Danny Alexander ‘threatening letter’ revealed by Salmond

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By a Newsnet reporter
 
First Minister Alex Salmond has revealed that the Scottish government received what he termed a ‘threatening’ letter from UK Minister Danny Alexander warning of cuts to the Scottish budget should increases to public sector pension contributions not be implemented.
 
The Scottish government had asked to delay the increases that will affect key sectors including the NHS, teaching and police.

However Lib Dem Treasury chief Alexander responded by threatening to withhold over £8 million per month from the Scottish grant if the changes weren’t made in April as demanded by Westminster.

The revelation was made by Mr Salmond during First Minister’s Questions as he responded to a question from Lib Dem Holyrood leader Willie Rennie.

Describing the letter as “extraordinary” and “threatening” the First Minister explained that the Scottish government had suggested that the increases in pension payments should be delayed until the public sector pay-freeze period had ended.

Mr Salmond read Mr Alexander’s response to MSPs: “If you decide not to take forward these changes, the Treasury will need to make corresponding adjustments to your budget.  I would have to reduce the Scottish government’s budget by £8.4m for every month’s delay.”

The First Minister added: “You can call that letter many things, but it doesn’t seem to me either liberal or democratic.”

The increases were defended by Mr Alexander in the letter – he wrote: “We are all living longer, with current pensioners expected to spend 40% of their adult lives in retirement, compared to 30% for pensioners in the 1950s.”

The increase to pension payments was a recommendation of the Hutton report published earlier this year.

The decision by the UK coalition has already led to threats of strikes and civil disorder from union leaders opposed to the move.  This Wednesday at its annual conference, the TUC voted unanimously in favour of taking action.

Ed Miliband was heckled at the conference on Tuesday after he said a one-day strike in June over pensions had been a “mistake”.  Union leaders responded by criticising the Labour leader for refusing to back workers, many on low pay.

Conservative Scotland Office junior minister David Mundel accused the First Minister having a “brass neck” over the public-sector pensions reforms.

Mr Mundell said: “The First Minister is riding roughshod over the respect agenda once again. The Scottish Government is the only one in the world which thinks it can avoid having to take tough decisions.”