John Hutton, who once claimed to be a Labour minister but always seemed more like a Tory, has delivered his report on public sector pensions.
Unsurprisingly for a died in the wool neoliberal, he has got his entire analysis wrong. As the FT reports:
Public service pensions directly affect up to 12 million people in the UK. They are a vital part of our national savings infrastructure. We should celebrate the fact that over 85% of those in the public sector are saving for their retirement in an employer-sponsored pension scheme. This contrasts with only 35% in the private sector. But as I outline in the interim report of the government’s Independent Public Services Commission today, for some time it has been apparent to many of us that we have a problem with the existing pension arrangements in the public sector.
First, the costs of providing these pensions are rising — up by a third in recent years - and these extra costs have fallen almost entirely onto the shoulders of taxpayers. This is not sustainable.
As I have shown in ‘Making Pensions Work’ all pensions in the UK are currently effectively paid by the state.
The reality is that this is the only thing that is sustainable.
No wonder public sector unions will, rightfully, be annoyed. This man has no clue what he is talking about.
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The comment about the extra burden falling almost entirely onto the taxpayer is a flat lie.
Every civil servant who joined up after 2002 couldn’t join PCSPS Classic but had to join Premium – at extra cost. Everyone who joined up after 2007 couldn’t join Premium but had to join Nuvos – at extra cost. Combined with those who, for their own good reasons, chose to switch from Classic, a good percentage of the extra cost has been defrayed by civil servants. Not to mention, of course, that we are taxpayers as well!
Richard, I’ve been linking to this blog recently and giving due attributory credit when writing some pieces for http://www.dailyfinance.co.uk, a site for which I freelance. I certainly take your point about the level of vitriol one attracts when arguing against what the ConDems present as consensus, and about the failure to address points made. A piece I wrote referencing your pensions report certainly seems to have got people going http://www.dailyfinance.co.uk/2010/10/07/why-hutton-won-t-make-pensions-work/
It would good to do an interview or series on DF, to take the arguments into another arena. This is the only avenue of contact I can find for you, so feel free to block the comment but maybe drop me a line.
best
Martin Cloake
I think people make the mistake of thinking that what’s always been there is somehow a guide for what’s reasonable. The view of what is fair, or the view of what we’re entitled to, seems to be based entirely on what we’ve grown accustomed to. It’s like the child credits row that’s currently going on – if they’d never existed no one on over 40k a year would have demanded them, but because they were there one there’s a genuine feeling of injustice that they’ve been taken away.
Perhaps I’d feel differently if I were a public sector worker. As it is, I’m not, but I work hard and I put away my own money for a pension, which won’t come to nearly the same amout as a public sector worker. Makes it harder to sympathise.