The "great pensions divide" - it isn't what you think

Mehdi Hasan on today's pensions strike.

As public-sector workers, including teachers, go on strike today, the (right-wing) papers are filled with anti-union, anti-public-sector-pension headlines and stories. The Daily Telegraph, on its front page, claims that "a mid-ranking teacher on £32,000 a year will receive a final salary pension that is the equivalent of having built up a £500,000 pension pot. This is 20 times higher than the average private-sector scheme, according to figures from the Office for National Statistics."

The Daily Mail headline is:

Great pensions divide: private-sector staff must put in a third of their pay to match state worker benefits.

But the "divide" isn't between private sector and public sector -- as usual, it's between the rich (including newspaper editors!) and the rest of us. Most papers conveniently chose to ignore a report from Income Data Services, published yesterday, which revealed a "widening gap" between the boardrooms and workers.

Thankfully, the Guardian didn't:

Directors in Britain's top 100 companies have accumulated final salary retirement pots worth £2.8m on average, according to figures that reveal a widening gap between the pensions awarded to boardroom executives and the shop floor.

Incomes Data Services (IDS) said about 46 per cent of FTSE 100 directors were still accruing final salary benefits in generous schemes that typically pay two-thirds of final salary as a retirement income.

A pot of £2.8m could buy an employee a pension annuity worth more than £170,000 a year, IDS said.

Using the Telegraph's aforementioned ratio, directors' pension pots are worth more than 100 times as much as the average private-sector scheme. The Guardian report continues:

Company directors, like MPs, have among the most generous schemes in the G20 group of richest nations, with guaranteed benefits worth two-thirds of final salary accrued at an accelerated pace. Many directors can earn their full pension after only 20 years service, while it takes MPs just 26 years. Most workers take between 35 and 40 years to accrue a full pension.

Meanwhile, a letter in today's Guardian reminds us of TUC research in 2009 outlining how:

. . . tax relief on pension contributions of £37bn is heavily skewed towards the better off. Treasury figures show that 60 per cent of tax relief goes to higher rate taxpayers, with 25 per cent going to the top 1 per cent of earners.

Where is the anger? The outrage? Where are the headlines bemoaning "gold-plated" pension schemes in Britain's (failing) boardrooms? As Mark Serwotka, the leader of the PCS union, has rightly pointed out:

It's not public-sector workers who exploit [private-sector workers] but their private-sector employers.

One final point: can we, once and for all, nail the right-wing lie that public-sector pensions are "unaffordable"? The cost of public-sector pensions is set to fall in the coming decades. Don't believe me? The Hutton Report, commissioned by the coalition government and used by ministers as a justification for the "reforms" to pension contributions, states on page 22:

There have been significant reforms to the main public-service pension schemes over the last decade, including increased pension ages for new members and a change in the indexation of pensions from RPI to CPI indexation. Some of these changes have reduced projected benefit payments in the coming decades. For the interim report, the commission asked the Government Actuary's Department (GAD) to project future public-service pensions expenditure. It projected benefit payments to fall gradually to around 1.4 per cent of GDP in 2059-2060, after peaking at 1.9 per cent of gross domestic product (GDP) in 2010-11.

But, as Jon Snow's interview with the Cabinet Office Minister, Francis Maude, on Channel 4 News on Monday evening revealed, the government seems totally unaware of the contents of the report that it commissioned -- and that it now chooses to hide behind.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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PMQs review: Jeremy Corbyn turns "the nasty party" back on Theresa May

The Labour leader exploited Conservative splits over disability benefits.

It didn't take long for Theresa May to herald the Conservatives' Copeland by-election victory at PMQs (and one couldn't blame her). But Jeremy Corbyn swiftly brought her down to earth. The Labour leader denounced the government for "sneaking out" its decision to overrule a court judgement calling for Personal Independence Payments (PIPs) to be extended to those with severe mental health problems.

Rather than merely expressing his own outrage, Corbyn drew on that of others. He smartly quoted Tory backbencher Heidi Allen, one of the tax credit rebels, who has called on May to "think agan" and "honour" the court's rulings. The Prime Minister protested that the government was merely returning PIPs to their "original intention" and was already spending more than ever on those with mental health conditions. But Corbyn had more ammunition, denouncing Conservative policy chair George Freeman for his suggestion that those "taking pills" for anxiety aren't "really disabled". After May branded Labour "the nasty party" in her conference speech, Corbyn suggested that the Tories were once again worthy of her epithet.

May emphasised that Freeman had apologised and, as so often, warned that the "extra support" promised by Labour would be impossible without the "strong economy" guaranteed by the Conservatives. "The one thing we know about Labour is that they would bankrupt Britain," she declared. Unlike on previous occasions, Corbyn had a ready riposte, reminding the Tories that they had increased the national debt by more than every previous Labour government.

But May saved her jibe of choice for the end, recalling shadow cabinet minister Cat Smith's assertion that the Copeland result was an "incredible achivement" for her party. "I think that word actually sums up the Right Honourable Gentleman's leadership. In-cred-ible," May concluded, with a rather surreal Thatcher-esque flourish.

Yet many economists and EU experts say the same of her Brexit plan. Having repeatedly hailed the UK's "strong economy" (which has so far proved resilient), May had better hope that single market withdrawal does not wreck it. But on Brexit, as on disability benefits, it is Conservative rebels, not Corbyn, who will determine her fate.

George Eaton is political editor of the New Statesman.