Don't let unions ruin my reforms says pension tsar, Lord Hutton
Ministers must not give an inch to militant unions opposed to public sector pension reform, the Government’s pensions tsar warned yesterday.
Lord Hutton’s plans, which would force millions of people to work longer for a lower pension, have sparked a furious backlash from unions this week, with some warning of a ‘summer of rage’.
Speaking at a pensions conference in Edinburgh yesterday, the former Labour Cabinet minister admitted he had had a ‘real problem’ justifying the policy to two of his children who work in the public sector and will be affected by the changes.
But Lord Hutton insisted that the reforms, designed to curb the excesses of Britain’s £1trillion public sector pension system, had to be implemented in full. He said the report was not a ‘pick and mix menu’.
He added: ‘I am not saying there can’t be unions putting forward their view of what they would like and the Government responding, but my report is essentially about the basic steelwork if you like, the basic structural work that should support these new career-average schemes.
‘I don’t want to see that selectively mucked about with. The package stands together.’
Some of Britain’s biggest unions warned of a wave of strikes in response to the proposals, which would replace pensions based on final salaries with arrangements based on career-average earnings.
The changes would also raise the pension age for many public sector workers, including nurses, policemen and soldiers.
But some critics say the reforms do not go far enough in curbing the cost of the gold-plated pensions paid to millions of public sector workers.
Lord Hutton stressed that his proposals had to be implemented as soon as possible.
He added: ‘I’ve got four kids, two of them work in the public sector. I had a real problem looking them in the eye and saying: “I’m going to go with what I’ve got, you have to work longer.”
‘For parents, to be in the position where you have to say to your kids – “work longer, I go when I want” – that is just not part of any concept of fairness.’
Lord Hutton, 55, is understood to have a protected public sector final salary scheme which means he will retire on a minimum of £30,000 a year – more than the average salary.
He could also withdraw a lump sum of £190,000 from his pension pot when he turns 65.
Lord Hutton said it would have been easier to recommend allowing existing employees to keep their current pension entitlements and imposing the new rules on only new entrants, but this would have put the problem off for another generation.
‘We can’t go on like this, that’s my fundamental point,’ he said.
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