Pensions: divide and rule?

Submitted by AWL on 20 October, 2005 - 12:59

By Ed Whitby, Newcastle City Unison, personal capacity

The Government’s new proposals on public service workers’ pensions, agreed with the union leaders on 18 October, are being portrayed as a victory.

Health workers, civil servants and teachers currently working will have their pension provision protected.

They can still retire at 60 on a full pension. The government had proposed to raise the normal retirement age gradually to 65, preserving provision for older workers but reducing it, on a tapering basis, for younger workers. The current proposals mean that the whole current workforce gets protection — at the expense of all the workers who join the public service pension schemes from 2006 onwards, who will have worse pensions and a later retirement age.

The union leaders, without consulting their members or even their union Executives, have sold out the principle they said they were fighting for — the right of workers to retire on a decent pension at an age young enough to enjoy it — with the safeguard that those they are selling out are not yet in the workforce, and so are ill-placed to object.

Detailed issues, such as ill-health retirement, remain to be negotiated for each scheme. And the largest single group of public service workers, those in local government, has been left to fight alone against specific proposals for them which increase their pension contributions and raise their pension age without even offering any protection at all to the current workforce.

What happened to the unions’ talk of a united strategy to defend public sector pensions and at the same time link up with the more general fight to raise the ever-decreasing state pension to a decent level? It appears that the union leaders lost their collective bottle.

Brown and Blair are playing the long game. The threat of industrial action forced them to make concessions. But by dividing workers into different sectors, and within each sector creating two tiers of workers, they hope to avoid making the concessions of principle that actual industrial action could force on them.

In local government, proposals have been put on the table by the local authorities in England and Wales (who have a Tory majority) to increase contributions and increase the pension age straight away, with no protection.

Partly this is a matter of financial calculations. Local government workers’ pensions come out of local pension funds which — due to the Tory changes in the 1980s which allowed the employers to take large “contribution holidays” — have a big shortfall of assets as measured against probable future liabilities. The teachers’ pension fund is not so badly placed, and civil service and health pensions are paid out of current revenue, not out of a fund.

The local authority employers have put down their proposal as a gesture to the Government as well as to the workers. They are telling the Government that if it wants to avoid a clash with local authority workers, then it must give more cash to local government.

Probably the local authority employers and the Government calculate on some leeway for softening the current ultra-hardline proposals. But softer may well be very bad! And it is going to be harder for local government workers to fight if all the other unions — and even other sectors of their own main union, Unison — are contentedly saying: “We’re all right, Jack. Pity about you and the new entrants, but there you go”.

Scottish local government pension negotiations are due in 2005, for implementation in 2007/8.

Any future attacks will leave public sector workers completely fragmented.

With the leaders promoting this deal to the membership as a great victory, and moreover a done deal, it will be difficult for the rank and file to overturn it. But trade unionists cannot and should not support this deal.

We should:

• Call on health and other public sector workers to reject the deal

• Call for emergency special conferences to discuss a strategy to develop the unity which was present before the general election and unite other sectors with the local government workers

• Agree a timetable for balloting local government workers now for action.

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