THE 29 unions said they had two million members out on strike across the UK on Wednesday. The government, not surprisingly, was downplaying the day of action – 38 per cent of schools opened, it insisted, while one-third of public servants were at their desks.
In Northern Ireland some 200,000 struck, closing schools, civil service offices, transport, and non-critical medical services, to protest against government pension plans. As displays of strength go, it was certainly not the “damp squib” British prime minister David Cameron predicted.
The issue is the squeeze by a government determined on sharp deficit reduction on public service pensions and pensioners. Contributions are to rise by an average of 3.2 per cent of salary over three years, saving the state £3.2 billion, while all will be expected to work longer – the retirement age will rise to 67 from 2026. The government blames changing demographics – people living longer, costing the pension system more – as much as the parlous state of government finances, and warns the disruption could cost the economy some £500 million.
Negotiations are continuing, though at a snail-like pace, and the government appears unlikely to make further concessions. It has threatened to withdraw its latest offer unless agreement is reached by the end of the year.
Where the unions take the dispute from here is another matter. There is no appetite, union leaders believe, for a prolonged general strike – members, they say, are unwilling to lose pay for long while public support could also dissipate very quickly. Rolling selective strikes by individual unions are the alternative, but appear unlikely to move a government with a solid majority and several years to run.
The Tory-Lib Dem government has yet to acquire the sort of pariah status with trade unionists that Margaret Thatcher once held – but then unions don’t matter as much these days. And yet its determination to do away with the deficit by the end of its term is both a recipe for further conflict and increasingly, economists argue, economic stagnation. A report published yesterday by the Institute for Fiscal Studies warns of a fall of 3 per cent in average incomes this year, with more to come in 2012, and the brunt of cutbacks falling on lower income families. It warns that families with children are likely to be worse off in 2016 than they were 12 years ago, a fall in family living standards comparable to that in the Callaghan years of the 1970s. What you sow, you reap. The pensions battle may yet only be the first.