THE PCS is discussing co-ordinated strike action with other unions to fight the Tory-LibDem onslaught on the pensions of millions of health, local council, civil servants and other public sector workers.
In advance of the attack outlined in Lord Hutton’s report on public sector pensions yesterday, the PCS said: ‘Any increase to contributions and the pension age for civil and public servants would be an unfair and unnecessary tax on working in the public sector and will be fiercely opposed.’
The PCS said it is already considering a ballot for national industrial action over pensions and called on the government to ‘engage in meaningful negotiations when it meets unions next week’.
It said that ministers have so far shown an unwillingness to negotiate, telling union representatives that there are things they will not discuss.
One such area is the change from using the RPI measure of inflation to CPI to calculate pension increases.
For newer members of the civil service in the new career average scheme, many of whom are young and facing high living costs, this would mean a cut in their pensions of around a fifth, said the union.
PCS general secretary Mark Serwotka said: ‘With the public sector pay freeze, high inflation and cuts to other benefits, forcing staff to pay more and work longer not only means a pay cut by another name, it would be an unfair and totally unnecessary tax on their work.
‘Even the governor of the Bank of England agrees with us that public spending did not cause the recession.
‘But this government, stuffed full of millionaires, appears happy to punish hard-working, loyal public servants for a problem caused by greed and recklessness in the financial sector.
‘We are already considering a strike ballot and talking to other unions about co-ordinating any action, and the government now has a responsibility to negotiate properly over its plans, without ruling out crucial areas before we even get round the table.’
Other public sector unions also warned of strike action over the issue.
Brian Strutton, GMB National Secretary said, ‘The government has already done the damage by seeking to impose a pension tax, cutting existing and future pensions and scrapping protections on privatisation.
‘Hutton’s commission is left with the arguably inconsequential change of final salary to career average and the explosive reneging on the age 60 deal which employers, government and scheme members entered into.
‘It’s actually a complete mess of conflicting ideas and I hope Hutton is brave enough to make this point to government.
‘Public sector pensions should not be a political football and all this is doing is forcing people out of pension saving and towards industrial action.’
Unison warned that the Hutton report brings the threat of industrial action closer, as the union’s members reel from pay freezes and job cuts.
‘Once again, the Government is expecting public sector workers to pay the price of the excesses of the bankers who caused the deficit,’ said the union’s general secretary Dave Prentis.
‘On top of a pay freeze, and the threat of redundancy, they now face a pensions raid.
‘This brings the threat of industrial action closer.
‘One million of our members are in these pension schemes and I urge the Government to enter into urgent, meaningful talks on the report, rather than rushing to make cuts.
‘Workers are already losing out as a result of the Government pre-empting the report, raiding the pension schemes and increasing contributions by 50 per cent.’
Unison said there is a lot of misinformation about public sector pension schemes. The facts are:
• The local government and NHS pension schemes were renegotiated in 2006 to make them sustainable and affordable.
• Both schemes are cash rich – more is going in than coming out.
• Last year, the NHS scheme received £2 billion more in contributions than it paid out and this money went straight to the Treasury.
• The average pension in public service pension schemes is very low, for example in local government, the average is just over £4,000, falling to £2,800 for women.
• If these people didn’t save for their retirement, they would have to rely on means-tested benefits paid for by the taxpayer.
• Pensioners are already being hit with the move from RPI to CPI to calculate annual inflation increases – this will reduce their value by 15 per cent.
• When the NHS scheme was renegotiated, protection was built in for current members to retain their retirement age of 60. New members have a retirement age of 65. If that agreement is broken, industrial action could follow.
• Government cuts to local government employers grants mean that the shortfall in pension contributions has to be made up by employees. They may have to pay between 50% and 100% more for the same pension. This is effectively a tax on low-paid workers.
• Studies have shown that if the contributions rise too much, workers will desert the scheme and it could collapse.
• The local government scheme invests more than £100 billion in the UK economy. If the scheme collapsed, it would have a devastating impact on the economy.
Unite assistant general secretary, Gail Cartmail said: ‘The fear is that Lord Hutton’s report will be cherry-picked by ministers for those recommendations that dovetail with their menu of radical measures that will hit the living standards of not very well paid public employees extremely hard in their retirement.
‘Recommendations that could be favourable to employees will be simply discarded.
‘And it should not be forgotten that under the Labour government measures were taken to tackle the issues facing public sector pensions.
‘Now the coalition, driven by right-wing dogma, wants to destroy that sensible and balanced settlement for public sector employees.’
Christine Blower, General Secretary of the National Union of Teachers, said: ‘Lord Hutton in his first report last October recognised that public sector pensions are far from “gold plated” and that the changes already made in 2007 are cutting their costs.
‘Despite this, he appears to have swallowed the lie that public sector pensions are still unaffordable.
‘The National Audit Office has confirmed that public sector pension costs are falling as expected due to the reforms already in place.
‘Teachers are already paying more, the normal pension age has been raised to 65 for new entrants and employer contributions have been capped.
‘We know the Government wants to attack public sector pensions. Their plans are based on politics, not economics.
‘Pensions have already been cut by changing their link from RPI to CPI inflation. As a result of this, next month’s pension increase will be 1.5 per cent less than it should have been.
‘The Government’s already stated desire to increase pension contributions by more than half could cost newly qualified teachers up to £60 a month – an additional cost which could see many leaving the Teachers‚ Pensions Scheme on the grounds that it is no longer affordable.
‘This would indeed be an irony when the scheme is affordable at a national level but not at an individual level.
‘The real pension problem is in the private sector where two-thirds of employees are not in any employer-backed scheme.
‘Cutting public sector pensions as well will just make more pensioners poorer and put the cost of supporting them onto the State and future taxpayers. We need decent pensions for all.’
General Secretary of the First Division Association of senior civil servants, Jonathan Baume said: ‘The FDA has repeatedly made clear our view that any changes to existing pension arrangements must be negotiated and agreed as a package, and not simply imposed.
‘Negotiations in the coming months will be very difficult, and no public sector union has ruled out the possibility of industrial action.
‘Moreover, civil servants see their pension as part of their overall reward package and, if pension benefits are to be cut, managers will expect higher pay to compensate.’
The BMA said: ‘An increase in the normal pensionable age for existing NHS staff would be unacceptable, particularly so soon after the introduction of a new scheme to which both unions and employers agreed.’
It added: ‘The NHS pension scheme represents an example of a successful and sustainable final salary scheme, to both employers and staff.
‘Most doctors pay into it for the majority of their working lives, and most saw their contributions increase significantly with the implementation of the new scheme.
‘Lord Hutton stated in his interim report that final salary does not provide value for money for lower paid employees, yet unions representing the lower paid (such as Unite, Unison and GMB) all support the retention of final salary.’
