Public Sector Pensions

John McDonnell Excerpts

Thursday 8th December 2011 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I just want to make a couple of brief statements, and I apologise for not being present for the opening speeches, but I was actually speaking at a conference on vulnerable workers.

I just ask the Government to let the negotiators negotiate. When the civil service unions attended the schemes’ talks this week, they were told what they can and cannot discuss. They cannot discuss pension age, despite the previous assurances that Ministers have given them. All schemes have to relate to the state pension age, so, even though some schemes may be able to afford a pension age of 65 years old, the Government are refusing to allow them even to negotiate it. The unions are also told that indexation is off the agenda, and that the index has to be CPI, not earnings, as Hutton recommended, or RPI, as currently.

The schemes have to be career-average. The civil service unions are not allowed to discuss contributions, which have to increase by 3.2% so that the average contribution is 5.6%. Costs always have to be within the scheme’s limit, but in addition the only transitional protection that they can discuss is 10 years for those aged 50, plus the three to four years of tapering for those just below that age. Even if the unions find savings, they cannot use them in another way for further protection. They cannot discuss Treasury assumptions about the discount rate, actuarial reductions for early retirement or any normal pension scheme issues. They are told also that they cannot discuss the abatement rules, which enable staff to take their accrued pension and work on. They can discuss the accrual rate, but that is all predetermined by the other elements not being open for negotiation.

So, what the civil service unions are allowed to discuss in the negotiations is nothing of substance, and in reality we face further industrial action because the Government will not allow negotiations to take place. The Government take an intimidatory attitude by putting things on the agenda and, if they do not get their way, then taking them off.

I echo what other Members have said about the contempt with which negotiators have been treated. I watched the discussion between the Minister for the Cabinet Office and Paymaster General and Mark Serwotka, the general secretary of the Public and Commercial Services Union, when the Minister accused him of not being at meetings. I now discover that Mark Serwotka was at every meeting that the Minister was at—matched on every occasion. If the Government are not deliberately provoking this dispute, they are walking into further industrial action because of their refusal to allow negotiations to take place.

I have toured around, talking to individual unions, and I have spoken to several union executives this week, but the depth of anger does not come from general secretaries or from executives; it comes from rank-and-file trade unionists, most of whom have never taken industrial action in their lives but all of whom are dedicated to the public service that they seek to provide.

So I just appeal to the Government: start negotiating properly; allow proper discussions to take place; seek to avoid industrial action; stop the abuse—the “damp squib” provocations that the Prime Minister has made; and start telling the truth about what people are going to get, because they are going to work longer, get less and pay more. If we look at the calculations that have been made using the Government’s own calculator, we find that no one will get more unless they work for many more years, and teachers and others do not want to work until they are 68 years old just to get some form of pension income that they can live off.

I urge the Government to get back to the negotiating table and to take their restrictions off the negotiations. They are dealing with people who are dedicated to public service, who are willing to settle and who do not want to seek further industrial action. I warn the Government that if they do not negotiate properly, there will inevitably be more disruption and more industrial action—and that the Government will be to blame for it.