And so, the independent commission led by Lord Hutton has concluded that public sector workers must pay in more into their pension. So let’s run that one past you again. At a time when enormous public sector cuts are to set in, workers are going to have to pay in more into their pension. Can you think of a seven letter word that will describe what will happen as a result? Here is a clue: it begins with a ‘str’ and ends with an ‘ikes’. Except, the CBI reckons we need to toughen up the laws against strikes.

This is what Lord Hutton told the BBC: Final-salary schemes are “fundamentally unfair” and “can lead to high flyers getting almost twice as much back in pensions than those on more modest earnings for the same amount of pension contributions.”

This is what the CBI said recently: “Industrial action across the public sector could increase as the government takes the necessary steps to reduce the deficit.” It said that the “… threshold for industrial action to be raised so that strikes can only go ahead if 40 per cent of balloted members vote in favour of action, as well as a majority of those voting. Currently strikes can go ahead provided a majority of those voting support it, irrespective of the turnout.”

What is clear is that the combination of public sector cuts at a time when workers will be asked to pay more into their pensions and get less back, will lead to unrest. Their obvious recourse is strike action, but if the CBI has its way it will be harder for unions to take industrial action.

This is what Peter Harwood, ACAS’ chief conciliator was quoted as saying in the Telegraph: “The risk is that if you make balloting too difficult you will get back to where we were in the 1970s and people will take unofficial action. If people feel strongly about something they will walk out.”
He said that “if you make it more difficult you might get unofficial action.” And added: “If it’s going to inflame the situation you really need to think twice.”

The economic case for reforming public sector pensions is undeniable. One of two things must happen. Either shares must boom again, like they did during that period from 1987 to 2000. Or we are going to have to work until we are older and pay more money into our pensions. And for public sector workers, the changes will be even more dramatic.

And yet, the social implications are enormous. The CBI and, indeed, Boris Johnson have anticipated this and want to see new laws to make industrial action less likely. But are they really right?

Investment and Business News is a succinct, erudite and informative roundup of today’s top news stories on business and the economy, with analysis thrown in. It’s free, and to subscribe: visit our home page and select subscribe