Campaign news

LRC calls on Labour leadership to oppose Hutton proposals

11th March 2011

The LRC - a grassroots membership organisation of Labour party members, trade unionists and Members of Parliament - is calling on Labour’s leadership to reject Lord Hutton’s proposals that public sector pensioners should pay higher contributions and receive a lower pension.

The LRC will be co-ordinating with unions and grassroots members to build opposition to these proposals (download model motion) and to have that reflected in the Party leadership. It is totally unjust that public sector workers should pay to fill the hole left by the banking crisis.

Lord Hutton has clearly found a more appropriate home for his politics in the Conservative-led government and should now be relieved of the burden of Labour Party membership.

John McDonnell MP, said:

“We call on the Labour leadership to oppose proposals that will force public sector workers to pay for a crisis caused by the banks. Hutton’s report effectively calls for a tax on public sector workers that will be used , as Osborne has clearly said, to fill the deficit.

“The National Audit Office confirmed in December that public sector pensions are affordable and sustainable in the future. It is difficult to take the Government’s rhetoric about affordability seriously when it is slashing corporation tax at the loss of billions of pounds of revenue.

“The LRC will stand in total solidarity with all trade unionists in opposing these unfair attacks, starting with UCU members on strike later this month.”

Essential reading on public sector pensions:

• Mark Serwotka ‘Lord Hutton has made scapegoats of public sector workers’, Guardian
• Economists letter on public sector pensions
• Faisal Islam’s blog on public sector pensions, Channel 4
• National Audit Office, The impact of the 2007-08 changes to public service pensions, Dec 2010
• Official Labour Party response to Hutton, Angela Eagle MP, Shadow Chief Secretary to the Treasury

Draft motion for CLPs

PUBLIC SERVICE WORKERS’ PENSIONS

This CLP believes that the state should provide pensions for public service workers so that those who spend their working lives serving our communities do not face poverty in retirement.

We therefore condemn the Tory led Coalition Government for;

(1) Changing the basis of uprating pensions in payment from the Retail Price Index (RPI) to Consumer Price Index (CPI) with effect from April 2011. We note that this change has reduced the lifetime value of the pension promise to public service workers by between 15% and 20%;

(2) Deciding to impose an increase in pension contributions of an average of 3% of salary from April 2012. This represents an increase of approximately 50% in pension contributions for many workers.

We further note that the recommendations of Lord Hutton to increase retirement ages for public sector workers and adopt a ceiling for employer contributions to pensions at the expense of the interests of employees will further undermine the value of public sector pensions.

We recognise that the Government may go further even than Hutton recommended - and we deplore the decision of a Labour parliamentarian to allow himself to be used by the Tories to attack and undermine the pensions of public sector workers.

We further recognise that an important motivation for reducing the value of public servant’s pensions is to make it easier to privatise public services. The attack upon public service pensions is part and parcel of the Tories’ attack upon the welfare state.

We believe that the Tories disgraceful attack upon public sector pensions could provoke massive opting out of pension schemes by low paid workers, worsening pensioner poverty for future generations and imposing a cost on the state as future pensioners claim means tested benefits.

We therefore call upon the Parliamentary Labour Party [and our MP] to pledge to reverse all of the Tory attacks upon public sector workers and their pensions.

We pledge our support to the trade unions in their campaign to defend public service pensions and agree to join and support demonstrations and picket lines in the event of industrial action.

Download this model motion (pdf file)