Public sector pensions reforms must happen

THERE HAS been a lot of debate about the future of pensions and, whilst I know many local people will understand the need for reform, I am also aware that some will have concerns over how these changes will impact on them.

Everyone is under financial pressure right now. The cost of living is rising. Millions of private sector workers have taken pay freezes or worse in the past three years, and many have lost their jobs.

Those in the public services are facing the second year of a pay freeze, and job insecurity is a feature for some, as the Government gets to grips with the enormous budget deficit we inherited from Labour.

It is understandable, then, that just as public sector workers want to protect their pensions, millions of other taxpayers are asking why they should be asked to pay more tax to fund them – especially as those in the private sector often receive considerably less or nothing at all by way of employer contributions.

On top of that, they are facing a rise in the state pension age to 66. It is unjustifiable that the taxpayer should work longer and pay more tax so that public sector workers can retire earlier and get more than them.

This debate is often polarised between two extremes. There are some trade unions who seem to believe that pensions for public service workers should not change.

Then there are those equally misguided voices who seem to think that the public services should be the front-runner in a race to the bottom.

Between these two, I believe there is an indisputable case for reforming public sector pensions.

They must be affordable, not just now but in the decades to come; and reform must be sustainable and correct the huge unfairness on the taxpayer and on low-earning public sector workers that exists under the current arrangements; reform must ensure that those in the public sector continue to receive among the best, if not the best, pensions available.

Let me sum up our position. We are all living longer. That means more years spent in work, as well as in retirement. To keep the best pensions in the country, public sector workers will have to contribute more.

When they do reach retirement age, the pension they receive will be broadly as generous for low and middle income earners as it is now. At the same time, we are protecting the pension that has been earned to date.

Where people seize the chance to shape it, a much better change can happen.

In reforming public service pensions, this Coalition Government is attempting to strike a fair and affordable balance between the legitimate interests of public service workers and the costs faced by other taxpayers.

This is not an attack on public sector pensions, it is an attempt to protect them for the long term.