Pension news

An 80 year-old pensioner with an average public sector pension would be more than £650 a year worse off if the budget change to the indexing of pensions had been in force since their retirement, according to TUC calculations released in July.

A little noticed budget announcement changed the figure used to uprate public sector pensions from the RPI inflation measure to CPI. As CPI is normally lower than RPI, public sector pensioners will usually get a smaller increase when their pensions are annually uprated.

Further details @

http://www.tuc.org.uk/publicsector/tuc-18170-f0.cfm

http://www.tuc.org.uk/pensions/tuc-18192-f0.cfm

In defence of public pensions
Meanwhile, TUC evidence to Lord Hutton's pensions review has made it clear that public service pensions are both affordable and sustainable.

Even before the switch to CPI indexing, the National Audit Office and the Office for Budget Responsibility had endorsed Treasury estimates that public sector pension commitments will remain stable as a proportion of GDP for the next 40 years.

Summary information @

http://www.tuc.org.uk/newsroom/tuc-18289-f0.cfm

Read the full submission @

http://www.tuc.org.uk/extras/responsetohutton.pdf

Real pensions scandal
Last month also saw the TUC responding to criticism of public sector pensions by the Institute of Directors, arguing instead that the real national scandal was employers' wholesale retreat from providing staff pensions.

The TUC said that the IoD had 'nothing to say' about top directors' pensions, which have continued to go up during the recession and whose most common retirement age is 60.

In other pensions news last month, the TUC said the consultation on annuities announced by the Government was 'irrelevant for the vast majority of pensioners and pension savers'.

TUC on IoD report @

http://www.tuc.org.uk/pensions/tuc-18175-f0.cfm

TUC on annuities consultation @

http://www.tuc.org.uk/pensions/tuc-18208-f0.cfm

Default move welcomed
Government plans to phase-out the UK's default retirement age by October next year have been welcomed by the TUC, with many people preferring a phased retirement to the 'cliff edge' where they work full-time one day and stop work the next.

But the TUC also struck a note of caution, pointing out that not everyone wants to work longer and may not be fit enough to continue. The new system should be about genuine choice, not an expectation that people work longer in place of decent pensions.

Full TUC reaction @

http://www.tuc.org.uk/law/tuc-18266-f0.cfm

Minister praises unionlearn
The first Conservative minister to address a TUC event since the mid-1990s delivered a resounding endorsement of trade unions' work on learning and skills, describing it as an 'immense success' in his address to the unionlearn annual conference.

John Hayes, the minister of state for further education, skills and lifelong learning, said that unionlearn was a 'powerful tool' in improving the skills vital for economic growth and recovery.

Read more @

http://www.tuc.org.uk/skills/tuc-18195-f0.cfm

Tax simplification, tax cuts for rich?
Plans announced last month by the Chancellor to overhaul the UK tax system through the creation of an Office for Tax Simplification received a cautious response from the TUC.

'If the Office for Tax Simplification closes loopholes and bears down on tax avoidance it will be welcome. But the worry must be that this is simply a softening up exercise for tax cuts for the rich, while ordinary people see services slashed and VAT increased,' said Brendan Barber.

More on this @

http://www.tuc.org.uk/economy/tuc-18219-f0.cfm

Minimum wage loophole closed
A loophole that allows payments made into travel and subsistence tax relief schemes counting towards the minimum wage will be closed from 1 January 2011.

The TUC said that an earlier consultation had uncovered abuse of these schemes by unscrupulous employers who have used these arrangements to avoid liability to pay National Insurance contributions.

Further information @

http://www.tuc.org.uk/newsroom/tuc-18260-f0.cfm

Mergers: look at the wider picture
The Government's response to the BIS select committee report into the Kraft-Cadbury takeover was 'disappointing', the TUC said last month.

The TUC said ministers has 'dashed hopes' of a new approach to regulating mergers, and had overlooked the 'wider economics' of mergers and acquisitions.

Details available @

http://www.tuc.org.uk/newsroom/tuc-18253-f0.cfm

Unions must rebuild in private sector
Last month's Stronger Unions conference heard how unions had to focus on the recruitment challenge in the private sector while also fighting against cuts in the public sector.

Attended by hundreds of union activists and reps, the TUC-organised event focused on the key issues facing unions today, including jobs, pay, pensions, vulnerable working and training. Delegates also discussed organising, bargaining and negotiating strategies.

More on the event @

http://www.tuc.org.uk/organisation/tuc-18167-f0.cfm

Climate policy rethink needed
The combined impact of the Government's climate change policies is imposing significant costs on the UK's energy intensive industries, and could result in some firms leaving the UK, a report published by the Energy Intensive Users Group (EIUG) and the TUC has discovered.

Steel making, ceramics, paper, cement and lime manufacture, aluminium, basic inorganic chemicals and other industries currently employ around 225,000 workers producing essential products for the UK's low-carbon economy.

Summary details @

http://www.tuc.org.uk/economy/tuc-18252-f0.cfm

Read full report @

http://www.tuc.org.uk/extras/wwastudy.pdf