by Martin Mayer
Almost every single public sector union is currently balloting their public sector membership for strike action on 30th November. As many as 3 million workers could be out on strike that day over the cuts to their pensions. That's probably more than even during the General Strike in 1926 and therefore likely to be the biggest single day of strike action in British history.
So why are teachers, nurses, fire fighters, local authority workers, civil servants and many more public sector workers so determined to strike over pensions? The answer is very simple. This is the biggest single attack on any group of workers' terms and conditions to date under this ConDem Government. And it comes after a wave of redundancies both compulsory and voluntary across the public sector as the ConDem Government's massive spending cuts begin to bite. Those who have kept their jobs have almost certainly suffered a wage freeze – some for two years running – and have had to work harder to pick up the work of those who have been made redundant. Some Local Authority workers like those employed by Tory Southampton City Council have actually had a pay cut imposed on them. Contrary to popular belief (as touted by much of the tabloid press) public sector workers are NOT the best paid workers in the country (e.g. 65% of civil servants are on £25000 p.a. or less). So attacking their public sector pensions is very much a step too far.
The scale of the attack on the public sector pensions beggars belief. For a start a typical public sector worker is being made to contribute an additional 3.2% towards their pension. That's equivalent to a massive cut in take-home pay after for what has been for many a second year of no pay rise at all. Whilst being made to pay 50% more their pensions, benefits are being cut to give a pension 50% less. As for retirement at 60 – forget it! They are being told they will not be able to take their retirement pension till 67 or 68 years of age!! Can you imagine after a career in teaching or nursing and making plans to retire at 60 to be told that you must work till you drop!
As if this is not bad enough the Government has imposed a change from RPI (retail price index) to CPI (consumer price index) for uprating pensions annually. CPI generally estimates inflation at least 1% below RPI so this will have a big effect on the value of the pension over lifetime – as much as 15% reduction in value. What is more, as with the other changes, these have been imposed without negotiation. 6 Trade Unions have clubbed together to take this to judicial review at the High Court as the ConDem Government has clearly breached its own regulations in the way it has imposed CPI without consultation or due process. It is typical of the cavalier fashion with which this millionaire cabinet has treated its most despised section of the British workforce – public sector workers.
Make no mistake about it. The ConDem Government's vicious and highly damaging spending cuts have been targeted at working people and particularly those who work in the public sector. This ideologically driven strategy is designed to reward the rich and powerful who are to blame for the economic crisis – and who have benefited from £25B tax cuts so far since they came into office – whilst seeking to permanently reduce the size of the state. Their intention is to dismantle as much as they can of the post-war welfare state and the public services on which so many of us depend. Hence the £20B cuts to NHS spending over 4 years, equivalent to 25% of its annual budget. Its NHS “Reform Bill” will break up the NHS and allow it be farmed out to big business on highly profitable contracts. Then there's the 14% annual cut to state education budgets which included the scrapping of the new school building programme (stayed for now by the High Court), the end of Education Maintenance Allowance to help poor youngsters stay in further education, plus of course the inexorable rise in tuition fees to £9000 p.a. Local Authorities face a £28B cut across the piece which has seen the slashing of Sure Start schemes designed to support young mothers on low incomes, the closure of public libraries, scrapping of socially supported bus services and much more. Worst and most pernicious of all are the £20B Welfare Benefit cuts which have already hit disabled workers and, by twisting the form of assessment, striking many unfit workers off benefit altogether. Next April when the majority of the cuts really begin to bite, watch out for poor families being turfed out of their homes because the capping of overall household benefits will mean the rent cannot be paid. Already Jobs Centres around the country are referring the poorest claimants to church charities for food handouts because State Benefits are so meagre (unless of course you still believe the insidious lies of the tabloid press which claim anyone on State benefits is living a life of luxury at our expense).
But let's get back to the pensions cuts. Do not be fooled that “we are all in this together” and public sector workers must make their contribution to help reduce the deficit – that's disproved by the tax give-aways to the rich and the snowballing once more of the bankers' bonus culture which is going on unchecked. Don't be fooled either by the other red herring that public sector pensions are “unsustainable”. The last Labour Government undertook a sustainability exercise into all the public sector pension schemes only a few years ago. One of the only asset based schemes (where the pension contributions are invested in bonds and shares etc.) is the Local Government Pension Scheme. This was relaunched as a new scheme as recently as April 2008 with employers paying less and employees paying more. Early retirement before 65 for those with long service is being phased out and medical severance pensions have been severely curtailed. There's certainly no need for another hit on this one. The other public sector schemes are not based on an investment fund but pay out pensions directly from the stream of contributions from employers and employees. They are thus totally immune from the vagaries of the markets and were remodelled by the Labour Government to limit employers' liabilities and shift much more of the financial burden onto the employees. In short the drive for sustainability has already been met - and recently. It's time to see through the spin. This is nothing more than a smash n'grab by a millionaire cabinet on our public sector workers pensions.
The last card that the ConDem Government and their media mogul friends have tried to play is to divide public sector and private sector workers with the claim that public sector workers have pensions far better than those enjoyed by private sector workers – it's time to make it fairer for everyone, they say. Well in the trade union movement we always said you make things fairer by levelling up not levelling down. It's true private sector workers have a had a terrible deal with their pension schemes in recent years. There have been a number of strikes and threats of strikes and in many cases where unions have fought back we have won sizeable concessions. But the law has been stacked against us as there has been precious little legal protection for private sector pension schemes – and very little interest from present or past governments for help. Many employers have closed down final salary schemes and far too many working people will end up with poverty pensions in retirement. But the real truth is that the very same bosses who have closed down pension schemes for their workers are enjoying executive pension bonanzas! The average executive pension of the top FTSE 100 directors is a staggering £237,000 p.a. And many of them enjoy enormous tax concessions on their overall pay and pensions packages as well.
On 30th November public sector workers will be in the front line of the resistance against this ConDem Government and their disastrous and destructive austerity spending cuts. The attacks on them are a disgrace and they should be applauded for their grit and determination to fight back to defend their hard won pensions. They are right to expect the solidarity and support from millions of working people not directly involved in this particular trade dispute. But 30th November will inevitably symbolise much more than a fight over pensions. It will be a day of mass protest against everything this ConDem Government stands for – and of course that means its massive spending cuts which are hitting hard already and more is to come. It's a chance for us to rally together and say we will not pay for the economic crisis caused by the bankers. We will not accept cuts to living standards for working people- not just public sector workers- whilst the rich and powerful not only get away scott free, but are enjoying record profits and inflation busting pay rises. Let's use the day to put forward the alternative which must include investment for growth and decent jobs. Instead of cutting welfare benefits and crippling our public services let's reclaim the £120B tax that is evaded avoided or just simply uncollected from the rich and powerful every single year – more than enough to wipe out the Government's deficit. We could be building our way out of the recession with new schools, a council house building programme and investment in public transport. We did it after the war with a bigger deficit in comparable terms then than we have now. We have a lot at stake to fight for and to defend. There are rallies and demonstrations planned in every city and most towns across the country. Let's get up off our knees and come out in force to support the public sector strikers on 30th November.