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Date Wed 22 June 2011

UNISON welcomes Scottish Government recognition of unfair attack on pensions

UNISON Scotland has welcomed a statement by Finance Secretary John Swinney that increased pension contributions will place an unnecessary burden on public service workers who are already suffering from pay restraint and rising living costs. The Finance Secretary told the Scottish Parliament that this would also damage the Scottish economy, undermining consumer confidence.

UNISON welcomes this recognition from the Scottish Government of the unfair and unnecessary attacks on public service workers’ pensions by the UK coalition government.

However, the union claims he must face up to the challenges facing Scottish workers and has urged him not to blindly follow the ConDems plans.

The union has also questioned the Scottish Government’s figures. Only the NHS and teachers costs are scored against Barnett and John Swinney claimed that was £230m. The Treasury would like him to levy on other schemes up to an apparent total of £400m. However, that would simply be a Scottish ‘tax’ on members of those schemes. In particular, the fully funded LGPS does not need additional contributions.

Dave Watson, UNISON’s Scottish Organiser, said: “We welcome the Finance Secretary’s recognition of these unfair and unnecessary attacks on public service workers. These additional contributions are not necessary to fund pensions in Scotland, they are simply a ‘tax’ on staff to pay back government debts that were raised to bail out the banks.

“The NHS scheme is a ‘pay as you go’ scheme with contributions and benefits paid out of revenue. In the last three years net cashflow has been around £2 billion in each year. The Scottish Local Government Pension Scheme is a funded scheme and is not scored against Barnett, so the Scottish Government needs to clarify its intentions regarding increasing contributions there to meet the Treasury’s expectations.

“UNISON is prepared to negotiate with the Scottish Government over the Hutton recommendations; however, a 50% increase in contributions will wreck quality pension provision as well as being unnecessary and unaffordable by our members. The UK and Scottish Governments must find a better way and work with trade unions to examine all available options to avoid large scale opt-out that will wreck the schemes and leave both governments with longer term costs.”

ENDS

Notes to editors

1. While primary pension legislation is a reserved matter for Westminster – including the state pension scheme and taxation – public service pension regulations are devolved. This includes the important aspects of scheme design, including pension contributions.

2. The Pensions Commission chaired by Lord Hutton made 27 recommendations in relation to public service pensions. Lord Hutton did not make a recommendation on the size of any employee contribution increases. The UK Government are proposing a 3.2% increase on top of the current average contribution of around 6.4% of pay – that’s a 50% increase.

3. Surveys show that over 50% of staff will opt-out of pension provision if contributions are increased much above current levels.

4. For more information on Scottish public sector pensions see
UNISON's briefing for MSPs (pdf)

5. For further information contact Dave Watson, Scottish Organiser for UNISON, on 07958 122 409, or Trisha Hamilton, Communications Officer on 0141 342 2877 / 07989.

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