Tuesday, 29 November 2011

Supporting the Pensions Strike

The following is an explosion of anger at a blog supporting local government workers who are not going on strike. Not quite blacklegs, because ununionised, but little better. Shame on them.
The blog supported the move to career-average pensions, and also the need to work for longer, but sympathised with people who would struggle to pay increased contributions.
This 'rant' is not comprehensive, but it makes some points I have not seen elsewhere.

Sorry – you have written a ridiculous, ill-thought-out article.

1. Career average
For me to support this AT ALL, it would have to be accompanied by some pretty tough negotiation on conversion rates, and not be merely a mechanism to reduce the final pension (my first monthly salary was £84).
In careers such as teaching, it would damage those teachers who chose to spend a long time in the classroom with the pupils; if we were to move to a final salary scheme, teachers joining the professional would need to be warned that – to get a good pension – they needed to go for promotion as far and as fast as possible, however appropriate that might be. Conversely, it would mean that failure at interview did not mean you missed THIS promotion – it would damage you for the rest of your life.

What I have against the government’s scheme in ALL its facets is that it is being applied retrospectively to people, some of whom may be 49 years of age and have been in the job for a quarter of a century. It may well be acceptable to say to NEW entrants that you are offering a career average scheme (it can be part of whether they decide to take the job or not). What is NOT acceptable is to attract a person with one scheme, wait until that person has based his/her whole career pathway and retirement plans upon that expectation, wait until it is too late for that person to leave the job or significantly alter his/her career … and then announce that everything that he/she had expected is changing/reducing.

For me, it is breach of contract, pure and simple. What would your credit company say if you suddenly wrote to them announcing that you were finding it hard to pay for your car so you would henceforth: (1) pay less monthly, (2) pay for fewer months and (3) base your repayments on the value of the average family car in 1974?

2. Work for longer
For me, this is also heinous.
It is utterly inappropriate in high-stress professions such as teaching, where some members barely get out with their mental health intact; can you REALLY see teachers (every teacher) ploughing on in the classroom until they are 68? What about public sector jobs (e.g. bin men) which require physical health and strength?
And it curtails by three years the general freedom/right of workers to choose to retire early with an actuarially-reduced pension.

But most of all, for me, it strikes me as THE most ridiculous overall economic policy to make older people work longer when we have youth unemployment of more than 1 million. When we talk public sector, we are not just talking about professional, qualified workers such as you lucky people – we are talking about hospital cleaners, dinner nannies and the like, on low pay with few or no qualifications.

Does it make any economic (or indeed financial) sense to force these people to work an extra three years, so that they can contribute what is in effect a pittance extra to their tiny pensions – and thereby keep an army of young people out of work on the dole? Surely the amount we will save on those pensions is peanuts compared to the £billions we will have to shell out in JSA etc.?
And the joke of it is, of course, that – when we are thinking about these VERY poor-paid workers who will only be getting very small pensions – the simple truth is that the State is going to have (at the end of the day) to make up in benefits every penny it saves on their pensions.

3. Higher payments
I’m sorry to be blunt, but your point about higher payments illustrates just how little you have thought about this, and how shallow (and selfish) your thinking is.
Because the increased payments are the LEAST of the government’s actions.
Changing to a career average scheme, deferring the end-date – these are substantive, contractual changes.
Increasing the payments – however annoying – is something that happens all the time. Mortgage interest rises, petrol prices go up – it is something we are used to, and have come to expect. You can negotiate a wage increase, or get a promotion, or simply adjust your spending and wait until inflation dulls the pain.
The damage done by increased contributions (in effect, a rise in taxes) can be easier borne because it is being applied to people who are still in full employment earning their full wage.
So – although I might play hell about it – I wouldn’t go on strike merely over increased payments.

4. Pension schemes
What is worst about the government schemes, and the statement that ‘we cannot afford pensions’ is that it is unrelated to the state of the various pension schemes. I am led to believe that the Local Government Officers scheme is in danger of becoming unviable; by contrast, I am told that the college lecturers’ scheme is in credit. As I understand it, the measures introduced by the Labour government will have solved the pension shortfall in the next couple of decades.
So the government’s assault on pensions is not, therefore, not related to the health of the different pension schemes – it is part of a more general assault on the public sector, to make them pay ‘their share’ (and let’s face it, the ‘lion’s share’) of the deficit reduction.
Moreover, it is regressive. Along with benefit cuts, the VAT rise and other government measures, it is aimed at a sector of the population huge numbers of whom are positively poor, and all but a handful of are decidedly ‘ordinary’.
And it aims to make them pay, moreover, not only out of their pockets now, but by reducing provision in a future when they will no longer be able to work and determine their own situation. It is therefore a truly terrifying and abusive measure, exercised upon the old-and-frail-to-be.

And, of course, it is ultimately a class war. The people proposing the pension changes – apart from those duped by government propaganda – are all people whose financial arrangements for their old age do NOT depend on gradually building up, incrementally from their wages, a small assured income for their old age. They will fund their retirement out of income from their property and investments – and it is to maintain the (sinful) yields from those sources that they are trying to erode the comparative pittance that hospital cleaners, council receptionists and the like were hoping to take into their retirement.

SHAME ON YOU for not being in a Union. Shame on your for breaking the strike.


  1. The blog to which I was replying did not publish my comments (though they did publish two comments agreeing with them), but they DID send me a tweet telling me that there was 'no need to be quite so angry!'

    So there you have it guys. Your real income is going to fall 16% in the next four years. You're going to have to work longer, pay more and get less at the end of your working life to support your retirement, but - hey - there's no need to get angry!

    It makes you realise that these people, patronising, smug, devoid of empathy, are THE ENEMY.

    Welcome back to the Thatcherite world of the 1980s.

  2. John, you are my hero. Not just for your brilliant advice and resources, but talking with common sense, compassion and determination on such a difficult topic.