Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

U.K. Unions Threaten Winter of Strikes Over Cameron’s Cuts

Don't Miss Out —
Follow us on:
General Secretary of Unite Len McCluskey
General Secretary of Unite Len McCluskey told reporters yesterday, “I think a strike this autumn is inevitable.” Photographer: Carl Court/AFP/Getty Images

Sept. 14 (Bloomberg) -- Britain is facing a winter of strikes after public-sector unions said they will trigger the “biggest mobilization for a generation” in an escalating dispute over Prime Minister David Cameron’s spending cuts.

As many as 14 unions plan a day of action on Nov. 30 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 said. Unions voted unanimously today to coordinate action.

“We’ve been patient, we’ve cooperated, but there comes a time when we say enough is enough, because if we don’t say it now they’ll come for more and more,” Dave Prentis, general secretary of the 1.4 million-member Unison health and local-government union, told delegates at the annual meeting of the Trades Union Congress in London today. “I give formal notice to 9,000 employers that we are balloting for industrial action.”

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. Unite, the biggest U.K. union with 1.5 million members, the Fire Brigades Union and the GMB union also gave notice of strike ballots today.

‘Fighting Back’

“This will be the biggest trade-union mobilization for a generation,” TUC General Secretary Brendan Barber told reporters in London after a meeting of 24 public-sector unions. “We remain absolutely committed to seeking to resolve this through genuine negotiations, but for that to succeed we need the government to take a new approach.”

At issue are 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. Unions accuse the government of imposing the changes without consultation.

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.

‘Mightily Upset’

“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.

“We’re happy to talk, but while we’re talking we’re preparing for massive strike action to show we’re serious,” Mark Serwotka, general secretary of the Public and Commercial Services Union, told delegates today. “We’re standing up for public-sector workers and service users everywhere.”

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.

Budget Cuts

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 2.18 percent in London on Sept. 12, the least since Bloomberg began collecting data on the securities in 1989. They were at 2.44 percent today, compared with 1.87 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.”

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.