Hutton Report - Remind me again why the low paid are paying for the Banker's crisis?

There was no great surprises this morning at 8am with the publication of Lord Hutton's final report on public sector pensions.

He doesn't seem to "get it" that he is being used by this Tory-led government to justify an infamous double whammy of massive increases in pension contributions at the same time as equally massive cuts in pension benefits.

There is no repeat no dire crisis in funding arrangements for public sector pension funds.  There are indeed problems but remember only 4 years ago there was a huge row between the then Government and the public sector unions about pensions.  A tough compromise deal was eventually hammered out which saw rises in employee contributions, reductions in benefits and caps on employer (taxpayer) contributions.  Which the unions accepted despite the pain because it was promised that this will make the schemes affordable and sustainable.  So what on earth has really changed in these 4 short years about pension fundiamentals?

What is happening is quite simply a Thatcherite and Orange book ideological attack on the principal of collective provision coupled with plain old fashioned public spending cuts.  For example this government has reduced grants to Councils by £1 billion based on an assumption that staff contributions to their pension schemes will go up by some 50%! (repeat 50%).  If this goes ahead then this will mean that pensions will become unaffordable and people will leave their schemes in droves.  If this happens and members can't afford to remain or join then yes, the public sector schemes will indeed fail.

So yet again we have some of the most low paid and vulnerable in our society being expected to help make good a public spending deficit caused solely by Bankers and the Rich who ripped off this country and now expect us to pay for it.

This lunchtime I was interviewed by Channel 5 News (who reported only my comments on the likelihood of strike action), live on Sky News (robust but interesting) and ITN (see caption and this link). 

Radio 5 Live: Pre Hutton Report on Public Pensions

This morning I was picked up from home by a car at 04:20am (the joy) and taken to the BBC studios in Shepherd Bush.  I was being interviewed on the Radio 5 "Wake Up To Money" business news.  Later today (08:00am) Lord Hutton was due to publish his interim report on the future of Public Sector Pensions.

I was there as a "shop steward and member of UNISON who is in the Local Government Pension Scheme" (LGPS).

I live in East London but at this time of night/morning it only took just over 25 minutes to drive to the West End.  Young people were still in the streets walking home from parties or night clubs. 

I was looking forward to this because I hadn't been interviewed in a studio before and I welcomed any opportunity to try and counter the sheer rubbish being put out about public sector pensions.

At the BBC I was wheeled into the studio with presenters Mickey Clark and Andrew Verity at 05:30am and interviewed alongside pension consultant, Dawid Konotery-Ahulu, who was in another studio.  You can check out a "play again" recording and podcast here.  I'm not sure how long this will be available.

I thought it was quite a fair debate (even if the first question was as ever about the prospect of strike action).  I did get an opportunity to try and argue :-

• Against the "propaganda, misconceptions and down right lies" told about public sector pensions. 
• We should not have a race to the gutter or to the bottom in pension provision.
• There are £100 billion of assets in the LGPS which could pay for all pensions for the next 20 years without any further contributions from anyone (not that I am suggesting that!)
• I pay nearly £190 per month to my pension and having been contributing similar levels for nearly 20 years.
• The most I could get out of my pension after 40 years of service is half pay and 1.5 x final salary lump sum
• The average LGPS for women is £2800 per year.  These pensions are not gold plated.
• In the NHS pension there is already an agreement to restrict employer contributions to 14%.
• If you got rid of final salary schemes then you will not save any money since if you want to avoid pensioner poverty you will have to spend similar or even more on money purchase schemes.  Decent pensions costs money.
• The real pension scandal is the 2/3 of private sector employees whose companies make no contribution whatsoever to their pensions.  Many of whom will have to rely on means tested pension benefits when they retire and this will have to be fully funded by all taxpayers.  

Afterwards I went out of the studio and soon after the next guest was sent in.  I was escorted to the reception and chatted to the researcher about pensions (ironically the BBC was supposed to be on strike over pensions yesterday). Another car took me home for 06:30 and I was able to have enough time for a quick run along Wanstead Flats in the morning fog before work.  

I'll post another time on the actual Hutton Report (when I have caught up on my zeds)

World Day for Decent Work - Thursday 7 October

Today is "World Day for Decent Work".  Check out "BloggersUnite" for further details.

"WDDW therefore has three core messages for this year:

1) Growth and decent jobs, not austerity, are essential to beating the crisis and ending poverty.

2) Quality public services are essential for a decent life and must not be slashed in the name of fiscal consolidation.

3) The financial sector must pay for the damage it has caused and be made to serve the real economy and real human needs".
Let's see if Lord Hutton is going mark the occasion by making his interim report on Public Pensions due out at 08:00 today really fair and equitable (see next post).