Former Labour Work and Pensions Secretary John Hutton says “nothing is being ruled out” as he begins his review into pubic sector pensions.
Writing in today’s Financial Times, Hutton warns the public sector “cannot remain immune from the major demographic and structural changes” taking place in society.
Prime Minister David Cameron recently hired Hutton to lead an independent review of public sector pensions.
Writing in the FT, Hutton highlights the fact that few private sector employees are members of open final salary pensions whilst recent National Audit Office statistics show the cost to the taxpayer of the four largest unfunded public sector schemes has increased 33 per cent in real terms over the past ten years.
Hutton says all accrued rights will be honoured and his review will be focused on fairness. Over the weekend, The Daily Telegraph reported that Cameron was considering giving the unions a seat on Hutton’s review as a way of appeasing them over the scale of public sector cut-backs.
Hutton says: “Workers in the public sector perform functions that are vital to our economy and society. The dinner ladies in our schools, the nurses looking after the sick and dying, and the soldiers fighting for us in Afghanistan, are all right to expect decent pay and pensions. Many of these jobs do not attract high salaries. That is why the retirement needs of those on the lowest levels of the public sector pay ladder will be one of my main concerns.
“I will do my best, guided by these principles of affordability, sustainability and fairness, to find the right solutions to the complex issues this inquiry must, rightly, address.”