Public Sector Pensions

Iain McKenzie Excerpts

Thursday 8th December 2011 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

I think that we all agree that there is an economic crisis in the UK, but it was caused neither by excessive public spending nor by the “gold-plated” pensions and pay of public sector workers. It was caused by a recession triggered by the banking collapse of 2007. Employees in the public sector have been subject to pay freezes and continuous efficiency savings, and time and again they have risen to the challenge and accepted that they need to play their part in these difficult times. They now find the future quality of their retirement is at stake and their much-prized pensions, which are possibly one of the main attractions of a public sector career, will be greatly reduced.

The Government tell us that the average public sector worker will be better off following the change to their pension, but what they quote as average earnings is not what Opposition Members regard as average earnings. Many public sector workers in my constituency of Inverclyde earn nowhere near the average the Government quote and will not be better off with this change in their pension. The Government tell us that we must follow the lead taken on pensions by the private sector, but I believe that that would be a race to the bottom on pension provision.

The private sector visited its pensions long before the world-wide finical crisis hit. It took contribution holidays and savagely stripped employees of decent pensions while excluding new employees from joining final salary schemes. Indeed, I recall my predecessor, the late David Cairns, some time ago naming and shaming a major private sector employer in my constituency over its unacceptable cuts to its pension scheme.

[Pete Wishart]

We have just discovered that Labour Members are down to a one-line Whip, which means they will not vote on the motion. Surely they could put aside what they describe as their historic hostility to the SNP and do the right thing by public sector workers by supporting the motion. Why are they not backing it?

[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.