John Hutton’s report on public sector pensions is a step in the right direction – but he needs to go much further
Yesterday we had the widely-trailed report on reforming public sector pensions. It has been put to me, including on Radio 5 Live, that now is not the time to reform these schemes. This is true. As the old proverb goes, the best time to plant a tree was 20 years ago. Nevertheless, the second best time to reform public sector pension schemes is definitely now.
It is interesting how quickly the climate of opinion has turned on this issue. It is just four years since the IEA first made waves by publishing Sir Humphrey’s Legacy. The IEA’s role is to change the climate of opinion by trying to make a big difference over a generation rather than a small difference to policy today. However, in this case, ideas turned rapidly into government action. Neil Record’s argument was so convincing that other think tanks – and also trade bodies – that are closer to the practical policy scene followed it with their own excellent analysis and proposals. Policy Exchange, the CBI and the Institute of Directors have all made important contributions to keep this subject on the map. Then, over the summer, an independent Public Sector Pensions Commission published its findings to some acclaim.
In the end, even politicians could not resist the tide of opinion – though it was the Liberal Democrats who responded to the intellectual arguments before the Conservative Party.
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