Public Sector Pensions

David Hamilton Excerpts

Thursday 8th December 2011 Commons Chamber

[Mr McKenzie]

I thank the hon. Gentleman and will now carry on.

We want to see not an equality of misery in pensions, but fairness. Public sector pensions are not gold-plated, but I accept that they require collaborative review. Instead, public sector workers are being told that they must work longer, pay more and expect less. Trade union leaders who called the strike action on 30 November were branded as militants by Government Ministers, and the Prime Minister described the day of action as a “damp squib”—hardly diplomacy, if they are indeed engaged in negotiations.

We again see the Government promote policies that are hurting but not working, and their plan to guide us out of these difficult times is clearly failing. For Scotland, this is a double whammy, with the SNP Government in Scotland in many ways excelling this Government in the failure league. We need to accept, as the Hutton report did, that public sector pensions are not gold-plated and that many public sector workers, especially women, will retire on an annual pension of around £5,600 a year.

[Mr David Hamilton (Midlothian) (Lab)]

Does my hon. Friend agree that many Labour Members are aghast at the SNP’s duplicity? On one hand the SNP is attacking the Opposition, and on the other hand it is putting forward proposals that are draconian, compared with what the Government have done. Indeed, it could do otherwise if it wanted.

[Mr McKenzie]

I agree. Public sector pensions are not gold-plated, and many, especially women, who work in the public sector will retire on an annual pension of some £5,600—a paltry £100 per week. They ask for fairness in their pensions now if they are not to ask for benefits in their retirement.

--- Later in debate ---

[Dr Whiteford]

I am grateful to the hon. Gentleman for allowing me to point out two things. The first is the Scottish Government’s living wage, which has been raised to £7.20. That will significantly protect the household income of low-paid workers. The second and more substantial is the role of the Scottish Government in the matter. There has been a lot of chat around the Chamber about the room for manoeuvre that the Scottish Government do or do not have. Let me make it clear that the Chief Secretary to the Treasury wrote to the Cabinet Secretary in Scotland, John Swinney, pointing out that the Treasury would cut the budget by £8.4 million a month—that is half a billion pounds over the spending review period—if the Scottish Government did not impose the pension increases.

[Mr David Hamilton]

Will the hon. Lady give way?

[Dr Whiteford]

Not at the moment.

The unions recognise that the Scottish Government have very limited room for manoeuvre. Their choice is very simple: they impose the increases or take the money out of another part of the budget, in other words pay twice. It is clear that even if the Scottish Government were to ignore the requirement and tried to find the money from somewhere else, the Government would cut that money from the budget.

[Mr Hamilton]

Will the hon. Lady give way?

[Dr Whiteford]

Not on that point.

I am grateful to the hon. Member for Hayes and Harlington (John McDonnell) for pointing out the approach that the Government have taken in the negotiations with the trade unions. It seems to me that they have used a similar approach with the Scottish Government, whose choice has been limited. They have been dictated to, and there has not been a basis for a sensible, grown-up negotiation.

Another point made in the debate has been about the Scottish Public Pensions Agency. The key point is that it was not recommendations that were put forward but a series of theoretical options. That was part of the process of the Hutton consultation, and it was quite proper for the Scottish Government to set out a range of theoretical positions. I am sorry that that has dominated the debate so much.

We all recognise the challenges of pension reform, but we want it to be done in a truly equitable way that does not encourage a race to the bottom. We have to acknowledge the progress that has already been made to put public sector pensions on a more sustainable footing and the mechanisms that already exist, but punishing public sector workers through a short-term tax grab will do absolutely nothing to tackle the inadequate pension provision in the private sector. It is nothing but a tax grab, and it is disappointing that the Government have relied so heavily on the arguments that we have heard today. In tough times, all people realise that they have to take a share of the pain, but public sector workers do not want to carry the can.