The CBI on public sector pensions
The CBI have joined the fray on public sector pensions.
Of course they are more subtle than the Taxpayers’ Alliance and right-wing tabloids in their arguments, but they will still be seized on by all those aiming to stir up pensions envy from private sector staff understandably angry about not having a pension. And I thought it was the left that was accused of the politics of envy.
The second sentence of the report leapt out at me:
“Private sector employers have taken decisive action to control pension costs”
You bet they have. Just look at the Government’s Pension Trends (pdf). In 1967 there were more than 8 million members of employer run pensions in the private sector. That figure had almost halved to 4.4 million by 2006 – around one in four private sector staff. In other words around three quarters of private sector workers have had their pension costs controlled pretty decisively.
What you won’t find in the CBI report is any estimate of the cost to the tax payer of paying means-tested benefits to the huge numbers of people already retired or due to retire in the decades to come whose employers have not provided any pension. The CBI report could just as well said, “Private sector employers have taken decisive action to transfer their pension costs to the taxpayer”.
Indeed the retreat from pension provision by employers was one of the main reasons why the government set up the Pensions Commission under Adair Turner, and why a new obligation on every employer to contribute to a pension – one of its main recommendations, and a long time union demand – will start in 2012, thanks to the Pensions Act 2008 which has just received Royal Assent.
(links to CBI report will be added – this was written while it was still under embargo, but I’m sure it will be prominent on their website)