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Sustainable Economy > Published by Alex Hern, November 4th 2011 at 12:55 pm

Hutton repeats his big fat lie on public sector pensions

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John Hutton has an opinion piece in the Telegraph today in which he repeats his politicised claims on the “sustainability” of public sector pensions.

ProtestHutton writes:

In an increasingly uncertain age, people naturally want to ensure that when they retire, they will still enjoy a reasonable standard of living. Yet as we all live longer, and our savings have to last longer, this is becoming increasingly difficult.

In 1955, a teacher retiring from the public sector could expect to live for another 16 years. Today, that figure is 29 years and rising. On one level, this is obviously excellent news – and the simple fact that we are living longer certainly does not mean the end of the world as we know it.

The downside is that to date, all of the extra costs associated with increased life expectancy have been met by taxpayers, rather than the members of the pension schemes. The system must adapt to these changes, or run the risk of implosion.

Public sector pensions already cost the taxpayer £32 billion a year. These costs have risen by a third in 10 years, and are set to go on rising. There is a compelling argument for managing these costs in a more sustainable way.

Public sector pensions are, however, already sustainable. We know this, because it is in Hutton’s own report, as Stephen Henderson wrote for this site in July:

The Office of Budget Responsibility’s July 2011 Fiscal Sustainability report (pdf) looks long into the future (2060) and guesses at the likely proportions of GDP that might arise as the population becomes more elderly.

The assumptions are based on current policies, not government proposals. Confirming earlier findings in the Hutton Report (pdf), they clearly predict the cost of public pensions will fall from 2% of GDP to 1.8% in 2030 and 1.4% in 2060 - without any of the current Hutton proposals.

Projected-benefit-payments-as-a-percentage-of-GDP
Following this revelation, Hutton attempted to clarify his argument.

He wrote in September:

[In the report] I was trying to talk about sustainability. That can be measured as total cost proportion of GDP. Affordability is a different judgement, a political judgement.

Hutton himself has demonstrated that pensions are sustainable. Affordability might not mean what you think it means. Public sector pensions are unaffordable, according to Hutton, if they are higher than private sector. This is the first point of Hutton’s Terms of Reference, which states that the Commission is to have regard to:

“…the growing disparity between public service and private sector pension provision, in the context of the overall reward package - including the impact on labour market mobility between public and private sectors and pensions as a barrier to greater plurality of provision of public services.”

So Hutton’s cry of unsustainability has nothing to do with the public purse, and everything to do with joining in Osborne’s race to the bottom.

As we argued in October:

The claim that public sector pensions should be low because private sector pensions are low is often heard. But why should it be true? Why not instead make the opposite argument: that the only reason why private sector pensions aren’t even lower is because they face competition from the public sector.

Some business may offer a fair pension out of the goodness of their heart, but many more offer the lowest that they can get away with – and if workers aren’t offered a better alternative in the public sector, then that low will be much, much lower.

Public sector workers striking to protect their pensions isn’t just good for them; it is good for all of us who work, because it ensures that the private sector can’t get away with offering the minimum possible. If reform is to come, let it come to the private, not public, pensions.

See also:

• Osborne dreaming of a race to the bottom – Alex Hern, October 3rd 2011

• FTSE suffers worst quarterly fall since 2002 as fears rise of “Great Stagnation” – Shamik Das, September 30th 2011

• Hutton should read his pensions report again before leaping to Cameron’s rescue – Michael Burke, September 16th 2011

• Don’t buy the right-wing spin: Public sector pension costs set to fall – Daniel Elton, September 15th 2011

• Ignore the Tory spin – pension liabilities and the NHS are affordable – Stephen Henderson, July 13th 2011

  • http://www.leftfootforward.org/2011/11/daily-mail-daily-telegraph-tintin-au-congo-controversy/ Mail and Telegraph plea for racist Tintin book even Hergé disowned | Left Foot Forward

    [...] would imagine there wasn’t something more important going [...]

  • http://twitter.com/mattkirkham/status/132542833977597952 Matt Kirkham

    Hutton repeats his big fat lie on public sector pensions:
    http://t.co/ZrjWEFj0

  • Dave Citizen

    I would have some sympathy with the line that public pension pots will wreck the economy but for 1 basic point:

    If the economy will be wrecked by the pensions of mostly poorer workers (average pension = £2400 for Local Govt workers) then the future must be bleak indeed. An economy that has enough money swilling around for Barclays Capital Bank to pay £236,000 as an average salary to its entire workforce, up 20% and not to forget our top footballers who do the economy no harm taking nearly the same each week. But the people who keep our drains flowing, vermin under control and turn out at 5am to clean up after the banker’s parties are just being so greedy that they’re putting the economy at risk.

    It really would be funny if it wasn’t so undemocratic and corrupt!!

  • http://twitter.com/adpucci/status/132547684149108736 Pucci D

    From earlier today: We expose how Lord Hutton has repeated his big fat public sector pensions lie: http://t.co/OJEacEjJ

  • http://twitter.com/banksider/status/132547857399025664 Simon Midgley

    #1 How Lord Hutton has repeated his big fat public sector pensions lie: http://t.co/OJEacEjJ

  • http://twitter.com/nigelstanley/status/132549973236654080 Nigel Stanley

    RT @leftfootfwd: #1 How Lord Hutton has repeated his big fat public sector pensions lie: http://t.co/dYL2SC4E

  • http://twitter.com/laylapup/status/132557062034034690 Cherry McCormack

    Hutton repeats his big fat lie on public sector pensions: http://t.co/OJEacEjJ writes @AlexHern #pensions

  • http://twitter.com/grmday/status/132563772345810945 Graham Day

    #1 How Lord Hutton has repeated his big fat public sector pensions lie: http://t.co/OJEacEjJ

  • http://twitter.com/apertureimage/status/132573505618325505 Chris

    Hutton repeats his big fat lie on public sector pensions http://t.co/VQXHzjkZ

  • http://twitter.com/blanchardspov/status/132585107881078786 Simon Blanchard

    Hutton repeats his big fat lie on public sector pensions: http://t.co/OJEacEjJ writes @AlexHern #pensions

  • http://twitter.com/arimaraka/status/132586414234796032 arimaraka

    Hutton repeats his big fat lie on public sector pensions: http://t.co/OJEacEjJ writes @AlexHern #pensions

  • http://twitter.com/g56g/status/132589940067405826 Gill Goodswen

    From earlier today: We expose how Lord Hutton has repeated his big fat public sector pensions lie: http://t.co/OJEacEjJ

  • http://twitter.com/_markmccormack/status/132764176375492609 Mark McCormack

    Good on @leftfootfwd for exposing John Hutton's lies on pensions http://t.co/jO53kn1p (via @danielelton) Humiliated to be in the same party

  • http://twitter.com/michellelgraham/status/132771174466850816 Michelle Graham

    Hutton’s 'unsustainability': nothing to do with public purse, to do with Osborne’s race to bottom MT @leftfootfwd http://t.co/MXCkq4TF

  • http://twitter.com/politicsuk1/status/132778554122448896 PoliticsUK

    http://t.co/hlt36EJE

    "Hutton himself has demonstrated… http://t.co/rLPPkxL4

  • http://twitter.com/ligomersall/status/132801448902803457 liane gomersall

    RT @leftfootfwd: Hutton repeats his big fat lie on public sector pensions http://t.co/ItWSWjuS

  • Rob the crip

    But it’s been like this since labour formed, the fact is nurses and teachers are now getting a pension worthy after getting large rises, because Labour did not change it, but if your a bin man or hospital porter then sadly your pension is not that of a nurse or teacher any more.

  • Dave Citizen

    Many people also ignore the fact that it’s the relative pension / income that matters. £16,000 per year would be pretty good if it was received in a society where top earners earned say £80,000 a year. But in the current Mad.Britain it’s like small change when it comes up against the spending power of the rich 2%. No wonder house prices are so inflated when rich people are buying them up for 2nd, 3rd, 4th, 5th + homes or perhaps some investments to be rented out to the plebs while asset values accumulate. Same goes for all the land too – workers don’t get a look in when planning laws are changed so land owners can make millions out of housing permissions – talk about encouraging the idle rich!

    Mad.Britain for mad.people!

  • http://twitter.com/cuchulaindundee/status/132916624067010560 Alan Cowan

    Hutton repeats his big fat lie on public sector pensions | Left Foot Forward http://t.co/02JDweBC

  • http://twitter.com/steve_trow/status/132918333027794944 Steve Trow

    From earlier today: We expose how Lord Hutton has repeated his big fat public sector pensions lie: http://t.co/OJEacEjJ

  • Paul Mackney

    I was once, by mistake, in a meeting where John Hutton was addressing businessmen and others from the private sector. I have seldom witnessed such obsequious brown-nosing. I suspect he is mainly is interested in his own preferment (to company directorships or the vermin in ermine) though he will persuade himself this is altruism. Whilst we need to point out any contradictions in his presentation of the pensions issues, we should never expect him to be an ally.

  • http://twitter.com/benmiddleton39/status/133579262140747776 BenMiddleton

    RT @leftfootfwd: Hutton repeats his big fat lie on public sector pensions http://t.co/tWMx0AeV

  • http://twitter.com/twttimestop/status/133686475840684032 Tweeted Times Top

    Hutton repeats his big fat lie on pub…: http://t.co/VrFYqFl0 most discussed on @danhurlbut/politics (http://t.co/gQYRfCgx)

  • http://www.leftfootforward.org/2011/11/enough-is-enough-why-young-people-deserve-a-decent-pension/ Enough is Enough: Why young people deserve a decent pension | Left Foot Forward

    [...] also: • Hutton repeats his big fat lie on public sector pensions – Alex Hern, November 4th [...]

  • http://twitter.com/redvark/status/135689521470771201 Richard Hardy

    RT @leftfootfwd: Hutton repeats his big fat lie on public sector pensions http://t.co/tWMx0AeV

  • http://www.leftfootforward.org/2011/11/george-osborne-public-sector-pensions-attack-hits-women-hardest/ More evidence Gideon’s savage attack on public sector pensions will hit women hardest | Left Foot Forward

    [...] also: • Hutton repeats his big fat lie on public sector pensions – Alex Hern, November 4th [...]

  • http://twitter.com/thedeadduck/status/139842947322613761 Molly

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/g56g/status/139844444420714496 Gill Goodswen

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/daz4126/status/139845160317091841 Darren Jones

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/shamethedevil/status/139847196848828416 John Jackson

    Yet more proof (were any actually needed !) that #JohnHutton really is (and, in fact, always was !!) a #Tory – http://t.co/qt7D9YSH

  • http://twitter.com/unitelondon/status/139847603075559425 Unite London&Eastern

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/bbri439/status/139847796206473216 brian hocknull

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/danweekes/status/139850232308576256 Daniel Weekes

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/bonsai_ent/status/139883504329691137 Sam Morris

    RT @leftfootfwd: Hutton repeats his big fat lie on public sector pensions http://t.co/mDn5dUPM

  • http://twitter.com/nellbridges/status/139903973871206400 Nell Epona Bridges

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/rozmorton/status/139958408999743488 Roz Morton

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/tooldtoroknroll/status/139982996353720320 David Irvine

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/jintyg51/status/139988966639280129 Janet Graham

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/rookie_73/status/139998311968014336 Rookie

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/christhegoth/status/140103950983643136 Christian Wilcox

    @BizzyRascal This should help you on pensions: http://t.co/ge9DMdZD & http://t.co/Ei40NvGi. They have to pay more & work later to get less.

  • http://twitter.com/panic_c_button/status/140169837077987328 Stephen Oliver

    Ok, for the umpteenth time, let's debunk Hutton's Big Fat Pensions Lie: http://t.co/dronhwbH #bbcqt

  • http://twitter.com/siannydrinky/status/140363425158135808 Sian Drinkwater

    #falseeconomy #greatpensionsrobbery #supportthepublicsector http://t.co/fUrlJQdw & http://t.co/SqOERGuk This affects the Private Sector too!

  • http://twitter.com/christhegoth/status/140401015450116097 Christian Wilcox

    FYI. Why workers are striking: http://t.co/ge9DMdZD & http://t.co/Ei40NvGi. What would you do in their place? #Croydon #Labour #N30

  • http://www.leftfootforward.org/2011/11/public-sector-pensions-private-sector-pensions-comparison/ Public sector pensions no more gold-plated than private sector | Left Foot Forward

    [...] Hutton repeats his big fat lie on public sector pensions – Alex Hern, November 4th [...]

  • http://www.leftfootforward.org/2011/11/four-myths-about-todays-strike-busted/ Four myths about today’s strike: Busted. | Left Foot Forward

    [...] Hutton himself accepts that they are sustainable, although he attempts to draw a distinction between sustainable and [...]

  • http://twitter.com/unitetheunion/status/141831847301758977 Unite the union

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/futureleft/status/141831952515870720 FutureLeft

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/sandwellgreen/status/141831975257387008 Sandwell Green Party

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/unitelondon/status/141832035810553858 Unite London&Eastern

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/asie/status/141832429341114368 Arlene Sierra

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/jaymckenna87/status/141832517786402816 James McKenna

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/cairngorm22/status/141832761127337984 Neil Reid

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/__karl__/status/141832891805073410 Karl

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/dominictristram/status/141832993986707456 Dominic Tristram

    @Hydor18 @akalebic Also worth reading: http://t.co/tWxsEzxE

  • http://twitter.com/msmousette/status/141833180167671808 Liz Panton

    RT @leftfootfwd: #n30 #strike #mythbusting: Pensions ARE sustainable at current level: http://t.co/GqMgWGKn via @unitetheunion

  • http://twitter.com/salt_mine/status/141833180192837632 Liz Panton MRCSLT

    RT @leftfootfwd: #n30 #strike #mythbusting: Pensions ARE sustainable at current level: http://t.co/RI4gWNlR via @unitetheunion

  • http://twitter.com/crlywrly/status/141833180280930304 Curly Wurly-Wyvern

    RT @leftfootfwd: #n30 #strike #mythbusting: Pensions ARE sustainable at current level: http://t.co/elONiDn6 via @unitetheunion

  • http://twitter.com/bigmick74/status/141833424427163649 Mick Sheridan

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/mibizc/status/141833533953019904 Dave Trew

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/redjourno/status/141833578202923008 Tom Wall

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/alan_199/status/141833787309953025 Alan199

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/angelapateman/status/141834645359702017 Angela Pateman

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/peeg24/status/141834898326568960 Paul Gardner

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/diseaselawyer/status/141836042272645120 Kim Harrison

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/benl167/status/141837050335866880 Ben Lewis

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/pbrightman/status/141845190804652032 Paul Brightman

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/rookie_73/status/141845628580929536 Rookie

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/jjjstevenson/status/141848081820954624 Jonathan Stevenson

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/o0hushoo/status/141851758321348608 Theo

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/derekjohnbryant/status/141852162195075073 Derek Bryant

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/konnolsky/status/141852273532874752 Pavel Konnolsky

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/katemck/status/141852653943656449 Kate McKenzie

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/cllr_rania_khan/status/141852892964470784 Rania Khan

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/davidschoibl/status/141854378024910848 davidschoibl

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/imogenradford/status/141859944948432897 Imogen Radford

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/alan_199/status/141861320285880320 Alan199

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/roziroo/status/141877940592971776 Ros Birch

    #n30 #mythbusting: Pensions *are* sustainable at the level they are: http://t.co/dronhwbH

  • http://twitter.com/jamieblanc/status/141912211365969920 jamie white

    @Claire_Suzanne_ this might explain. http://t.co/4AzuAOBJ

  • http://twitter.com/amchugh83/status/142184083487858688 Andrew McHugh

    RT @leftfootfwd: Hutton repeats his big fat lie on public sector pensions http://t.co/9gHE3RoJ

  • http://twitter.com/jennitpk/status/143249025162948608 Jennir

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://twitter.com/kevindykes1/status/143299077336080384 Kevin Dykes

    Cameron quoting Hutton in his defence, but once again, here's why Hutton's wrong: http://t.co/dronhwbH #PMQs #n30

  • http://www.leftfootforward.org/2011/12/raising-the-pension-age-will-be-a-public-health-disaster/ Raising the pension age will be a public health disaster | Left Foot Forward

    [...] also: • Hutton repeats his big fat lie on public sector pensions – Alex Hern, November 4th [...]