Labour peer rejects claim that his report shows cost of public sector will fall, not rise, in the long term ? but unions are not satisfied
A furious row has broken out between Britain's three largest trade unions and Lord Hutton after the former Labour cabinet minister accused unions of "fundamental dishonesty" over their interpretation of his report into public sector pension reform.
The GMB union, which joined Unison and Unite in announcing strike ballots over pensions on Wednesday, said the comments called into question Hutton's independence after he was asked by the coalition government to produce a study of pensions for public sector employees.
Responding to comments made by Hutton published on the Guardian's Reality Check blog, the GMB's national officer for public services, Brian Strutton, said: "John Hutton's statements to the Guardian are inaccurate and show that he was never independent." Hutton has insisted that pensions are so crucial that they need a cross-party political solution.
The row broke out after Hutton disputed union claims that his report confirms that public sector pension costs will fall, relative to GDP, over the next 50 years. Unions have referred to a chart in Hutton's final document that shows benefit payments falling to around 1.4% of GDP by 2059-60 compared with a 2011 peak of 1.9%.
Hutton told the Guardian the chart assumed that reforms agreed with the previous government would be implemented. Those changes include a "cap and share" system that set a ceiling on pension costs. If that ceiling is reached, unions would accept increases in contributions or working longer ? issues that are now the subject of deadlocked discussions.
Hutton said the chart "includes the assumptions that people work longer and pay more" and warned that reform would be needed to make the 1.4% figure a reality. He added: "It's fundamentally dishonest for people to cite those figures and reach the conclusion in my report that everything is fine."
But Strutton said a similar chart on payments as a proportion of GDP also appeared in Hutton's interim report and also cited the figure of 1.4% by 2059-60. That chart included the switch in pension inflation from the RPI measure to the lower CPI measure, a two-year pay freeze and reductions in public sector jobs, but it did not appear to include increased contributions or an extended retirement age, Strutton said.
"In fact the graph covers assumed cost savings already in existence at the time and shows these were already on track to ensure public sector pensions costs are steady and then slightly falling as a proportion of GDP," said Strutton.
Unison and Unite also rejected Hutton's comments.
Source: http://www.guardian.co.uk/society/2011/sep/15/unions-and-hutton-exchange-angry-words-over-pensions
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