Monday, 8 November 2010

We’re All In It Together (Not)

At a time when public and private sector final salary pension schemes are under attack, see my previous post here for an example, The Guardian newspaper reports that teachers in private schools such as Eton and Harrow, are having their pensions subsidised by the tax payer. Teachers at the Prime Minister, Chancellor and Deputy Prime Minister’s schools all benefit from this public subsidy to their pensions.

A Freedom of Information Act (FOI) request from the Green party to the Department for Education (DfE) reveals that more than 62,000 teachers, including 1,600 at the country’s top private schools at a cost of around £40m per year at the top 100 private schools to the public purse. The DfE deems it necessary to give this subsidy because private sector money purchase pensions are less reliable than public sector final salary schemes, as they are reliant on the vagaries of the financial markets. The taxpayer therefore has been topping up private school teacher’s pensions by around a 6% contribution per year.

Noel Lynch, Chair of the London Green party who initiated the FOI request said: “It’s scandalous that taxpayers are unknowingly paying towards the pensions of teachers at schools like Eton and Harrow. It will come as a surprise to a lot of people that these elite, private sector employers have access to the government’s Teachers’ Pension Scheme to the tune of over £40 million.

“It’s unfair that these schools are exempted from the risks of stock market fluctuations while other similar sized organisations must suffer the consequences of a volatile market.”

So, not only will teachers at the top private schools earn more but they also have a comparable pension to public sector teachers. On top of this, private schools such as Eton are allowed charity status, and so are exempt from paying tax, when by anyone’s estimation Eton is not a charity but an extremely privileged institution. This makes it easy for private schools to attract the best teachers and perpetuates the class divide in our society. At a time of public spending cuts, how can a tax handout from ordinary people to the teachers of children of the most wealthy people in the country be justified?

For most workers, there is trade off between higher salaries in the private sector or a potentially more secure pension in the public sector, but teachers in private schools can have it both ways, without ever having to work even a single day in a public sector school, all at the expense of the tax payer. Claims by the government about the financial crisis that ‘we are all in it together’ and ‘those with the broadest shoulders should carry the heaviest burden’ and such like are not borne out by government policy.

The Green Party believes that this money should be ploughed into more urgent areas within the education budget such as building new local schools in deprived areas and employing more teachers in the public sector to reduce class sizes.

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