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Responding to reports that the Chancellor is planning to keep most of the windfall that will result from increased national insurance contributions in 2016, following the decision to bring forward the single state pension, TUC General Secretary Frances O'Grady said:

date: 19 March 2013

embargo: For immediate release

Responding to reports that the Chancellor is planning to keep most of the windfall that will result from increased national insurance contributions in 2016, following the decision to bring forward the single state pension, TUC General Secretary Frances O'Grady said:

'We are worried that the Chancellor is using the move to a single-tier pension to make a stealth grab across the public sector - including breaching the promised ring-fence around NHS spending.

'This is because the end of contracting out in public sector pensions means that from 2016 all public sector employers will have to find £3.3 billion in extra national insurance payments. Staff will also pay more.

'The NHS - which employs more than one in four public sector workers - will need to find almost a billion pounds in extra payments. Unless the Treasury reimburses this in full, this would represent a significant cut in funding across the NHS.

'And across the public sector other employers will be under similar pressure, with local government also facing a further billion pound cut in resources.

'We know the Treasury recognises this issue. The Chancellor must make clear in the budget whether this windfall national insurance payment will be given back to the public sector or whether he is planning a stealth cut in not just the NHS, but across every bit of the public sector.'

NOTES TO EDITORS:

- According to the Office for National Statistics, the NHS employs 27 per cent of the public sector workforce. This would mean the NHS absorbing around £900m of the extra £3.3bn in national insurance contributions in 2016. Local government and education face similar bills. Private sector employers and employees in both the public and private sectors would pay the rest of the £5.5bn in extra contributions. Further information is available in the government's written ministerial statement www.parliament.uk/documents/commons-vote-office/March-2013/19-3-13/7-DWP-StatePensionReform.pdf

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Alex Rossiter T: 020 7467 1337 M: 07887 572130 E: arossiter@tuc.org.uk

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