Are the Hutton pensions reforms the right place to fight?

The reforms to the public-sector pensions that John Hutton, the former Labour Secretary of State for Work and Pensions, proposed in his report for the government earlier this week have understandably dropped out of the news. They will, however, be back.

Even without the need to reduce the deficit, public-sector pensions were becoming more and more expensive, given rising life expectancy. Hutton has given the government all the political cover it needs to make the case and introduce the reforms, providing it plays it right.

It is an area that contains danger for all the main Westminster parties. Labour’s very close links with the unions, which now predominantly represent public-sector workers, will mean that opposition to the reforms will make them look like the mouthpiece of their paymasters, whereas even qualified support will place a lot of strain on both their union relationship and that of the party with many of its vocal supporters. It also has to deal with the obvious fact that one of its own has written the report on which the changes will probably be based.

The Lib Dems have a watered-down version of the same problem. Many of their natural supporters work in the public sector. Even if these people accept the intellectual case for change, it’s natural to feel a resentment towards those implementing them.

The Conservatives, on the other hand, face the opposite danger: looking too keen to do things that will hurt and in so doing, retoxifying their brand. Pulling a disproportionately larger section of their support from the retired and private-sector workers, there is plenty of pressure from their voters to let someone else take the ‘hit’, especially as it would bring state-sector pensions more into line with those from private firms.

There’s also the bigger picture. The political narrative can only sustain a focus on two or three ongoing stories. If the union reaction to the report is anything to go by, any attempt to implement them will result in large-scale strikes. That will not only make the pension reforms one of those stories for several months, on and off, but reduce the scope for something else to become one. With a lot of the cuts set to bite in 2011/12, keeping the pension reforms centre-stage could well be quite beneficial to the government both because of the difficulty in Labour making traction against them, and because of what they’ll block out (as well as the inherent benefits of making the changes).

One of the qualities necessary in any political leader is knowing when, where and how to pick the battles to fight. Hutton has ensured that public-sector pensions will be one area, as the government would be accused of timidity bordering on cowardice were it not to go as far as something a former Labour minister proposed.

But the how and when remain to be resolved and the political climate going into the second half of the parliament will depend in no small part on the skill of the three leaders and the ministers in the big-spending departments in handling this issue, and the pressures from both without and within to take the easy option.

David Herdson