It’s pretty much certain that tomorrow’s strikes – which I’ll be taking part in – are going to be seriously disruptive for a lot of people. I’m sorry about that. I wish it didn’t have to be that way, and I’m pretty sure everyone else taking action feels the same way. Unfortunately it’s pretty much unavoidable; if strikes aren’t disruptive, they won’t have any impact. We’re not doing it because we like causing trouble, despite what Michael Gove would have you believe; it’s just that at this point it’s the only option open to us. The government is determined to eviscerate public sector pensions, and this is the only way they might be made to reconsider.
If you’ve been following the pensions issue in the media, you could be forgiven for thinking that what the government wants to do is totally justified, that our pensions are far too generous, and that we’re being greedy and unrealistic. This article is an attempt to explain why that isn’t the case.
The first and by far the most important point is this: There is no pensions crisis. That really can’t be emphasised enough. Despite what the government and most of the papers keep saying, it simply isn’t true that public sector pensions are going to become much more expensive at any time in the foreseeable future. It’s certainly true that we’re living longer now than we were a few decades ago, but public sector pensions were already reformed to accommodate that a few years ago. The costs of the various schemes as they currently exist are projected to be stable for at least the next five decades. Don’t believe me? Ask the Public Accounts Committee of the House of Commons (“Government projections suggest that the 2007-08 changes are likely to reduce costs to taxpayers of the pension schemes by £67 billion over 50 years, with costs stabilising at around 1% of Gross Domestic Product (GDP) or 2% of public expenditure”). Or the National Audit Office (“We estimate that the 2007-08 changes will reduce costs to taxpayers in 2059-60 by 14 per cent…As a consequence of the changes, overall costs to taxpayers will stabilise at around 1.0 per cent of GDP, close to their current levels.”) If you’re feeling particularly masochistic you could even read the whole 208-page Government-commissioned report on the subject by Lord Hutton, which at no point ever claims that pensions are unaffordable or likely to become so.
There’s no particular reason why you should spend your time struggling through his lordship’s less-than-riveting prose, of course, but you might at least hope that a government minister with some responsibility for the issue might have taken the time to do so. Yet apparently Francis Maude hasn’t bothered. When challenged on the subject on the Today Programme during the previous round of strikes back in June, he claimed time and again that pensions were unaffordable, despite it being repeatedly pointed out to him that this simply wasn’t true. Maude’s not the only government minister to make dubious claims on this issue either; Danny Alexander was called out by Channel 4’s Fact Check blog just last week for falsely claiming that low and middle-earners would do better under the proposed new scheme than the current one.
But I realise that might not convince you. Even if pensions are affordable, you might well think that they’re simply not fair. Virtually everyone in the private sector has to settle for extremely poor pensions – or in some cases no pension at all – so why should we get a better deal just because we’re employed by the state? Put like that, I’ll grant that it looks like a convincing case. But think of it this way: say the government gets its way, and all we public sector workers have to settle for a much worse pension deal. Would that make you much better off? It absolutely isn’t right that people working in the public sector get a decent pension when barely anyone else does, but taking that away from us isn’t going to make your retirement any more comfortable. What might actually help to improve pension provision for everyone is recovering at least some of the £70 billion pounds a year the economy loses to tax avoidance. (That’s several times the cost of public sector pensions at the moment.)
Everyone, wherever they work, should be able to rely on having an adequate pension when they retire. (And “adequate” is the best that can be said about most public sector pensions, incidentally. Not “gold-plated”. Not “generous”. Just adequate.) If I could go on strike to demand a good pension for everyone, I genuinely would. But at the moment employment law only lets workers go on strike over a direct dispute with their employer, so I can’t. You can, though. If you’re not in a union, you can join one. If you want better wages, a pension or any other improvement in your working conditions, you’re much better off in a union than not. And it’s not just good for you either – societies with high levels of union membership have much narrower gaps between rich and poor, and are better off and less prone to financial crises as a result. And if you do unionise, and you go on strike against your boss for a better pension, I promise I’ll support you in any way I can. And somehow, I don’t think I’d be the only one.
If you do want to support striking workers near you, Richard wrote a fantastic piece back in June on what you can do which you can read here.