‘A measure of something that doesn’t exist’
SIR - Following Mr Milton’s reply to my letter I contacted Professor Ian Tonks whom he had quoted stating that the public sector pension liability was “in excess of �800 billion”.
In his e-mail to me he stated “In relation to your comment that �800 billion pension liability is excessive – I think it is possible to generate such a number.” So, unlike Mr Milton, he does not claim that figure as a hard mathematical fact.
There is nothing factual about public sector pension liability figures at all. They are based on a number of assumptions.
As I now understand it, those who calculate these figures look at the pensions being received by retired public sector workers and the pensions to be received on retirement of current public sector workers and they pretend they have private pensions.
They tot up these pensions and work out what size of pot would service these pensions. It is a measure of something that does not exist and Mr Milton has used it as a red herring.
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In 2006 the actuarial consultant Watson Wyatt came up with a figure of �960 billion. We know that in 2009 Professor Ian Tonks calculated �800 billion and in answer to a parliamentary question the minister responsible Angela Eagle quoted �600 billion. So either this weird and wonderful statistic is steadily reducing or there is no agreed way of calculating it.
Of course, it’s all nonsense. There is no pot and public sector pensions are paid out of taxes as they should be. Pensions are deferred wages. The figures being bandied about by the finance industry seem designed to alarm us hiding the fact that private pensions are not very good.
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The huge financial crisis was not caused by public sector pensioners present and future but by those engaged in speculating in fictional capital. It was spivs in suits not workers in police, ambulance or nurses’ uniforms that caused the crisis and part of the way out is for taxes not to be avoided and the rich to pay their fair share. Another part is public ownership and control of the finance sector and the other commanding heights of industry.
The case against the spending cuts will be put at a public meeting called by our friends in the North Devon Anti-Cuts Alliance at 2.00pm Saturday 29th January at the Guild Hall, Butchers Row, Barnstaple. Your readers are all invited.
North Devon Communist Party
n Correspondence on this subject is now closed - Editor.