Guest post: Shadow Treasury’s Peter Dowd exposes Tories’ public-sector pensions betrayal

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

Bootle Labour MP Peter Dowd

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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7 responses to “Guest post: Shadow Treasury’s Peter Dowd exposes Tories’ public-sector pensions betrayal

  1. How do other EU member states’ healthcare and other public services compare with ours in the UK I wonder?
    My feeling is ours are worse and the MSM is keeping quiet about it.
    I can’t remember the last time the UK’s “recovery” was compared with other members’ – on TV anyway.

  2. Excellent post, but one comradely criticism. Don’t let the enemy colonise our language. Cuts to pensions are NOT “reforms”.

  3. An important issue that rarely gets headlines, because it refers to the future and is much more invisible than other results of austerity.

    In response to Alan Harrison’s observation, I’d note that the term ‘reform’ (along with ‘modernisation’) was a favourite of the Blair years – which, if I recall was when the pension age discrimination for women started.

    Worth noting how remuneration and benefits for MPs have suffered from ‘reform’. 🙂

  4. It is worth remembering that Public Sector workers normally take poorer pay to receive a reasonable Pension and that they also pay a large contribution out of their wages. MPs, vast majority of whom have proved themselves incompetent, get paid as ordinary backbenchers almost three times the national average, and gave themselves a huge Pension uplift in 2016.

    • “Jobs for life” like the Civil Service were all the rage at one time.
      I never appreciated the supposed security or believed it would last – I left a similar type of job because of the sheer tedium of it.
      The people there were all cut from the same cloth – keep your nose clean, think of the pension and whatever you do never, ever make a fuss.
      I still can’t stand people who think that way.
      Especially when the dullard beancounters are running the country.

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