Leading article: The wrong time for mass industrial action

Even with the reforms, public-sector pensions are better than private sector equivalents
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The Independent Online

There is no denying that public-sector workers are facing difficult times, and no denying that the Government's proposed pension reforms add to an already heavy burden of wage freezes, inflation and redundancy threats. Even so, now is no time to strike. With the economy back on the brink of recession, and chill winds from the euro crisis whipping dangerously through public and private sectors alike, the prospect of up to two million teachers, immigration workers and civil servants bringing Britain grinding to a halt is a dismaying one. The trade unions should act responsibly, and call their action off.

That is not to say that the implications of the pension reforms are insignificant. Staff are being asked to pay more and work longer, and may still receive less when they retire. Such a prospect would never be welcome. In the context of £83bn worth of spending cuts and economic stagnation, it is grim indeed. But to portray the situation as a typical Tory-led government using any excuse to hack back the state is a characterisation as lazy as it is false. The proposed reforms are no ideologically driven, back-of-a-napkin policy whim. They are based on analysis from John Hutton – a former Labour minister, no less – with the inescapable conclusion that the generosity of the current pension arrangements is simply unsustainable. With people living longer, and the demographic balance tilting towards the elderly, there is no alternative but for individuals to take on more of the financial load that currently rests on taxpayers' shoulders.

The case for reform is only part of the issue, however. That public-sector workers, galvanised by their unions, are ready to cause national havoc to defend terms and conditions that compare so favourably with those of their private-sector counterparts, only adds to the sense that state employees are out of touch with the damage that recession has already wrought elsewhere.

It is grossly mistaken to take recent "business as usual" double-digit pay increases at the very top of the private sector as an index of the rest of the commercial world. Executive greed apart, rank-and-file private-sector workers have been, and continue to be, sharply squeezed.

Although wage increases have picked up slightly this year, they are still languishing at 2.5 per cent, less than half the inflation rate. And that follows several years of pay freezes, and even cuts, as employees bargained hard to hold on to their jobs. Such developments render the common claim that public-sector benefits make up for comparatively low salaries hopelessly outdated. In fact, the gap between public and private pay has reversed in recent years, particularly at the lower end of the scale. A comparison of pension arrangements tells a similar tale. Even with the proposed reforms, public-sector plans remain considerably more generous than their equivalents in the private sector, where final salary schemes have long been off-limits to new entrants, if not closed altogether.

Neither is the public sector uniquely threatened by either the spending cuts or the worsening economic climate. As many as two million jobs have been lost since the start of the recession – the vast majority of them in business – and the worst may not be over. Not only has the past week alone seen hundreds more private-sector job losses, but problems at Thomas Cook and Arcadia do not bode well for the high street.

Against such a background, it is impossible to justify the biggest strike since the Winter of Discontent in 1979. Faced with a slew of gloomy indicators, any avoidable economic drag is inexcusable. The trade unions must go back to the negotiating table, hammer out a deal and avoid industrial action. This is not about an ideological battle over the size of the state. It is about what the taxpayer can afford. Now is the time for some realism from the public sector. It is time that we were all in it together.