Nasty smell around public sector pensions…

20 06 2011

Danny Alexander (the flatulent Lib Dem Chief Secretary to the Treasury famously accused of making a stink before appearing on the Andrew Marr show) has really come up trumps this time, with his inflammatory comments about public sector workers’ pensions and the premature announcement that they will have to work six years longer (until  66) and pay more for a reduced pay out during retirement.  

Whether this is just another ill-timed venting of hot air from the flame haired politician or, more likely, a carefully laid trap to draw the unions into a battle in which the coalition government are convinced they will hold the upper hand and ultimately win, Danny boy’s pre-emptive bomb shell has effectively blown a hole through the planned negotiations over the pension arrangements of doctors, nurses, teachers, civil servants and town hall workers, igniting a justifiably angry response from public sector unions.       

750,000 are already expected to take part in strikes planned for 30th June, which would make it the biggest walk-out since the miners’ strikes of the 1980s, while on-going union ballots could lead to further industrial action, in the autumn, on a scale that has not been seen since the General Strike of 1926.     

Shadow Chancellor, Ed Balls, has cautioned the unions that by taking industrial action over pension reform they are playing directly into the hands of a government, as it will distract attention away from their failing economic recovery plan.

Meanwhile, Noxious Danny has already set about poisoning the atmosphere between private and public sector workers, vilifying the latter as free loaders unfairly enjoying superior pension arrangements at enormous cost to the tax payer. He always conveniently forgets to mention that public sector workers are tax payers too!

So much for: ‘unifying the country’, ‘we’re all in this together’ and ‘the big society’?

There is no doubt that with average public and private salaries now on a par and people living longer, public sector pension arrangements are becoming unsustainable, and need to be reviewed, but this should be done sensitively through consultation and with the agreed changes implemented gradually, so that employees are treated fairly.

The winds of change, emanating from the Chief Secretary, intend to cut a swathe through the existing public sector pension arrangements breazing in the ‘confirmed’ changes by 2020, just nine years away. This is a ridiculously hasty timetable. People plan and prepare for their retirement over a life-time and therefore pension reform must be introduced at a similarly measured pace.

It is blatantly unreasonable, for public sector employees in their late forties and early 50s, who have been steadily working their way towards retirement at 60, (or in some cases, such as my own, planning to take an actuarially reduced pension between 55 and 60) to suddenly be confronted with a requirement to work an extra six years for a reduced pay out.

‘Matt’ captured this beautifully in his ‘Sunday Telegraph’ cartoon (left) which has the an elderly lady patient asking the plastic surgeon if he can make her look six years older!   

Also, let’s not forget that although public sector wages have undoubtedly and deservedly improved in recent times, many opted for these jobs, at a time when average private sector salaries were significantly higher, in the knowledge that the imbalance would eventually be redressed by early retirement opportunities and a generous guaranteed pension scheme.

History suggests there can only ever be one outcome to industrial action that divides the nation in a way that this issue clearly will.

The government will cast the public sector workers as greedy, unreasonable, attempting to derail the economic recovery programme and  bring down the government, while actually revelling in the opportunity to flex their political muscle, show they’re not for turning, and remind the electorate, yet again, that it’s all Labour’s fault anyway!

I would suggest that Ed Balls has got it absolutely spot on, but the unions are caught in a no-win situation.

Significantly on this occasion, it seems to be union members rather than their leaders who are spoiling for a fight and they cannot, neither should they be, denied the public expression of their anti-government feeling.

Unions are there to support the needs and voice the concerns of their membership, and in so doing ensuring that they are treated fairly. Failure to respond at time like this would merely demonstrate how impotent they actually are.

I have no doubt that union leaders would actually prefer to sit down and negotiate a compromise solution but Danny doesn’t seem in the mood for clear the air talks! Ironically, it is the government, having recently been forced to back down on NHS reforms, that seems to be rather looking forward to reasserting itself, seemingly hell-bent on demonstrating how tough it is prepared to be, by re-enacting the power struggles of the Thatcher years – all in the name of national economic recovery.

History, I fear, will inevitably repeat itself with the trade unions eventually forced to concede defeat, and the Labour Party, by association, suffering a further damaging set back to their come-back chances.

Interestingly it is the Lib Dems, ‘Noxious Danny’ and ‘Strictly Vince’, who have been sent out to head this one up (presumably, in order to mend a few fences after claiming all the plaudits for the NHS climb down) while the ultimate beneficiaries (come the next election), ‘Call me Dave’ and ‘Boy George’, are happy to urge them on from behind. Perhaps someone should tell them it’s not a good idea to stand downwind from Danny!       

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