Unions and Coalition square up in summer of pension discontent

19th June 2011

The Guardian interviewed Prentice and led the newspaper with the story this weekend.

"It will be the biggest since the general strike. It won't be the miners' strike. We are going to win," he said.

What provoked the trade unions' ire was an announcement on Friday from Lib Dem Chief Secretary to the Treasury Danny Alexander of Government plans for reform. He told the unions to work longer and pay more – not exactly music to union leaders' ears.

Alexander announced the package in a speech to think tank the Institute for Public Policy Research also reported by the Guardian

The government has confirmed that it will raise pension contributions by 3.2 per cent, increase the retirement age for civil servants to 66 and move to a career average scheme to replace the more generous final salary version where the pension is most likely based on what you are earning when you retire and is therefore much higher. It plans to introduce the increased contribution rates from next year.

Ministers argue it is unfair for other taxpayers to pay for more generous schemes for public employees than they might get in the private sector.

Alexander justified the changes on the Today programme saying: "People in this country are living longer – we're seeing longevity increase by 10 years since the 1970s, and that's predicted to go further in the future. That's why we're increasing the state pension age – it will go up to 66 from 2020 – and that's why we're recommending there is an increase in pension contributions. If we make those changes – alongside changes going on for every other person in this country – then we can protect something which is very important, that people who give their working life in service to the public continue to receive among the very best pensions in retirement."

Here the BBC i-player shows Alexander making the case.

But Mel Bousted, general secretary of the Association of Teachers and Lecturers is featured here on the BBC adamantly opposed.

The teachers are now likely to be joined by their bosses as the Headmasters union, the NAHT announced plans for a strike ballot, reported here on the Times Education Supplement website.

The TUC has also entered the fray castigating Alexander for undermining the negotiations.

TUC general secretary Brendan Barber, the general secretary of the TUC said: "At such a critical time in complex negotiations this is a deeply inflammatory public intervention with a clumsy mix of announcements apparently designed to pre-empt the talks, coupled with crude threats that even worse terms might be imposed if unions refuse to acquiesce to this assault on their pensions."

However it wasn't bad news for all public sector workers. The Financial Times majored on the fact, that the lower paid, those earning less than £18,000 would be exempted from the increased contribution charge.  

Meanwhile the large employer's organisation, the Confederation of British Industry urged the Government and David Cameron in particular to stand firm reported here on the Telegraph.

As threat followed counter threat Lib Dem business secretary Vince Cable tried to be more conciliatory saying that negotiations with reasonable people could mean strikes could be avoided reported here on Politics Home.

Besides the big argument, there were other tensions.

Late last week, a review into police pay by former rail regulator Tom Winsor, further angered the unions by recommending that police civilian support staff lose the right to strike.

Those staff, who are members of the Public and Commercial Services Union, are due to strike on June 30th reported in the Guardian.

As the article notes the Hutton review of public sector pensions has already suggested that the retirement age for police officers should be raised from 55 to 60 but Winsor asks whether a proportion of pay and pension entitlements should be "at risk" because of poor performance.

One of Dave Prentice's claims is that the Government have bought into the ‘Daily Mail view' of the public sector.

Well here is that Daily Mail view from its leader column this weekend.

It said: "The real danger is that Mr Cameron is starting to look spineless. His enemies scent blood. Chief among them are the unions, who were yesterday scathing in their criticism of the reasonable plan to raise the public sector retirement age. Increasingly, they think if Mr Cameron receives only a gentle push, he will roll over – a dangerous scenario. This echoes the political cowardice which allowed the selfish unions to engage in crippling industrial discontent in the 1970s. One thing is clear: if the unions persist in their irresponsible actions – which could wreck the fragile economic recovery – the Coalition must legislate to insist on a minimum 50 per cent turnout for strike ballots to be binding. And, with the country £1trillion in debt, there can be no compromise over the modest reforms to gold-plated public sector pensions."

Unsurprisingly the Sun is in agreement too. Here is an excerpt from its ‘The Sun says' comment section

"Britain doesn't have the money to keep paying them at current levels. The anger of State workers is understandable. Nobody wants to work longer and pay more for a smaller pension when wages are frozen and inflation rising. But the facts stare us in the face. The cupboard is bare. We are all living longer. Bringing public pensions into line with the private sector is fair and inescapable."

But the trade union leaders may not appreciate the Guardian leader column either:

"No one should pretend that these are not difficult issues. But Britain cannot stand aside from the historic need to recast the transition between work and retirement. The Holy Grail is to avoid, or at least to mitigate as much as possible, the triple whammy of asking workers to pay more, work longer and get less. There is no cost-free answer, but there are better and worse ways of producing a balanced package. In the long term, working a bit longer is crucial, as Lord Hutton and the government both believe. But so is protecting the lowest-paid, as Mr Alexander rightly stressed yesterday. And so is the need to avoid dumping the costs on the next generation. Raging against these conflicting imperatives is understandable but pointless. As so often, this is an argument in which jaw-jaw is better than war-war. Both sides need to remain at the table, avoid a shouting match, and accept their responsibilities."

The issue has attracted thousands of comments across the message boards this weekend but here we bring you four.

On the Mail, Katherine from West Midlands has a slightly different take – if older workers stay in their jobs will it frustrate young people as they seek work?  

"I notice a lot of vitriolic comment coming from the private sector workers who have poor pension plans. Isn't the problem here that the private sector ought to get its house in order and treat its staff better rather than penalise the public sector workers? My biggest point would be about jobs: where are the jobs for the younger generation going to come from if workers are working longer years? New jobs aren't going to be made, are they? So are they going to stop training new teachers, doctors and nurses etc? And if so, what are those people going to do instead."

On the Telegraph Turney was untypical. He does not want the pension changes for the moment at least.

He writes: "I don't actually mind paying more for my pension, what annoys me is the fact that it comes in the middle of a pay freeze and a rising cost of living. There seems to be a lack of respect for all public sector workers and a stereotypical image of left wing layabouts. Most people on these boards will, at some point, rely on some form of help from public servants."

Jaded Libertarian was more typical of the Telegraph view.

"The productive part of the economy is the only part that creates wealth.  They take raw materials and turn them into goods and services – creating something new that has value.  This they exchange for money and this they pay taxes on. The public sector is paid from these taxes.

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