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Public-sector pay? Forget it - pensions are the real problem

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James Brockett

20 Jun 2008 | 12:14

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Articles more than one month old can be viewed only by CIPD members or PM Subscribers.

There’s been a lot of talk about public-sector pay this month. The latest three-year deal for NHS staff has been criticised for being well below inflation, Gordon Brown has turned down a pay rise for MPs, while his attempts to restrict pay for teachers and the police have continued to raise people’s hackles.

The government clearly want to be seen to tighten a few belts in response to the worrying economic situation – even if the effects of such a policy on controlling inflation are seen by economists as marginal at best.

But if Gordon really wants to save money, why doesn’t he look at the countless millions poured into public-sector pensions? They cost the taxpayer more than £21 billion this year. To put this in perspective, it’s more than all the rest of the workforce put into their pensions – even though the public-sector only represents 18 per cent of all working people. A large proportion of private sector employees pay more (through their taxes) for the retirement of civil servants than they do for their own retirement.

The supposed pay ‘restraint’ in the public-sector is nothing more than empty posturing when the vast majority of its staff, including MPs, are retiring at 60 for a comfortable few decades living it up at everyone else’s expense. Meanwhile, many of the taxpayers funding this will have to work until they’re 70, or simply until they drop dead. Our baby boomer political leaders don’t have any interest in solving this inequality because they will all be long gone by the time the young people in this country start feeling the pain.

I for one would happily give everyone in the public sector a whopping pay rise in the present if they would accept more realistic pension plans that are even in the same ballpark as what the rest of us have to deal with.