Lord Hutton’s public sector pension review could be ‘cherry picked’
by coalition for its own right-wing agenda
7 March 2011
Fears that the government will ‘cherry pick’ Lord Hutton’s
report on public sector pensions to fit its own right-wing agenda
were expressed by Unite, the largest union in country, today
(Monday 7 March).
The report by the former works and pensions secretary, due out
on Thursday (10 March), is likely to recommend that public service
employees should continue to receive ‘good quality’ defined
benefits/pensions.
But Unite, which has 250,000 members working in the public
sector, said that there were at least four government initiatives
that could sideline Lord Hutton’s report and make worse the pension
provision available to workers in public services.
Unite assistant general secretary, Gail Cartmail, said: ”Lord
Hutton already recognised in his interim report that public sector
pensions are not ‘gold plated’ – the average local government
pension is just £4,000-a-year and a part-time female NHS employee
can expect an average of £2,500-a-year.
”While we don’t expect to endorse the whole premise of the
Hutton report, it could be reasonably well-balanced, for example,
we understand he wants a more independent and less political
oversight of public sector pensions, and also recognises there is a
limit to how much an employee can be expected to contribute. We
expect this report to be a curate’s egg.
”However, this report could be marginalised by what the
coalition is cooking up to hit public sector pensions.”
Unite outlined four changes being proposed by the coalition that
would have an adverse affect on public sector pensions:
- The change from calculating pensions increases from the retail
price index (RPI) to the consumer price index (CPI), which Lord
Hutton has estimated would be the equivalent of a 15 per cent
reduction. Unite said this would have ‘a devastating effect.’
- The £2.8 billion annual ‘raid’ on public sector pensions
announced in last autumn’s comprehensive spending review due to
increased contributions. Unite said that ministers were using the
public sector pensions funds as ‘a piggy bank’.
- The tearing up of the ‘fair deal’ commitment to public sector
employees transferred to private sector companies, which has meant
those employees continuing to pay into and receive the benefits of
the public sector pension funds.
- The treasury’s current review of the discount rate – a
technical measure designed to ensure that the government pays less
in contributions.
Gail Cartmail said: ”The fear is that Lord Hutton’s report will be
cherry-picked by ministers for those recommendations that dovetail
with their menu of radical measures that will hit the living
standards of not very well paid public employees extremely hard in
their retirement. Recommendations that could be favourable to
employees will be simply discarded.
”And it should not be forgotten that under the Labour government
measures were taken to tackle the issues facing public sector
pensions. Now the coalition, driven by right-wing dogma, wants to
destroy that sensible and balanced settlement for public sector
employees.“
ENDS
Notes to news editors:
For further information, please contact Gail Cartmail on 07768
931305 and/or Unite communications officer, Shaun Noble on 07768
693940
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