Time to be More Awkward

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Tony and Gordon's public pay policy problem

Before the Little Bliar set off to put an Easter tan on his flawless conscience in Bermuda, he must have thought that things weren't going too badly, all things considered. The fact that he was still in the job was little short of a miracle in itself. Then the Iraqi people go and decide to mount a major uprising on the first anniversary of the start of the war and back home three major trade union disputes rear up all at once. As the Financial Times pointed out, what they describe as 'bloodcurdling threats of strike action' are not entirely unheard of whenever the NUT annual conference takes place over the Easter weekend. But when this coincides with the first major dispute involving civil servants for about ten years, it is not so easily dismissed. And neither is the threat of national strike action involving workers employed by Network Rail.

There are important differences in the background to each of these disputes but, as the Financial Times was again not slow to point out, there is also a clear underlying theme: part of the unexpected upsurge of militancy is to do with wage rises, as a result of Gordon Brown's latest plans to reduce the public sector pay bill. But all three disputes also contain elements which threaten to undermine what Blair likes to think of as 'progress' over wider public sector reforms.

Apart from demands for a serious pay increase, the key underlying issue which came up at the National Union of Teachers annual conference was for the abolition of performance-related pay (PRP) arrangements which, as predicted when they were first introduced in the late 1990s, have done nothing to increase teachers' pay to a level where they can afford to buy a house, for example. On top of that, performance-based pay rises have either proven to be completely divisive in the staff room, because this type of scheme by its nature guarantees that only a minority of staff are in for a big increase, or, probably more often, the entire PRP allocation is quite rightly shared out among everybody but then rarely amounts to much.

In the civil service the long-running dispute between the government and members of three big unions - the PCS, Prospect and Amicus - is also over pay and the imposition of a new performance-related pay arrangement, but this time the PRP proposals are only just coming in and, in some cases, have been imposed. In the latest two-day stoppage over 100,000 workers in three key departments were involved. For the first time in their history this has included employees at the Office for National Statistics (ONS) as well as staff employed in the prison service and at job centres and benefits offices.

All told, about half a million civil servants are involved in the recent confrontation over pay. And a big part of the problem is that - as a result of government attempts to introduce 'flexibility' in pay arrangements - national bargaining was done away with some years back, to be replaced by around 90 different bargaining groups. What they have in common is that the clerical and admin staff employed in most of these civil service departments and agencies took an incessant pounding during the Thatcher era and now get by on shockingly low wages. They have all ended up on a wide range of different rates as well.

According to the PCS-the union headed up by Mark Serwotka, which is now campaigning for a return to national pay bargaining-thousands of civil servants earn less than £10,000 a year and it is estimated that more than 20,000 staff in the DWP have to claim the same benefits as they dole out because of poverty wages. The increasingly Blairite Financial Times's outrageously sniffy response to this was to say: why worry if members depend on benefits to top up their pay - 'that is exactly what those benefits are designed to do'?

At Network Rail (formerly Railtrack) the story is a little bit more convoluted and has as much to do with pensions as it has to do with a basic pay rise. Here the argument has been brewing up since about the middle of last year, when the government finally conceded that it had lost the plot on rail infrastructure maintenance expenditure. It effectively admitted to being given the complete runaround by firms like Jarvis and Balfour Beatty but was too embarrassed to say as much and so instead came up with the subterfuge that it would make much more sense if this kind of work was brought back 'in-house' (as it was before privatisation).

For workers who had been employed by the privateers for the past few years, moving back into Network Rail should involve a fairly straightforward transfer of terms and conditions under the existing Transfer of Undertakings, or TUPE, legislation. However, TUPE does not cover pensions, and when a special national conference of representatives was called by the RMT on this issue last December, it became clear that equal entitlements for existing staff as well as new starters was put as a top priority by workers in this part of the industry. Given that the former British Rail Pension Scheme (now Railpen) is currently estimated to control £13.6 billion worth of assets, this does not seem an unreasonable request. Yet Network Rail has also closed its pension scheme to new entrants.

So, for members of all three unions, what they are prepared to put up with will provide a key barometer for the success or otherwise of Gordon Brown's new public sector pay policy. The terms for this were broadly outlined towards the end of last year when it became increasingly apparent that Treasury coffers were taking a much heavier hit than had previously been anticipated - largely due to the immense costs incurred by fighting a wholly illegal and unnecessary war in Iraq.

Guidance issued by the Treasury for pay negotiations which take place this year insist upon a top limit for pay rises of 3.5 percent - but this includes the allocation put aside for performance pay. In most cases, pay offers have been much lower and have utilised crafty Gordon's new measure of inflation, which excludes housing costs (probably the single most important component of expenditure for low-paid workers in every metropolitan area these days). And, by another stroke of fortune, it so happens that the latest CPI figure, of 1.3 percent, comes in at roughly half of the old RPI figure (2.5 percent).

With the threat of massive cuts in civil service jobs, the Tescoisation of the entire education system, the government's attack on these key public sector unions must be resisted. Otherwise, they will be reduced to the same kind of state as the railways have been left in by market-driven zealotry.