TUC decent pension when they retire."
The issue seems set to take centre stage in the run-up to the general election, despite the divided loyalties of some union officials. It is clear that the coordinated action is being taken in the hopes that it might force a government retreat rather than continue the confrontation to polling day.
Although many public sector workers are becoming aware of the issue late in the day, the widespread reaction is summed up by UNISON
Average life
expectancy for
hospital cleaning
staff and similarly
low-paid public sector staff has not increased at all in the
last 30 years. activist and Plymouth Respect parliamentary candidate Tony Staunton: "What good is a Labour government if it keeps attacking public sector workers?"
The government has been "reviewing" all public sector pension schemes in the light of claims that people are living longer to draw their pensions, resulting in escalating costs. They are inflicting real pain now, but offering no compensating gains for public sector workers.
Local government bosses, trying to make light of the new proposals, argued that:
"Employees can pay a little more, can work a little longer, or can receive a little less. These are the only alternapay bill. But ministers' concern is to stem long-term costs: the government currently spends 1.5 percent of GDP on public sector pensions, and without the proposed changes this would increase over 30 years to 2.3 percent.
This is why Blair's government have already decided as a matter of policy to increase the normal pension age in all public sector schemes from 60 to 65 years. This proposal alone cuts the value of schemes by up to 30 percent.
The TUC Day of Action saw the publication of new, cataclysmic claims for the scale of the unfunded cost of public sector pensions: accountants calculate the total liability at a staggering £690 billion two thirds of Britain's GDP and far higher than the national debt. Ministers seized on the figures to justify their hard line. go' basis, from taxation, so no such fund is required.
Nevertheless the soaring liability has been used as a pretext by those who are hostile to the public sector pension schemes: these are now more generous than many in the private sector, which have been cut back in recent years.
The British Chambers of Commerce has urged the government to increase pension contributions from public sector workers, to reduce the cost of the schemes to taxpayers.
New Labour's proposed "reform" to the local government scheme would indeed increase employee contributions and tip the balance between employer and employee contributions from the present 2:1 to 60:40. This more favourable ratio for the employers, as the Financial Times has pointed out, was last achieved in 1926!
In addition the minimum age at which a pension will become payable (except on grounds of ill health) is set to increase from age 50 to 55