Public Sector Pensions
Recently, the major public sector unions balloted their members and announced their intention to strike next Wednesday, 30 November, in a dispute with the Government over their pensions. I think that a strike would be totally irresponsible.
It's good news that the average 60 year old is living ten years longer now than they did in the 1970s. But the cost of pensions has risen by a third over the last decade to £32 billion. That's more than we spend on police, prison and the courts. These additional costs have generally fallen to the taxpayer. This is unfair and unaffordable.
We need a fairer balance between what employees pay and what other taxpayers have to contribute. Many outside of the public sector would have to pay in a third of their salary to get the same pensions in the private sector.
The Government asked the former Labour Cabinet Minister John Hutton to take a balanced look at the issues. His recommendations were clear. Public servants had to pay more for their pensions in the interests of fairness and for sustainable public finances. Future pension arrangements had to change. But he was clear that public service pensions should remain of high quality and value.
Ahead of the strikes, the Government released its ‘best offer' to the unions. It is fair and affordable, and contains two significant revisions to its predecessor: it provides significant transitional protections for workers close to retirement, and sets out a rate at which pension benefits accumulate that is 8 per cent more generous than previously offered.
Public sector pensions will still be among the very best. They'll have a guaranteed benefit, something very few private sector workers now enjoy. The vast majority of public sector workers on low and middle incomes will get, at retirement, a pension that is at least as good, and in some cases better, than the one they would receive under their existing schemes.
So this is a fair pension deal. It strikes an equitable balance between the public sector workers who benefit from their pensions and other taxpayers. Demanding that taxpayers should pay more for pensions that most will never enjoy is wrong. That's why I believe the planned strike is completely unjustifiable.