SNP suggested ‘even deeper pension cuts’ than coalition

The SNP government is facing claims of “utter hypocrisy” over the pensions dispute at the heart of tomorrow’s strike, after official documents revealed that ministers had produced their own proposals for hardline cuts.

The measures, in a submission to the UK inquiry that drew up the controversial changes, would have a “far bigger impact” than the reforms being pushed through by the coalition, it was claimed yesterday.

Finance secretary John Swinney has condemned the changes that prompted the strike, claiming they will pile pressure on hard-pressed households.

Mr Swinney told MSPs earlier this year they “will have significant and negative implications on the long-term retirement provision of some of the lowest-paid individuals in our society.”

But a submission to the Hutton inquiry by the Scottish Government’s Scottish Public Pensions Agency (SPPA) set out four suggestions for possible reform.

The options include “movement to a defined contribution scheme… which places the risk of uncertainty over the value of their final pension with the members”.

This is similar to most private-sector schemes and means workers would not be certain of the final pension pay-out, which they currently get in the “defined benefit” scheme.

Other options for change suggested by the SPPA include reducing the current employer contribution levels, with members meeting all the extra costs.

Another suggestion set out is “reducing the level of benefits available… without necessarily reducing member contributions.” In addition, the Scottish submission sets out the prospect of “introducing later retirement ages”.

Tory Lothians MSP Gavin Brown said: “All of the options are demonstrably worse than the ones that are going to be going ahead.

“If you’d suggested going to defined contribution, instead of defined benefit, you’d get strung up. The UK government hasn’t gone anywhere near suggesting something like that.

“The SNP have been doing an awful lot of grandstanding. I think it’s just utter hypocrisy to be as vocally critical of the UK government, yet their own government agency are suggesting this, which would have a far bigger impact on the wallets of public-sector workers.”

The coalition has proposed that public-sector workers retire in future at 66, which would mean up to six years longer at work for some. Better-paid staff would also have to pay up to an extra 3.2 per cent of their earnings into their public-sector pension schemes in 2014.

But a Scottish Government spokesman last night insisted the suggestions were a “broad spectrum of theoretical options for information”.

“No preference was stated,” he said. “The Scottish Government has been absolutely clear in its opposition to the UK government’s proposals to increase employee contributions, which ministers regard as a naked cash-grab by UK ministers, driven not by the need for sensible and fair long-term pensions reform, but by deficit-reduction targets.”