2.5 million public service employees are being told how much extra the coalition government intends to force them to pay in pension contributions from April 2012, but not the increases that they intend to impose from 2013 and 2014.
The government states that public sector workers who earn between £15,000 and £21,000 (£26,000 for teachers, and £26,557 for NHS workers) will pay 0.6 per cent more from next April, while those earning over £50,000 will pay an extra £768 a year if they work in the NHS; if they are teachers, an extra £696 a year; and civil servants will pay £684 extra a year.
Doctors on £100,000 a year will pay an extra £2,000 a year; teachers an extra £1,752 a year and civil servants £2,100 extra a year. This will see doctors paying over £10,000 a year in contributions.
There will be annual increases until 2015 designed to produce an extra £3bn a year.
The government is trying to implement the recommendations of Lord Hutton, the former Labour pensions minister.
Dr Hamish Meldrum, Chairman of Council at the BMA, commented, making clear that what was involved here was pensions robbery.
He said: ‘This isn’t about making the NHS pension sustainable in the long term – it already is. This is simply a tax on public sector workers. The NHS scheme is already affordable, yet the government is asking doctors to pay hundreds of thousands of pounds more for a worse deal on retirement.
‘The NHS pension is currently delivering a massive surplus to the Treasury. It underwent major reform only three years ago, which saw doctors’ contributions increase significantly.’
The team representing health unions in discussions with the Department of Health stated yesterday: ‘These proposals have been formulated without the agreement of NHS Staff Side, who do not view the proposals as legitimate. . .
‘We have not and still do not accept the Treasury’s rationale for imposed contribution increases which have been devised to counteract the effects of the financial crisis caused by reckless risk taking in the banking sector. . .
‘It is clear that government still expects to impose further contribution increases in 2013 and 2014 and that these should prevail following government proposals to reduce benefits planned to be implemented in 2015. . . It will be extremely difficult for unions to consult members over these proposals when they will not know the possible increases in contributions due in 2013 and 2014 and before we have even started negotiations on possible further reforms of the NHS scheme, it does seriously undermine those negotiations and once again calls into question the sincerity of government ministers.’
Unison General Secretary Dave Prentis commented that ‘these talks are being put in jeopardy by the crude and naive tactics of government ministers who don’t seem to understand the word “negotiate”.’
The UCU general secretary, Sally Hunt, said: ‘Any increase in contributions from members will not aid their retirement; they will raise funds for the Treasury. This is simply a tax on public sector workers.’
PCS general secretary Mark Serwotka said: ‘These highly detailed proposals show that the government has made its mind up and is not negotiating seriously. It makes a mockery of the ongoing talks.’
Brian Strutton, GMB National Secretary for Public Services, said: ‘Workers cannot take a pay freeze for another year. Neither can they afford cuts in pay to meet higher pensions contributions to ease Treasury finances.’
Jonathan Baume, FDA General Secretary, said: ‘This is nothing more than a pay cut for civil servants as part of the government’s deficit reduction programme.’
Christine Blower, General Secretary of the National Union of Teachers, the largest teachers’ union, said: ‘We cannot allow this ruthless dismantling of our public sector pensions to go ahead.’
The situation is crystal clear. The pensions robbery is to be imposed and the only way to answer it is for the TUC to call a general strike to bring down the coalition government.