I work for the University of Oxford and am a paid-up member of the Universities and Colleges Union. I’ve just set my work out of office message to read:
“Thank you for your email. In line with the ballot of the University and Colleges Union I am taking part in industrial action in the form of a strike today to send a message to our government that I will not accept their erosion of and withdrawal of support to UK Higher Education. This means I will not be dealing with any email sent to me today. If you still wish to contact me please re-send your email another day.”
I will not be crossing any picket lines in to the town hall today and fully support the action by all the hard working council staff that provide you and me with so many services we depend on right across the City.
It was bad enough that Clegg and co carped on about what a good thing tuition fees of £9k were and now the Tory-led coalition is attempting to slash remuneration for academic and academic-related (that’s me) staff in Universities in the form of a big reduction in pension benefits and an increase in contributions from employees. Now let me be clear, these changes don’t affect me YET but I see them as part of a slippery slope so I am willing to join the legally-called strike action to support the work of the Universities and Colleges Union to protect the rights of my current and future colleagues and to join the collective effort in sending as strong a message as possible to the coalition that Higher Education (along with many other public services) is much more valuable than this and that the cuts are going too far. If we screw higher education now then in 20 or so years time we’ll be in a much greater mess than we are now!
I should also say that I don’t think Labour did any better when in power and it’s shocking how they don’t really have a plan to get the UK out the financial mess THAT THEY LET US GET INTO when they were last in power. We do have to sort out the economy and reverse the dangerous slip back to recession that we’re currently seeing. The Leader of the Labour Party isn’t even supporting this strike (See http://labourlist.org/2011/11/ed-miliband-wont-back-strikes/) which I think is frankly outrageous given how it was the Unions that got him elected to be leader of the party in the first place!
It’s good to see that the coalition is taking its responsibilities on benefits seriously and has protected the most vulnerable in society from real-terms cuts in income. I’m also pleased to see that the chancellor has put the January rise in fuel taxes (struggling families really can’t afford it any more than the many business that are now spending so much on fuel) on hold but there is still so much more that could be done.
I know it’s fashionable to bash bankers and so on but really – do these people actually NEED to be so wealthy? Remember – it wasn’t the public sector workers (from nurses to civil servants to academics to border control staff) who caused this recession. You didn’t see them engaging in all sort of greed-fuelled high-risk, low-sense banking activity that simply made them richer and left the UK (and much of the rest of the world) in the mess it is now in. And are they paying the penalty for any of this? Not a chance! The coalition is trying to dump it all on the hard-working, lower-paid public sector and almost universally public spirited workers of our country. If Labour had regulated the banks properly about 10 years ago then I believe we wouldn’t be in the mess we are now in. But I’m not an economist so don’t pretend to have all the answers here. [following comments, I should add that it’s investment bankers I have the real problem with, not so much the retail bankers although they should not have been allowed to let individuals get into so much personal debt either]
Remember – nobody chooses a public sector job for the money – so for the coalition to hit us rather than hitting those who are making a fortune out of everyone else’s suffering is, I think, utterly outrageous.
Er, Unless I’m confused the Coalition has nothing to do with your pension. USS is controlled by an independent trust who are increasing contributions because their actuaries think there’s a potential future issue.
Individual members of the public sector may not have caused the problem, but the vast increase in the size of the sector under Labour is what has unbalanced the public finances. The bank bailout is not the problem, we’re earning interest on the loans and should get our money back eventually on selling the shares in banks. But ever-increasing pension liabilities have to be met from somewhere. Either the employee through increased contributions and/or a cut in benefits, or an increase by the employer. Which in the case of the public sector means more taxes for everyone.
Oh, and you’re wrong about your last point. I did choose my current job for the money, my pay went up considerably coming from a private sector job. 🙂
James: Allow me to quote from the 2011 USS annual report.
“The fund increased by 11.7% in 2010, in line with the scheme’s strategic asset allocation benchmark, and well ahead of inflation. The funding level increased from 91% in March 2010 to 98% in March 2011 on the scheme’s technical provisions basis. These figures are both measured against the most recent triennial valuation dated March 2008. A further valuation commenced on 31 March 2011, in which further provision is likely to be made for continuing improvements in mortality and the funding level using these revised assumptions is likely to be slightly reduced. Nevertheless, it is pleasing that the fund is in a relatively strong position given the very significant market dislocations of the past few years.”
Do you still think the USS NEEDS to make these changes or were you just quoting Daily Mail-style propaganda?
Your quote from the USS annual report appears to say that in March 2011 the fund’s assets only covered 98% of its liabilities and they are expecting the valuation happening at the moment to show that the figure has dropped back slightly since then. The fund may well be in a relatively strong position but it still doesn’t think it can cover its liabilities. On that basis, it did and still does need to make changes.
And James is right about the USS not being anything to do with the government – to quote the first line in the very same report:
“Universities Superannuation Scheme Limited is the corporate trustee of one of the largest private sector pension funds in the UK with assets at 31 March 2011 of over £32 billion.”
So you (and I) have a private sector pension.
I understood today’s strike to be about public sector pensions. I am sorry to say its hard to believe in the case for support with this level of misunderstanding.
2 questions:
1. I understand the frustration about pensions, I have many friends in the public sector; but honestly what is the viable alternative?
2. You lay much of this at the feet of bankers for being *so* wealthy. Where’s the personal responsibility for those people who over-stretched themselves with credit cards, loans and mortgages on properties that they couldn’t afford, betting on the house price rise to continue? Surely this personal “greed-fuelled high-risk, low-sense banking activity” was also to blame?
I agree the banks were pushing easy credit terms onto their customers, but that still doesn’t absolve us from making the choice not to accept.
Nelson – these are valid questions and my answers are:
1. The government could make more money by taxing extremely lucrative financial activity more and by making it much harder to avoid tax. It’s too often the richest that avoid the most tax. I was just reading in the paper at the weekend about the exclusive flats in central London that are worth millions. They are each owned by a company that has full control of the lease so rather than sell the leasehold flats the developers sell the company thus avoiding stamp duty. TO me that is outrageous and little better than raw fraud.
2. Sure people didn’t have to borrow more than they could afford but that doesn’t excuse the banks for being so reckless. The whole market was crazy and people were being pushed into all sorts of things they could never afford. Sometimes when there are children to feed, cars to service, houses to maintain, those things are hard to resist. I am no fan of a Labour-style nanny state but I do think, as I said in the post, that the banks (particularly investment rather than retail)should not have been allowed to be as reckless as they were.
On your point 1 – these companies may be making huge profits but they are operating within the law as it stands today. If you feel strongly that this is an issue that needs to be addressed in legislation, then I hope you have taken it up with your MP. At the end of the day, unless we tell our MPs what we think they have no way of second guessing what the general public want them to do.
On your point 2 – agreed. The banks have a lot to answer for. However, we cannot go back in time any more than we can cancel WWII, and we have to work together to bring this country back on an even keel. If we achieve that, then there will be more in the kitty to service pensions in the future.
While I’m not striking, I support your action. You tell us you’re no economist so don’t feel comfortable saying all this is about anything more than corporate greed. Well, if you leave the intellectual debate to these modern day priests who serve their religious masters by appearing to legitimize dogma with impressive-looking math then we will lose the argument. This is not a technical problem about finance we face, it is about how people who care only for themselves and their immediate social network assert their will. They are a global tribe working with right wing governments to privatize land, goods, services and ideas. This is not a conspiracy theory, just a ‘free market’ game with inevitable consequences. To me this disingenuous ideology has all the signs of a cancer and unless we act decisively it will do much much more harm than we’re seeing today. Let’s be frank, crony-capitalism is dictatorship, and we’d get a particularly reptilian set of ‘strong men’ proclaiming themselves as leaders.
Anyway enough from me. SolidariTea! And here’s an article that expresses better what I mean:
http://www.huffingtonpost.com/mobileweb/jeffrey-sachs/fairness-and-the-occupy-m_b_1116135.html
I’d go much further than this though 🙂
A nicely written post.
I also work for the University of Oxford and while I don’t like to see the deductions on my pay slip increase, I think it’s inevitable that I will need to work longer. After all, I’m expected to be in better health come the age of 65 than my parents and grandparents. I do worry what the pension age will be when I get to 65 though.
I feel much wealthier than my friends in private sector jobs (who earn much more). Not in monetary terms, but in terms of work-life balance, health, security and pension. I am at work today as I have a son or daughter due in the next week or two and I need every penny I can get…
The public sector, like banking, also has a collection of highly overpaid but often unproductive employees at the top end. However, the majority of people working in the banking sector are like the majority of public sector workers – on average pay. Many private sector workers will only qualify for the basic state pension without any of the guarantees that are given to public sector workers, yet they also lack the income to invest in pension topups from their own resources. What we must not lose sight of is that if we exclude the small percentage of the population that have no worries over their retirement, we are all in the same boat. The UK economy cannot run in isolation from the rest of the world, so we are to some extent at the mercy of what happens to other economies who trade with us. Clearly the UK economy is in dire straits and we need to rein in our spending so that we live within our means. Perhaps the most equitable solution would be to pool all the pension funds, public and private, and share them equally amongst those who have paid their contributions throughout their working lives. As I see it, the economy is not a bottomless pit, and the union action is effectively punishing those who are not union members by demanding more than their fair share of the pensions pot. There are probably as many poor paid workers that are not union members as those who are. They also may not have had a choice of well paid work – either through lack of skills or through personal choice. They will be the ones that will suffer through the pensions inequality that the unions are striving for.
If pay is held in nominal terms while inflation is running at 5-6% per year, then real pay is reduced by 5-6% per year. This very quickly has a larger effect on your real pay than the increase in your pension contributions.
Inflation creeps up on people, destroying their savings, pay and living standards. Why don’t people give it the attention it deserves?
Hi Tony,
I know it’s fashionable to bash bankers while abdicating personal responsibility, but really anyone who took on excessive debt during the bubble (not boom) years is partially to blame for our problems. That includes private individuals and companies as well as local and central governments.
By some measures, the UK is the most indebted major economy in the world. This global report is not quite up to date, but it illustrates the run-up period of credit expansion well:
http://www.mckinsey.com/mgi/reports/freepass_pdfs/debt_and_deleveraging/debt_and_deleveraging_full_report.pdf
See in particular Exhibits 1 and
Very little has changed since 2010. Here’s an update:
http://www.bbc.co.uk/news/business-15820601
Much of the UK credit expansion in the last two decades was funnelled into property speculation via buy-to-let, and interest-only and self-cert mortgages (so called liar loans).
Every bubble bursts one way or another and for the UK this has only just begun. Remember, the debts are much bigger this time than they were for Great Depression mk 1.
Assuming http://www.leeds.ac.uk/forstaff/news/article/2616/latest_uss_valuation_reveals_29bn_funding_gap is correct, the valuation in March mentioned in the report has a much more gloomy outlook.
As every pension presentation I’ve seen has said, if you make a small change now it accumulates over time. Whereas if you wait you’ll have to make much bigger changes. The valuation from 2010 (the last one that appears up on the USS website) mentions increasing contributions by 2% to clear a £3bn deficit in 30 years. (Note this already includes the employers increasing their contributions by 2% 2 years ago).
If you discuss the issues in terms of money, as though it somehow sits in a piggy bank and we foolishly emptied it during the ‘good times’ then we’d be playing into the hands of the people that crashed society (and of course show ourselves to be ignorant of how the banking system works).
We have been ‘gamed’ into conceptualizing the world with a false language. Let’s think about this crisis using down-to-earth questions: what jobs does the system make me do, how does the system change my relationships with the people around me, am I destroying the planet, am I setting up future wars by inflicting injustices on people in other countries (or indeed areas of our own country).
If this day of strikes focuses on money then we’re missing the point. Personally I would gladly have my pension reduced if it meant human capital could be directed towards building a more sustainable and fair society. To get to that point though, we have to remove a large section of the corporate and political system. This really is not a time for tinkering.
To disagree with what a previous comment, I don’t believe that the unions are striving for inequality in pensions. Just because it is unfair that non-union-represented workers would not get as fair a deal than if they were union represented, means that the problem is that they cannot get their voice heard to argue for their poor pension predicament. The problem is not that those that can get their voice heard, shouldn’t.
Two wrongs don’t make a right: both union represented and non-union represented workers both having their pensions unfairly and *permanently* raided is all wrong.
Since we are in a serious financial problem in this country (caused by the bankers, not the Labour party. Remember that the Tories were also fully supportive to the spending of the Labour Government to rescue the banks*), and we must hope to recover from it (one day), then it makes sense to have two plans for pensions:
– one fair long term one that a normal economy can cope with, and
– one short term temporary one that means cutting Government financial commitments to pensions drastically *now*, but only until a pre-agreed measure has been met that means the economy is strong enough to put the pensions back on the track for the long term plan.
I believe it is wrong to seriously cut financial commitments to pensions permanently for what is not a permanent (albeit a drawn out) financial crisis. I am not currently a union member (the UCU subs are *huge*) but I fully support any action those affected feel they need to take, and I appreciate that especially for those such as school teachers, the industrial action is for many an unfortunate last resort.
* … and all Governments are guilty of not putting in place proceudres to prevent this happening in the first place.
I’ve had personal experience of private sector employers ‘moving the goalposts’, first by closing their final salary schemes to new entrants and then by winding them up completely. State employees seem to be getting a softer ride than many private-sector workers on this issue: anyone less than ten years from retirement isn’t affected.
The view that state employees are less well rewarded is also, in my view, a little outdated – particularly for those in senior positions. These state employees at least are extremely well remunerated and are usually cited in times such as these (I’d include union bosses in this category too). But sadly this distracts attention from the remainder to whom it does still apply.
I’m no fan of this government but I know the country is broke and I know it’s unaffordable to continue as things stand. I think most people know this and agree with debt-reduction changes – right up until it affects them personally. I don’t like it but I can see at least see the reasons and it doesn’t feel like it’s being done out of vindictiveness. They do still want our votes in a few years’ time!
It is tempting to bash the wealthy – especially bankers – but is yet higher taxes really the answer? We already take half their salary and a six-figure earner is paying the equivalent of quite a few average folk’s contributions. Why not a bit more carrot and less stick? Encourage them to use their wealth in Victorian-style philanthropy. They could be urged to spend their cash in exchange for posterity. I don’t care if my local school, library or hospital is named after a rich banker: I’d just be glad to see it’s not being closed. I’m sure that Fred Goodwin et al would prefer to be remembered for their good deeds. Or are we all just hoping that they’ll be visited by three ghosts?