The Scottish Government has been “threatened” with a budget cut worth £100 million if it refuses to implement controversial Westminster public sector pension reforms.
Alex Salmond accused Chief Secretary to the Treasury Danny Alexander of “holding a gun” to his head over the issue, which looks set to cause widespread industrial action across the UK.
The First Minister revealed the Scottish Government has been told its budget will be reduced by £8.4 million for any month it delays imposing the reforms, which are staunchly opposed by the unions.
A spokesman for Mr Salmond said the cut would be equivalent to the jobs of 286 nurses, 216 police officers or 250 teachers.
He added: “This is the Treasury holding a financial gun to the Scottish Government’s head.
“We believe these pension proposals will further damage economic recovery. This is not the right time for the measures and they need to rethink the proposals on a UK-wide basis.”
Scotland Office minister David Mundell attacked Mr Salmond’s “brass neck” and stressed the current financial settlement was calculated on the basis that the reforms would be in place.
The UK is facing strike action by more than 20 unions representing up to three million workers over the reforms, which include workers paying an extra 3.2% in contributions.
During First Minister’s questions at Holyrood on Thursday, it was revealed the Scottish Government has asked for a three-month extension from implementing the reforms in Scotland “without financial penalty.”
In what Mr Salmond described as an “extraordinary, even threatening” response, Mr Alexander refused the request.
“These reforms have been under discussion for some time and the fiscal position inherited by this government is such that even small reductions in savings from this policy would mean finding alternative savings from other programmes,” said the Liberal Democrat MP.
“In the event of any time overrun the Treasury would have to reduce the Scottish Government’s budget by £8.4 million for every month’s delay.”
Continued…
The Scottish Government is responsible for administering four pension schemes which the changes apply to, including teachers, police, the NHS and firefighters’ schemes.
In total it has control over more than 250,000 Scots’ pensions and is expected to introduce the increased contributions on a staggered basis from April.
Tory MP Mr Mundell said: “The Scottish Government accepted money from the Treasury on the understanding that is was only available because of increased pension contributions from public sector workers. Now they want to keep the money and not have workers make the extra contributions.
“If the First Minister doesn’t want to help create the extra resources then he can’t be entitled to a share of it.”
He added: “Even Robin Hood would blush at this approach but there appears to be no end to the First Minister’s brass neck on such issues.”
Scottish Liberal Democrat leader Willie Rennie said the SNP administration had “dithered and delayed” over the issue.
He added: “It’s a shame that the SNP prefer to posture, picking another fight with Westminster, rather than seeking to secure the long-term future of the public sector pension schemes.”
Mr Salmond had previously called the UK Government “unreasonable” over the timing of introducing increased contributions.
Unions are preparing ballot papers for millions of public sector workers to launch a series of strikes, starting with a day of action on November 30.
Most of the pensions being introduced by the coalition were recommended in an independent report by Lord Hutton.