On the eve of last week’s strikes by teachers and other disgruntled public-sector workers, Labour party figures gathered at the £45m new headquarters of Unison, Britain’s largest public-sector union. Dave Prentis, Unison’s £142,000-a-year general secretary, played charming host to Ed Miliband, Ed Balls and more than 100 donors and would-be-donors from the City.
“Prentis was going out of his way to tell us all that Unison was not involved in the next day’s strike action,” said one Labour donor. “And when the PCS [Public and Commercial Services Union] came up in conversation, you got the firm impression he was not a fan of the strike strategy.”
Prentis, however, is not necessarily the mild-mannered moderate he made himself out to be. Speaking to The Sunday Times last month, the leader of 1.3m NHS and town hall workers had been unequivocal that Unison was simply biding its time before joining other more militant unions in industrial action against the government’s plans for reform.
Prentis had said he supported unions intent on strikes and had added: “They have got their timescale to industrial action, we have got our road to industrial action, and eventually they will come together. We are absolutely adamant that unless there are acceptable agreements on pensions we will move to take industrial action.”
He is not alone in quietly planning confrontation over the coalition’s plans to curb the enormous cost of public-sector pensions.
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NASUWT, a teachers’ union that also did not strike, said that they were planning on industrial action in the autumn unless the government backed down on reforms.
Unions that did strike last week are even blunter. Christine Blower, leader of the National Union of Teachers (NUT), described the strikes as the “first phase” of a “co-ordinated campaign”. Mark Serwotka, leader of the PCS, claimed that up to 4m workers could strike in the autumn if the row is not resolved. Bob Crow, the militant general secretary of the RMT union, which has many members working for the London Underground, declared that the only possible response to the government’s “attack on jobs and services” is “coordinated strike action, civil disobedience and a crescendo of protest”.
UK public-sector pensions are far more generous than most people’s retirement benefits The public are not convinced. A YouGov poll late last week showed that 49% thought it was wrong for teachers to strike; only 40% thought it was right. And 50% opposed civil servants’ strikes, with only 38% supporting them.
It is not hard to see why voters oppose industrial action. UK public-sector pensions are far more generous than most people’s retirement benefits. About 85% of public-sector workers have some form of employer-sponsored provision, compared with 35% in the private sector.
Many public-sector workers enjoy pensions that are based on final salaries and index-linked so that their value rises with inflation in retirement.
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They are hugely costly and have largely disappeared from the private sector.
According to pensions experts Hymans Robertson, a teacher earning £32,000 on retirement after full service can expect a pension of between £14,000 and £21,000, depending on the scheme and whether they take a tax-free lump sum. A hospital consultant earning £100,000 can expect a pension of £44,000 to £67,000, depending on the scheme and tax-free sum.
The average private-sector pension pot at retirement is £25,000, which would buy a pension of about £1,500 a year. Though public-sector workers do pay contributions, it is the taxpayer who foots most of the bill for their pensions. Ministers believe voters are growing more aware of the disparity, hence the lack of support for strikes.
“The strikes were a damp squib,” said one triumphant government source. “The unions’ industrial muscle was tested on Thursday and found to be seriously lacking.”
Privately, the Tories claim Serwotka, whom they describe as a “total unreconstructed Trot”, has served them as “the original useful idiot” for pushing the unions into an early strike that gained them no tactical advantage in negotiations with the government and little public sympathy. Behind the bluster, some moderate unions are said to agree.
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Ministers remain optimistic that they can win most of the unions over to their argument by the middle of this autumn. Yesterday Francis Maude, minister for the Cabinet Office who is handling negotiations, said: “You can’t rule out a massive shutdown in the autumn, but there’s no public appetite for that. Most people are still going to think, ‘Public-sector workers get much better pensions than I get; in fact, I’ll be paying more for their pensions than I do for my own.’
“Although public-sector workers will have to pay more and pay longer, I genuinely believe that when they look at what we are offering they will think, ‘That’s fair, I can live with that.’
“Working longer and contributing more are unavoidable; otherwise we will continue to have more and more people in retirement funded by fewer and fewer people in work.” Under government plans, public-sector workers on average would have to pay an additional 3.2% of their salary in pension contributions. However, anyone earning less than £15,000 would be exempt and those on less than £18,000 would have the increase capped at 1.5%.
The retirement age for public-sector workers, currently 60, would rise to 66 in 2020, then 68 in 2046. Future pensions would be linked to career average earnings, rather than final salaries, and to the consumer price index of inflation, rather than the higher retail price index.