These are responses to three questions from NUT members:
Q) Aren't these pensions threats only 'proposals' ? If so, why do we need to consider strike action?
Of course, before they become law, then they can be classed as 'proposals'. However, once they become law, it can then be too late to change them. Therefore, unions always have to seek to act at an earlier stage, both through negotiations and campaigning but also, because it is our most effective weapon, through strike action.
In 2005, when the last Government suggested similar proposals about raising the retirement age to 65, the NUT, alongside other unions, threatened to ballot for strike action. The mere threat of joint action was enough to convince the Government to back down and we achieved a negotiated agreement over changes to the Teachers' Pension Scheme. We hope that we can succeed in persuading this Government to back down too - although we recognise that, this time, we will probably have to carry out our threats and take action.
Obviously we always have to judge when to negotiate, when to ballot and when to take action - and these steps are being carefully considered by the NUT National Executive, in discussion with other unions.
The initial Hutton Report last October made outline proposals to make teachers 'pay more, work longer and get less pension'. Since then, the Government have firstly insisted that they will change from the RPI inflation index to the lower CPI index from April 1st 2011. This will cost teachers £10,000's over their retirement. While Hutton had not issued precise figures, Ministers then wrote in January to state that they expect pensions contributions to increase from the present 6.4% to 9.8% of pension - phased in from 2012 to 2014. Under our pressure, they have now said that this decision won't be made until June 2011. However, the £2.8 billion savings expected from this increase are still due to be made in the March 2011 Budget.
Therefore, unions have been saying to the Government that, if they are serious about negotiating, they need to withdraw the RPI/CPI increase this April and those savings from this March's Budget. If they do not, then we have to conclude that the Government is not serious in offering negotiations and the NUT is likely to proceed with a ballot for strike action, possibly alongside other unions as well.
The timetable for that ballot is yet to be agreed but might well follow after the issuing of Hutton's final report in early March when we will then be clear what he is recommending about the increase in retirement age and any change to a worse 'career-average' scheme.
Q) Everyone's living longer, surely we have to pay more into our pension fund?
This is a good question - and a vital point for teachers to understand. There’s no need for our pension contributions to go up.
Of course, if life expectancy is increasing, we would expect to have to pay more to fund the additional costs of pensions. That’s why unions previously agreed that our contributions would go up from 6.0% to 6.4% in 2007. But this was based on a proper valuation of the scheme looking at all the relevant statistics. There has been NO new valuation made to justify what the Government is imposing.
In fact statistics contained in a National Audit Office report published In December confirms that the changes agreed between Unions and the Government in 2005 are “on course to deliver substantial savings”. In fact, the Government Actuary’s Dept. calculates those agreed changes will CUT the cost of public sector pensions by 14%. So there is no justification for the proposed new contribution increases.
In short, these increases would just be an unfair additional tax from teachers to the Government - and nothing to do with funding teachers' pensions.
Of course, if life expectancy is increasing, we would expect to have to pay more to fund the additional costs of pensions. That’s why unions previously agreed that our contributions would go up from 6.0% to 6.4% in 2007. But this was based on a proper valuation of the scheme looking at all the relevant statistics. There has been NO new valuation made to justify what the Government is imposing.
In fact statistics contained in a National Audit Office report published In December confirms that the changes agreed between Unions and the Government in 2005 are “on course to deliver substantial savings”. In fact, the Government Actuary’s Dept. calculates those agreed changes will CUT the cost of public sector pensions by 14%. So there is no justification for the proposed new contribution increases.
In short, these increases would just be an unfair additional tax from teachers to the Government - and nothing to do with funding teachers' pensions.
Q) Aren't cuts inevitable?
The NUT and the TUC, representing unions as a whole, do not think so. In fact, one of the main TUC slogans for the March 26 national demonstration against the Government's spending cuts - which we are hoping will be supported by hundreds of thousands of people - is "not inevitable, not necessary". Economists explain that cuts will actually make the deficit worse
“The government [wants to] cut expenditure. If the rest of the economy reacts by ‘tightening belts’, not shopping, cutting investment, laying off staff, then we wave goodbye to ‘balancing the budget’. Tax revenues fall and benefits rise. And the deficit will worsen.” (Economist Ann Pettifor in the NUT’s ‘The Teacher’ ). This has been shown by the situation in Ireland:
You only have to look to Ireland to see these harsh economic truths. “The massive cuts in spending and pay have increased unemployment and sapped demand, causing the economy to shrink further. Ireland is now considered more at risk of default than before it started making cuts”.(From the PCS pamphlet – ‘There is an Alternative’).
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