U.K. unions are threatening a winter of strikes as they step up their opposition to Prime Minister David Cameron’s spending cuts.
As many as 10 unions plan a one-day stoppage in November and strikes may continue into 2012 with disruptions to schools, fire-fighting services and courts unless the government waters downs its plans to curb public-sector pensions, labor leaders say. The Trades Union Congress, the umbrella group representing 6.2 million workers, will debate joint action at its annual conference in London today.
“I think a strike this autumn is inevitable,” Len McCluskey, general secretary of Unite, the biggest U.K. union with 1.5 million members, told reporters yesterday. “We’ve been discussing with our colleagues in order that we can move together in a coordinated fashion. It will go into 2012 without a shadow of a doubt. We’re planning for it to be a long dispute.”
Unions want to build a “coalition of resistance” against the 80 billion-pound ($126 billion) program of spending cuts, which Cameron’s coalition government says is necessary to narrow the budget deficit and shield Britain from the debt crisis engulfing the euro area. TUC General Secretary Brendan Barber has proposed a levy on members to raise 2 million pounds over the next two years to fund the campaign.
“If the coalition refuses to move, if it refuses to reach a compromise on pensions, I believe a ballot will be inevitable,” Dave Prentis, general secretary of the 1.4 million-member Unison health and local-government union, told reporters yesterday. “We’ve not got one concession from the coalition. If Unison moves, the other public service unions will move down the same road.”
Unions are fighting plans to make government employees retire later and contribute more to their pensions while getting less in return. Ministers say the overhaul is fair as the more than 5 million workers who contribute to public-sector pensions enjoy benefits that are no longer available to those in the private sector.
Most government-pension plans operate on a pay-as-you-go basis, meaning the contributions of workers and their employers are used to pay retired members. The shortfall is made up from the public purse, a cost the Treasury predicts will rise to almost 10 billion pounds by 2016 from 7 billion pounds today.
“We don’t want strikes,” Cabinet Office minister Francis Maude told reporters at a lunch yesterday. “The public would be very fed up if there were widespread strikes which closed schools again and affected services. People who in many cases are paying more towards public pensions than their own pensions would be mightily upset if there’s industrial action.”
November’s strike may prove more disruptive than a stoppage involving teachers and other government workers on June 30. Then, only four unions took part and the government said turnout fell far short of the “hundreds of thousands” predicted by unions.
The call to action underlines the growing pressure on Cameron to ease the pace of deficit reduction a month after Britain experienced its worst riots since the 1980s as violence erupted in London and spread to other English cities.
A two-year public-sector pay freeze began in April and the government plans to ax more than 300,000 jobs by 2015 as part of an effort to wipe out a deficit that ballooned to 11 percent of economic output in the aftermath of the recession.
The opposition Labour Party and its union backers say the cuts are hampering an economy that has barely grown since September, threatening to push up the country’s 7.9 percent jobless rate and make it harder to tackle the deficit.
Pessimism about the economy caused yields on 10-year U.K. government bonds to fall to 2.24 percent in London on Aug. 18, the least since Bloomberg began collecting data on the securities in 1989. They were at 2.41 percent yesterday, compared with 1.79 percent on similar-maturity German bunds, Europe’s benchmark.
“You can’t cut the deficit by depressing the economy,” Barber told delegates on Sept. 12. “It’s only through jobs and growth that we can heal the public finances.”
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