Pension reforms 'fair', says David Cameron

Click to follow
Indy Politics

The Government's controversial plans to reform public sector pensions are "fair", the Prime Minister insisted today, as he told hundreds of thousands of teachers, lecturers and civil servants they are wrong to go on strike.

David Cameron said the changes being proposed for millions of public sector workers were a "good deal", which would secure affordable pensions for decades to come.

He spoke out as the scale of disruption caused by Thursday's 24-hour walkout by members of four unions became clear, with thousands of schools, jobcentres, tax offices and courts set to be closed or badly disrupted.

Driving tests will be cancelled and customs checks at ports affected, while picket lines will be mounted outside Government departments.

Mr Cameron, addressing the annual conference of the Local Government Group in Birmingham, said reform was "essential", warning that the pension system was in danger of "going broke" unless action was taken because people were living much longer.

"We just can't go on as we are. That's not because, as some people say, public service pensions are ridiculously generous. In fact, around half of public service pensioners receive less than £6,000 a year.

"The reason we can't go on as we are is because as the baby boomers retire - and thankfully live longer - the pension system is in danger of going broke.

"In the 1970s, when a civil servant, say, retired at 60, they could expect to claim a pension for around 20 years. Today, when they retire at 60, they can expect to claim a pension for nearly 30 years - about a 50% increase on before.

"More people claiming their pension for longer has a real-life impact on our ability to pay for pensions. Indeed, we are already seeing the impact.

"In 2009, total payments to public service pensioners and their dependants were almost £32 billion - an increase of a third, even after allowing for inflation, compared to 1999."

The Prime Minister defended the move to increase the pension age as well as contributions, maintaining that the proposals were fair for taxpayers as well as employees.

The balance between what public sector employees paid into their pensions and what the taxpayer contributed was getting "massively out of kilter", said the Prime Minister.

Civil servants contribute around 1.5% and 3.5% towards their pension, compared with 19% from taxpayers, while taxpayers paid the equivalent of £1,000 per household towards maintaining public sector pensions, which Mr Cameron said was not fair.

"We need to rebalance the system. That's why from April next year, we are proposing to increase the contributions public sector workers have to make to their pension."

Workers will still receive a guaranteed amount in retirement and it was untrue that workers would be stripped of benefits they had already accumulated.

"Public service pensions will remain among the very best, much better indeed than for many private sector workers.

"So to those considering strike action, at a time when discussions are ongoing, I would say to you, these strikes are wrong - for you, for the people you serve, for the good of the country. It's the changes we propose that are right."

A survey by the Press Association revealed more than 3,700 schools in 80 areas will be affected by the industrial action being taken by members of the National Union of Teachers (NUT) and the Association of Teachers and Lecturers (ATL).

If these figures are replicated across England, it means that more than 7,500 schools will be forced to close or partially close, while a strike by members of the University and College Union (UCU) is expected to cause "significant disruption" at 350 colleges and 75 universities, according to the union.

Schools can decide on their plans until tomorrow, so the numbers hit by the walkout are likely to rise.

The NUT has estimated that 85% of schools could be affected, which equates to around 17,000 state schools, collectively educating millions of pupils.

The Government has said "rigorous" contingency plans were in place to ensure essential services are maintained during the strike.

But the National Association of Head Teachers has expressed "grave concerns" about a call by Education Secretary Michael Gove that parents could volunteer to cover for striking teachers.

General secretary Russell Hobby said: "It is probably not unlawful but we would strongly advise our members not to accept voluntary help to cover for absent staff this Thursday."

The Public and Commercial Services union said it expected its members in jobcentres, tax offices, Government departments, driving test centres, ports, courts and airports will strongly support the strike.

The union also represents security staff in the Houses of Parliament, as well as workers who transport prisoners to courts and coastguard employees.

A meeting between ministers and union leaders yesterday made some progress on the future of the local government pension scheme, but the talks were described as a "farce" by PCS leader Mark Serwotka, who accused the Government of having no interest in negotiating on plans to cut pensions, extend the retirement age and increase contributions.

"On Thursday we will see hundreds of thousands of civil and public servants on strike and, on the experience of today's meeting and the last few months of Government obstinacy, we fully expect to be joined by millions more in the autumn," he said.

Childcare agencies reported a huge increase in inquiries from working parents trying to make alternative arrangements for their children on Thursday.

Amanda Coxen of Tinies Childcare Agency said calls had doubled, while Ben Black of said: "So far for Thursday we have had 250 parents book an emergency nanny - on a normal day we have 75 parents a day.

"Parents calling us are always stressed and cross as they have important deadlines to meet and just can't take a day off at such short notice to look after their children.

"Even though more and more parents are working flexibly compared to five years ago, they still need to book an emergency nanny to be able to work efficiently and effectively - something that is not possible if you are having to look after the children."

Mr Cameron told a question and answer session after his speech that no one should doubt the "absolute resolve" of the Government to deal with the pensions issue fairly.

"The Government is absolutely committed to seeing this though," said the Prime Minister, adding that he understood the concerns being expressed at the reforms, but stressing that the coalition had inherited "completely unsustainable" debt, with a budget deficit worse than that faced by Greece.

He praised public sector workers for being "extremely tolerant and generous" in accepting a pay freeze and said the Government was not trying to engineer a conflict with the unions.

"I believe rational and reasonable people, when they sit in a room and look at the proposals, will recognise this is good for the long-term future of the public sector, which I care about deeply."

Mr Cameron said there were some "real misconceptions" and "scare stories" about the reforms.

GMB union official Brian Strutton responded: "Mr Cameron has restated the Government case for reform but has said nothing on the scope for negotiations.

"This is crucial to avoiding any escalation of the current disputes and the limited progress that has been made in talks needs to be encouraged, not damped down.

"For example, Government has helpfully recognised the need for specific talks about the local government pension scheme and I believe this is the way forward for reform negotiations in all the schemes.

"Mr Cameron's speech doesn't seem to look beyond the strike this week, yet negotiations continue. The pensions for 12 million people are at stake in these talks."

Meanwhile, Education Secretary Michael Gove said the planned walkout by teachers was "unnecessary, premature and disruptive" and would cause "massive inconvenience to hard-working families".

Mr Gove, who was summoned to the Commons to answer an urgent question, said: "This strike, at this time, will not help our schools."

Shadow education secretary Andy Burnham, who asked the question, said the strike was a "mistake" but said the Government "can't evade its share of the responsibility for the disruption".

Unite general secretary Len McCluskey said: "Whatever the Prime Minister may claim, local government is another area, just as with the NHS, where workers simply do not believe what he is saying - and that is because they do not think the coalition has their interests at heart.

"Increasingly, it seems, the public do not believe his Government either. The solution is not to try to poison the debate, but to support meaningful talks.'

"His speech is very selective in relation to facts - he has highlighted civil servants' contribution rates as they are by far the lowest - the reason for this is because it is compensation for low pay increases over many years. It is a cruel fact that more than half of the women in the NHS scheme retire on a pension of about £3,500-a-year."