Strikes highlight union concerns over public sector pension reform

In June 2011, four trade unions staged one-day strikes over the UK coalition government’s proposed changes to public sector pension schemes. The strikes primarily affected schools and functions performed by the Civil Service. Talks over pension reform between the government and public sector unions are continuing. Although government sources question the impact of the strikes, more unions are thought likely to hold ballots over industrial action in the autumn.

On 30 June 2011, four trade unions staged one-day strikes over the UK coalition government’s proposed changes to public sector pension schemes. The strikes primarily affected schools and functions performed by the Civil Service. The unions involved were the National Union of Teachers (NUT), the Association of Teachers and Lecturers (ATL), the University and College Union (UCU) and the Public and Commercial Services Union (PCS).

Government and union sources disagreed over the impact of the strikes. The NUT estimated that 85% of the 21,500 state schools in England and Wales were affected by the strike while the government put the figure affected at nearer half. The government also indicated that fewer than 100,000 civil servants – around one-fifth of the workforce – took part in the industrial action. PCS said that the strike had been supported by 200,000 civil servants across the UK.

Background

Public sector pension reform is high on the coalition government’s agenda. The coalition government is pursuing a series of changes, including using the consumer prices index (CPI) rather than the generally higher retail prices index (RPI) as the basis for increasing pensions, and raising employee contributions. In March 2011, the independent Public Service Pensions Commission, chaired by former Labour minister Lord Hutton (UK1103019I), recommended that:

• existing final salary schemes should be replaced by schemes linking employees’ pension entitlements to their career average earnings;

• the normal pension age in most public schemes should be linked to the state pension age (which is to rise to 66 and eventually 68).

Talks on the issue been taking place between the coalition government and public sector unions are being coordinated by the Trades Union Congress (TUC). The unions are concerned that government plans mean that public sector workers will have to work longer and pay more for less generous retirement benefits. A key issue is whether current public sector pensions are ‘unaffordable’, as government ministers claim. The TUC argues that the Hutton report indicated that the cost of public sector pensions as a share of gross domestic product (GDP) is set to fall in the years ahead.

The unions reacted angrily to a speech on 17 June by the Chief Secretary to the Treasury, Danny Alexander, in which he confirmed government plans to increase workers’ pension contributions, increase retirement ages and switch to career average schemes. Following talks on 27 June, NUT General Secretary Christine Blower said there had been ‘no movement’ from the government and confirmed that industrial action would go ahead on 30 June.

Reaction to the strikes

In a statement on the industrial action, Cabinet Office minister Francis Maude said:

... the vast majority of hard-working public sector employees do not support today’s premature strike. ... Reform of public sector pensions is inevitable, but we will ensure that public sector pensions will still be among the very best, with a guaranteed pension which very few private sector staff now enjoy. But they will be paid later because people live longer.

The Labour Party leader Ed Milliband said he regretted that the strike had gone ahead while talks between the government and public sector unions were still proceeding. However, his comments drew angry criticism from some trade union leaders.

After a meeting of public sector unions on 1 July, TUC General Secretary Brendan Barber said in a press release:

Yesterday’s action – and the media debate around it – exposed the fundamental weakness in the government’s case for change in public service pensions, and their increasingly threadbare claim to be motivated by concerns over long-term affordability.

Next steps

Further talks between the coalition government and the unions were scheduled for July. In a statement issued after a meeting on 27 June, the government said , ‘this is a genuine consultation to which we are committed in order to try and agree a way forward with the unions, including on how to implement the changes on contributions set out in the Spending Review’. The TUC press release of 1 July stated that ‘these must be genuine negotiations on all the issues. We do not accept in any way the government’s suggestion that these talks are just about implementation of decisions already taken.’

Depending on the outcome of the talks, other public sector unions are thought likely to ballot their members over industrial action in the autumn. The General Secretary of Unite, Len McCluskey, told the Guardian on 18 July that he thought further strikes were ‘inevitable’ in view of the government’s ‘intransigence’ over pension reform.

Mark Hall, IRRU, University of Warwick