What is at stake, sector by sector

Submitted by Anon on 22 March, 2005 - 12:57

By kate Ahrens

In local government, Unison, TGWU, Amicus and UCATT are taking action on 23 March following votes for strike ranging from 70% to 83%. Alongside them will be the civil service union PCS, and even the small senior civil service union FDA, who had not had a strike ballot in 20 years but have voted to take action now. NIPSA, the Northern Ireland public services union, is also taking action.

Education unions are now balloting and NATFHE and NUT are discussing an “education” day of strike action in late April, with NUT proposing 26 April.

When NATFHE first announced their intention to strike and identified 13 April as a possible strike date, Dave Prentis, Unison General Secretary, made it clear that day would not become a second day of action for local government workers, nor would he get Unison’s higher education members out for that day.

Not all public sector unions have joined in with the action. FBU Executive decided not to ballot for any action, despite the grave threats to their pension scheme. As we go to press, NASUWT has yet to announce any plans for balloting.

No health unions are involved in the industrial strategy. The leaderships continue to hide behind an ongoing “consultation” on the NHS pension scheme, despite the fact that the major element of the proposed changes — the increase in the normal retirement age to 65 — is not part of the consultation.

Most of the union leaderships have been nervous about pursuing strike action — particularly close to the general election. Virtually all the unions have been pressurised by their members into balloting for action.

Therefore, activists need to promote their own strategy for winning the dispute, rather than relying on the union leaders to conduct the fight the way we would want them to.

The attack on public sector schemes comes after more than a decade of attacks on the rights of private sector workers and the destruction of virtually all of the private final salary schemes.

It is a sign of the scale of defeats that the working class has suffered on this issue that the local government workers’ average pension of £3,800 per year appears to be generous in comparison with some of the tiny amounts that private sector workers can expect.

The cutting of the link between the basic state pension and increases in earnings done under the Tories has worsened the situation, leading to a crisis in pensioner poverty that is set only to get worse.

We must take on the government’s lies that the country cannot afford to spend more on pensions for everyone.

Cuts in private sector schemes have largely come about when companies discovered they had to pay back some of the millions of pounds they’d saved in taking pension “holidays” from their contributions when the stock market seemed very buoyant. Rather than cut their profits to make up the shortfall, they closed the schemes.

Central to the demands of the public sector unions has to be a solution that works for everyone — not just the workers left in public sector schemes.

The attacks

The government intends to increase the age at which people can retire on an unreduced pension from 60 to 65 across the board. Because all the public sector schemes are slightly different now, the other elements of the proposals differ, but the end result for all workers will be working longer in return for a smaller pension. The changes also raise the point at which early retirement can be taken, from 50 to 55.

NHS

The NHS is currently undergoing a consultation on the way the scheme should be changed, although this does not include any discussion of the proposed increase in retirement age.

Other proposals include a shift away from a final salary scheme to a Career Average Retirement Earnings (CARE) scheme. This is still a defined benefits scheme but is subject to less variation with pay rises and promotions (and therefore has a more predictable outcome). It generally results in a lower pension for anyone who gets a promotion in their working career — which is very common in the NHS.

The changes are proposed to come into effect from April 2006 for new starters, with complex protection arrangements for existing staff.

Local government

The key change which the government wants to force through on 1 April 2005 is the abolition of the “rule of 85”. This allows for retirement on full pension if the total of your age and your length of membership of the scheme is 85 at the point you retire.

Further changes to the scheme, including a threat to final salary status, will be announced to coincide with other schemes’ changes in April 2006. Although these proposals have not yet been announced, it seems likely that it will involve similar proposals to the NHS to shift from a final salary scheme to a career average scheme.

Education (school teachers and lecturers)

The increase in the normal retirement age is due to come into force in September 2006, with protection for existing staff until September 2013.

Civil Service

Proposals include suggestions of a change from final salary status to career average. Again, the increase in retirement age is due to come into force in 2006.

Firefighters

The changes proposed would create a “minimum” pensions age of 55, where the current scheme only requires a certain length of service.

More important, given that 60% of firefighters take ill-health retirement, is the proposal to reduce the benefits available to members retiring on ill-health grounds.

Our demands

  • An increase in the basic state pension, restoration of the link to average earnings
  • Nationalisation of pension funds under democratic and workers’ control
  • Compulsory contributions by employers, in the form of a tax on capital

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