Hutton Pensions Report Brings Industrial Action Closer

UNISON, the UK’s largest union today warned that the Hutton report will bring the threat of industrial action closer, as the union’s members reel from pay freezes and job cuts.

Once again, the Government is expecting public sector workers to pay the price of the excesses of the bankers who caused the deficit, said the union’s general secretary Dave Prentis. And he called on the Government to enter into urgent, meaningful talks on the substance of the Hutton report, rather than rushing to make cuts.

Dave Prentis said:

“This will be just one more attack on innocent public sector workers who are being expected to pay the price of the deficit, while the bankers who caused it continue to enjoy bumper pay and bonuses. “On top of a pay freeze, and the threat of redundancy, they now face a pensions raid. This brings the threat of industrial action closer. “One million of our members are in these pension schemes and I urge the Government to enter into urgent, meaningful talks on the report, rather than rushing to make cuts. “Workers are already losing out as a result of the Government pre-empting the report, raiding the pension schemes and increasing contributions by 50%.”

There is a lot of misinformation about public sector pension schemes. The facts are:

The local government and NHS pension schemes were renegotiated in 2006 to make them sustainable and affordable.

Both schemes are cash rich – more is going in than coming out.

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

The average pension in public service pension schemes is very low, for example in local government, the average is just over £4,000, falling to £2,800 for women.

If these people didn’t save for their retirement, they would have to rely on *means-tested benefits paid for by the taxpayer.

Pensioners are already being hit with the move from RPI to CPI to calculate annual inflation increases – this will reduce their value by 15%.

When the NHS scheme was renegotiated, protection was built in for current members to retain their retirement age of 60. New members have a retirement age of 65. If that agreement is broken, industrial action could follow.

Government cuts to local government employers grants mean that the shortfall in pension contributions has to be made up by employees. They may have to pay between 50% and 100% more for the same pension. This is effectively a tax on low paid workers.

Studies have shown that if the contributions rise too much, workers will desert the scheme and it could collapse.

The local government scheme invests more than £100billion in the UK economy. If the scheme collapsed, it would have a devastating impact on the economy.

Click here to read the report.

Click here for the summarised report.