“There’s got to be a deal here between the taxpayer and the scheme member and that deal is going to unravel if the people in the public sector say they will not contemplate change,” he said.
His report has two main recommendations.
First, he wants to raise the retirement age to 66 by 2020. Hutton claims that retiring early, say at 55, is no longer acceptable when people are living longer.
Second, he wants to do away with “generous final salary” pension schemes, which the government and the press claim are rife in the public sector. Instead they will be set at the average salary across a person’s career.
Thirdly, Hutton says workers should up their contribution to the pension scheme from 6.4% to 9.4%: i.e. a 3% pay cut or, with inflation running at over 5%, an 8% real pay cut. Scandalously, many unions have already agreed to this increase.
There isn’t anything generous about public sector pensions. The average is about £4,200 a year – hardly “gold plated”. The gold plated pension and early retirement schemes are reserved for top civil servants, local government officials– not frontline staff – and of course CEOs and bankers!
The changes will especially worsen the pension provision of women, who make up more than 70 per cent of the public service workforce, because women often have an enforced break in their careers to raise children, as well as doing much of the low paid work.
The cost of pensions
The government is to look at the report in the summer but Chancellor George Osborne is already saying that the cost must be reduced by a further £2 billion.
The Coalition has already linked pension increases to the lower, CPI rate of inflation, so they will depreciate – by as much as £10,000 over the average retirement. It has also called for greater contributions from staff.
Yet the National Audit Office reports that public sector pension costs have already fallen by 14% recently because of the extra contributions paid in by staff. Furthermore Hutton even raised the possibility that the costs will fall more dramatically when the baby boom generation reaches retirement. So where is the so-called “crisis”?
Strike against pension attack
This is an issue that could – and should – unite every public sector union against the government.
The UCU are striking this month. The NUT proposed a campaign of coordinated strikes back in November but since then has gone silent. Now we read in the Guardian that “educational unions are in discussions with the PCS over action in June”.
PCS general secretary Mark Serwotka said:
“Even the governor of the Bank of England agrees with us that public spending did not cause the recession. But this government, stuffed full of millionaires, appears happy to punish hard-working, loyal public servants for a problem caused by greed and recklessness in the financial sector.”
That is all very good to highlight why the mass of workers is being forced to pay for the bankers’ crisis.
But then Serwotka goes on to say:
“We are already considering a strike ballot and talking to other unions about co-ordinating any action, and the government now has a responsibility to negotiate properly over its plans, without ruling out crucial areas before we even get round the table.”
All we have is “considering” and “talking” in order to achieve “proper negotiations” with the government. Meanwhile the same government that is carrying out the biggest attack on workers’ living standards since the war.
This is disgraceful. Every public sector union member should demand their right to a ballot and a programme of joint strikes to defend their pensions – immediately.
We need to fight for an all out strike in the public sector to defend our pensions. Public sector unions should co-ordinate action and, if necessary, break the anti-union laws to deliver a huge indefinite strike and crush the government’s attacks. If we are not prepared to break the law then the Tories will break us.
