The Government’s controversial plans to reform public sector pensions are ‘fair’, the Prime Minister insisted, 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 tomorrow’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.
“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.
Workers will still receive a guaranteed amount in retirement and it was untrue that workers would be stripped of benefits they had already accumulated.