Disclaimer: I am a public sector worker who can expect a public sector pension. This may reflect my views on the issue. It also reflects the views of others who write about this issue but do they declare their interest?
Today many of the public sector unions were on strike in protest at government proposals to “reform” public sector pensions. This caused quite a bit of disruption to people trying to use various public sector services – especially as many schools were closed. The government is of course condemning those who went on strike – how dare they inconvenience the public by going on strike when the discussions are not even complete.
Well the government “negotiators” have already put their foot in it by implying that many things are not subject to negotiation – if all you’re left with is to negotiate what the measures are to be called, then you’re not negotiating at all. Plus anyone watching the news would be mistaken for thinking that these pension reforms are all about making public sector pensions affordable.
What the government fails to point out is that measures taken in the past – including unilaterally (i.e. without negotiating) changing the index linking to a lower rate – have already made the public sector pensions affordable. According to the latest calculated figures, the cost of public sector pensions peaked in 2009-2010 at 1.9% of GDP which is expected to fall to 1.4% of GDP. This is according to this BBC article (I’ve been very lazy and have not hunted down the original report).
As one BBC commentator pointed out, these measures are aimed not at making public sector pensions affordable but at making public sector pensions fairer in comparison to private sector pensions. So the government is lying; no surprise there!
But it isn’t fair for a low-paid private sector worker to be paying taxes that contribute towards a more generous public sector salary for those lucky enough to hang on to their public sector job! To be more clear, the public sector scheme should should not be excessively generous in comparison to private sector schemes.
One thing to point out is that pension schemes usually work by the employee making a hefty contribution out of his or her monthly salary and their employer also making a contribution each month. That is no different in the public sector!
So what we have here is a government determined to bring down public sector pensions to the level in the private sector rather than tackle the admittedly harder problem of bringing up the level of private sector pensions. Or in other words we have a government working to keep the average worker poor so the rich can get richer.
Just what you would expect a Tory government to do.