RPI to CPI Early Day Motion 1032

Stargazer57

teacher_retired wrote: »

Its worth taking a look at Daily telegraph site 'Theres nothing unaffordable about public sector pensions by Jeremy Warner March 11th 2011'.
An interesting economic analysis & point of view that current changes already made would suffice without Hutton.

Have you actually read the article?

This is what he says:
What it shows is that even without the Hutton reforms, the cost of public sector pensions on the key measure of affordability (as a percentage of GDP) has already peaked and is set to decline markedly over the years ahead. That’s because public sector pensions have already been quite significantly reformed, the two main changes being higher employee contributions and the shift from RPI to the generally lower CPI for indexing purposes.

So in order to make public sector pensions affordable, they had to make the change which this thread, with its 800+ posts opposes.

I see that both Ripoff and MEY said "Thank You to teacher retired For This Useful Post"

viridens

As mentioned here before, I have kept up membership of my last union (£30 a year) after retiring. I have also been pestering their pension campaign person as to why there has been no mention of EDM 1032 in any union communication. At least their latest emailshot (below) mentions the RPI/CPI issue.


Your Pension!
11 March 2011

Dear Member

Your pension is under threat. Under the government’s plans, you will pay more, work longer and get less so the Treasury can claw back £2.8bn from public sector pensions to help plug the national deficit caused by the banking crisis.

What has Hutton recommended?

• You will pay more in pension contributions every month –the government has already announced this will be an average of at least 3% more
• You will eventually work to age 66 and future increases in the retirement age will be in line with those for the state pension age
• A move from a pension based on final salary to one based on career average

Hutton’s recommendations are on top of changes announced by the government last year, which included the switch from RPI to CPI from April 2011. This means overall you will get up to 25% less in retirement benefits.

What’s ATL’s response?
ATL has campaigned to protect the Teachers Pension Scheme (TPS) and the Local Government Pension Scheme (LGPS) in England and Wales and similar schemes in Scotland and Northern Ireland. According to Lord Hutton and the National Audit Office, the costs of public sector schemes are coming down not going up and will continue to do so for the foreseeable future. Therefore both the TPS and LGPS are sustainable and affordable.

What happens next?
Talks between the unions and government are ongoing and we have successfully postponed an announcement on the imposed hike in contributions. Discussions continue as we write to you, but so far the government has refused to provide evidence to support increasing the contribution rates, insisting that contributions can increase without the Government Actuary’s Department undertaking a scheme evaluation The TPS valuation has been postponed since Autumn 2009.

What can you do?
Already ATL members have shown their dismay at the plans to increase contribution rates. Thousands of you have signed our petition and hundreds are attending pension roadshows across the UK.

Without a robust response from ATL members, the government’s proposals for England and Wales will go ahead and we expect similar changes to be made to pensions in Scotland and Northern Ireland.

You must act now. Speak out for your pension by:

• signing our petition against paying more, working longer, getting less at www.atl.org.uk/pensionpetition
• attending one of our roadshows, details can be found on www.atl.org.uk
• joining ATL members on the anti-cuts ‘March for the alternative’ on 26 March, details on www.atl.org.uk
• downloading or ordering posters, flyers and information to share with your colleagues
• writing to your MP demanding the changes are halted using the template letter on www.atl.org.uk
• reading emails about the changes; you can tell us your email address by updating your details on the website or emailing [EMAIL="membership@atl.org.uk"]membership@atl.org.uk[/EMAIL]
• visiting www.atl.org.uk/pensionscampaign for news

Kind regards,

Dr Mary Bousted
General secretary, ATL


Your Pension!
11 March 2011

Contact details:
[EMAIL="Communications@atl.org.uk"]Communications@atl.org.uk[/EMAIL]


Moved house? Changed jobs? Update your details at www.atl.org.uk/update or email [EMAIL="membership@atl.org.uk"]membership@atl.org.uk[/EMAIL]
This email has been sent to you as a member of the ATL – the education union. We will never give your email address to anyone else. If you do not wish to receive communications from us by email, click here to unsubscribe

I remain concerned that the only agenda with the RPI/CPI swindle at the top is our own.

Interested_Taxpayer

Stargazer57 wrote: »

Have you actually read the article?

This is what he says:
What it shows is that even without the Hutton reforms, the cost of public sector pensions on the key measure of affordability (as a percentage of GDP) has already peaked and is set to decline markedly over the years ahead. That’s because public sector pensions have already been quite significantly reformed, the two main changes being higher employee contributions and the shift from RPI to the generally lower CPI for indexing purposes.

So in order to make public sector pensions affordable, they had to make the change which this thread, with its 800+ posts opposes.

I see that both Ripoff and MEY said "Thank You to teacher retired For This Useful Post"

Have you actually read and understood what EDM1032 says? That's what this thread is about and what most of the posters on here support not oppose.

MEY_3

Stargazer57 wrote: »

Have you actually read the article?

I see that both Ripoff and MEY said "Thank You to teacher retired For This Useful Post"

Yes, Stargazer57. My thanks is for alerting me to the link, not for the content. It fails to mention, for instance, that private sector pension tax relief makes those pensions more expensive than public sector ones by some margin and is just another politically-biased distortion of the real agenda that is now becoming apparent. i.e. making it easier to dismantle the public sector by making it more attractive to potential buyers. Grubby business - politics.

JamesU

viridens wrote: »

Your pension is under threat. Under the government’s plans, you will pay more, work longer and get less so the Treasury can claw back £2.8bn from public sector pensions to help plug the national deficit caused by the banking crisis??.

Mey, Viridens. Update on your previous posts from my side. I felt that the BBC news coverage of pension reforms including the more specific RPI/CPI was adequate. Lord Hutton's interim and final report have far reaching consequences with complex issues and whatever changes are implemented from this by the Government will effect around 5 million pesnioners. A general overview on the BBC news was the best that could be expected. It is impossible to differentiate specific issues from the general picture in such reporting and, if anything, I was quite impressed by it. For example on the BBC there was a reasonable analysis of the effect of career averaging of pensions, need to change the age of retirement etc in a manner that was understandable by the public who may not see things in the same level of detail as discussed here.

I listened to the Newsnight appraisal and discussion and was both impressed and in disbelief at the same time.

On the panel, there was no real input from the Pensions Policy Institute (career averaging fairer which is fair enough, deflection and no answer on the question of the effect of cost reductions) or Price Waterhouse Coopers (pleased about recommendations on governance issues).

But there was a lot of discussion with Mark "Servotak" (name not known) from the Public and Comercial Services Union. He did well to explain the average 25% overall reduction in pensions based on existing reform and highlighted the problem with the switch from RPI to CPI. But the stand taken by him from the start was "no change whatsoever needed, work longer, pay more, get less". This must be a developing slogan that is being canvassed by unions now given the same wording from Viridens union letter (bolded above, and also not sure about the argument for blaming the banks here either). Then there was initial comments on cutting jobs, 2yrs frozen pay, mass privatisation, lower paid workers paying three times more NI and a recycling of arguments why there is no need for pension changes as since 2005 onwards schemes were modernised (not enough yet of course), cost of pensions decreasing, was attack on public workers (economic rebalance??), was deficit reduction at the expense of pensioners (quite possiby), was not fair (balance??), pay has always been behind that of the private sector (???), etc etc and finally the unions are not going to accept this, will unite, will almost cetainly take action etc etc.....I could continue but there is no point. This type of inflexible upfront response from the unions will not wash with the public at large, or myself as a taxpayer for that matter.

So in summary the unions seem to be doing a poor job at being objective and reasonable. I feel that the scattergun attack on a range of issues being thrown around by the unions such as those mentioned above (and do not forget loss of public sector jobs of course) are unfocused and will not go down well with the public, myself included. Although I was inclined to support the demonstration in London on the issue of RPI/CPI and canvass colleagues to come along to do the same, I will no longer be doing this.

There needs to be substantial reform of public sector pensions to make them more affordable in the long term and I have found Lord Hutton's reports informative and objective. The responses that I have seen to date from the unions are inufficiently objective and seem unreasonable to me. However, on the issue of RPI and CPI, I am still convinced the switch is inappropriate, uneccessary and with the right focus can be changed, which of course is the focus on this thread.

JamesU

Interested_Taxpayer

Very interesting blog from Patrick Collinson in the Guardian today. He supports and encourages the fight against the switch to the CPI. However, he does not think that some of Hutton's recommendations are worth fighting against. I tend to agree.

www.guardian.co.uk/money/blog/2011/mar/12/public-sector-pensions-burden-getting-lighter

I hope you change your mind JamesU. We need you and your colleagues in this fight. Serwotka is on the far left of the PCS and does not speak for all Civil Servants or all Public Sector Unions. Far from it.
Might well be a ploy by the BBC to put him on to turn the public against any fight. I note he also appeared on the The Daily Politics on Thursday.

www.bbc.co.uk/iplayer/episode/b00zgysp/The_Daily_Politics_10_03_2011/

Old_Slaphead

MEY wrote: »

It fails to mention, for instance, that private sector pension tax relief makes those pensions more expensive than public sector ones by some margin

Care to explain this MEY ?

MEY_3

JamesU - It is interesting how different people view things. I thought the News was stereotypical as I said but as for Newsnight my take was that Mark whoever refreshingly only answered when addressed and dealt with the points clearly and in a balanced way. No squabbles for once. Contrary to your view I think he was suggesting that reforms have already taken place and Hutton's plans effectively mean that if pensions issues are to addressed again so soon then those previous reforms were pointless.

If the general public do take against the unions over their response to Hutton this I believe will not be on the issues but on the usual negative presentation of unions (possibly their weakness in the private sector is why their pensions and pension provision is so weak) that is habitual. That underlines my criticism of the News programme.

You say more reform must take place quote:" (not enough yet of course)" but I think there is no "of course" about it. They are not unaffordable. Even Hutton says public sector pensions are more efficient than private. And it is the whole pensions, public and private, issue that really cries out for debate. It is not so called "gold plated" public service pensions that are the scandal. It is the criminal mess that is private pensions in this country, that have been systematically abused by employers, governments and the pensions industry for many years, that should really be top of the agenda. And for private pensions this is an area that is subsidised with tax relief far in excess of the costs of the public sector pensions.
I cannot for the life of me see how you can support Hutton but also support the fight against CPI. Hutton's so called savings rely heavily on the CPI change.

Like you, I have decided not to travel to the 26 March march, not because I don't believe the cuts are too savage but because my primary motive would be to campaign against CPI but unless an active group of anti-CPI-ers attended it would be an issue lost on the day. I'd rather use my resources to maintain the CPI fight in other ways. When I suggested on here that a group of us should attend the march I got no response. My feeling is that the TUC do not really want the CPI issue to deflect from the cuts agenda of the march.

Finally I think you are incorrect about the unions' scattergun approach. I believe I now understand their rationale even though I deplore it (it took me a while to fathom). I'll leave you to think it through for yourself. All the clues are in this post, on this thread and in Hutton. Just think from a group union perspective how you would tackle this. Suffice it to say the unions may not be quite the natural ally we'd assume as we fight CPI.

teacher_retired

Stargazer57 wrote: »

Have you actually read the article?

This is what he says:
What it shows is that even without the Hutton reforms, the cost of public sector pensions on the key measure of affordability (as a percentage of GDP) has already peaked and is set to decline markedly over the years ahead. That’s because public sector pensions have already been quite significantly reformed, the two main changes being higher employee contributions and the shift from RPI to the generally lower CPI for indexing purposes.

So in order to make public sector pensions affordable, they had to make the change which this thread, with its 800+ posts opposes.

I see that both Ripoff and MEY said "Thank You to teacher retired For This Useful Post"

I stand humbly corrected I missed the latter point.
I believe the changes already made were sufficient was the point but I missed the cpi reference.
My mistake, my apologies and thanks for the correction.
I am commited to the principle of accrued benefits being honoured and future inflation proofing being just that as reflected in the EDM.

MEY_3

Old_Slaphead wrote: »

Care to explain this MEY ?

Keep up, Old Slaphead! The link was published previously I believe but here it is again in case I'm wrong, and I got it elsewhere.

http://www.taxresearch.org.uk/Blog/page/2/