Living Standards

Julie Hilling Excerpts

Wednesday 30th November 2011 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

I am grateful to have been called to speak in this debate. I declare an interest as a proud trade unionist and a proud deferred member of the local government pension scheme.

The pension dispute is just the tip of the iceberg of the devastating effect of the Government’s policies on the living standards of ordinary people. My surgery is full and my postbag is full of letters from people who are struggling because of Government policies, which make the poor pay for the devastation that irresponsible bankers wrought on the world.

People are losing their homes and jobs. They are terrified that they will lose their disability living allowance. They are struggling to pay their household bills and are very frightened. Things will only get worse for those ordinary people. Let me tell hon. Members what my constituents are telling me. Paul works in customer accounts for a local council. He tells me that he strongly objects to the pension proposals affecting him. He says that he has already lost £3,000 owing to the new pay and grading structure and will now have to pay 3% more for his pension and work longer. Like many thousands of others, he believes that he may well have to leave the pension scheme altogether.

Jeanette is another constituent who is deeply annoyed by the cuts to the local government pensions. She says:

“I really need to express my disgust at the treatment of Local Government employees, as the majority of us do work very hard and make a great contribution to local services and meeting national targets and budgets. I feel we are pawns in the political game and are easy targets, with propaganda being used to fuel the media misconception that we are lazy, workshy overpaid employees who have a cushy working life in comparison to the private sector.”

She went on to say that she felt that she was having her pension stolen from her.

It is no wonder that those constituents are so angry. Their pension scheme is a funded scheme: both employee and employer pay actual money into an actual fund. It takes in £4 billion a year more than it pays out and was changed just a few years ago to make it sustainable. Now the Secretary of State for Communities and Local Government wants to rob the fund of £900 million—not to make it sustainable or to improve it, but to satisfy his need to make cuts, rather like the worst employers of the past who raided pension funds.

This illustrates the complexity of public sector pensions. There are six schemes, not one—all with different rules, accrual rates, retirement ages and benefits. Contribution rates range from 0% for the armed forces to 11% for the police. To speak of them as though they were one unaffordable public sector pension is misleading. The Government say that their proposals are an improvement, but they are not telling the whole truth. The average public sector worker will still end up with a pension of less than £6,000, will have to work a number of years longer, will have to pay 3% more and have their pension uprated by the consumer prices index rather than the retail prices index.

It is no wonder that public sector workers are angry, but they are also scared. Paula, a teacher of deaf children for 30 years, told me of her fears that her pension will lose its value because of its being uprated by the CPI. She said:

“I have little or no family, I live alone and if I were to fall into debt the fear of that keeps me awake at night. My lifestyle is already very frugal, I have no choice about that because of the price of gas, electricity and fuel. My pension puts limits on my lifestyle now. I dread to think of what will become of me in a few years’ time when my financial position has not kept pace with prices and that wakes me up at night constantly.”

Of course, there is much worse to come for the low paid: cuts to housing benefit and in-work benefit for a great many low paid workers—

[Mr Speaker]

Order. The Front-Bench winding-up speeches will begin at 6.40 pm. I call Pat Glass.