So, why am I striking?
The government is continuing to persist in their unaffordable and unsustainable claims. The Hutton interim report published in October 2010 stated that as a percentage of GDP, the cost of public sector pensions will go from 1.9% to 1.7% by 2030 due to the reforms that happened in 2006 under the previous Government.
The government is deliberately being less than honest over the true impact of the pensions changes in order to meet their pre-election rhetoric. This is nothing more than playing games with people’s retirement plans.
The government is not negotiating. They are using classic bully-boy playground tactics with added “you won’t be my friend anymore” childishness. Threatening to withdraw an offer that hasn’t been formally put on the table and without consideration of any of the other negotiation points of the unions, such as age to start to withdraw pension, and use of CPI rather than RPI in indexation, is not negotiation in my book.
I object to the fact that my increased pension contributions is not going towards my final pension but instead to pay down the deficit. This is a tax imposed on workers who did the least to create the economic downturn and the targets should be the banks via a global transaction tax and hit the tax avoiders and evaders which would go much further to resolve the deficit problems that we have.
In addition, Andrew Lansley’s comment on BBC News this morning that there will be a 25 year deal is a non-starter. He simply cannot tie the hands of future parliaments and I will not have stability as I will (with luck) still be working in 33 years time. If I am to build up a little nest egg for when I am 68, I need to know now where I stand, and I don’t.
I am also a trade unionist. I represent members from workplace up to regional level. But I have been unsure over what it is the unions wants to achieve.
For the last ten years, the Public and Commercial Services Union (PCS) has said that we only strike as a last resort. Regrettably, on this occasion, the ballot for June 30 was a first resort. Before negotiations barely started. As if we were the scouts attempting to soften up the “enemy” before the masses going over the top.
The Unions have painted a picture of some kind of fantasy world in which we are living in our own Life on Mars regression to the seventies. I have heard and read people say that we must aspire to be the miners circa 1973. That all we need to do is to take part in a general strike and the government will fall under the strength of the protest (like we were living through the Arab Spring in an undemocratic Middle Eastern country), and then we will have an imaginary utopian government of national unity to replace a legitimately elected government.
Slight problem. Maggie Thatcher.
Maggie Thatcher was a game changer. Willing to stare down the unions, helped by an illegal strike action as Scargill did not ballot the miners, given carte blanche to change union laws in defiance of international standards leaving us with the second worse set of industrial laws in the west (after the United States).
That is the future of Industrial Action. We have the heirs of Thatcher in Government. Not the heirs of Heath. It therefore has to be about negotiation, not militancy.
I am losing patience with both sides, for god’s sake, use the Plan B, get round the table, put your ideological objections to the other to one side and get us a deal.
*The author has been a member of the Liberal Democrats since 1995 and is a Union Rep for the PCS in the East of England and is writing in a personal capacity.
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19 Comments
Since I wrote this piece, I did in fact lose patience and resigned the two posts I held within the PCS.
Good post.
I keep hearing conflicting accounts of what’s actually going on.
1) Public sector pensions are unsustainable and currently being subsidised by tax-payers money.
2) Public sector pensions are already sustainable and the government are just trying to claw back money to pay back the deficit.
3) Will Hutton’s recommendations on reform (e.g. Changing to average salary rather than final salary schemes) were necessary but the government have pushed further.
What I’d give for the source documents that actually set out the truth regarding this whole mess…
What’s your position, and what kind of deal would you be looking for Ian?
The trouble is this government dominated by a bunch of right wing reactionary anti-european Tories (as a Liberal since 1974 & trade unionist since 1980 I never supported this travesty of a coalition). The Tories hate the union movement and seek to undermine them; we as Liberals and trade unionists and believers in free speech need to support the public sector workers in preventing the downright theft of our pensions.
As a party we should never been involved in putting the hated Tories in power and remained a trusted independent party of opposition – thus upholding our values and the trust of the public instead of being seen as a puppet of the Tories and a party who has betrayed our voters over breaking promises on EMA, University fees, harming the poor and cutting public expenditure etc etc – none of which we promised in our manifesto – and that is why we are now at 7% in the opinion polls. Never ever trust the Tories and never sit down and sup with the devil – you know it will devour you!
Daniel:
I dont think you will ever find the source document that actually set out the truth. The reason for this is because even if you take the Hutton reports (both the interim and the final) both the unions and the government have selectively used fact and figures to back up their own ideological posturings. Coupled with Hutton apparently not even understanding his own document (see for example Financial Times article and rebuttal from Mark Serwotka Rebuttal from Mark Serwotka), it is not at all easy to seperate fact from fiction.
I am looking for a deal from the government that is based on honesty, truth and doesn’t pander to any preconceived ideas over sustainability. The sustainability issue was brought up in the Tory Manifesto and subsequently proven to be wrong. This was spectacularly brought home by Mark Serwotka on the Today programme in June and Francis Maude subsequently pulled out of further interviews Source However, the union side should also not be nitpicking over CPI/RPI claiming that we are losing out on thousands of pounds because the the public at large are baffled about the fact that the latest plans show better pension arrangements irregardless of the indexation measure!
David:
I understand your points, I really do. I’ve personally struggled with the political compromises required as part of a coalition for the last 18 months and more. I have always carefully considered each and every compromise as to whether this is a deal breaker or not for me. This is even more acute with my trade unionism.
I haven’t reached that point. I like the idea of 75% of the manifesto being implemented already. I like the idea of the triple lock, the pupil premium, scrapping the ID card.
I like the fact that after 15 years campaigning for the party, we are now in a position to push forward our programme for government.
But lets be realistic here, if we were not in government to provide the moderating fluence on the rabid right, what would have happened?
Cameron would have gone to the country last year seeking an outright mandate. He would have got it. And then where would we be?? Deeper in the brown stuff than we are now with our credibility shot to pieces because after all our posturings about working with others and pushing the good things about working in a coalition, we did not have the cojones to actually do so.
As long as its not a permanent political pact, and we are just as open to coalition/working with Labour as required,(an excellent example can be seen here) then I see no issue with a temporary tory/lib coalition as we have at the moment.
What is the difference between the amount you’ll pay into your pension scheme over your lifetime, and the amount a worker on a defined contribution (i.e. non-final-salary) scheme would have had to have paid in over the same period to accrue the same pensionable benefits?
That’s the key question, everything else falls by the wayside. How much would you have to pay under a DC scheme to match the public sector final salary scheme?
I was very interested to read your views, Ian, but I do wonder whether some of the points you raise are based on “unaffordable and unsustainable claims” made by public sector Unions.
To deal with a couple of the points you raise:
1. The Hutton interim report published in October 2010 stated that as a percentage of GDP, the cost of public sector pensions will go from 1.9% to 1.7% by 2030 due to the reforms that happened in 2006 under the previous Government. But that assumes that 1.7% is “acceptable”. 1.9% or 1.7% are both massively more than the cost 20 or 30 years ago. Why? Because people are living so much longer in retirement.
2. I object to the fact that my increased pension contributions is not going towards my final pension but instead to pay down the deficit. That’s a classic bit of “spin” from the Unions – it’s actually meaningless. It is no more or less true to say that when I pay my Council Tax it is “to pay down the deficit”. What the increased pension contributions are really about is those who benefit through receiving their pension for much longer (due to increased longevity) paying for some of the extra cost, rather than it all being met by taxpayers.
Personally I think it is the unions that are using buuly boy tacktics. If they don’t get what they want they will screw it up for the rest of us. I hear that some unionist are claiming that some people are trying to cause a rift between the public and private sector. I think the unions are mamaging to do that all by themselves. They are calling out all the public sector workers no matter what that might do to the economy while the rest of us are taking often worse cuts in an effort to keep as many jobs as possible. It’s time the public sector realised that everytime they over indulge in job creation and over generous benifits that they can’t just turn round and tax the rest of us more to avoid getting themselves out of the mess they have got themselves into
Andreas C:
Sorry don’t have those figures to hand. But what is noticeable about the difference in pension provisions between the private and public sector is that a) tax rules brought in by Gordon Brown and b) the pensions holidays that many company indulged in during the 80s and 90s ruined pension provision and led to associated higher costs on the state – such as paying means tested Pension Credit and the compensation having to be paid out by the pensions regulator. Many union activitists will say that private sector workers did not fight for their schemes at the time. The difference being, that public sector workers are not prepared to allow changes to the schemes without a ballyhoo about it.
Simon:
Thanks very much for your comments. I realise its all relative in relation to the percentage of GDP and whether or not it makes it affordable. I take the view that if there are to be people employed by the state, then there are attendant costs with that – salary, pension costs, overtime, electricity, computers and so on and so forth.
I do not have a problem with paying increased contributions, the pensions calculator on the Civil Service website shows that I am highly likely to be better off in my retirement, so I have to decide whether its better to lose a little bit now for a little more later, this was one of the points I raised in the resignation letter I wrote out and emailed to fellow PCS members. But again, the money I pay out will not be contributing to my pension pot which after all is the whole point of the contributions.
Im not sure the council tax is the right analogy – Georgie Osborne has frozen council tax raises.
Richard:
Im very familiar with the line of argument you put forward. Its the classic reaction from the private sector.
If closing schools and offices and Jobcentres ruin the economy in the scale that you think, then why have bank holidays? Why close down the country for two days next year for the Diamond Jubilee? If wealth creation is the be all and end all of what this country should be about in how it treats it workers, hell, lets do away with weekends too!!
Mary Djevsky in the Independent writes a rather thought provoking piece in The Independent earlier this week.
As for job creation commentary, the civil service haven’t recruited in about two years and are losing staff all the time. I simply do not recognise your description of “over indulge in job creation”.
Ian
Why have holidays? Because we’re human. I’m not for total work 24/7 but getting the balance correct so it is as fair as possible for all within the realms of reality and human nature and at te end of the day we can pay our way. For some reason It makes me think me of the argumment that with less jobs there will be less tax income but if the goverment is having to borrow billions to get say for example to get 30% of it back in tax does not seem sensible to me, just a faster road to disastor. I think some people just don’t think things through properly and my agrguments just lead them to the next page then they get stuck again.
It was the time before the last two years that the public sector got too big and it will take a long time to get the balance right again. There is always a time lag between winding down the public sector and the private sector creating the jobs to fill that kind of void. I can’t be bothered to explain buut that is jjust the way it is.
One of the ironies of the situation is that if there were no public sector unions then there would almost certainly have been a speedy and equitable solution to the issue of public sector pensions by now.
At least that appears to be the logic if we accept the prevalent union side claim that comparable jobs in the private sector are generally paid more than those in the public sector.
If that is the case, then they are saying that the public sector (around 56% unionised, I think) ends up with a worse deal than the private sector (only around 14% unionised).
Andreas C: see editorial column of this week’s Liberal Democrat News (p. 7) for comparative figures.
“I object to the fact that my increased pension contributions is not going towards my final pension but instead to pay down the deficit.”
I object to the fact that I can’t afford to top up my pension because I’ve got to top up yours!
Look, the pensions industry got it totally wrong many years ago and successive governments have lacked the guts to put this right.
If the public sector were the private sector, your pension would no longer be final salary based, and the pension scheme could have collapsed long ago, maybe taking the scheme trustees and the company with it. My pension pot varies with the economy. Why shouldn’t yours?
I fail to see any fair argument for protecting your pension in a way that private sector workers’ pensions have not been.
“They lied to us!” And us. “We thought we were paying enough!” Same here.
Dose of reality needed. Read this week’s Lib Dem News editorial, page 7, look at the figures, get a calculator, and work out that you’re not so hard done by.
Does anyone have an online or scan of that P7? I don’t get Lib Dem News.
Oh, and someone needs to fix Simon Shaw’s comment, there’s an unclosed bold tag there.
Over 6 years ago, I first stood for election to a Lib Dem position on the Local Government Association in the HR field.
I said this in my “Election Address” then:
“I have a particular interest in the pensions issue. In the medium term I do not see how we can sustain, in the public sector, final salary schemes now largely denied to the majority of the population who work in the private sector.
In terms of pension schemes generally, until now the choice has been either a Defined Benefits (final salary) scheme or a Defined Contributions scheme. With the former, all the risk lies with the employer; with the latter, all the risk is with the employee. I would like to see Local Government take the lead in devising a hybrid scheme where the risk is shared.
From the employee’s point of view, what point is there in having an extremely generous (and costly to the employer) pension scheme where all the risk lies with the employer, but where many younger employees in the public sector cannot afford to buy a house?
We need to be conscious of the fact the senior officers who advise us on such issues in our various authorities are the real gainers with a final salary scheme – their final salaries greatly exceed their career-average salaries. Their gain is at the (relative) expense of lower paid staff whose real-terms earnings over their career follow a much flatter profile.”
I don’t actually agree with Hutton and the Coalition Government on one key aspects of their reforms, That is the emphasis on public sector employees paying quite a lot more (and in the case of higher paid staff, a great deal more).
I think there should be a greater shift to REDUCING the amount of pension paid, i.e. reducing the “accrual rate”. In simply terms I would say that public sector pensions are “too generous”. I actually think that is a more liberal approach. The alternative is a “nanny state” approach which says staff must pay quite a lot more for a very generous pension.
Shouldn’t staff be able to decide to have a little more take-home pay during their working life, and have slightly less pension in retirement (i.e. a “generous” pension rather than a “very generous” one).
I haven’t been into the complexities of this and don’t want to take sides, but it does seem to me the government has been putting out two contradictory messages: (1): the deal on the table is the best you will get; (2) the unions are irresponsible for striking when negotiations are still going on. If this is the best deal the government can possibly deliver, what are the continuing negotiations about? If they’re about minor tweaks, what’s wrong with striking over substantive issues?
I can’t see a one-day strike as bully-boy tactics. As someone pointed out in the pub, all these public-sector workers had a day off over the royal marriage and the economy didn’t die. A caring private sector employer could give its staff with childcare duties a day off, and anyway, few people have so little annual leave that one day makes much difference. Repeated strikes would be much more serious, but remember that all the participants are losing all their pay for every day struck. Abraham Lincoln on the campaign trail in a state with a big strike going on said he did not want to take sides over the strike, but he celebrated the fact that the workers were free to strike if they wished!
You make some fair points Ian in response to my letter however – I am not convinced that Cameron would have got an outright majority or even gone to the polls; however after the 2010 Election I think we missed an opportunity – responsible and creative opposition the result of which would have held us in greater stead and respect with the public than what actually happened – ie our seeming (in the public mind) with breaking promises which we had rightly criticised other parties in doing and in the PUBLIC’S VIEW (even now) of being the Tories poodle with the Tories claiming the benefit of LibDem input. Also we are in a coalition with people you just cannot trust – one example – – look at the referendum on electoral reform (we should have insisted on STV being genuine reform unlike AV which is a con) where Cameron betrayed his promise to us in saying he wouldn’t campaign – we got nothing! The Tories on the other hand got their seat re-distribution which of course favour them (I won’t say gerrymandered).
Also what I believe to be the most important issue facing this country – Europe – we stand closer to Labour (as we do on the economy) and completely hostile to the Tories views on repatriating (hoho) powers (what they of course mean is: withdrawing safeguards to workers and citizens). We generally stand with Will Hutton and many Labour MPs in seeing joining the Euro as an objective which the Tories reject. Remember too the Tory Right now, in the main, want to leave Europe or so emasculate it as to make it meaningless.
NEXT:
‘There is always a time lag between winding down the public sector and the private sector creating the jobs to fill that kind of void.’
As a teacher for 30 years I am very suspicious of the Private Sector taking over the public sector – it generally means a reduction in workers rights; poorer pay and conditions; lower pensions – we need to ensure private pensions reach the level of public service pensions like mine (for which, like others in the public sector, I have paid)
In education we see a creeping privatisation supported of course by our coalition allies which we have always been against ie so called Academies (creaming off money for local government schools) and these ghastly so called ‘free schools’. Both are run by an odd assortment of groups (in for profit) including religious groups (being a secularist I believe also in ending the apartheid of so called Faith schools).
On the issue of holidays – I thought that (you) Ian made a excellent point – remember actually we have far fewer holidays than our compatriots in mainland Europe.
@david orr
Just to comment on a couple of the points you made:
“need to support the public sector workers in preventing the downright theft of our pensions.”
That’s rather misleading, I think. The changes being discussed are for the future and don’t affect any pension accumulated to date.
“we need to ensure private pensions reach the level of public service pensions like mine (for which, like others in the public sector, I have paid)”
But the point is that you haven’t been paying enough. Since you started as a teacher 30 years ago the share of the cost of your and other public sector workers’ pensions met by the taxpayer has risen massively – because pensioners are living a lot longer than they used to.
Simon –
Whether you agree with my comments or not on my own position do you realise that with these new proposals many poor public sector workers might have to opt out of the pension schemes altogether; that students who enter the professional public service with £9000 debt (our broken promise to students – many of whom will never vote for us again) will then face paying very high sums into their pension pot which they will not be able to afford and also opt out. In the end the country will pay dearly for these proposals.
In regard to private sector workers they have been screwed down by their employers and now get a pittance. We need government legislation to ensure private employers offer their workers the same rights.
Don’t believe the lies of the Tory Party – Britain is still a rich country with enormous wealth spread unevenly and we can so arrange our taxation system as end this deficit and pay people decent pensions when they retire. Increase the 50% tax for high earners; introduce a land tax (a Liberal idea); a local income tax (another Liberal idea) and profit windfall taxes as well as much higher taxes and regulations on the banks and city – Cameron’s public school pals. Remember we are being governed by a cabinet dominated by multi millionaire Tories who have no idea how the other half leave and being in Tories care less.
People have a right to retire with a decent pension at 65 – this is being stolen by this government and that includes my own – you have no idea how much public sector workers have been paying into our pensions!