The second Hutton Pensions Commission report has confirmed plans to make public sector workers PAY MORE to RETIRE OLDER and to GET LESS PENSION when they do.
Ex-Labour Minister John Hutton, now advising the Con-Dem Government, had already recommended a massive hike in pension contributions. This is on top of the Government’s decision to rip off millions of workers and pensioners by switching from RPI to the lower CPI indexation for pensions and benefits from April.
For example, they want teachers’ monthly payments to go up by 50% - that’s around a £100 per month pay cut. With a public sector pay freeze and rising inflation , this would be another huge squeeze on incomes.
Hutton claims that the increases are inevitable to account for rising life expectancy. It’s not true. No actuarial analysis has been provided to justify them. In fact Hutton’s own figures show that public sector pension scheme costs are already set to fall. So this extra money isn’t to help pay for retiring colleagues. No, the Government just wants to impose an extra tax on public sector workers to plug the hole in their finances. But why should we foot the bill for the bankers’ gambling debts?
These attacks are part and parcel of the Government’s privatisation agenda. In order to privatise schools and other public services, businesses don’t want to have to pay the costs of decent pensions. Reports suggest states that a public sector pension of £20,000 might be cut to just £6,000 in a private scheme.
Hutton’s new proposal is that the ‘normal pension age’ would rise first to 65 for all but then increase further to 68 to track the rising state pension age. Do they seriously expect a 68 year-old to have to struggle around a classroom? Or for older workers to be forced to work on while the younger generation is unable to find employment?
He has also proposed that existing ‘final-salary’ schemes should be replaced by ‘career-average’ pensions. Hutton wants to divide opposition by claiming that this would be ‘fairer’ to those lower down the pay-scale. But what Hutton intends will be unfair to all of us.
In principle, a career-average scheme can be constructed in a way that maintains pension levels – but their intention is to cut pension costs. These schemes will be calculated to give us LESS pension even though we'll be paying in MORE.
Hutton also wants to divide the public sector from private sector colleagues by saying that we can’t expect to carry on with final salary pensions when most private-sector workers aren’t getting them. But why should we allow ourselves to be ripped-off in the same way as private companies have ripped-off their employees? The best way to defend all workers is for someone to put up a fight – and we are going to!
Hutton’s report must be met with a quick response – a co-ordinated ballot across the public sector for united strike action to defeat the pensions robbery. It’s also yet another reason to be out on the streets of London on 26 March!
The UCU have already balloted lecturers for action over pensions (and secured a 72% majority for strike action from those in the Teachers Pension Scheme). The PCS, NUT and other teaching unions are discussing balloting for co-ordinated action starting in June. But this mustn’t just be a token protest; it must be the start of an escalating program of strike action to defeat these attacks. A famous victory over pensions would then raise workers’ confidence to fight all of the Con-Dem’s cuts.