Thursday, 10 March 2011

Public Sector Pension's reform likely to trigger unrest

The Hutton Report has announced that public sector pensions will be reformed, which means that most workers in the public sector will get less and will have to work longer. The new system will involve scrapping the final salary scheme in which pension is determined by final grade and insted pensions will be determined by average pay throughout career. As for the retirement age, it will be brought into line with the national retirement age of 65 from its previous age of 60 for public sector workers. This is yet another blow for the public sector to add to the pay freeze, which with inflation predicted to be 4% will see a significant fall in real income (in fact employees in the public sector will be 4% worse off).
Taking away pension rights, freezing pay, sacking workers and putting remaining staff under pressure is a sure way to stir up wide spread union action. Civil service unions have becoming increasingly more daring in recent years, increasing strikes and its rumoured they are mobilising for mass protest. Add to the civil service unions to the battle cries of the aggrieved teaching unions, the already striking lecturers, furious students and the police federation has made its stance as very much against the Government. You have to wonder who isn't against the Government.
Walking around Preston Town Centre I was surprised to see members of the Socialist Worker Party asking for signature against cuts, I was even more surprised to see the number of signatures they had as people showed a keen interest in their march on London. The graph from Youpoll shown bellow shows the decline in popularity of the Lib Dem and Conservative party since forming Government.

The popularity of the Government is falling and Unions are mobilizing, times are going to be very tough for the Government. As long as they maintain their plan of contractive fiscal policy through cut backs whist leaving the super rich and culprit banks untouched, people are going to questions what Government they elected.

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