In an exclusive guest post, Bootle MP and Shadow Chief Secretary to the Treasury Peter Dowd exposes the Tories’ plan to renege on their pensions promise to the public sector
The Pensions Policy Institute found that these measures “reduced the average value of the pension benefit for members of these schemes by more than a third.”
Another broken promise from this government.
Not content with swingeing cuts to public services and ramping up of social security sanctions, in 2013 the Coalition government turned it’s ire towards our public sector workers. The Tory-led government decided that the pension entitlements that these workers had been saving for throughout their public service were ‘too generous’ and no longer sustainable under their all-encompassing austerity programme.
As a result pension reforms were introduced, moving almost all public sector workers on to less secure pension schemes. At the time the Pensions Policy Institute found that these measures “reduced the average value of the pension benefit for members of these schemes by more than a third.” A handful of those closest to retirement were offered ‘transitional protections’ to mitigate the cuts falling on their retirement income, only a few years away.
At the end of last year, this decision to protect some older workers from the cuts faced by the rest was found by the Court of Appeal to amount to age discrimination. The government are appealing.
This decision is a positive step for those public servants who have suffered under the Tory-Lib Dem cutbacks, but sadly it isn’t the whole story.
early valuation of some public sector pension schemes suggested that they had come in cheaper than projected, and that public sector workers would therefore see some additional benefits, as promised
Concerned about the widespread anti-austerity protests at the time, in 2013 the government also agreed a concession with the trade unions. That where public sector pension schemes cost less than projected, the leftover spending would be distributed to the workers, whether by reducing the amount they had to save to get their pension, or by increasing the pension itself.
Before the Court of Appeal verdict of age discrimination, Liz Truss MP, the Chief Secretary to the Treasury, announced that early valuation of some public sector pension schemes suggested that they had come in cheaper than projected, and that public sector workers would therefore see some additional benefits, as promised.
to rectify their age discrimination shambles, the government has reneged on its promise.
Now, with a £4bn bill looming to rectify their age discrimination shambles, the government has reneged on its promise. The Chief Secretary says that no additional benefits will be paid until the appeal is over, and even then, if the government lose their appeal they may break their promise.
How can anyone now believe a word that this government says? The Prime Minister promised that she wouldn’t call an election in 2017 before doing just that, at their recent conference May said that ‘austerity is over’, despite the fact that billions more in cuts are still to come. And now, the very same government is reneging on a promise it made to public sector workers, as it slashed their pensions, that if things went better than expected they would benefit.
We want a time-frame for when their dues will be paid, and this time we want them to stick to it.
We cannot let this stand. That’s why Labour is demanding that the government publish its valuations of the public sector pensions, setting out how much workers should get under its original promise. That they immediately commit to keeping their word, and paying out what they owe to our public servants. And lastly, that they apologise for yet another Tory mess, with all the unnecessary stress and delay that this has caused. We want a time-frame for when their dues will be paid, and this time we want them to stick to it.
Peter Dowd MP
Shadow Chief Secretary to the Treasury
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