GMB: Hutton right to resist slash and burn
Brian Strutton, national secretary of GMB comments upon the release of John Hutton’s report on public sector pensions:
“GMB consider that Hutton has not given the green light to attack public sector pensions and Hutton is right to resist a slash and burn approach.
“GMB has always believed that public sector pension reform should be evidence based and Hutton has dispelled some of the myths peddled by politicians and the media alike. It is the correct message for him to send to the government that defined benefit provision is the most suitable method of providing affordable and fair pensions for most public sector workers – indeed GMB believes this applies to all workers. GMB has been an advocate of average salary alternatives to final salary schemes on fairness grounds but they should not be used as a Trojan horse to simply cut benefits.
“Hutton has identified an affordability gap that he does not think should fall on taxpayers. All the reformed schemes have recognised this and the introduction of ‘cap and share’ in return for maintaining benefits is a key feature of the process of controlling costs to the taxpayer. It is vital that these processes are allowed to operate and their effectiveness in managing long term scheme affordability monitored before any more drastic changes are made.
“GMB agrees that there is a case for looking at member contribution rates, for example we have called for the introduction of a 10% contribution rate for those in local government earning over £100,000. However, general increases in contribution rates, above and beyond those agreed through cost sharing, would leave a great many low paid workers unable to pay more when they face a pay freeze and job losses. Affordability is an issue for public sector workers as well as taxpayers.
“Strangely, the interim report rightly highlights concerns over inequalities between scheme members but then seems to ride roughshod over this equality objective in suggesting that private sector workers providing public services should be treated worse than those employed by the public sector. That seems an odd conclusion. There is clearly a lot more work to be done if there is truly to be a level playing field for those providing public services.
“The challenge for the government is clear. If you want fairness and you want workers to save for their own retirement there have to be good quality, reliable pension schemes affordable to them. John Hutton is right to resist the slash and burn approach but this interim report is only part of the picture. Focus now needs to be given to each specific scheme to ensure each remains fair, affordable and sustainable.”
