Public Sector Pensions

Debate between Roger Williams and Lindsay Roy

Thursday 8th December 2011 Commons Chamber

[Lindsay Roy]

The Government pre-empted Hutton and were precipitate in taking forward the action with the 3% increase.

Not only have public sector workers been penalised, but the wealthier owners in our society, particularly the bankers, have not been challenged in the same way. As taxpayers, we have bailed out the bankers, so some of the richest people in our society continue to be rewarded, and it was some of them who created this financial crisis. Patently, we are not all in this together.

As a cover for their actions, the Government continue to peddle a number of myths, which, if Members will pardon the pun, I will try to scotch. First, it is said that public sector pensions are gold-plated. As we have heard, there are varying figures for this, but they vary between £3,000 to £5,000.

Secondly, it is said that the public sector unions were spoiling for confrontation. Nothing could be further from the truth.

[Roger Williams (Brecon and Radnorshire) (LD)]

The hon. Gentleman is making a powerful point, and many of us have sympathy for those on small and medium incomes, but there are people on large incomes who also receive very large pensions. People pay taxation to provide those high pensions and that is a matter of concern.

[Lindsay Roy]

I do not want to be drawn to the lowest common denominator. We have already heard the issues surrounding tax relief in the private sector.

Industrial action is a last resort and a signal of anger and frustration among our constituents. Most of my constituents had never taken industrial action in their life and hope not to do so again.

The third myth was that the immediate 3% increase was recommended by Hutton; it was not. The fourth is that the intensive and serious negotiations between senior Ministers and senior trade union officials had continued right up until the 11th hour; they had not. Senior leaders last met on 2 November. To add insult to injury, this coalition Government decided to break the pension link with the retail prices index and move to the consumer prices index, thereby having a significant detrimental effect on the value of pensions, with a drop of between 11% and 14%.

All mainstream political parties fully recognise that there needs to be a comprehensive review of public sector pensions to ensure fairness, sustainability and affordability. At no time did we pretend that challenging decisions would not have to be made about contributions, entitlement and retirement age. Reform was to be strategic and phased and it would inevitably involve difficult decisions as people are living longer. It is now incumbent on the Government to engage as a matter of urgency in serious and meaningful negotiations at the most senior level and as immediately as possible with trade unions to agree an acceptable settlement.

Fundamentally, we need to draw up a long-term plan for decent pensions in the public sector, to continue to engage high-quality recruits, to retain the many committed public servants who do a tremendous job on our behalf and to reward fairly those who reach their pension age. I therefore urge the Government to go home and think again, rescind these unfair short-term changes and to bring to the table a fair, affordable and sustainable plan for long-term pension reform.