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Public Workers Strike in Britain Over Pensions

Friday, 01 July 2011 10:09 By Sarah Lyall, The New York Times News Service | Report

London -  Joining a growing wave of unrest in Europe over government austerity measures, tens of thousands of British teachers and public-sector workers walked off their jobs on Thursday to protest proposed changes to their pension plans.

More than 10,000 schools were affected by the strikes, as were universities, Social Security offices, courtrooms, airport customs desks and other government operations. Union officials warned that the strike could be the first of a series of walkouts here in the next few months, reflecting growing unhappiness over layoffs, salary freezes, tax increases and a persistently sluggish economy.

Much of the workers’ anger, said Mark Serwotka, general secretary of the Public and Commercial Services Union, has to do with a feeling of helplessness and resentment at having to suffer from the mistakes of bankers and others who caused the economic crisis. The government, Mr. Serwotka said in a statement, is “forcing some of the most vulnerable people in our society to pay for a crisis that was not of their making.”

Around Europe, workers are feeling the same way. In recent months, the Irish and Portuguese governments have been voted out of office on a tide of voter anger at their part in the financial upheavals and at the austerity measures that were imposed as a remedy. Britain has experienced waves of student protests, sometimes violent, over the government’s decision to increase tuition and cut education spending. In the past week, Greece has been convulsed with riots as residents reacted with fury to its harsh austerity package.

In Britain, it has come down to a test of Prime Minister David Cameron’s resolve, and his political fortunes, as he tries to hold firm to his stringent budget in the face of public unhappiness.

The issue exercising the strikers in Britain on Thursday was the government’s proposal to change their pension plans. Public pensions currently cost Britain nearly $50 billion a year, and the government says that with an aging population, the current pension arrangement is unsustainable.

As a result, it has proposed raising the working age to 66 by 2020, increasing the monthly amount that public-sector employees are required to contribute toward their pensions, and changing the way pensions are calculated. Under the current system, pensions are based on workers’ final salaries; the new plan would base them instead on an average career salary.

“Basically, it means we pay 50 percent more each month and get less when we retire,” said Olayinka Williams, 27, a middle manager at a secondary school in Camden, who took part in a large demonstration in central London.

Another protester, a 27-year-old teacher at an Islington elementary school, said that basing a pension on a career average, rather than a final salary, discriminated against women who take maternity leave or work part time to raise their children.

“We could have made a lot more in the private sector, but we chose to go into teaching,” said the teacher, who asked that her name not be used because she was afraid of reprisals from her school. The government’s budget cuts are really hitting home, she said: her parents, 55-year-old social workers, both lost their jobs this week.

Her anger, and that of other strikers, is set against a backdrop of wider complaints as the Conservative-led coalition government’s austerity program — which has imposed spending reductions of as much as 20 percent across most government departments — begins to bite.

Mr. Cameron has said the cuts are essential if Britain is to avoid falling into a situation as severe as that in Greece, which is swimming in debt, barely hanging on to its international bailout and enduring violent protests and strikes over its own, far harsher, austerity measures. But the growing unhappiness with Mr. Cameron’s plans demonstrates the difficulties faced by governments across Europe that have decided to save, rather than spend, their way out of the economic crisis.

The International Monetary Fund recently applauded Britain’s spartan approach, saying that “strong fiscal consolidation” is “essential to achieve a more sustainable budgetary position, thus reducing fiscal risks.” But since the 2008-9 recession, the country’s recovery has been anemic, and many economists say they are alarmed by its direction.

Inflation stands at 4.5 percent, pushed up by higher-than-expected prices in oil and other commodities. Gross domestic product rose by just 0.5 percent in the first quarter, while household spending slumped by 0.6 percent.

“We have an economy on a plateau,” Joe Grice, chief economist for the Office of National Statistics, said after the numbers were released.

In an interview, Andrew Scott, professor of economics at the London Business School, said, “I always thought the government was going too far too fast, and that it would trigger protests that would make the cuts more difficult.”

Jonathan Portes, director of the National Institute for Economic and Social Research, an independent study group, said that Mr. Cameron would be wise to slow the pace of his cuts.

“In our opinion, the fiscal plans were overly aggressive,” Mr. Portes said. “No serious economist believes that fiscal consolidation is unnecessary over time,” he added. “The deficit needs to be reduced; the question is what is a sensible and appropriate pace given economic development on growth.”

How public unhappiness will affect the government’s political fortunes remains to be seen.

The Labour opposition, aware that too close an association with unions has worked against it in the past, tried to walk a fine line on Thursday, sympathizing with the workers’ grievances while saying they should not have gone on strike.

The government sought to portray the strikes as unpopular, emphasizing how parents had to scramble to find child care because schools had closed. Francis Maude, the government minister in charge of pension negotiations, said that with talks between the government and the unions continuing, it was unacceptable for teachers to go on strike.

“It’s absolutely unjustifiable for parents up and down the country to be inconvenienced like this, forced to lose a day’s work, when they’re trying to go out and earn money to pay the taxes which are going to support teachers’ pensions,” Mr. Maude told the BBC.

But as she took part in the demonstration, one primary school teacher in London said that while parents had at first been skeptical of the walkout, they had come around once they understood what was at stake.

“Once you explain it to them, lots of parents are really supportive,” said the teacher, who did not want to give her full name because she did not want to get in trouble with her employer.

Dave Prentice, general secretary of Unison, a public-sector union with 1.3 million members, said he had not yet polled his members about going on strike. But if the workers continued to be treated “with disdain” by the government, he said, that could change.


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Public Workers Strike in Britain Over Pensions

Friday, 01 July 2011 10:09 By Sarah Lyall, The New York Times News Service | Report

London -  Joining a growing wave of unrest in Europe over government austerity measures, tens of thousands of British teachers and public-sector workers walked off their jobs on Thursday to protest proposed changes to their pension plans.

More than 10,000 schools were affected by the strikes, as were universities, Social Security offices, courtrooms, airport customs desks and other government operations. Union officials warned that the strike could be the first of a series of walkouts here in the next few months, reflecting growing unhappiness over layoffs, salary freezes, tax increases and a persistently sluggish economy.

Much of the workers’ anger, said Mark Serwotka, general secretary of the Public and Commercial Services Union, has to do with a feeling of helplessness and resentment at having to suffer from the mistakes of bankers and others who caused the economic crisis. The government, Mr. Serwotka said in a statement, is “forcing some of the most vulnerable people in our society to pay for a crisis that was not of their making.”

Around Europe, workers are feeling the same way. In recent months, the Irish and Portuguese governments have been voted out of office on a tide of voter anger at their part in the financial upheavals and at the austerity measures that were imposed as a remedy. Britain has experienced waves of student protests, sometimes violent, over the government’s decision to increase tuition and cut education spending. In the past week, Greece has been convulsed with riots as residents reacted with fury to its harsh austerity package.

In Britain, it has come down to a test of Prime Minister David Cameron’s resolve, and his political fortunes, as he tries to hold firm to his stringent budget in the face of public unhappiness.

The issue exercising the strikers in Britain on Thursday was the government’s proposal to change their pension plans. Public pensions currently cost Britain nearly $50 billion a year, and the government says that with an aging population, the current pension arrangement is unsustainable.

As a result, it has proposed raising the working age to 66 by 2020, increasing the monthly amount that public-sector employees are required to contribute toward their pensions, and changing the way pensions are calculated. Under the current system, pensions are based on workers’ final salaries; the new plan would base them instead on an average career salary.

“Basically, it means we pay 50 percent more each month and get less when we retire,” said Olayinka Williams, 27, a middle manager at a secondary school in Camden, who took part in a large demonstration in central London.

Another protester, a 27-year-old teacher at an Islington elementary school, said that basing a pension on a career average, rather than a final salary, discriminated against women who take maternity leave or work part time to raise their children.

“We could have made a lot more in the private sector, but we chose to go into teaching,” said the teacher, who asked that her name not be used because she was afraid of reprisals from her school. The government’s budget cuts are really hitting home, she said: her parents, 55-year-old social workers, both lost their jobs this week.

Her anger, and that of other strikers, is set against a backdrop of wider complaints as the Conservative-led coalition government’s austerity program — which has imposed spending reductions of as much as 20 percent across most government departments — begins to bite.

Mr. Cameron has said the cuts are essential if Britain is to avoid falling into a situation as severe as that in Greece, which is swimming in debt, barely hanging on to its international bailout and enduring violent protests and strikes over its own, far harsher, austerity measures. But the growing unhappiness with Mr. Cameron’s plans demonstrates the difficulties faced by governments across Europe that have decided to save, rather than spend, their way out of the economic crisis.

The International Monetary Fund recently applauded Britain’s spartan approach, saying that “strong fiscal consolidation” is “essential to achieve a more sustainable budgetary position, thus reducing fiscal risks.” But since the 2008-9 recession, the country’s recovery has been anemic, and many economists say they are alarmed by its direction.

Inflation stands at 4.5 percent, pushed up by higher-than-expected prices in oil and other commodities. Gross domestic product rose by just 0.5 percent in the first quarter, while household spending slumped by 0.6 percent.

“We have an economy on a plateau,” Joe Grice, chief economist for the Office of National Statistics, said after the numbers were released.

In an interview, Andrew Scott, professor of economics at the London Business School, said, “I always thought the government was going too far too fast, and that it would trigger protests that would make the cuts more difficult.”

Jonathan Portes, director of the National Institute for Economic and Social Research, an independent study group, said that Mr. Cameron would be wise to slow the pace of his cuts.

“In our opinion, the fiscal plans were overly aggressive,” Mr. Portes said. “No serious economist believes that fiscal consolidation is unnecessary over time,” he added. “The deficit needs to be reduced; the question is what is a sensible and appropriate pace given economic development on growth.”

How public unhappiness will affect the government’s political fortunes remains to be seen.

The Labour opposition, aware that too close an association with unions has worked against it in the past, tried to walk a fine line on Thursday, sympathizing with the workers’ grievances while saying they should not have gone on strike.

The government sought to portray the strikes as unpopular, emphasizing how parents had to scramble to find child care because schools had closed. Francis Maude, the government minister in charge of pension negotiations, said that with talks between the government and the unions continuing, it was unacceptable for teachers to go on strike.

“It’s absolutely unjustifiable for parents up and down the country to be inconvenienced like this, forced to lose a day’s work, when they’re trying to go out and earn money to pay the taxes which are going to support teachers’ pensions,” Mr. Maude told the BBC.

But as she took part in the demonstration, one primary school teacher in London said that while parents had at first been skeptical of the walkout, they had come around once they understood what was at stake.

“Once you explain it to them, lots of parents are really supportive,” said the teacher, who did not want to give her full name because she did not want to get in trouble with her employer.

Dave Prentice, general secretary of Unison, a public-sector union with 1.3 million members, said he had not yet polled his members about going on strike. But if the workers continued to be treated “with disdain” by the government, he said, that could change.


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