Pensions and Strikes

There is to be a strike tomorrow. Thousands of people are going to down tools, stop work, and march shouting slogans first thought up by their ancestors long, long ago.

Do I support them?

No.

To be fair (I try to be, sometimes), my first annoyance with this whole matter was the money, but then I heard that teachers had been advised not to tell parents whether or not their schools would be closed for the day, purely to increase the anger and frustration amongst those who pay the teacher's salaries and pensions. That is adding a new level of cynical contempt for the public to the matter.

It was largely that which made me want to think about pensions and how the teachers and other civil servants are being treated compared with the people who have to pay for all their benefits through the tax system.

There was a time when striking was justified. People in Britain used to have appalling working conditions, and many would slave for a pittance, only to die young. This was the period of the industrial revolution. The old systems of feudal loyalty had been wiped away, and the linkages between barons and their peasants and their lands were lost.

There was much about medieval Britain that could be admired. Medieval institutions took their responsibilities seriously. A nobleman's table would save food for the poor. all were expected to save a tenth for those who couldn't afford their own food. The Church made sure that locals did not starve. Yes, there were exceptions, but the rules were clear, and they appear to have been honoured.

Peasants had to work for free, because a serf's labour was his duty. He had to work on his lord's lands for a set number of days a year. It was a part of the social contract, the tripartite arrangement, whereby the workers gave their efforts to the common good, the clergy protected their souls, and the "Bellatores", the knights and men-at-arms, maintained the rule of law, punishing those who deserved it, preventing riots and generally keeping the King's Peace. In return, the lord would have to provide food and drink for his peasants. In those happy days, there were no fears about drunk driving, no concerns about liver damage, so there were many happy people. And there were many more feast days than we now have bank holidays. I saw a calculation recently that showed the total days worked by peasants in the 1300s were fewer than those which we work today. And they drank a damn sight more.

With the advent of the industrial revolution, the bonds holding men and women to their area have been cut. Now they are free to travel as they want, and can offer their labour to any who will pay. There is no free food and drink at regular feast days, but men and women (and children) are free to make a living as they wish.

There are advantages to this – and costs. Now governments look upon their citizens as units of work. The right of individuals to enjoy their lives is less important than the number of days working productively.

In many countries there has been a presumption that those who worked for the government would be paid rather less than others. And because of this, they should be granted other benefits.

I well remember as a salesman the day I spoke with a DP manager for a local authority and lost the power of speech. At the time I had not taken a holiday in three years. The man I was talking to had been employed by his London council for some twenty six years, and as such was eligible for fourteen weeks holiday each year. I simply could not comprehend such generosity.

But it's not only holidays. There are pensions, too.

The men and women going on strike are doing so because they are being asked to pay another three percent of their income into their pensions.

And it outrages many. It probably would be enough to get me to march, if I were in the fortunate position of having a pension like theirs, in order to protect the deal I'd accepted when I had taken the job. No one told all these workers that their contracts would be changed.

No one tells anyone that their salary and benefits can go down as well as up.

But Britain is bankrupt. Not a lot of people seem to realize how far into the red we've gone.

Gordon Brown's government managed to double public spending between 2006 and 2010. After all the projected cuts (and there is no cut in public spending yet, for all the froth and fury, we're spending more this year than last, and more than Labour's last year in government) we will return to the level of expenditure of 2007. Which is not a massive achievement, frankly.

Times are hard. Some public servants have seen pay freezes. But when it comes to pensions, they are fighting the wrong cause.

Yes, many would understand that people will feel hard done by when they see their pensions being altered.

I'm afraid I think they should grin and bear it.

Our civil service pensions are not affordable. They are paid out of the current year's tax take, and I say again: it ain't affordable. The number of pensioners is growing alarmingly as we all live longer, and the longer we tinker at the fringes of pensions reform, the more all our kids will have to pay.

It's hard for a non-pensions industry bod to get a grip on, I know. Just to confirm, I asked an actuary last night what the basic calculations were.

For someone who wants a pension of £20,000 today, the calculation is that they will need a funding pot of at least 50 times that amount. So, if you want a pension paying you £20,000, you will need to have saved 50 X 20,000. That is a million.

So, for a teacher earning £35,000 who wants a £20,000 pension, that person will have had to have saved a fair amount of money. Especially if they want to take early retirement.

Of course, it is worse for other workers. Someone in the private sector would have to earn that pension pot without too much help from the government, and would have to work until 65 years. After that, they'd take out the money as a lump, invest it, and take an annual amount as an annuity.

A civil servant wouldn't have to worry about such grubby fiddling. They are guaranteed their money from the tax take.

At present the police spend about half their annual budgets on their pensions. As the number of employees falls below the number of pensioners, where should the line be drawn?

Just how long do the unions think this can continue?

Many accept the basic illogicality of this situation, but then declare, apparently without irony, that we should not all join a race to the bottom, as if there was a forest of money-trees somewhere in the midlands, and all we have to do is cultivate them so that all the private sector workers can enjoy the same benefits. Some no doubt reckon that the best solution would be to tax all bankers to take their money and bonuses, and redistribute it (ie steal it) for others.

The banks would leave en masse. Many of their workers wouldn't – they'd just join the growing dole-queues – and the country would have lost all the revenues the banks have given us. That isn't a solution.

Equally there is no forest of money-trees. We cannot get rid of the debt. Printing money is helping – but only by causing inflation. It's simultaneously destroying the savings of all those who have put their money into pension funds. A double whammy for all our pensioners.

But the unions don't want to pay a little more for their own pensions.

So, do I support the strikers tomorrow?

Sorry, guys, no.

You are asking me and my family to agree to pay for your pensions so that you don't have to.

If you want a pension pot of a million quid (and who wouldn't?), I am afraid I think you should pay for it from your own savings. Not mine.

Tagged: author, crime writer, pensions, pointless actions, Strike, Unions, work to rule