Irvine's pension deal branded 'a downright insult' to workers

Trade unions mounted an attack yesterday on the system that will let the Lord Chancellor, Lord Irvine of Lairg, retire on a pension of £90,000 a year.

A week after the Government warned that people would have to work longer or save more to provide for their retirement, news emerged that a 30-year-old scheme will allow the Lord Chancellor to claim a £180,000 lump sum and an annual income of £90,000 when he stands down.

Lord Irvine, 62, earns £180,045 a year and is the highest-paid member of the Cabinet. His pension entitlement will be based on a one-off payment of a year's salary and a pension of half his salary, which will be index-linked.

Unions expressed anger that Lord Irvine's package would give him four and a half times the income of a typical working man or woman, and made the point that public-sector workers were told by the Government last week that their normal retirement age would be raised from 60 to 65 under a plan to ease Britain's £27bn pensions shortfall.

The Royal College of Nursing called the package "a downright insult". Howard Catton, its policy adviser, said: "How can a senior Government figure get so much while the rest of us are being told to work until we drop for meagre payouts? The timing – a few days before Christmas, at the height of the debate about pensions – could not possibly be worse."

Eamonn O'Kane, general secretary of the NASUWT teaching union, said: "Staff have been told they'll have to work on for five more years [to the age of 65]. Their mouths will drop open when they hear the generosity with which the Lord Chancellor is being treated."

John Edmonds, leader of the GMB general union, said: "How can ministers justify forcing others to work until they drop when a member of their own Cabinet is expecting a telephone-number pension at taxpayers' expense?"

Opposition parties also raised questions on the size of Lord Irvine's pension. David Willetts, the shadow Work and Pensions Secretary, said: "These details will be an insult to thousands of ordinary working people at a time when the nation is facing a pensions crisis. He'll be far better off as a pensioner than most people in a full-time job."

Steve Webb, pensions spokesman for the Liberal Democrats, said: "This will sicken those who thought they had provided a decent pension for themselves and now have to work on."

A spokesman for the Lord Chancellor's Department said: "The fact is that this dates back to 1972, long before Lord Irvine was Lord Chancellor. It was reviewed in 1981 and still stands. Lord Irvine gets what he is entitled to by statute, as do many other senior public servants. Whether Lord Irvine intends to claim the full pension is entirely a matter for him."

Under a convention, a retiring lord chancellor does not return to working as a lawyer or judge after he stands down.