Owen Jones on the Strikes

How Your Pension Gets Ripped Off

Ripped-Off Britons offers an outstanding blog post explaining what’s going on behind the scenes with your pensions, which the government seems extraordinarily indifferent to:

With gentle sounding charges of 2.5%, much less than the 15% service charge you pay when you go for a restaurant meal, the pension funds can grab nearly half of a lifetime’s savings. Something you may only realise when you get the letter announcing your pitifully disappointing pension, discovering too late the jaws of post-retirement poverty that have been tightening on your throat for the previous 40 years.

Read the whole post. I can’t possibly do it justice here. But anyone who really thinks the Tories aren’t doing anything ideological with public sector pensions ought to think again after reading this.

Related articles

• Why I’m striking tomorrow (catsyellowdays.wordpress.com)

A Strike For Pensions Justice

From TUC General Secretary Brendan Barber:

This government cancelled the tax on bankers’ bonuses. Instead it has brought in a nurses’, teachers’ and lollipop ladies’ tax.

This is what the increase in pension contributions – around £1,000 a year for a nurse – really means. It is not paying for pensions but going straight to the Treasury to fill the hole left by the bonus tax.

It takes a lot to get Brits to strike. Yet the government has driven millions of its own staff to stop work, including unions that have never gone on strike before such as head-teachers. They are not stupid or manipulated by union leaders, but ordinary decent people doing important jobs taking a stand as a last resort.

We know the strike will cause difficulties today, and we regret that. But it’s proved to be the only language the government understands.

I’ve been leading talks with ministers for months. But they were going nowhere. It’s only when we called a day of action that government started to move. Ministers should listen carefully today to their staff, and get stuck into trying to reach the fair negotiated settlement that unions want.

(photo by HeardinLondon)

Total Policing on Strike Day

This letter, allegedly from the Metropolitan Police, is being distributed today:

This is quite unbelievable intimidation against a thoroughly legal strike. Welcome to Bernard Hogan-Howe’s total policing.

The Myth of Unaffordable Public Sector Pensions

From George Eaton in the New Statesman:

Forcing workers to pay more is a political choice, not an economic necessity.

Around two million public sector workers will strike today over the government’s reforms to public sector pensions. Photograph: Getty Images.

The biggest strike for a generation has begun, with around 30 unions, including, for the first time in its history, the National Association of Head Teachers, and two million public sector workers walking out in protest at the government’s reforms to public sector pensions. According to the Department for Education, around 58 per cent of England’s 21,700 state schools will be closed, with a further 13 per cent partially shut.

With most polls showing a small majority against the strike and others showing support evenly split between the strikers and the government, the battle for public opinion has only just begun. Indeed, the most notable poll finding of recent days (courtesy of TNS-BMRB) is that just 4 per cent of private sector workers claim to know a lot about why the strike is happening. Despite the increasingly sharp rhetoric from both sides, the truth is that today’s “day of action” may change little.

But there’s no doubt that Osborne’s new, tougher austerity programme has upped the stakes. As I reported yesterday, the Office for Budget Responsibility predicts that no fewer than 710,000 public sector jobs will be cut by 2017, 310,000 more than previously forecast. In addition, Osborne’s plan to cap pay rises at 1 per cent means that some workers will have suffer an average 16 per cent pay cut over the next five years. If public sector workers can’t go on strike in these circumstances, when can they?

For now, here are two myths that deserve to be rebutted again. The first is that public sector pensions, in their current form, are “unaffordable”. David Cameron, for instance, has frequently claimed that the system is “broke”. But as the graph below from the government-commissioned Hutton Report shows, public sector pension payments peaked at 1.9 per cent of GDP in 2010-11 and will gradually fall over the next fifty years to 1.4 per cent in 2059-60. The government’s plan to ask employees to work longer and pay more is a political choice, not an economic necessity.

As the Public Accounts Committee observed: “Officials appeared to define affordability on the basis of public perception rather than judgement on the cost in relation to either GDP or total public spending.” In other words, the public have been misled and ministers are determined to keep misleading them.

The second is that inadequate pension provision in the private sector is a reason to reduce pension provision in the public sector. The Daily Mail et al repeatedly point out that two-thirds of private sector employees do not have a company pension, compared to just 12 per cent of public sector workers. But this is an argument for improving provision in the private sector, not for driving it down in the public sector. Ministers must not fire the starting gun on a race to the bottom. Indeed, many pensionless private sector workers depend on their partner’s public sector pension to ensure a basic standard of living in old age.

We can debate the merits of industrial action as a form of protest. But with public sector workers facing a triple crunch – higher contributions, a tougher inflation index and lower benefits – it’s hardly surprising that they feel compelled to defend their rights. Even before any of the Hutton reforms are introduced, George Osborne’s decision to uprate benefits in line with CPI, rather than the RPI, has already reduced the value of some pensions by 15 per cent.

Strip away the government’s rhetoric (“unaffordable”, “untenable”) and the truth is that ministers are forcing workers to take another pay cut, forcing them to pick up the tab for a crisis that they did not cause. The public might be on the side of ministers, for now at least, but the facts are on the side of the unions.