Pensions - Articles - 'Scary meaningless' public sector pensions numbers

 Reacting to new Treasury estimates for the costs of future public sector pensions liabilities published today (Wednesday), TUC General Secretary Brendan Barber said:

 'These figures are a nakedly political attempt by the government to strengthen its hand in the negotiations on public sector pensions, after its continued failure to sustain the argument that they are unaffordable.

 'These numbers may well be scarily big, but they are close to meaningless. Both the National Audit Office (NAO) and John Hutton's review say that this is not an appropriate measure of the affordability of public sector pensions. Small variations in assumptions can produce huge differences in this figure, even though the payments remain the same.

 'Projecting the government's future liabilities on any area of spending and presenting them as a bill that has to be paid all at once will always produce numbers too big for most people to grasp.

 'The truth is that even before the government slashed the value of pensions by linking them to the lower Consumer Prices Index (CPI) inflation measure, public sector pensions were the one part of age-related expenditure not set to increase in the years ahead.

 'NAO figures and the Hutton report show the cost of public sector pensions as a share of GDP falling in years ahead.

 'This is an ideological government that wants to reduce the size of the state and cut public services to fund tax cuts for its rich friends. It is not surprising therefore that the government will use any opportunity to scare people about the public finances - but scare tactics do not make for sensible politics.

 'No wonder the Office for Budget Responsibility has warned of the limitations of this approach to accounting in their report today.'