Outlook Gulp. If you're a teacher, a nurse, a binman or a civil servant – in short, if you work in the public sector – the latest news from the BBC makes uncomfortable viewing. The cuts the Corporation proposes to make to the pension benefits it offers its staff could set a precedent that ministers follow over the years ahead, particularly if BBC bosses can avoid a very painful industrial dispute.
Judging from the howls of outrage emanating from union representatives at Television Centre last night, that may prove tricky. But the reaction of workers at companies such as Barclays Bank, Vodafone, Morrisons and Aviva – or any other business that has already shut its final salary pension scheme, or pared back on benefits in another way – is likely to be "welcome to the real world".
There will no doubt be endless arguments about the way the BBC is treating its staff – though note that it is sticking with a retirement age of 60, despite plans for an increase in the state pension age to 66 and beyond – but the inescapable truth is that old-style final salary schemes are no longer affordable.
The distinction between funded schemes such as the one at the BBC and unfunded plans, more normal in the public sector, is a red herring. Either way, if the money coming into the scheme falls short of the pensions due to go out, the taxpayer – and the licence fee is just another tax – has to meet the bill. It would be difficult enough to expect that of taxpayers at any time, but even more so when so many of them have already seen their private sector guaranteed pensions disappear.
The Government has already singled out the public sector pension bill as a long-term source of cost savings. It may choose to wield the axe differently to the BBC, but the axe will fall.
Indeed, one wonders whether the BBC, which appears to be terrified of Conservative ministers who were so critical of it when in opposition, is seeking to curry favour with the new Government, providing the Treasury with a template for cuts.Reuse content