Salford Lib Dem leader criticises public sector worker strike action

Tens of thousands of public sector workers, many of them teachers, are expected to strike on Thursday, in England and Wales. Currently public sector workers largely enjoy more generous pensions than their equivalents in the private sector and the Coalition Government has acknowledged the growing difference in approach between the private and public sectors. The private sector long ago realised the rising cost and substantial risk involved in offering final salary schemes, based on years of service and end of career earnings, made them unsustainable.

The Coalition Government has a responsibility to ensure that pensions in the civil service are both fair and sustainable in the long term.  As it stands, by 2015-16, £10bn per year will be needed simply to meet the gap between pension contributions and payments to the unfunded pensions they support. In difficult economic circumstances, we simply cannot ignore public spending in an area that will more than double within five years.

The cost of public sector pensions has spiralled out of control in recent years, with benefits paid out of the five largest schemes rising by a third in real terms over the past decade. The problem is that most of these are not funded, so the burden falls on the taxpayer. To give some idea of the scale, the value of unfunded pension liabilities was put by the government’s actuary’s department at £770 billion in 2008.

Councillor Norman Owen, Leader of the Liberal Democrat group on Salford Council said,

“I fully believe that public sector workers deserve a decent income when they retire. However, presently, most civil servants have a system that is far more generous than pension schemes elsewhere in the public and private sectors.  We must create for the Civil Service an affordable and flexible pension package with a sustainable balance between pay and pensions that is appropriate to the times. I think it’s also important to bear in mind that restraint is being shown across the board – private sector employees have already seen final salary schemes close and returns from defined contribution schemes fall.”

Councillor Owen added:

“As a former shop steward myself, I know that unions have the right to strike, but it is completely wrong For the PCS, NUT, ATL and UCU unions to continue with this strike action whilst negotiations are still ongoing with the Coalition Government. However, I agree with  the Coalition Government’s steps to ensure the long term sustainability of public sector pensions, while reducing the existing inequality – something Liberal Democrats campaigned for before the election.  As you know, John Hutton published his report into public sector pensions in early October in which he emphasised the need for fairness when it comes to pension reform so that the lowest paid workers are protected.”