Danny Alexander's continued spin that we need to push up public sector pensions premiums so we can afford them is a myth that doesn't stand up to scrutiny.
Chief Secretary to the Treasury, Danny Alexander, has defended the Coalition’s intentions to ask public sector workers to pay up to £3,000 per year more for their pensions this morning, on the old government line that public sector workers need to pay greater premiums so we can afford such provision in future.
The Treasury’s press release claims that the reforms:
“are designed to ensure that public service pensions remain among the very best available, while dealing with increased costs of people living longer.”
However, this is pure piffle. As Michael Burke wrote on Left Foot Forward earlier this month:
“The justification for the attack on public sector pensions is rapidly being unravelled. The chart below has had a good airing and even made it onto the BBC’s main news programme last night.
“The government has repeatedly claimed that the pension entitlements are “unaffordable”. The chart shows that – under current arrangements – the cost of pensions has already peaked at 1.9% of GDP and that they will fall to 1.4% of GDP over the next 40 years.”
The real reason, as Micheal Burke pointed out, for this reform, is to prime the public sector for privatisation, as set out in the terms of reference of the Hutton Report:
“…the growing disparity between public service and private sector pension provision, in the context of the overall reward package – including the impact on labour market mobility between public and private sectors and pensions as a barrier to greater plurality of provision of public services.”
Privatisation and outsourcing of public services is a good thing or a bad thing, but that’s what we ought to be arguing about here as it’s the real issue. The ‘we have to reform because we’re all living longer and can’t afford this pensions’ is a myth that Alexander should stop indulging in. In fact, if the changes spark a withdrawal, the Treasury will lose money overall.
59 Responses to “Danny Alexander repeats the ‘big lie’ that pension reform needed to stop spiralling costs”
Selohesra
Leon – I dont think I have ever suggested not fixing private pensions – was merely pointing out that when everone has to make sacrifices to make up for Labour’s financial incompetence we can’t ring fence the bleating public sector and their pensions. I suspect you were one of those cheering on brave Gordon when he raided the private sector pensions though. Most sane people realise some cutbacks need to be made – lets just try and do that fairly rather than pretending you can push it all on the bankers and other City workers.
Leon Wolfson
Selohesra – No, because they’re already “fixed” in your view, right. I get it.
And everyone needs to be sacrificed on the altar of “more profits for big companies”. I understand completely.
I know, not suspect, you’re a typical nasty assumption-making Tory.
Sane people know that slashing schemes which are supportable long-term and killing growth are the wrong places to cut. But the Tories can’t have any of that nonsense, company profits are at steak!
( http://wiki.onlinegamers.org/index.php?title=A_COMPANY_IS_AT_STEAK )
Ian Upton
Danny Alexander repeats the ‘big lie’ that pension reform needed to stop spiralling costs, via @leftfootfwd http://fb.me/14necJ16T
Shropshire Unison
Danny Alexander repeats the ‘big lie’ that pension reform needed to stop spiralling costs, via @leftfootfwd http://fb.me/14necJ16T
Clempo
Leon
I agree wholeheartedly with your comments and views. As a Civil Service Pensioner I have paid many times over for my so called gold (I wish)plated pension, only to find at the last minute this incompetent government changed my contract without agreement and made the increments dependent upon CPI and not the contractual RPI. Just have to wait and see what happens in the courts or Europe.
Judging by the amount of Tory trolls on here, there are a few villages missing their ‘idiots’