By Claire West
Fears that the government will ‘cherry pick’ Lord Hutton’s report on public sector pensions to fit its own right-wing agenda have been expressed by Unite, the union.
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 £2.8bn 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.’