With the public sector pensions dispute at a pivotal point, the first few weeks of 2012 will be critical in framing the future of widespread opposition to this government's cruel and unnecessary programme of austerity.
We have an opportunity to firmly reject the premise that public servants should pay more, work longer and get less, to pay for a recession caused by failing banks.
In doing this we would take a big step forward in opposing the guiding principle behind this Tory-led government's central policy: that those least culpable should pay the highest price for the mistakes of the financial and political elite.
The momentum we generated, particularly in the second half of the year, undoubtedly forced some minor concessions from ministers who quite obviously set out to suffocate the pensions talks with a belligerent refusal to talk about the key issues of concern for millions of public sector workers.
If they moved at all it was grudgingly and not very far. And it is worth remembering how chief secretary to the treasury Danny Alexander reported the signing of the so-called "heads of agreement" with some unions.
Cheered on by Tory backbenchers in the Commons, he crowed that the latest offer delivered "the government's key objectives in full", with "no new money" since the offer that brought 2 million people out on strike on 30 November.
He also confirmed that the new pensions would be "substantially more affordable to alternative providers". The desired outcome, this was the first remit given to John Hutton, who has shamefully allowed his Labour credentials to be used as cover for a thoroughly biased inquiry, fuelling the government's myth of inevitability about the need for further "reform" – when the uncontested analysis shows public sector pensions are affordable now and in the future.
In rejecting the offer, the Public and Commercial Services union is saying low and modestly paid people should not have to find an extra £50 a month or more to pay off the budget deficit; we are rejecting the attempt to force public servants to work to 68 – unnecessary and obscene in the sixth largest economy in the world; and we are rejecting the blatant unfairness of taking billions of pounds from people's pensions through the switch in inflation indexation from RPI to CPI.
We have not, as Alexander untruthfully claimed in parliament, "walked away from the talks". In fact, we are asking for proper negotiations with ministers to be reopened – on the central issues of contributions, pension age and indexation – but the government is attempting to exclude us from future discussions.
So as we head into 2012, we have to ask ourselves what is important, and what and who we stand for. Do we stand with the millionaires in the cabinet, who do not lead the same lives as the rest of us, who do not rely on the same public services that we do? Or do we stand for the people whose jobs, pensions and pay are being crushed to sustain a broken financial system.
We have the opportunity to fight and win on pensions, and in so doing we will embolden many more people for the inevitable battles in the year ahead.
Comments
2 January 2012 2:13PM
So as we head into 2012, we have to ask ourselves what is important, and what and who we stand for. Do we stand with the millionaires in the cabinet, who do not lead the same lives as the rest of us, who do not rely on the same public services that we do? Or do we stand for the people whose jobs, pensions and pay are being crushed to sustain a broken financial system.
After 30 years of being shafted, I sincerely hope we pick the latter.
He also confirmed that the new pensions would be "substantially more affordable to alternative providers".
As in, these pensions will be absolutely shit, but my friends in the city can make a nice little profit out of them.
2 January 2012 2:14PM
Mr Serwotka you can't demand money that the private sector isn't earning. The country is no longer making a profit, it's seriously in debt and you are demanding more for your people, for that to happen someone else is going to have to pay for it by losing their job or seeing their pension cut. Is that what you want at this time of austerity someone else to pay for your demands?
2 January 2012 2:17PM
I used to have to tell my children that blame doesn't solve problems, and that mature people focused on that, rather than shouting "he did it".
Do you believe the banks should have been allowed to fail? How do you propose the consequences of economic meltdown should be handled?
Do you believe the Government should now print money to pay pensions and maintain public spending? How do you propose to handle the consequent inflation and currency crisis?
Do you believe the Government should continue to borrow to pay pensions and maintain public spending? How do you propose to handle the consequent rise in interest payments it will have to meet tomorrow and for the next fifty years?
Remember a movie called "I'm all right Jack, starring Peter Sellers?
Anyway, my children are almost grown up now. They generally focus on fixing problems and avoiding playing the blame game. I thought you'd like to know.
Let me know how you get on.
2 January 2012 2:17PM
If the financial system is broken, then how can it be that the same financial system has been shown to be able to pay for future pensions? And as a slogan, 'hands off our pensions' would make more sense if those going to be in receipt of them paid for them rather than expecting the taxpayer to fork out ever greater sums.
2 January 2012 2:21PM
Erm, the public sector are tax payers, and they already pay contributions for their pension.
Do try and post something meaningful, rather than regurgitate headlines from the Daily Mail.
2 January 2012 2:24PM
So an NHS surgeon mending a hip isn't contributing to society or 'earning' money but a banker who gambles using toxic debt is? Your answer would be to get rid of the surgeon and hope that the banker might just strike lucky next time and save the day for us all.
Sorry, but don't expect the rest of us to spread our cheeks for the private sector.
2 January 2012 2:26PM
We have an opportunity to firmly reject the premise that public servants should pay more, work longer and get less, to pay for a recession caused by failing banks.
Actually, public sector pensions were unaffordable anyway. Nothing to do with the recession.
Gordon Brown planned public spending on the basis that the economy would grow for ever by 5%, since he had personally abolished the economic cycle.
Indeed, even in his fantasy world, the numbers still didn't stack up.
People in the private sector -- the ones who actually pay for the public sector through their hard and stressful work -- should not have the subsidise superior pensions on the part of public sector.
My own solution to the problem is quite simple: to dramatically slash the best paid public sector jobs, and their pensions. If these people can get better jobs and pensions in the private sector, let them try!
2 January 2012 2:26PM
Yes they are but they are not introducing new money into the system, merely circulation money around the system. The country has to earn new money to remain viable and pay ever increasing wages and pensions, otherwise we end up like Greece paying Civil Servants and such far more that the country can earn, let alone afford.
2 January 2012 2:30PM
the public sector are tax payers,
Only in a meaningless sense that a book-entry in made deducting 'tax' from their salaries.
The people who shell out large amounts of cash to keep the public sector going are those wicked private sector people.
2 January 2012 2:32PM
You don't understand how Government finance works.
The more it spends, the more money it creates. There is continuously new money being injected into the system. A country like ours with a monetary sovereignty, ie pounds, can never go bankrupt..
It can pay for all the pensions it ever wants to.
2 January 2012 2:33PM
Not unless s/he specialises in treating foreign patients who've got loadsa money.
This is about basic finances, not about the value of a person's job. I worked in an industry that brought millions of dollars into the UK treasury but no way would any of us have equated ourselves with an NHS surgeon. It's about how the country pays it's bills and finances itself, do we earn our daily bread or do we keep on borrowing until the bailiffs call.
The choice is yours!
2 January 2012 2:34PM
Oh, please.
The biggest drain on the tax payers purse is the private sector, the private sector don't pay a single penny to support the public sector. Do some research.
2 January 2012 2:35PM
Why, exactly, should public sector workers get a much, much better pension than the vast majority of private sector workers?
2 January 2012 2:36PM
Maybe you should start by asking 'why are private sector pensions so shit'
2 January 2012 2:37PM
For society to function public and private sectors are mutually dependent. When the Tories come to power they pit one sector against the other. Workers in both sectors pay taxes for the common good. Mark Serwotka is right to stand up for public sector workers' rights and pensions. They should not be punished for the excesses of the bankers and the City and tax evasion and avoidance should be a criminal offence. If tax was properly collected, there would be no need for the austerity cuts. Good Luck, Mark!
2 January 2012 2:39PM
You can't keep creating new money as eventually the currency becomes worthless, it's that simple. Money does not create new money, only the export of products and service for foreign currency.
I think that history will prove you wrong, we can and will go bust if we keep on printing fiat money as in the end no one will trust our currency.
Anyway thanks for that piece of logic, it just made my day, I must print it off and show it to my (old) accountant, as I'm sure that she too will find it amusing.
2 January 2012 2:42PM
That's interesting. Since 2008. the bank of England has printed off over £300 billion, So, how much more do you think it would take before our currency was worthless? Maybe you could ask your friend, the accountant.
2 January 2012 2:44PM
And if the NHS were to go private the UK's GDP would rise due to increased transactions and inflated medical treatment. According to your criteria this would be a good thing because it would inject 'wealth' into the system. But how many people would file for bankruptcy due to an inability to pay for their cancer treatment? How many people would be priced out of paying for expensive surgery?
The example is instructive because private insurance companies and hospitals would earn shitloads, and it would all look great on paper as GDP rises and more money circulates, but it would only further strangle the working class (and even the middle class).
More money in the system isn't of itself a good thing; it's how that money is distributed and used in society that counts.
2 January 2012 2:47PM
And force those in the private wealth producing sectors of the economy to subsidise your guilt-edged, inflation-proofed, pensions through our hard earned taxes. NO !!!!
Public Sector pensions must be brought under control and be funded by the workers contributions. Just like everyone else.
2 January 2012 2:48PM
And what exactly is the bank of England/government using to support the value of that money?
I don't know how long it will take but I suspect that since the Bank of England began the Quantitive Easing the value of the pound on the world market has decrease significantly. Printing money without anything to support it is just another way of devaluing a currency.
2 January 2012 2:49PM
Because, unlike those in the private sector, they've fought to keep decent pensions?
2 January 2012 2:51PM
You are doomed to fail matey,most of the other unions are now neering agreement on this and Labour knows full well too that the present public sector pensions system cannot be sustained,Joe Public,the vast majority of which don't enjoy these taxpayer-funded benefits,yet are expected to work longer and pay for them don't support your unions view either.You shouldn't forget either that there are very many currently unemployed who could easily do your members jobs.
2 January 2012 2:53PM
I don't remember the public sector complaining when Brown did so much to destroy private sector pensions.
The fact is that public sector workers get pensions out of all proportion to the 'contributions' they make. Moreover, they are paid more than the great majority of private sector workers. It is all completely unaffordable and unsustainable, along with the rest of the West's economic model.
Another poster has said that the Tories always pit public sector workers against private.
Actually, it was Brown who did this more than anyone else, by throwing money at our eternally useless and increasingly grasping public sector.
2 January 2012 2:55PM
Well someone has to suffer in scapegoat politics. We've had illegal immigrants; striking miners (the enemy within, some of whom had previously served this country on the streets of Northern Ireland); Dole scroungers; Single mothers on income support. You fuckin name it, they have managed to deflect the actual cause of poverty and inequality in this country for decades. Now its down to the public sector, because they have fuck all else to sell off to line their Oxbridge arse pockets with plus they detest the ideololgy of Keynes. We are many; they are few. Simple as that. They have the media and the police and MI5. All we need to do is switch X Factor and Celebrity Big Brother off and stop reading the Sun then persuade the private sector workforce that they are also worthy of decent pensions, working conditions and pay. This is our country and they are our servants and when the majority of people realise that, the fuckin tossers running this plutocracy, along with their dinosaur economic plans, are fucked.
2 January 2012 2:56PM
No the GDP would not rise, not unless they began treating foreign patients and bring in foreign money. What you are talking about is money that's already in the system, so no wealth is being created.
But none of it is NEW money, it's what is already in the system.
We need the new money to pay the bills because we are part of a global economic system and are heavily dependent on others for our food and energy resources.
2 January 2012 3:00PM
Oh dear.
Firstly, the pound has actually held steady throughout against the dollar and the Euro. This despite interest rates and growth being almost zero, the two biggest factors in valuing a currency. In fact, you could argue that the pound should have fallen in value even without any quantitive easing.
2 January 2012 3:00PM
Mark Serwotka is one of my heroes. I hope he & his members win, especially on keeping current contributions as low as possible for his members. The rest of it can be fixed, once we toss out this Tory Coalition.
After we've achieved that, I will be relentlessly pressing Labour to re-instate the pensions of public sector workers & reverse any privatisations of public services (allowing workers the chance of restoring any pensions which they've lost due to the period of privatisation).
2 January 2012 3:02PM
How does ring fencing a final salary pension scheme for public sector workers, and forming the rest of the population to contribute towards paying for it, serve social justice?
2 January 2012 3:03PM
A superbly-explained exposition, Mark Serwotka.
"Substantially more affordable to alternative providers". Explain this again and again. The Government is restructuring a public-sector overhead cost to make our public sector "substantially more affordable to alternative providers".
Say it often and say it clear. The 'big picture' should not be left to you to explain to the British people. Shame on Labour, which was, once more, failing to distinguish the tree and the wood, failing itself and its constituency.
But, well-done for spelling it out
"Substantially more affordable to alternative providers". The Government is restructuring a public-sector overhead cost to make it "substantially more affordable to alternative providers"..
Perhaps if Nov 30 needs to be repeated, a timid Labour leader will not again fail to support and endorse you, and lose 3 million votes. providing us all with excellent reason to not even register our vote or bother to cast it.
Keep up the good work!
2 January 2012 3:03PM
There you have it, from the horses mouth itself, the reason for the Public Sector union strike action.
The issue of public sector pension, protection of the staff and the often repeated " Fairness" agenda are all for the birds. The real agenda is the long term one that the union officials have been talking about in the second half of the nineties- that of not tolerating another Labour defeat like the one in 1992. They were going to find a common cause among the very many groups of workers so that all could co-ordinate the action. The pension reform gave them an alibi.
The union bosses are challenging the electorates entitlement to fire any failing government. In their battle, the Public Sector workers are mere battering ram to be used and abandoned as their battle develops.
As for fairness, here are a body of people who demand to protect their privileged pensions and perks at the expense of the private sector workers who have no employer's pension to speak of, many have suffered serious reductions in their pay in2008 followed by virtually no pay increase and are just too please to have a job to go to.
The once great movement that was formed to protect the weak among the workers have now degenerated in to one that wishes to exploit the poor private sector workers even more. I
2 January 2012 3:05PM
And it's views like that that have to be overcome if we're ever going to resolve our problems. You're setting yourself up to be ignored or overridden. Not least by the Labour party, to whom you will be a great embarrassment should they ever return to office
2 January 2012 3:07PM
It's worse than that. Private sector pensions were introduced by a conservative government in them 1970s and to benefit you really had to work for a company from cradle to grave, it also depended on your position in the company. Companies also had a habit of taking "pension Holidays" which sent many schemes into the red. Companies saw it as a means of cheap cash in times of need.
Robert Maxwell wasn't the only one to use his company's pension scheme as a cash cow.
2 January 2012 3:10PM
Really? So come next Autumn, the government can just declare yellow leaves to be £10 notes and we will all be rich?
You better rent a dinner jacket, I've got a feeling the Nobel prize committee may be calling
2 January 2012 3:12PM
Sure! Professionals who have spent years in FE into their twenties living on a pittance, who built up experience and skills over the years which keep the country educated, healthy and safe should consider themselves to be no more than inferior and expendable day workers who could easily transfer their skills to any other part of the economy. Medical staff, educators, police all have skills that should quite naturally be transferable to banking, engineering, manufacturing, computing, and they mostly have fully operational bodies which can be used for stacking shelves and starting up new businesses like butcher shops, bakeries, high tech plant and instrument manufacturing.
The lack of understanding and respect for the training and skills components in other professions by some people is breath-taking at times. It takes years to become trained and competent in many of these public services professions you demean with such venom and vindictiveness. I can live quite happily without a iPhone, in fact I do, but I'd be in a state of pure panic if I didn't have access to most of the public services if they were not readily available and I had urgent need.
I put this attitude down to those who spread the lie that any manager who could run a Pepsi factory has the skills and the ability to transfer to any large company and institution to be just as successful anywhere. We've had nothing but chaos and incompetence ever since. Blaming skilled workers and professionals for being obstreperous and difficult rather than acknowledging that education, training, skills and familiarity with any field of endeavor are essential to be able to lead and run them successfully.
As far as the banks,hedge funds and corporates are concerned, they, like so many other perpetrators and bullies just point a finger at those who rush to the aid of those who have been attacked and need assistance, and walk away leaving the rescuers as the scapegoats. No wonder so many people now increasingly despise the banks and those who now turn on the innocent and try to put them in the dock instead of themselves.
2 January 2012 3:12PM
Because the mighty dollar has also been devalued because of quantitve easing! Sterling is tied more closely to the US dollar than to any other currency. Right across Europe and the US all countries that suffered under the banking crisis have been using quantitive easing to try and put more money into their struggling economies. It's can work short term but not when everyone is also doing it and inflation is out of control.
2 January 2012 3:14PM
Come back when you have got a clue about what you're saying.
Meanwhile, go and read up on Fiat money and monetary sovereignty.
2 January 2012 3:16PM
Mark,
Thank you for continuing to defend the hard-won contractual pension rights of your members.
I am still waiting for an explanation from my own union (Unison) as to how a pitiful 'offer' (which is actually a very significant pay cut) was unacceptable all year only to suddenly be acceptable two weeks ago. I went on strike to oppose working longer and paying more for less in retirement. Nothing has changed. The 'offer' is still unacceptable. Unison and the other unions will struggle to sell this nonsense to their members. We are ready to strike again.
Those crowing that 'there is no money left' should do some basic research instead of blindly repeating government soundbites. For all his faults, Hutton made clear that public sector pensions are affordable now and in the future without the need for these cuts (lets call them what they really are). Despite claims the the pensions are 'unsustainable' the govt has produced no evidence in support of this assertion and has consistently refused to value the schemes to test their 'affordability'. This should be the first stage in any open, fair and transparent review exercise.
The object of this exercise is quite simple - the Tories wish to remove a substantial sum of money from public sector pensions. The money they cream off will not go towards the pension funds and therefore has nothing whatsoever to do with 'sustainability'. It is a tax targeted at public sector workers.
The other agenda is to reduce the value of public sector pensions in order to i) make public sector services more profitable and thus easier to privatise, and ii) ensure that private sector employers (CBI and other Tory donors) do not feel obliged to 'compete' in the employment market by offering their own prospective employees decent pensions. Therefore, one direct outcome of cutting public sector pensions will be even worse provision in the private sector.
Anyone who thinks this is about equality is kidding themselves. This is the race to the bottom. Anyone who supports these attacks on public sector pensions is simply making it easier for private sector employers to cut pensions even further. Wake up
2 January 2012 3:18PM
You seem like a sensible cove, what do you think about this Anglosphere idea as an option for Britain (or England)... ? There have been a few articles on this recently
http://online.wsj.com/article/SB10001424052970204791104577110163558996698.html
2 January 2012 3:21PM
Fiat money may pay pensions, but how will the pensions buy goods?
2 January 2012 3:22PM
Your withering tone is becoming slightly grating.
2 January 2012 3:23PM
I hope so. Care to join in, or have you nothing to say?
2 January 2012 3:23PM
GDP as it is measured would rise because people would be spending more money than they normally would on a service they currently get free of charge. Inflated treatment would also inject more money and raise the number of transactions within the system.
It's the way we measure our economic model. How do you think the Tories and their masters in the private sector justified privatising our other public services in the 80's? They said it would 'improve efficiency' and benefit the economy.
2 January 2012 3:23PM
Could I ask what you do for a living?
2 January 2012 3:24PM
How many actually knew about it, most getting on with their jobs and their lives? Long hours and responsible jobs. Coming home from school after teaching all day I normally looked forward to at least two to three hours of prep and marking, even after the frequent after-school training sessions, before dealing with my own everyday stuff like cooking and cleaning. Public servants may not have been aware of the situation with private pensions, but we certainly didn't cheer from the sidelines to diminish and even destroy them while it was going on.
I remember something about a lot of rich people putting their money into pensions that had serious tax advantages rather than paying full tax, but I'm no financial advisor so maybe someone else could come in here. I do remember, one time, that even my mother towards the end of her working career was advised to put her small savings into a private pension scheme because of the tax situation at the time, which seemed crazy as she might need those funds accessible and available at any time if an important repair was needed or an emergency arose.
This needs someone very familiar with the tax/pension situation at the time, and to be honest I don't think they'll come as they're more than likely the same financial advisors who caused a lot of the problems in the first place.
2 January 2012 3:25PM
Is this the same private sector lauded at the last election for being the future saviour of the British economy and how they'll easily pick up the slack after the government decided to lay off millions of public sector workers?
Now, frankly splitting it into 'private' and public' is divisive bollocks because both sectors rely heavily upon each other, and making one suffer (public) is going to make the other (private) suffer, especially a number of SME's which handle a lot of outsourced public sector work but the coalition didn't appear to think about this and went down the road of cutting back important services and wrecking production in this country.
The fact is there won't be an improvement when, or if, we ever pull ourselves out of this. The political elites will ensure their backers are kept sweet, while the rest of us are being taught to find over crumbs when in reality we should all be standing against this government, or any neoliberal government, as they don't give a toss about you, me, or our children unless you fall within a certain income or come from a certain part of society.
So, what are we going to do about this or are people just happy to repeat bollocks from the Big Book of British Politics and hope 'our' side wins?
2 January 2012 3:26PM
Serwotka
So you expect the 21m poor sods in the private sector to work to 68 to pay for 6m public sector employees to retire at 55 or 60? I can see that winning overwhelming popular support; if the tories have an ounce of sense they will string this out to 2014 and then use it as a bear trap for Labour in the election campaign.
moretorybullshit
From these comments, I can only assume that you take your economics lessons from the Harare school............
Genius.
Sooooo.....................if the private sector shut down completely tomorrow, the public sector could carry on its merry way, spending, failing to educate our kids, killing our hospital patients, filling in useless forms, collecting useless stats, etc. etc. could it?
2 January 2012 3:28PM
While I understand his position, the article seems totally without balance:
How is it unnecessary? We have a large debt which will only get bigger if nothing is done. Public pensions are unsustainable in their current form, I'd rather the Govt ease it down a bit rather than having to rapidly cut, or even default, on them in 20 years time.
2 January 2012 3:29PM
Here we go then:
In a fiat money system, money is not backed by a physical commodity (i.e.: gold). Instead, the only thing that gives the money value is its relative scarcity and the faith placed in it by the people that use it.
In a fiat monetary system, there is no restrain on the amount of money that can be created. This allows unlimited credit creation. This is why personal debt is now at £1.5 Trillion
Initially, a rapid growth in the availability of credit is often mistaken for economic growth, as spending and business profits grow and frequently there is a rapid growth in equity prices. This is what has been happening for the last 30 years.
In the long run, however, the economy tends to suffer much more by the following contraction than it gained from the expansion in credit. This expansion in credit can be seen in the Debt/GDP ratio. This is what is happening now.
In most cases, a fiat monetary system comes into existence as a result of excessive public debt. When the government is unable to repay all its debt in gold or silver, the temptation to remove physical backing rather than to default becomes irresistible. This was the case in 18th century France during the Law scheme, as well as in the 70s in the US, when Nixon removed the last link between the dollar and gold which is still in effect today.
Hyper-inflation is the terminal stage of any fiat currency. In hyper-inflation, money looses most of its value practically overnight. Hyper-inflation is often the result of increasing regular inflation to the point where all confidence in money is lost. In a fiat monetary system, the value of money is based on confidence, and once that confidence is gone, money irreversibly becomes worthless, regardless of its scarcity. Gold has replaced every fiat currency for the past 3000 years.
All Fiat monetary systems have always imploded. This is what is happening now.
2 January 2012 3:30PM
Quite, so how can the argument that workers in private industry should be funding finally salary schemes for public sector workers, possibly stand up? We need a minimum national scheme for all workers on average salary or lower
2 January 2012 3:30PM
I work in local government, providing local services to local people.
In common with private sector employees ( I used to be one) I pay tax, NI and pension contributions.