Wednesday, November 02, 2011

Looking at what the Government are doing to our pensions

In order to assess what the Government is up to in relation to public service pensions the best thing must be to see what they themselves have to say.

Before assessing today’s announcement it is important to be clear about what, according to the Government, has already been agreed (that is to say, agreed by themselves with themselves, probably over a very agreeable meal and some fine wine…) and is therefore not changed by what has been said today.

These “agreed changes” include not only the change in uprating pensions from the Retail Price Index (RPI) to the Consumer Price Index (CPI), which reduces the lifetime value of our pensions by at least 15%. This change, which hits private as well as public sector workers, transfers £83 Billion pounds from workers to bosses (including the Chancellor of the Exchequer) over the next fifteen years. The Government, which is waiting as we are for the outcome of our legal challenge to this act of theft, has proposed no change whatsoever on this point. (If you haven’t already signed the e-petition against this do so now!)

Incidentally, the RPI/CPI change make the Government liars when they say that one thing that won’t change is the value of our accrued benefits. They tell public servants that “all the benefits you have earned, up to the point when any changes are introduced, are fully protected”. Given that our benefits, post retirement have been reduced by tens of billions of pounds by George Osborne’s sleight of hand with price indexation, this is the sort of statement which makes Nick Clegg look like a decent and honourable individual.

Another area of what the Government are calling the “agreed changes” which are not touched by today’s announcement are the contribution increases, about which HM Treasury say; “Employee contributions will rise from 2012. This was announced as part of the Spending Review and there has been a consultation on this issue already. Members of public service pension schemes will pay more for their pensions from April 2012. Average increase in member contributions for public service pension schemes (excluding the Local Government Pension Scheme) should be assumed to be 3.2% of salary. Average increases for the Local Government scheme should be assumed to be 1.5% of salary.”

This statement is also riddled with outright lies. The Local Government Pension Scheme (LGPS) consultation is still underway – and the only reason that the contribution increases in the LGPS are lower than in the other schemes is because the Government are also proposing detrimental changes to accrual rates with immediate effect (hitting all workers including the lowest paid). For those who don’t find the dishonesty of Tories (and their Lib Dem stooges) at all shocking, the important point is that the contribution increases – a 3% extra tax on public servants who choose to save for their retirement – are taken as a given by the Government. The Chancellor’s cash grab on our financially viable and affordable pension schemes, to raise billions annually to pay off the deficit caused by the bankers, is still on – and nothing Danny Alexander and Francis Maude said this morning has changed any of that.

The great bulk of the changes which can be illustrated by UNISON’s pension calculators are therefore simply not touched by the “offer” made by Danny Alexander this morning. The only material change for most members is to Box 8 on the LGPS calculator and Box 10 on the NHS calculator, where the accrual rate in the “new” scheme should now be set to 60ths. (I hope the necessary changes to the online calculators can soon be made). This is a modest concession, increasing the value of pensionable service post 2015 by some 8%, but the other “concession” announced today is somewhat more problematic.

If you read the detail of today’s publication from the Cabinet of millionaires, you’ll read that “the Government’s objective is to provide protection to those who on 1 April 2012 are within ten years of Normal Pension Age,” however this objective is to be met in scheme specific negotiations subject to overall cost ceilings. In other words, any protection for those close to retirement must be at the expense of those further from retirement.

For a trade union movement which already fails to reach the great majority of young workers, collusion with these age-related divide and rule tactics would be the kiss of death!

That’s why our General Secretary, Dave Prentis, did well to lead a strong response from the TUC to the poisoned chalice offered by Ministers this morning. The Government are not confident or strong. They have not made this offer conditional upon withdrawal of strike action but instead say that it remains open to the end of the year.

Today the Government showed weakness both by shifting their position and by the bluster which accompanied that move – but they also showed the animal cunning of the British ruling class as they tried to give as little as possible whilst trying to divide their opponents and take advantage of the weakness of those who see their role as mediators rather than leaders.

Tomorrow will see the result of the largest ballot in the history of British trade unionism. UNISON members will speak and we will say that we are prepared to fight this Government to defend our pensions.

Let that be our answer to the Government. A million workers prepared to take on the Cabinet of millionaires. (The turnout in the ballot mayn’t be all we might have hoped for, but that’s why the last Tory Government introduced postal ballots – to depress the turnout!)

Wednesday 2 November 2011 was the day that those who don’t want workers to fight the Tories tried and failed to set the agenda. Tomorrow will be different.

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