The Government’s response to the Unions in the dispute over public sector pensions is an interesting negotiating tactic, but does not suggest that the underlying dynamics of the negotiation have changed.
Union leaders were summoned to Downing Street on Wednesday last week to hear the Government’s latest proposals. They were told that an average worker would now be able to get a pension of 2/3 of their average salary, and that anyone retiring over the next 10 years would suffer no reduction in the amount of pension. Overall, some 5 million public sector workers will have to work six years longer and pay 3.2 percent more in contributions in order to get their pension pot. However, Minister Danny Alexander claimed that the new deal was about 8 percent better than previously offered.
The manner of the proposal was interesting. One of the characteristics of the negotiation so far is that there has not been much traditional negotiation process. There have been lots of declamatory statements of expectation on both sides, but very little apparent engagement. There does not seem to have been any climate setting, or exploration of needs or concessions that might meet those needs – emotional payments that can be just as effective as cash in enabling agreement. In the absence of such process it is easy for both sides to retreat to positional statements which simply develop a hostile climate. Once again this latest offer from the Government seems to have come somewhat out of the blue – with Union leaders having no idea what to expect when they were summoned to their Downing Street meeting. So, the negotiation process still seems somewhat disconnected.
The timing of the proposal was also interesting – just the day before the announcement of the Unison strike ballot – and arguably too late to avert the strikes. Right on cue, on Thursday, the Unison strike ballot revealed a majority of 78% in favour of strike action (though only 29% of its members took part in the ballot). TUC leader Brendon Barber said there were still “major areas of concern” and claimed the improved offer had not gone far enough.
There has been a feeling that the Government prioritises reductions in the public sector deficit above all other priorities – fearing that if it does not do so then the UK may find itself in the same position as Greece, Italy and other states with a sovereign debt crisis. The Government may also feel that belt-tightening in the private sector means that there is little sympathy for the Unions. Many people in the private sector have no pension, or limited pension protection, so they will see public sector workers as comparatively well off. A Yougov poll for the Sunday Times this week indicated that 53% of those polled were opposed to the strikes, compared to only 31% supporting the strikes.
In this context it may be that the intention behind the latest Government proposal is to settle the issue if they can, but to further capture the moral high ground if they can’t. If, as seems likely, the Unions continue to reject the latest proposal, the public will face major disruption on November 30th and beyond. In that context there will be even less sympathy for the position of the Unions if they are perceived to have rejected a “reasonable” Government proposal beforehand….