45 pm on 27 October 2008.

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Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government) 5:45, 27 October 2008

My apologies, my Lords; I did not address those specific questions. With regard to the unfunded public service pension liabilities as calculated, the latest figure I have is the one the noble Lord cited, £650 billion. That figure looks at a stream of payments and applies some form of discount rate to it.

I urge the noble Lord—this is the more important thing—to look at the projections for public service pensions that are made in the long-term public finance report, because they reflect the agreement made in 2005. The latest report, published in March 2008, showed that expenditure on unfunded public service pension benefits remains affordable; it is projected to increase from around 1.5 per cent of GDP to a maximum of 2 per cent over the next 50 years. I remind him, when he considers those figures, that they partly reflect that there are now more people working in the public sector than in the past: more nurses, more teachers, more doctors. We should be pleased about that. However, the sustainability of that can be seen in the long-term public finance report.