Readers of Treasury Secretary Danny Alexander’s spin in today’s Daily Telegraph would be forgiven for not realising that in 2005 major reforms to the UK’s public sector pensions were made in agreement between the trade unions and the then Labour Government. http://www.telegraph.co.uk/news/politics/8580934/Make-no-mistake-we-will-reform-public-sector-pensions.html
Alexander states that ‘I believe there is an indisputable case for reforming public sector pensions. They must be affordable, not just now but in the decades to come; and reform must be sustainable and correct the huge unfairness on the taxpayer and on low-earning public sector workers that exists under the current arrangements’.
This was precisely the rationale for the 2005 agreement which led to an increased retirement age (to 65) and cost sharing arrangements (increased contributions for employees) as well as transitional protections which the Government now seeks to repudiate. Extensive work was undertaken by the unions and employers across all public sector schemes to facilitate these changes which are documented in a Parliamentary briefing from 2009: http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/snbt-02209.pdf
At the time the agreement was widely regarded as a major breakthrough for the long term viability of the pension schemes but even then siren voices were raised by employer organisations such as the CBI who claimed it was a “bad deal for the taxpayer”: http://www.timesonline.co.uk/tol/news/uk/article580128.ece
The current Government proposals do not arise from the recession, the public spending debt or the bogus arguments about affordability (which have been addressed).
The Government is simply settling a score about the 2005 agreement which neither they nor their big business backers have ever regarded as finished business.
