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Eating a pension July 31, 2017

Posted by WorldbyStorm in Uncategorized.
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It’s odd, Philip Hammond when questioned recently about whether he had said public sector workers are ‘overpaid’ at Cabinet answered in a way that shows up just how problematic this area is…

Hammond said that while public-sector pay had formerly “raced ahead” of private salaries, the gap had now closed. But, he added, public-sector pensions skewed the picture. “When you take into account the very generous contributions that public-sector employers have to pay in for their workers’ very generous pensions, they are still about 10% ahead,” he said.

“And I don’t for a moment deny that there are areas in the public service where recruitment and retention is becoming an issue, that there are areas of the country where public-sector wages and private-sector wages are getting out of kilter in the other direction. We have to look at these things and we have to discuss them.”

And then:

Asked whether he thus did believe public-sector workforce was overpaid, Hammond said it was “a relative question”.

He said: “This is about the relationship between public- and private-sector pay. And it is a simple fact – independent figures show that public-sector workers, on average, are paid about 10% more than private-sector workers.

“You can’t eat your pension, you can’t feed your kids with your pension contribution, I understand that. I understand all the issues that public-sector workers are facing.”

And that’s a basic truth. A pension is indeed an asset but it has near enough no impact on daily life. But as always in these discussions there’s the basic point that the private sector (and this is true here too) does not offer most workers occupational pensions. It is not even at the races. Complaining that the PS has pensions (or some workers in it do) is essentially an evasion in this larger debate.

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