Parliament and Politics: Pensions equality 'would cost pounds 50bn and 100,000 jobs'

EQUAL pension rights for British men and women would cost pounds 50bn and 100,000 jobs, the Attorney General, Sir Nicholas Lyell, warned yesterday.

He was giving evidence in the European Court of Justice as it tries to resolve a complex battle over equal retirement benefits.

Five EC countries including Britain were involved in a one-day hearing in the Luxembourg court yesterday. The judges will not deliver their verdicts in two British cases - nor in the separate German and Dutch cases - until at least June.

The biggest case involves the Coloroll home furnishing group. A network of different pension schemes within the group has been complicated by the issue over whether women should receive pension benefits at 60 while men wait until 65.

Another case involves a Yorkshire technician, David Neath, who was made redundant at 55 in June 1990 after 17 years with one firm. He was not allowed an early retirement pension but was offered a deferred pension from the age of 65. A woman in the same situation would have been offered a deferred pension at 60.

He claims the Government is in breach of EC rules by refusing to offer him a pension until the age of 65. The Luxembourg court established the principle of equal pension rights for men and women in a similar case in May 1990. But argument continues over whether the ruling applied only to pension rights earned from that date.

Mr Neath wants the judges to rule that equality should be backdated to ensure equal treatment takes effect immediately.

Sir Nicholas said the Government respected the 1990 decision, but believed equal treatment should only apply to benefits payable in respect of service after that date, to safeguard 'legal certainty and financial equilibrium'. There would be a huge cost to employers forced to start paying men's pensions five years early to bring them into line with women, he said.

The Government had estimated that the capitalised cost of bringing forward pension entitlement for male workers in respect of pre-May 1990 service would exceed pounds 50bn in total. 'Most of the pounds 50bn would have to be taken from resources of employers, out of turnover, profits, dividends or diverted from investment. The Treasury says this would ultimately result in a 0.5 to 0.75 per cent reduction in national output, an increase of 100,000 people unemployed and significant financial consequences,' he said.

Roger Lyons, general secretary of the MSF union for skilled and professional workers, which is backing Mr Neath's action, said that the Government figures were 'scare-mongering'. He added: 'The real cost is to the thousands of men and women who are losing out because the situation is so unclear and unfair.'

Lorraine Fletcher, pensions adviser to the Equal Opportunities Commission, said she hoped the court action would 'help to clarify the rights of millions of working people, many of whom are anxiously awaiting the outcome'.