The Pensions Issue

Where are we on Pensions? As you know the Government have taken the view that Public Sector Pensions are too expensive for the state to support in their current format. The reform will address the three areas that generate cost, namely:
• The employee’s level of contribution
• The age from which the full pension is payable
• The accrual rate, or in other words the value that you get for your contributions

The reason why this is a dispute across the Public Sector is that these reforms will affect all staff in the Public Sector, though there are a variety of schemes and thus the effects are not consistent. The challenge for the unions involved is to not get picked off by individual deals (like the FBU seem to have done) and the problem for PCS is that it is pretty much the only union where Government is sole employer and controller of the pension scheme.

There is, of course, a political element. None of the unions involved in the 30 June action were affiliates of the Labour Party hence the absence of support from the Labour front bench. As one insider put it, “We are not going to hitch our star to Mark Serwotka.” The introduction of affiliated unions into co-ordinated action will lead to a loss of control exerted by PCS, as we’ve already seen with the date of the November action being decided by the large unions. There is also the not inconsiderable side issue of Len McCluskey’s interest in maintaining good relations with PCS as a merger (or takeover in real terms) with Unite is certainly on his agenda.

PCS is a small union by comparison to Unite, GMB and Unison, but it is also peripheral because of the political views of the leadership. Everybody within Westminster, as well as every other union, knows that PCS is led by the far left and that does generally lead to isolation when it comes to big decisions. However that doesn’t mean that PCS isn’t seen by the other unions to have its uses. You can rely upon the far left to make a lot of noise and thus generate activity and interest.

So far the PCS leadership has been content to not be in the lead position. Even for 30 June the action was generally described as being taken by teachers and civil servants rather than the other way round. The same will be true, and to a greater extent, in November. We have already seen newspaper headlines that list the sectors that will be striking and they usually omit civil servants entirely. We think that this contentment to play second fiddle (or even fifth or sixth) is probably linked to the knowledge that PCS is most at risk from being left as the last man standing if Government chooses to do some real negotiating.

This maturity of approach should be recognised. In our opinion a 4themembers NEC wouldn’t have done anything differently when it comes to the Pensions issue since the election of the Coalition Government. The question we need to ask is what is the exit strategy?

What are the likely outcomes and options? To start with it is sensible to ignore the possibility that the Coalition Government falls. Should that happen the game changes completely and the number of permutations becomes too numerous to list. Instead we should concentrate purely on a PCS perspective.

We in 4themembers fully support the action on 30 November. We, in common with similar-minded colleagues elsewhere in the trade union movement, need to demonstrate resolve that the Government’s proposals are unfair and that negotiations should resume with a view to achieving an acceptable settlement.

So what scope is there for negotiation? The pension age, connected as it is to the national retirement age, has limited scope for negotiation. There might be some room around minimum length of service but that would be a minor concession and would not assist very many of our members.

The level of contribution that we make is probably the most obvious area for negotiation. While it might be argued that actually the accrual rate is more important most members look at their monthly pay packet rather than consider their monthly pension. A government that wishes to settle this dispute would be best advised to move on the contributions issue rather than the accrual as it is more likely to pacify rank-and-file members, or at least the majority of them.

This is where PCS has another problem. Contribution rates by Civil Servants are generally the lowest in the Public Sector, often by some margin (for example by comparison to firefighters). There’s little doubt that PCS members will have to contribute more, the question is how much more would members be prepared to pay?

On the question of the effect on final pension, again how much less pension would PCS members be prepared to accept in order to settle the dispute?

These are hypothetical questions with no answer because the Government has shown no sign of serious negotiating on any of the three pillars (the fourth being the overall cost envelope) mentioned at the beginning of this piece. A successful day of action at the end of November is essential to get to the point where we can begin to worry about them.