Pensions study sparks union fury in Britain

7th October 2010, Comments 0 comments

A major report proposed sweeping reforms to public sector pensions in Britain Thursday, sparking fury from trade unions as the government prepares deep spending cuts to tackle a massive deficit.

One British union leader pledged "French-style protests" in response to the report, commissioned by Prime Minister David Cameron's coalition government.

The study floated options including increasing retirement ages and pension contribution rates for workers such as teachers, civil servants and doctors, as well as scrapping lucrative so called final salary pension schemes, based on an employee's salary at retirement.

It comes amid disputed pension reforms across Europe. Millions of people in France have protested over plans to raise the retirement age from 60 to 62, while Greece was also hit by strikes over the issue earlier this year.

"We have under-estimated the cost of providing the current range of public sector pensions for years," said the report's author John Hutton, a former pensions secretary for the opposition Labour party.

In comments to the BBC, he added: "It is unsustainable to remain wedded to this idea that you can still retire at 60. We are all living much longer in retirement. We expect to live to 88 or longer."

There are currently 12 million people in Britain signed up to or dependent on public sector pension schemes, which paid out some 32 billion pounds (35 billion euros, 50 billion dollars) in 2008-09.

Many say the current system is unsustainable, particularly given the state of Britain's public finances and rising life expectancy.

Cameron's government will announce spending cuts of around 25 percent in most departments on October 20 as it battles to tackle public sector borrowing forecast at 149 billion pounds in the current financial year.

But union leaders condemned the report, with some calling for strikes.

Bob Crow of the Rail, Maritime and Transport Workers' Union, said: "This attack on the people who make this country tick will spark a furious backlash and will drive millions on to the streets in French-style protests."

© 2010 AFP

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