Government claim:
“reform is essential because the costs of public service pensions have risen dramatically over the last few decades”
Reality:
This is very misleading. It is true that public sector pensions cost, as Alexander said “just under 1% of GDP in 1970, they account for around 2% of GDP today”.
However, due to the changes agreed in 2007, the Hutton report shows that public sector pension costs will fall from 1.9% today down to 1.4%. The Public Accounts Committee has said that the changes will mean: “costs stabilising at around 1% of Gross Domestic Product (GDP)”.
The government’s document, published on 2 November 2011, shows that pension costs will reduce under the 2007 deal to the level they were in the mid-1980s.
These proposed new reforms are a tax on public sector workers to pay for the banking crisis and this government’s failure to generate economic growth.