Lord Hutton: I didn't recommend pension contributions hike
THE architect of the ­Government's pension plans yesterday distanced himself from the decision to hike contributions by 3.2%.
Jason BeattieHead of politics
Ex-Labour Cabinet minister John Hutton said he had not recommended the increase announced by Treasury Chief Secretary Danny Alexander.
He said his report – the basis of the Government's plans – specifically warned about the dangers of imposing contributions which would lead people to opt out of pension schemes.
"I did warn if they are going to put up contributions they had to protect the low paid. And any increase did not force people out of these schemes," he told the Mirror.
But he also had a blunt message for the hundreds of thousands of striking workers seeking to block the Government's reforms, saying they must accept pension costs were "real and set to grow".
Opponents of the plans have seized on forecasts in his report which show the amount spent on public sector pensions is projected to fall gradually to about 1.4% of GDP in 2059-60, from 1.9% in 2010-11.
But Lord Hutton said this forecast was based on the assumption of major reforms to public sector pensions.
He said: "The costs increases are real and are set to continue for some time. It is true that my report contained predictions which show a gradually falling share of GDP being taken up in meeting these pensions costs. But we must avoid torturing the data until it confesses.
"My conclusion was that the public could not be sure that schemes will remain ­sustainable in the future."
And he warned both sides needed to be honest about the figures, "reaching a sensible agreement that offers the ­prospect of sustaining good quality pension schemes".
Union leaders have vowed to step up industrial action in the wake of Thursday's strike which saw 600,000 teachers and civil servants walk out.
They are protesting at the Government plans to make them work longer, pay more in contributions but receive reduced payments.