Hutton - Behind The Headlines

It has become obvious with the publication of the Hutton report on Public Sector Pensions that trade union opposition is not optional. UNISON has no alternative but to maximise its resistance to the range of proposals on offer.

From the increased contributions that will price members out of the schemes; to the lower pensions that will be on offer at the end of a much longer working life; Hutton’s slogan of pay more for longer to get a smaller pension at the end of it is not going to strike a cord with UNISON members.

If we are to take action however, we need to get angry. We cannot accept the myths that are being peddled and more than that, we need to be able to refute them.

But little of the press coverage of the report was critical- in the sense that the British media accepted the tenets of the report as a given. Crucial to this is the belief that public sector pensions are unaffordable.

But to quote Glyn Jenkins, UNISON’s own Pensions Expert
“Commentators have their own agenda in exaggerating the problems of costs in the public sector. Most of the figures quoted in the Press are meaningless telephone numbers; they should be well aware that the pension scheme does not suddenly need to produce a cheque to pay its entire deficit unless the employer closes the scheme or goes bust. Precisely because public sector schemes can take a long term view, the cost is likely to be sustainable.”

The reality is the LGPS is funded and at the moment income from investments and contributions exceed expenditure on benefits by £4 billion to £5 billion a year that is being paid into the funds to pay for the future.

Last year, the NHS scheme received £2billion more in contributions than it paid out and this money went straight to the Treasury.

We know at the end of the day the pensions are not gold plated. Three quarters of the local government workforce is women. Their average pension will be £2800 a year - about £56 a week. The average annual pension for retired NHS staff is around £7,000. The average for former women workers is around £5,000 with more than 50% receiving a pension of less than £3,500.

Male NHS pensioners get an average of about £13,500 while more than half receive a pension of less than £6,500. Let’s remember that the NHS scheme included all NHS workers, including GPs and consultants- whose final salary on which their pension is based will be at least double that of most of our members and the majority of NHS workers, pushing that average up.

Given these facts, why are public sector pensions and public sector pensioners subject to such levels of opprobrium? For some the equation is simple. Private sector employers have been allowed to close decent final salary schemes and basically screw their workforces for some time.

Closure of these final salary arrangements is due entirely to the greed of the corporations for whom the cost of providing decent pensions has become a drag on profits for shareholders and, in the so called non-profit sector, the pressure to keep costs down by keeping the employee costs as low as possible.

So they applaud equality of misery all round. particularly the CBI whose Director General is quoted in the Guardian thus;-
“Pension reforms will also help the Prime Minister's "big society" programme to really get off the ground. Public sector pensions remain the biggest barrier to the private and third sectors providing public services. Pension costs and liabilities are far higher for providers outside the public sector. When third sector and private sector organisations currently bid for work they have to be able to cover the full cost of public sector pension liabilities, and many simply do not have the money to do so.”

In plainer language, the CBI believes that decent pensions are better reserved for those at the top, those in the boardroom. To quote Ruth Sutherland in the Observer
“In good times and bad, the rewards at the top keep rolling, far outstripping any increase in prosperity for the rest of society and deepening the gulf between a tiny super-class of executives and the rest of humanity. In the decade to 2009, the average FTSE 100 chief executive has seen his rewards jump 125%, while the heads of smaller quoted firms have seen their pay increase by 80%, according to remuneration specialists.”

Those rewards will include pensions packages that the ordinary public servant can only dream of. Measure your pension in millions and you obviously deserve it, get £56 a week and you are a luxury that the UK can’t afford.

It is ironic, to say the least, to see BBC reporters po faced about the Hutton report given that many of them were on strike about their own pension scheme recently.

The hostility of the Tory press and the (self styled) Taxpayers Alliance is founded in their very antipathy to the idea of the welfare state and of public servants being rightly recompensed for their labours.

Our pensions are part of the package of the remuneration we receive. In return we provide essential services. The idea that society requires to provide the basic necessities of life such as education and health and social services for citizens and that it is paid for through universal taxation to which each should give according to their income is not one with which they identify.

They applaud the cuts not simply as a means of economic policy but as a rolling back of the frontiers of the state. Applause for the Hutton report is part of the same political programme.

The attack on our pensions is part of class attack on the workers of this country; - For our own retirements and for the generations that follow we can only defend ourselves, by preparing for industrial action.

Jane Carolan