By Chris Hickey, PCS
All the militant threats by public sector union leaders to launch the biggest single day’s strike action since the General Strike of 1926 have culminated in a “reserved rights” public sector pensions deal which fundamentally delivers the Blairite aim of a public sector retirement age of 65.
On 18 October, the Public and Commercial Services Union (PCS), the main civil service union and one led by supposed Marxists, “heralded [the] agreement…that secures the pensions of three million people working in the civil service, health and education as a significant achievement.”
The leadership heralded the deal without the members of the union’s Executive Committee even having seen it. They were rewarded for their presumption by just one Executive member voting against the deal (John Moloney, a member of AWL and of the PCS left faction Socialist Caucus) and one abstaining (Socialist Caucus member Rod Bacon).
The would-be Marxists of the Socialist Party and the SWP have been talking about future prospects of "millions on strike" as ever since they voted to call off real action - the public sector strike planned in March, in the run up to the general election, when the government was at its weakest. But they voted for the reserved rights deal.
Many workers already in the public sector pension schemes will be pleased that the threat to their pensions seems to have gone away. The agreement will deliver to existing public sector workers reserved rights to their existing pension entitlements, for the time being at least. Although at present (and at the time PCS NEC voted to accept the deal) it is not certainly not clear that these pension entitlements will have any more legal protection than they had when the Blair regime announced its attack on public sector retirement age.
The union leaders have not wanted to explain the downsides of the deal. These are enormous.
• introduces a two-tier pensions workforce throughout the civil service, the NHS, and education;
• has the unions, including the “Marxist”-led PCS, calling on the Blairites to introduce two tier pension deals throughout the rest of the public sector in order to be fair to existing workers in local government and the fire service;
• gives new staff the choice between paying higher contributions for the privilege of retiring at 60 — not the most obviously easy and attractive prospect for low paid staff — or to continue working until they are 65;
• leaves existing scheme members vulnerable to future attack as more and more of the workforce is inevitably made up of staff lacking the “reserved rights”;
• abandons public sector unity by leaving local government and fire service workers, who are not covered by the deal, isolated;
• makes the fight for a working class wide political and industrial response to the pensions crisis much harder.
Undoubtedly New Labour’s retreat from its original plan to change the retirement age of existing public sector workers (in 2013 or 2018, depending on sector) shows the potential of the trade union movement to protect workers. But protecting, for the time being, what existing members already have is not a proper trade off for refraining from industrial action, selling the pass on future members, and leaving other public sector workers to deal separately with the Blair regime.
Under the agreement, “…existing scheme members will have the right to suffer no detriment in terms of their normal pension age  and will retain their existing pension provision unless individual or collective agreements…are reached which allow changes to those provisions or transition to new schemes. New entrants from the date of implemetation will only be offered pensions in the new schemes…” The target date for reaching final agreement, with new staff joining the new scheme as soon as possible thereafter, is June 2006.
The agreement is equally clear that “all new scheme members who under the new arrangements would retire on a lower pension than they would under existing rules will be offered the opportunity (!) to increase contributions so [they] can retire on a full pension at age 60.”
Some of the money saved by the new schemes can be spent either on improving those schemes for new workers or on reserved rights for existing workers. Effectively, the reserved rights are the Blairites' breathtakingly cheeky trade off for a poorer scheme for workers hired from the summer of 2006 onwards.
In a letter to the Guardian, Alan Johnson, the government’s representative in the negotiations, said: “Turnover of staff guarantees that this change quickly works its way through the system and ensures that we deliver in full the £13 billion planned savings…We said these reforms would save 2% of the payroll bill, with 1% reinvested to improve the new pension schemes. Now unions and their members can choose whether to spend that money on improving the scheme for new entrants or the transitional arrangements for existing staff.”
DIVIDE AND RULE
Alan Johnson is right to expect a rapid turnover resulting in a large and growing number of staff who will lack the reserved rights. A mere eight to ten per cent of new staff joining the civil service would result in something like 36,000-50,000 workers without reserved rights in a single year, depending on precise calculation of total civil service staff.
The union tops are obviously content to rely on the good faith of Blairite (or future Tory) ministers and civil service mandarins to leave the reserved rights alone. UNISON boss Dave Prentis saw the grand hand of “social partnership” last March. But the fact is we are entering into a pension deal tailor-made for a future divide-and-rule attack on the reserved rights of existing members.
When Mark Serwotka first stood for PCS General Secretary in 2000 he demanded “Action on Pay. A return to national pay bargaining — unity is strength. End the wild variation in pay between civil service departments and agencies, which sees staff in the same grade earning thousands of pounds less compared with their colleagues in better paying areas.”
I remember the words well because I wrote them for him. Unfortunately, we have had no action on pay despite the years he and Left Unity have dominated PCS affairs. Low pay and the wild variations in pay persist, and these result in low and unequal pensions.
Even more unfortunately, the pensions deal, if it goes through as it stands, will introduce a whole new layer of pay inequality for the same grade of work — because occupational pensions are simply deferred pay.
Unless the scheme-specific negotiations produce some miracle way of improving pensions for new employees, the deal will result in an effective pay cut. Occupational pension schemes represent the element of pay put aside each month to enable workers to have an income in retirement. An increase in pension age from 60 to 65 is a cut in pay because members will have to work longer for their deferred pay. In principle it is no different from the employer enforcing an increase in the working day and cutting our hourly rate.
On 25 January the PCS General Secretary and the President issued a circular saying that the Blairite plan to raise pension age would mean that “…the majority currently in post and future generations of civil and public servants…will have to work longer for the maximum pension. PCS is opposed to this. We are opposed to compulsion. We favour the individual having a choice as to when they wish/need to retire.” They were absolutely right to couple opposition to the retirement age of existing members to a change for future staff.
Now however, it seems that what they really meant to say was, “we favour the individual having a choice as to when they wish/need to retire, although the future generations, those coming in from summer 2006, should pay extra for that choice.”
A BROADER WORKING-CLASS PERSPECTIVE
The union leaders are effectively accepting that the public sector pension age should be 65 in the medium to long term, and that the new schemes should be poorer than they otherwise would be, in exchange for the “significant achievement” of preserving what existing members already have. The sole gain from the potential might of the public sector unions is to keep what we already have.
This is the most narrow, provincial and unambitious agenda any trade union bureaucrat could have and is utterly devoid of any wider conception of working class interests.
A broader perspective would appreciate the divide and rule danger we face through the reserved rights option. It would recognise that local government workers have an average pension of just £3,800 a year (£73 a week) and civil servants just £4,800 a year (£92 a week), and the state pension is still being deliberately run down in relative value.
Instead of starting to divide the membership up from the summer of next year, a broader class perspective would point to the need for a powerful industrial and political campaign that seeks, amongst other things, to:
• drive up public sector pay (low and unequal pay will always result in low and unequal occupational pensions — most PCS members already work beyond 60 because they cannot afford to do otherwise);
• increase the pension accrual rate (MPs are on 1/40th of their substantial salaries for every year worked and the top bosses are on 1/30th — public sector workers are on 1/60th and 1/80th);
• significantly boost the state pension and reconnect it to wages;
• reach out to private sector workers in their fight for pension justice.
The pension rights of working class people have been under attack for years now. We do not have a crisis of life expectancy — working class people living too long! — but of exploitation and roll back of long-won rights. The roll back continues with the imposition of a retirement age of 65 for future public sector trade unionists. It does so despite the huge medical and other evidence that poorer paid, lower status, workers will lead more sickly lives and die younger than the mandarins, ministers and bosses.
The utterly hypocritical attacks of the bosses and their press on public sector pensions is an attempt to deflect the attention of workers away from the wide-ranging class nature of the attack to the “privileges” of public sector workers. The labour movement has to take the political and industrial fight to New Labour and the bosses.
“Reserved rights” is not the way to do this. They simply swell the numbers of people, future public sector workers without reserved rights, who might be demagogically appealed to in the event of a renewed attack on the “reserved” rights.
JUST PUT A TICK WHERE THE DAILY MAIL PUTS A CROSS
According to the “Marxist” leadership of PCS the demagogic attacks show what a victory we have won rather than what dangers we face — “If the bosses denounce the deal it’s because they realise our success” type of argument. It’s as if all serious activists have to do is put a tick where the Daily Mail and the Daily Telegraph put a cross. The self same people ignore the cold, open, calculation of Alan Johnson set out in the Guardian and the Times.
The PCS “Marxists” are in truth providing a left cover for the leaderships of the other unions whom they so happily denounce in private and in their press — in the “socialist” part of their lives. In their fear of being isolated against the Blairites, they nevertheless prefer, in their real active labour movement roles, a unity of the union bureaucracies to the hard work of building unity with the most active, militant, layers of the public sector unions.
The task for serious working-class militants and socialists now is to build an alliance across the public sector and demand that principles, words and action have some relationship. When we say we are opposed to the two-tier workforce we mean it. Within PCS the fight for an integrated campaign on national pay, pensions and jobs must go on.