These strikes are wrong, Cameron tells public sector workers

Tuesday, June 28, 2011

These strikes are wrong, Cameron tells public sector workers

PM urges workers planning to strike on Thursday to stop and reconsider arguments about public sector pension reforms

Public sector pensions cost every household �1,000 a year, David Cameron claimed as he made a detailed appeal to unions to accept the government's proposals and back away from strike action.

The prime minister said he believed there were "misconceptions" amongst those planning to strike on Thursday, urging them to stop and reconsider the arguments. He warned that the pensions system was "in danger of going broke" if reforms were not made.

"Of course, in a democracy people can go out and protest," Cameron told the Local Government Association conference in Birmingham. "But the people marching should know what they're objecting to, and I believe there are some misconceptions flying around."

Concerns about the impact of Thursday's strikes were raised when it emerged that the UK Border Agency has written to airlines suggesting they might encourage people to choose another day to fly amid concerns about the impact of immigration staff taking strike action at Heathrow and other major airports.

The cabinet met and discussed contingency plans on Tuesday as the number of schools estimated to be closed on Thursday grew.

In comments that unions said were an attempt to drive a wedge between private and public sector workers, Cameron said: "The taxpayer currently contributes over two-thirds of the costs of maintaining public sector pensions. That's the equivalent of �1,000 a household. That figure is only expected to rise.

"Is that a fair? I don't believe it is, especially when people in the private sector are seeing the value of their own pensions falling, their own pension age rise and when, according to the Office for National Statistics, the average gross pay in the public sector is now higher than in the private sector. So we need to rebalance the system."

In a speech almost entirely focused on the pensions issue, but notable for its non-confrontational language, he argued:

? That reforms are essential as people live longer and the bill for public sector pensions rises. "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 retired at 60, they could expect to claim a pension for around 20 years," he said. "Today, when they retire at 60, they can expect to claim a pension for nearly 30 years ? about a 50% increase on before."

? That the system of paying for public sector pensions needs to be rebalanced to make it fairer on the taxpayer. But he also argued that the reforms would be fair for public sector workers, protecting their defined benefits, albeit under a pension scheme with payouts based on career averages instead of final salaries. Accrued rights would also be protected, and the lowest paid protected from contributions increases.

"Your pre-reform entitlements are being fully protected," he said. "What you have earned you will keep. Fact. That's why I can look you in the eye and say public service pensions will remain among the very best ? much better, indeed, than for many private sector workers."

? He argued that the career-average scheme was fairer for low paid workers, who are no longer expected to subsidise the final salary schemes of those who jump to the highest salaries before retirement. "This is not about saving money. It's about doing what's right and fair by you," he said.

? Refusing to act now would store up a problem in the future that in five, 10 or 15 years would become unaffordable, he said.

? He concluded with a direct appeal to those planning to strike on Thursday, saying: "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. Right for the long term. Right by the taxpayer. And, most crucially of all, right by you."

Polly Curtis

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