Pensions reform delay to cost £260m: Sammy Wilson
The Stormont Executive will have to find £260m a year if it delays public sector pension reform — equivalent to paying for 5,000 teachers or 8,000 nurses, the Assembly has been told.
Finance Minister Sammy Wilson also warned another way to fund a postponment would be shutting down all business support schemes and tourism promotion, because the total is more than the entire Department of Enterprise, Trade and Investment’s annual budget.
The angry DUP minister said the “stark reality” was his Sinn Fein and SDLP Executive colleagues had “potentially squandered” limited resources on an unnecessary process, which voters will find difficult to understand.
His attack came after a split at last week’s Executive meeting at which a proposal to leave the public sector pensions upheaval to Westminster to deal with on a nationwide basis was blocked by nationalists.
DUP sources claimed Sinn Fein ministers had been “spooked” over the issue by the SDLP’s Alex Attwood, who could be the minister here left to implement the changes.
The row is similar to the recent clash over welfare reform, which led to a 10-hour Assembly face-off.
Mr Wilson told MLAs it was up to SF and the SDLP to answer the “hard questions” and added: “The people of Northern Ireland will not understand, not least the people who Sinn Fein say they represent.”
Sinn Fein’s Mitchel McLaughlin, however, suggested the issue could have more to do with Mr Wilson’s style as a minister than a difference in principle over pensions.
Mr McLaughlin, a member of the Stormont committee which monitors Mr Wilson and his department, said Mr Wilson should examine his own approach, including dealing with the committee.
It is the latest area of tension between the two main power-sharing parties to emerge after several fractious months which have also seen Mr Wilson and Education Minister John O’Dowd clash over financial procedures, and the fallout over social security changes.
The unease is against the backdrop of the DUP accusing the Sinn Fein chairman, Declan Kearney, of a “bitter unionist-hating rant” over how to deal with the legacy of the Troubles, and Mr Kearney accusing DUP leader Peter Robinson of “talking out of both sides of his mouth”.
The SDLP’s Alban Maginness said teachers, policemen and health workers were concerned about changes in how their pension pots will be calculated.
“They are very concerned that this legislation will result in the erosion of their pensions and they are right to defend their proper interests,” Mr Maginness said.
But Mr Wilson said: “Every effort will be made to advance the legislative process where possible, but in my view we have potentially squandered our limited resources on an unnecessary process.”
Questions and answers
Q Why are public sector pensions being changed?
A To reduce the future financial burden of public service pensions on taxpayers, the Government plans to introduce major changes to schemes in the sector from the 2015 financial year.
Q In what way will they be altered?
A A report by Lord Hutton in March last year concluded that schemes based on final salaries in the public sector are no longer sustainable and recommended an alternative model including an ‘average salary’ scheme.
Q How did the public service trade unions respond?
A With anger over changes they argued would mean workers paying more into their pensions, working for longer and still accepting a lesser pension than the more lucrative final salary arrangement.
Q Were the changes to apply here?
A Yes. As far back as March the Executive signed up to the national pension reforms including schemes linked to the state pension age — which has already changed and could change again in future — and not to adopt a different approach in the province.
Q Has this position remained the same?
A Finance Minister Sammy Wilson says he tried three times since March to introduce a legislative consent motion to allow NI to be subsumed within the Westminster legislation and meet the April 2015 deadline set by the Treasury, but it did not make the Executive agenda until last Thursday.
Q And what happened then?
A Mr Wilson told the Assembly yesterday Sinn Fein and SDLP ministers blocked his proposal which means the Assembly must introduce its own legislation and has no chance of meeting the deadline, which will incur a penalty because it breaks with national parity.