Commenting on Hutton’s proposals to raise contribution rates for public sector workers, General Secretary Paul Noon said: “This would amount to a savage pay cut when members are already suffering a two-year pay freeze.
“Civil servants have also been subjected to a recruitment embargo, job cuts and attacks on their terms and conditions. They are in no mood to accept unfair and unwarranted attacks on their pension scheme.”
In evidence to Hutton, Prospect argued that public sector pensions are both sustainable and affordable. Recent reforms have capped the cost to taxpayers from these schemes. Official projections from the National Audit Office show that total expenditure on the main unfunded schemes will be 1.7% of GDP in 2059-60 – exactly the same level as today.
Noon warned that implementing Hutton’s increases would rip up agreements between the government and unions to cap the cost of public sector pensions to taxpayers. “Pension schemes need long-term, stable management and not knee-jerk responses to the latest fiscal crisis. While we will consider any serious proposals, reforms need to be within the framework already established for sharing the costs of these schemes.”
The ‘cap and share’ reforms to the Principal Civil Service Pension Scheme made in 2007 demonstrated that staff were fully prepared to accept fair change, said Noon. All new entrants to the civil service are already on a pension age of 65 and in a career average scheme.
Prospect’s evidence criticised leading government figures for prejudicing Hutton’s inquiry even before it began. The Deputy Prime Minister called public sector schemes “gold-plated” and “unreformed.” The Chancellor said they were “unsustainable.” Those statements are simply not backed up by the evidence, said Noon.
He added: “The government has already unilaterally cut the value of every public service pension by billions of pounds, by increasing benefits in line with the Consumer Prices Index rather than the Retail Prices Index.
“These new proposals have nothing to do with remuneration levels or the sustainability of public sector pensions. They are simply a crude method of using public sector workers to pay down more than their fair share of the deficit.”