Striking out

The public sector strikes on pensions have caught the headlines, but are unlikely to capture the imaginations of the government's policy brokers, says Finbarr Bermingham

Open-top buses, draped in banners lambasting the "great pensions robbery" courier union members towards Parliament Square, London. Teachers in Birmingham, unaccustomed to such a late start, gather outside their workplaces to voice their anger at their "pensions being used to pay off the bankers' debt". Staff at the British Geological Survey and Environment Agency in Nottinghamshire man a picket line, frustrated at what they perceive as financial mismanagement at the top level of government. Today, Britain is feeling the effect of one of the largest industrial walkouts of recent decades, as two million public sector workers take to the streets to demonstrate against the government's pension reforms.

Over 50 per cent of England's state schools are closed, with 80 per cent shut in Wales, and only 30 out of 2,700 remaining open in Scotland. Bus and train services have ground to a halt in Northern Ireland, and 20 per cent of routine NHS operations across the UK have been cancelled. The trade unions have gone for the jugular, but the government remains unmoved. Public sector workers, it says, will still receive a "generous" pension, and need to come into line with the rest of society.

Method in the madness?

Public sector workers have traditionally had larger, more secure pensions than the average private sector worker. They're mostly on final salary schemes, meaning their pension is a percentage of their final salary multiplied by the number of years they have worked. Under the Teachers' Pension Scheme, for instance, teachers get 1/80 of their final salary. So if they retired on £25,000 and had contributed to the scheme for 20 years, their pension would be £6,250 per year (£25,000 x 1/80 x 20). Many public sector workers retire at 60, while the retirement age for private sector workers is 65 (and is due to rise to 66 by 2020, and then to 68 between 2044 and 2046).

The government has been trying to slash public expenditure, in a bid to cut the deficit, and sees public sector pensions as an area in which it can make savings. It also says that, because people are living longer, public sector workers should contribute more to their pension pots, and for a greater period of time.

Under the reforms the government is proposing, teachers would see a hike of 50 per cent (from 6.4 per cent to 9.6 per cent) in the amount they're required to contribute from their salary every month to ensure they receive their pension. Anyone on a salary greater than £40,000 could be in for a 64 per cent increase. Public sector workers will also be required to work for at least six years longer than their predecessors.

Taking sides

The Trade Union Congress (TUC) has said the public sector is "under attack" and that the strikes aren't about asking for more, but about "defending what was already promised". TUC leader Brendan Barber said: "Public servants are no longer being asked to make a temporary sacrifice, but to accept a permanent deep cut in their living standards that will add up to over 16 per cent by 2015, when you include pay and pension contributions."

The government, however, insists the cuts are necessary to trim a financially "bloated" public sector. The strikes, they say, will cost the economy £500 million and lack the support of the general public. During a lively Prime Minister's Question Time in the midst of the industrial action, David Cameron described the strike as a "damp squib", saying the unions had failed to make the impact they'd hoped. Chancellor George Osborne defended the reforms, saying he was offering a "very decent" pension for public sector workers, and that the strikes "will achieve nothing".

Public opinion has been divided. Some workers have raged against what they perceive as "preciousness" and "ingratitude" by civil servants. Others questioned the timing and accused the strikers of disrupting the lives of other workers who are "worse off than them". With schools closed, many parents have had to take unpaid leave to take care of their children, and NHS patients have faced delays on operations and disruption to ambulance services. Those that support the strikes, however, have done so on the basis that many public sector workers are poorly paid and deserving of a decent pension.

How will it pan out?

Despite the polarisation of opinion, the general consensus is that one day of strikes won't change the government's mind. The romanticised general strike of 1926 (which lasted nine days), the Winter of Discontent of 1978-1979 (which rumbled on for months), and the miners' strike of the mid-1980s (during which ten people died) all failed to force the serving governments' hands. Minister for the Cabinet, Francis Maude, has threatened to redraw legislation to limit the unions' power to strike in the future, showing Downing Street's disdain for the action. However, it's likely that the right to collective action will remain in place, but so too will the government's reforms.