Public-sector pensions: Spot the odd one out

As hundreds of thousands strike over pension reform, pressure grows for politicians to share pain

Andrew Grice,Andy McSmith
Thursday 30 June 2011 00:00 BST

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Louise Thomas

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MPs face having to pay an extra 3.2 per cent of their salaries into their pension scheme in an attempt to avoid inflaming the dispute with public-sector unions – but even after the change, their pensions will be among the most generous in the country, and better than those available to civil servants.

Click HERE to view UK on strike graphic (72 kb)

The move emerged on the eve of today's 24-hour strike by up to 750,000 teachers, lecturers and civil servants over the Government's plans to scale back their pensions. The action is expected to cause widespread disruption, closing a third of schools, partially closing another third and resulting in delays at passport controls at airports.

With MPs facing charges of hypocrisy for wanting to protect their own pensions while other public workers have their provisions cut, David Cameron told the Commons at Prime Minister's Questions: "We are public-sector workers as well and we should be subject to exactly the same changes we are asking others to take on.

"So the increase in contributions should apply to the MPs' system, even though it is a system where we pay in quite a lot. We are saying right across the board that the increase in pensions contributions is right to create a healthier, long-term system."

Sir George Young, the Commons Leader, will table a motion before the summer recess starts next month transferring control of MPs' pensions from Parliament to the Independent Parliamentary Standards Authority set up after the MPs' expenses scandal. It will propose a 3.2 per cent rise in MPs' pension contributions, in line with the extra demand placed on most public servants.

Although some Labour and Conservative MPs may dislike the proposal, they are expected to have to swallow the medicine.

But even then, the taxpayers' contribution to the MPs' fund is capped at 28.7 per cent – higher than other public-sector schemes.

At present, MPs can contribute either 11.9, 7.9 or 5.9 per cent of their £65,738-a-year salary. Accrual is capped at two-thirds of an MP's final salary, payable after 26 years in the Commons. This is expected to be changed to a career average figure, in line with the proposal for the rest of the public sector. But that would not have the same impact as on other workers because MPs are all on the same salary.

Brian Donohue, the Labour MP who chairs the trustees of the Parliamentary Contributory Pension Fund, agreed that the scheme should be brought into line with those for other public employees: "That will have to be the position."

Whether the change will cool the anger of the four unions on strike today is another matter. In the largest co-ordinated union protests for five years, teachers, lecturers and civil servants will take to the streets in more than 70 towns and cities in England and Wales.

More than 7,800 schools in 143 areas will be hit by the strike, forcing hundreds of thousands of parents to make special childcare arrangements. Based on incomplete data, government sources estimated that about a third of England's 24,000 schools would close, and another third would be partially disrupted.

About one-fifth of Britain's 500,000 civil servants will strike, bringing delays to ports and airports, where immigration offices will close for the day. Those who are working in Whitehall have been told they can bring their children into the office if their schools are closed.

The Public and Commercial Services Union, which represents staff in government offices, and three teaching unions – the National Union of Teachers, the University and College Union and the ATL – have called their members out for one day in the battle over pensions.

Yesterday, Mr Cameron condemned the strikes, telling MPs: "I don't believe there is any case for industrial action, not least because talks are still ongoing. It is only a minority of unions who have taken the decision to go ahead and strike. What I want to see tomorrow is as many mums and dads as possible able to take their children to school."

He taunted the Labour leader Ed Miliband for not mentioning the strikes at Prime Minister's Questions. "What the whole country will have noticed is, at a time when people are worrying about strikes, he can't ask about strikes because he is in the pocket of the unions."

None of the four unions staging nationwide strikes today has ever been affiliated to the Labour Party. But Britain's two biggest unions, Unite and Unison, which do contribute substantially to Labour funds, have thousands of their members on strike in Birmingham and Southampton, where council staff are protesting at proposed wage cuts.

Labour sources pointed out that Mr Miliband had already opposed the strikes. He will speak out again in a speech to the Local Government Association today.

Vox Pop: 'They have a point, but I'm not sure striking is the right way'

In Camden, north London, all but four schools were due to close or partially close today because of teachers strikes. Several private school teachers were also due to join the walk-out from the London borough. Here those affected by the closure of Fleet Primary School, Hampstead, share their views.

Laila Chittoo, parent

"I am not saying what they are doing is wrong but where is the money going to come from? There is not enough of it in the pot. It is certainly disruptive for parents and, more importantly, for the children who need to continue their studies. My daughter is going to one of the other parent's houses because I have appointments that I have to keep.

"Luckily it is a small school and all the parents help each other out. The teachers have a valid point to show how unhappy they are and I hope they prove something but I am not sure if striking is the right way. The teachers are really good here and I support them."

Her daughter, pupil, Natasha

"I know the teachers are going on strike but they have not really spoken to us about it. I like going to school so I am a bit disappointed to not be going in. If the weather is nice, we will go to Hampstead Heath so that will be nice."

Mary Alexander, teacher

"We had a strike in March against local council cuts to education services so that galvanised us. We are all united. We have had the facts laid out to us and the changes are so vast: increased contributions and they have already changed from RPI [Retail Prices Index] to CPI [Consumer Prices Index] which reduces the pensions by about 15 per cent, and pushing up the retirement age.

"For me, that will be 68. When you are a teacher, you have to spend all day on your feet, doing PE lessons and standing on tables for displays – it is not a desk job. I am here at 7.30 in the morning till 6pm and there are 30 kids running after me.

"For each year you retire early, they want to take away 5 per cent of your pension. We need to make the public aware of all this. They want 50 per cent extra in contributions and some of us cannot afford it. I do not like to think of it as us putting the Government up to ransom and demanding they give us everything, but we want to be listened to and for them to let us know they are negotiating."

Liberal Democrat councillor and school governor Tom Simon

"I am sympathetic to the concerns of the teachers who are striking, but I'm not convinced that enough has been done to avoid these strikes and feel they are too hasty. The strikes mean that many schools will be closed and this does have an impact on children and their parents who have to take time off work to look after them."

Andrew Baisley, Camden NUT branch secretary

"Teachers are striking because the Government's plans for the pension scheme are unfair and unnecessary and being done without any proper consultation. They feel they are being given no choice. The amounts of money in question are not small amounts of money. These are enormous changes. Even though I've been paying into my pension for 17 years, I'm halfway through my career, I still stand to lose £8,000 a year. I feel awful for anyone younger who is losing even bigger sums.

"We will end up with people not going into teaching, and re-creating the recruitment problems that there were at the start of my career."

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