A second national debt that needs to be dealt with

PayDirt

What about the employment contracts these public servants with pensions have, where their rights are legally enforceable? Time for a two-stage currency switch where public servants get paid and take their pensions in fast depreciating pounds sterling while private companies attract the best by paying them in Euros or somesuch. Will happen sooner or later.

TomTom

Is it true that in 2003 Council Pension Schemes were opened to Councillors to participate ?

BenM

"The liabilities for this second national debt add up to around £1.2 trillion – around £47,000 per household. Let me repeat that figure: £1.2 trillion – or over a million million."

So what?

Those liabilities aren't all due at once. They're very long term, stretching out over decades - so the UK is easily able to meet them.

Stop trying to scare people with big numbers and no context.

"This is leading to the manifestly unjust situation where private sector workers will be paying more towards public pensions than they save for themselves – around £15,000 each."

What is manifestly unjust?

Private sector workers could have got themselves a public sector job and enjoyed these benefits. Public sector work was not a closed shop.

What is needed is getting the Private Sector to get its own house in order and to avoid this foolish race to the bottom where no one gets anything simply because bitter Tories can't face the total mess they've made of the economy.

Lonesome Dave

Public sector staff could always re-apply for their "own" jobs as may in the private sector have had to. The subsequent contracts on offer may not be the same but hey ho, they don't need to aply....

Dan Grover

I thought that, in Treasury speak, a trillion was a thousand billion? I mean, you never hear about "one hundred thousand billion."

HJ

Paydirt:

"What about the employment contracts these public servants with pensions have, where their rights are legally enforceable?"

Just as Brown taxed private sector funds which had already been invested on the basis that they were tax free, it should be possible to devise a tax on pension income received (above a certain level) where the pensions are not backed by a fund. It cannot be beyond the wit of the government to reduce the taxpayer liability even on existing entitlements.

sam

Got to love that "perhaps" in the "perhaps this is why half the private sector doesn't have pensions". As in "we have no evidence whatsoever that these things are linked, and intuitively they have nothing to do with each other, as public sector pension contributions are paid through general tax, but by suggesting some link we add weight to our case"

There's a good argument in here - don't waste it by drawing a straw man cause and effect

Mr. Green

#Dan
I think a financial "Trillion" is a numerical "Billion" (1 million millions)

Foundavoice

BenM's comments are so far removed from reality I can't be bothered to entertain them.

Mr Green - Dan is correct. We adopted the 1,000 million as a trillion (it used be be million million IIRC) in the 70s as this is the generally accepted worldwide and avoids confusion.

Adrian

Some people choose an occupation in public service because it offers a good pension. If pensions are no better than the private sector it follows that those people might take thier talents elsewhere. I'm not suggesting that there will be a shortage of people willing to work as teachers, police officers, firefighters, nurses etc., but the quality of candidates will be reduced.

Pensions are by nature a long term thing. For some in the public sector there is no fund. The treasury shoulders the burden. In the case of police officers, a pension to which the individual contributes 11% of earnings at present is paid directly by the police authority from central government grants and precepts.

Since 1919 governments have had the opportunity to set up pension funds for the police but have chosen not to do so. Still, at least it provides an outlet for bitter envy from those who not serve.

There is a legitimate question about pensions. What is the value of police service, teaching, nursing, street cleaning? Are they less valuable than, say, futures trading? The answer is yes because without enterprise there is no sustainable public sector. However, tackling pension provision in the private sector is as important as the public sector because an astonishing number of people make no provision at all for their future.

TrevorsDen

In '98 pensions was 16% of spending, in '06 it was 17% of spending and in 2012 it will be 18% of spending.

Its not going to get any better - By 2050, half the population will be aged 55 or over.

So BenM - needs to think again. But BenM thinks all problems can be solved by spending money he has not got.
Of course if we just spend more with borrowed money then the %age going to pensions will come down and BenM will shout 'success'
Pensions do not become liable in 20 years - they are becoming liable now every day every month every year.

TGF UKIP

With approximately four times the number of private sector than there are public sector workers, this should be an easy one for the Cameron Tories to win on.

So useless are they,though, at any sort of populist communication that we can almost certainly expect to see Unison & co carrying the day in the polls on this. It really is just so easy for the Swivel Eyed and his mates.

So far as the number goes, though, it was the Obama triumph in the US and the Brown achievement over here to put "trillion" into common usage. The best way, however, to get anyone to grasp just how large a number it is, is to pose the question "How many days, weeks months or years is a trillion seconds"

While most people guess a few years at most, the answer is a gobsmacking 31,668 years (source: DT Business section)

DC

I don't know about the rest of public servants but I've served in the military for 17 years now and 'the pension trap' is a common squaddie term. Many of us reach the point where the disruption, multiple tours and other negative aspects of forces life are only outweighed by the prospect of a decent pension at a relatively early age. Take away the pension and retention of experience within the military will be much more difficult to achieve.

GrahamS

So it's OK for taxpayers to bail out the banks and investors in Equitable Life, oh and fund wars that have nothing to do with us but not fund public sector workers who have paid into a pension fund all their working lives.
A pension scheme is a long term contract and if the public sector pension was run by a private company they would not be allowed to change the terms of the contract right at the end of the deal.

If the money had been properly saved and invested then it would still be there to pay out now instead of being squandered, as it was being collected, by successive governments.

Framer

Civil servants currently pay nothing for their pensions which are so generous it would cost someone in the private sector around 20% of their earnings. Now they are going to be asked to cough up a mere 3%!

The trick is that employers' contributions keep rising to fill the gap and if that fails 'ASLC' comes into play [state top-up, as and when necessary].

Note how Francis Maude made concession after concession when reducing slightly the 3-years salary redundancy pay-offs for civil servants. He is frit of the public sector unions.

When UKIP spots the fact that those unions represent a labour aristocracy they might make a real breakthrough.

Nick

GrahamS, you may think that a private company would not be allowed to change the terms of a contract, but that is precisely what a large and increasing number of private sector organisations have done with their pension schemes. Of course there's a sham "consultation" to keep the lawyers away, but most contracts are barely worth the paper they are printed on.