Cameron will achieve something this week that even Thatcher couldn’t

November 28, 2011 3:00 pm

Alex White condemned the proposed strike action on Wednesday as the work of the “noisy left” lacking any “common sense”. I think it’s fair to say that I’ve never been called a “socialist-extremist” before but I think he is completely wrong. Here’s why.

David Cameron will achieve something this week that even Margaret Thatcher couldn’t. He has galvanised 33 Unions and 1.2 million workers into a united front. Over a million workers have made an active decision to vote for the strike. Something has changed. This is no ordinary industrial action. And that is why Labour’s response should be different. We should actively support the workers who have decided to withdraw their labour.

Labour’s dilemma has always been that as a party of government, it has not wanted to take sides between public sector employers and public sector unions. The last government was haunted by the memory of the Winter of Discontent.

Yet the majority of the people who returned their ballot papers were not involved in the industrial unrest of 1979. Many have put their cross next to ‘yes’ for strike action for the first time in their lives. Many of the professions involved have never gone on strike before. That is why this action is different. This is not the “noisy left” or even Alex White’s “working class core vote” leading the charge – this is as much a revolt of middle England as it is of anyone.

For 1.2 million people to return a ballot paper, consciously taking a decision to withdraw their labour and lose a day’s pay, demonstrates that there is a shift in thinking among a far wider cross-section of society. You cannot build an alliance of 1.2 million people without head teachers in Surrey, cleaners in Glamorgan and hospital workers in Liverpool sharing a view that the government’s proposals are unfair.

Labour has the opportunity to charecterise this issue in two ways. Firstly: it is a straight money grab – George Osborne’s 3% tax on public sector workers. Secondly, the application of these changes is manifestly unfair, with the poorest part time workers being hit hard.

This is not about long term sustainability of public sector pensions – the 3% rise is not going into the pension pot, it’s going straight to the Treasury. This is not a reform of public sector pension arrangements. It is a tax. Labour frontbenchers should be crying from the rooftops about Osborne’s unfair stealth tax on the poorest part time workers. And they could make that point if they visited picketing head teachers, physiotherapists and radiographers in Surrey, Kent and Kensington.

And when our shadow ministers visit picketing Middle Englanders in the Home Counties they should explain to those workers that Wednesday is Cameron’s chaos, brought about because he made unfair proposals and refused to seriously negotiate.

I am on strike on Wednesday. I will of course be explaining how the Labour Party believes these changes are unfair – but it would be a lot easier to get our message across and win the support of my colleagues if our Party took an unequivocal position of support for them.

Stephanie Peacock is a teacher and one of the West Midlands representatives on the National Policy Forum

  • Neil Foster

    Brilliant article Steph.

  • GuyM

    If you don’t take that extra 3% from public sector workers then the private sector workers have to cover it through their taxes.

    How about we all pay a set percentage in and all employers pay a set percentage and we all have the same pension, public or private sector……. of course that would mean public sector workers getting far less… but it would be fair wouldn’t it?

    • alx w

      Isn’t that what NI is ‘supposed’ to be?

  • Sonia

    Thanks Stephanie. 

  • Adam Wissen

    Guy 

    What you propose is not on the table as an option but if such a deal were to be suggested the unions would certainly be willing to listen providing the pensions of the super rich in the private sector were up for grabs as part of this.

    But let me guess, you’re an apologist for ‘the masters of the universe’ and it wasn’t fair pensions for all you had in mind, but equality of misery for the working and middle class.

  • alex williams

    There is a distinct lack of facts in this whole debate. No figures in public circulation as to the actual gap between money in and money out. The government has benefitted from a loan from public sector workers since these pensions were started, is this gap because there is a bulge in the number or retirees which in 20 years may disappear. In effect are new workers, simply being asked to pay for the better pensions of those who came before? Another act of pulling up the draw bridge by the baby boomers? We are told that it is due to increased life expectancy, one presumes these current figures are working on further projections, or will we return to the table again in another 5 years? Projections can be seriously flawed and if we are to become a poorer nation in general can it genuinely be sustained. Is life expectatncy increasing for all public sector workers? The biggest question is do we think that people having spent 35-40 years at the coal face maintain that standard well into their sixties? Should there be a cap on public sector pensions somewhere between 35K and 40K and after that you top up with a private pension?
    My own self interest. I am a teacher. The cost to me is roughly 50% extra contributions, 20% increase in working life and 15% less at the end of it. I’d be happy to negotiate and about half that seems a deal I could cut, but it seems it is all or nothing. Cynically I think the gvt know that most teachers, nurses and other frontline staff won’t see it throughbeyond 65 or barely beyond 60 and will just retire early on a massively reduced pension. I presume all those who argue about the discrepency between public and private pensions as justification to slash public sector benefits will then be celebrating others misery.

  • alex williams

    Or perhaps we could desgin such a scheme which sees private sector workers getting far more too, and we all meet in the middle. I presume you would enforce all workers would have to be part of the scheme, we wouldn’t want the uber rich opting out would we? Public sector pensions all round, or would you rather they were forced to be run by private pension fund managers. Perhaps instead we could use these contributions to invest in publuc sector investments like social housing, infrastruture etc.

  • Dave Postles

    How about you pay them £150k like your annual salary instead?

  • jaime taurosangastre candelas

    There may be other ways.

    I’m a supporter of a “living pension”, payable to everyone irrespective of their background.  The figure I have in mind is about £12,000 tax-free at today’s money, at the state retirement age, of course index-linked.  Qualification through NI contributions over a number of years, and for the unwaged NI contributions made centrally by JSA or disability credits or any other source of benefits.  A fair pension for all, no matter the employment history.  From a Shetland crofter via a Merseyside taxi driver, a Cardiff nurse to the Duke of Westminster, £12,000 a year when they retire.  Even long-term prisoners released after 30 years in jail.

    Beyond that, no public sector pensions at all, but instead a scheme where an agreed proportion of salary is each month paid into a fund that the employee controls and holds the investment decisions.  That agreed proportion of salary to be in addition to normal monthly salary, and funded by the employer.  I see no reason why the private sector could not also join in on this scheme.  The employee would be free to top up regularly or every so often, or not at all, according to personal choice, and to choose when to convert to an annuity, which would be taxable.  Whatever the percentage – I suggest 3% – it is fixed for everyone, from every sector in public life, so no ability for senior managers to have a better deal than workers.

    Everyone’s personal pension fund to be fully transportable, so a librarian with seventeen years of Council service can take a job as an archivist in an NHS hospital, and only needs to tell the NHS trust the pension account details for the NHS contributions to start adding onto 17 years of Council contributions.  No more multiple micro pensions.

    I’d invest mine in gold and land, someone else may choose to invest in sustainable forestry, other people in the FTSE, others again in renewable energy or whatever range of investments they choose.  The freedom of choice is liberating for everyone.  No doubt businesses would spring up to offer investment advice for those who wish it, but they would be barred from taking any money from the pension account:  it should be a fee for advice arrangement, not a percentage of fund.

    To me it is an attractive idea, but the changeover period between now and then would need to ensure that no-one loses out in comparison with their current plan.  That makes it a very long term payoff for the country, but ultimately fairer.

    • alex williams

      Sounds like a form of socialism to me. Can’t see it catching on. Everyone getting the same? Nah that’s just daft. There is definitely a case for universal benefits and the savings with regard to admin would probably be massive.

      • jaime taurosangastre candelas

        I can’t detect if you are being sarcastic or not Alex – that’s my fault, of course.  My idea is the basic “living pension” is the same for all, not the annuity from the additional contributions and differing investment decisions.  Also, to be clear, this would be a scheme for public sector workers, to which the private sector could join if they wish.  Only the public sector and benefits claimants are capped at a single rate (I suggest 3%):  private sector people could maybe get more from their companies, or may be offered less, but at least there is a common benchmark.

        • alex williams

          My Fault. I was being sarcastic at first but serious for the second half….I was thinking that this is the opportunity to sort the private pension mess out as well rather than just create this divide and rule strategy that the ‘nasty’ party is once more pursuing.

    • Peter Barnard

      @ Jaime,

      “Living pension.”

      You are definitely on the right track, Jaime.

      As it happens, it’s something that I suggested perhaps six months or more ago.

      That makes four of us now – me, you, Derek B and Hugh (if I recall his remarks correctly) : how about that for a “representative mix?”

      • jaime taurosangastre candelas

        Thanks Peter, it was definitely from LL that I learned the phrase “living pension”, and quite possibly from you, as you say about 6 months ago.  My original inspiration for the idea (and I claim no ownership whatsoever) was Lula, who proposed such a radical concept in his first election campaign.  There are a couple of Portuguese Brasilian websites that go into more detail, but to be honest my Portuguese is pretty poor and I may traduce their nuances if I attempted to translate in public.  We’re also in a completely different country, so much may be irrelevant.

        I do think that a simple £1000 a month for all pensioners would allow the Government to clear away all sorts of credits and winter fuel payments and so on, so the administration should be “relatively” simple.  £1000 a month sounds like a huge increase, no doubt spurring concerns as to affordability, but having done some “slightly more than” cigarette packet maths, I think that that increase and a corresponding central rate of 3% for public sector workers into their personal plans works out about even (within 10%, anyway).  The one area where my idea would not immediately work is for public sector workers within 12 years* of retirement, who could lose out.  That’s why I say it is a long term scheme, and transitional arrangements would probably be needed for those in that 12 year group.

        *  I used NHS pension figures for that.  I know other groups are all a bit different.

        • Peter Barnard

          It’s definitely affordable, Jaime, once you take into account tax relief on occupational and private pensions, many people would be relieved of contributions to personal pensions …

          Only difference is, I’d scrap the NI Fund and take it out of general taxation.

      • derek

        “Living Pension” cracking idea!!!! The first time I saw the Post @f9f79e8ab4d5a46a915f6cff53cf5feb:disqus (and it must be nearly a year ago) I grasped the brilliance at once.

      • alex williams

        Could I be added to this exhaulted list of names? I could make the tea!

        • Peter Barnard


          @  Alex W,

          Oh, I think that you are capable of a bit more than that, Alex!

          Best wishes.

          (mine’s milk  with no sugar …)

  • Anonymous

    Thankyou Stephanie, these are all excellent and pragmatic arguments.

    It’s so important to hear the facts and figures stated calmly and sensibly
    as an antidote to all the rhetoric, hype and hysteria being whipped up
    against hard working and ordinary workers.

    Also, if large numbers of women speaking out and being visible,
    I think this will resonate strongly with the public at large,
    perhaps as a collective voice of reason?

    Wishing you and your colleagues luck tomorrow,
    and we all know this action is unprecedented and never taken lightly.
    It’s the principles at stake.

    Jo

    • Bill Lockhart

      Why do people going on strike need “luck”?

  • Hugh

    Stating that “the application of these changes is manifestly unfair, with the poorest part time workers being hit hard” is manifestly dishonest. Low paid workers are facing lower increases in contributions than higher paid workers; those earning under £15,000 (full time equivalent) are facing no increase in contributions at all. Final salary schemes disproportionately benefit higher earners in comparison to career average schemes.

    Furthermore, if you want to insist the 3% rise is not going into the pension pot (which is right because in most cases there is no pot) and is therefore just a tax then at least be accurate: it’s not a tax; it’s a reduction in the subsidy.

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