HARRIET HARMAN – Public sector v private sector pensions
Friday 25th November 2011
Speakers: Harriet Harman
JD: Welcome to Broadcasting House in London and to the Radio Theatre. On our panel: Sir Martin Sorel is the CEO of WPP, the world’s largest advertising and marketing group, which has 354 of the Fortune Global 500 on its books. Last year for this his total remuneration came to some 4 million pounds, of which just over 1 million was his basic salary, which in a competitive international marketplace--he says--is very low. Brendan Barber has been a leading light in the TUC since the Miner’s Strike and the whopping dispute. And, as Britain faces what he describes as the biggest trade union mobilisation for a generation, he says, as the TUC’s general secretary, that its role is to be Britain’s conscience, standing up to the forces making us more unequal. As if in response to that, the Conservative backbencher Matthew Hanckock has tweeted about next week’s day of action: ‘’Oh, the irony. Unions’ new tune: let’s work together’’. MH was George Osbourne’s chief of staff and economic advisor until winning his seat in may but last year--he got into the House and remains there, one of the Chancellor’s closest colleagues. As to the cause of this increasingly bitter dispute between the Government and the trade unions, HH as SDPM, DL of Labour, Shadow Sec. of State for C,M,&S, says that the proposed changes to public sector pensions—‘’It’s all to pay for cutting that flipping deficit too far and too fast.’’ Our Panel:
Q: Nora Fry: I’m flying to Munich and back on Wed; should I cancel my trip?
JD: We’ve heard on the news airports talking about 12 hour delays, airlines being asked to reduce the number of passengers they bring into the country, and also on the news as a corollary to that, the NHS talking about 5500 operations being cancelled, 40000 outpatients being postponed, emergency cover still being given. So it’s both Nora’s trip, BB, and the broader issue obviously.
BB: Yes, well, Nora, you’ll have to make that candid call…depends on circumstances and whether it’s easier to switch to another day, but look, the broader issue of course is that this is a hugely important dispute, affecting the pensions of 6 million public sector workers, and we’ve reached this position of strike action, balloted on by 30 unions representing every part of the public sector, unions that have not balloted their members for decades, in some cases never before balloted for industrial action. We’ve reached this position because despite months and months of trying to find a negotiated settlement. We’ve not been able to do that. And the Gov’t has absolutely dug in its heels, determined to force through major changes that are really damaging to the pension security of those public sector workers. Changes that involve the changing indexation—
JD: [interrupting] Now, we may come onto the issues underlying the dispute; this is really about impact of the other day itself. So hold it there and I’ll come back to you, perhaps. Matthew Hancock.
MH: Well, I think that it’s a bit complacent of BB to say, ‘’well, you know, you might have to change to another day’’ because millions of people flying in and out of Britain and coming through our ports won’t be able to change to another day, even with the help of the airlines who will take on the cost, as we’ve heard today. And that’s added to the literally millions of families, up and down the country, who won’t be able to take their children to school, and so whose jobs will be disrupted, and the economic costs of that will be vast. And then we hear about the 5000 hospital operations that are going to be cancelled because of this action. And I think it is deeply irresponsible at a time when everybody knows that things are in a very difficult position, and—people are living longer, that’s the good news, but of course that means it has to be paid for. So the idea that it is right to therefore put so many people at such enormous inconvenience and indeed for ill people in danger, I think is deeply irresponsible, and I think that the public won’t wear it.
DD: Is it responsible Harriet Harman, both in relation to the cancelation of operations, which seems likely to follow this action and the airlines not being able to land because of the inability to process people through customs, through border controls?
HH: Well I hope it is not going to happen--I don’t want to see anybody have to cancel their flight, I don’t want to see anybody have their operation cancelled. I don’t want to see anybody have to take a day off work and lose pay because the schools are closed. And I don’t want to see a million people who have voted for a strike to feel that they have been backed into a corner but that they have got no option but to go out on strike to make the government listen to them when actually they work in public services because they care about public services. And as for Matthew saying…
HH: I was really concerned in the House of Commons last Wednesday when I saw like Matthew a whole load of Conservative MPs, kind of like a pack baying for the blood. This is a million people, 3/4s of them are women, most of them are low-paid, it is no good pointing the figure and David Cameron then appearing on the television saying ‘’If there is a strike we all know who to blame’’. It is not his job to point the figure of blame it is his job to resolve the dispute and there is still time before next Wednesday…
MH: But Harriet, you used to say that you were on the side of families and how can you be on the side of families when you are on the side of shutting thousands of schools up and down our country?
HH: I’m not on the side of shutting the schools…
MH: Well then condemn the strike…
HH: But those people, those 750,000 part time women who work and who actually earn less than £15,000 a year but are going to have the 3% increase on their pension contribution, they are families as well as people who work and I’m…
DD: Just to clarify your position… you used the phrase just now that it will be because they think they have got no option but to strike, if they have been through the processes, and I assume you think it is a just cause from what you have said, and I am quoting you, you know if they have gone through a process you shouldn’t be saying to people they can’t strike. Do you share the view that they will have no option but to strike?
HH: No. I don’t want them to…
DD: No, we know you don’t them to; you have said that. If they go though the processes do you believe it is a just cause that gives them no option but to strike if there is no movement?
HH: I have sympathy with people who are low paid and who are being told ‘we are going to take 3% out of your, we are going to make you pay 3% more, you didn’t cause the global financial crisis, you are low paid but you are going to have to pay for it,’ but I don’t want there to be a dispute and I think the government could resolve it. Yes the Unions have got to negotiate further, I mean Brendan would say that their position is completely correct, but the reality is that to solve a dispute both sides have to work together…
DD: You think the unions have got to move?
HH: Yes I do because actually I think there is a process of ensuring that when people live longer there has to be changes in pension, but I think the reality…[interrupted by DD]
DD [interrupting to ask BB]: Are you prepared in principle to give ground as HH says you should?
BB: We are negotiating and have been doing so seriously for almost a year—
DD: [interrupting] --and you’re prepared to give more ground than you claim you’ve given already?
BB: --to try to get to an agreement on the shape of our pension system for the future. But there are key areas where the Gov’t have made it crystal clear they’re not willing to move one iota. And that makes it very, very difficult when one party’s saying ‘’you move but we’re not going to reconsider our position to any degree at all’’.
DD: Sir Martin Sorell.
Sir MS: I wondered whether I was going to get any chance to make a contribution to this squabble. I thought the question was actually whether you should cancel your trip to Munich. It’s a very practical one. We have 13,000 people in the UK now, having increased that number by over 10% this year. And they will have to respond to clients’ needs and people’s needs within the company on Wed. And they’ll have to go about their jobs. And we’ll find alternative ways; we’ve dealt with situations like this and responded to--natural disasters as well (for example in Thailand at the moment we’re doing exactly the same). So we respond to all these challenges all the time. So to look at it from a purely practical point of view--which is what I think the question was asking--we will find alternative ways of running our business on Wed. I was at a school in Lambeth this afternoon, and the headmistress told me that the school will not close on Wed. Our people, and generally people in Britain, I think are quite clever in finding ways round these situations. It’s one day. And we’ll respond practically and deal with it.
DD: What’s your view of the strike?
Sir MS: Well, my view at the end of the day is that the Gov’t and the unions should’ve found a way around this at this particular point in time. There are so many other challenges, Jonathan, that we have to deal with. This is the last thing we need. There should have been some way of negotiating a settlement—in fact, I did say to BB over dinner…
BB: [interrupting] The very light supper we had before the premiere
Sir MS: Actually it was quite heavy.
BB: -Was it?
MS: -Yes it was quite heavy
BB: - I left before you
MS: But anyway, we did discuss about what was the breaking point, or what was the difficult point. And I would have thought through—in difficult times like this not just in the UK but the US and Europe—that we could have found a way through it.
DD: I’m gonna pick up on that--you’ll have a chance to come in MH, as you want to--by going to our next question:
Q. John Fry: When will the trade unions recognize that people in the private sector are already having to work longer and pay more to receive a reduced pension—and accept that this is a fact of life?
DD: And you believe therefore, no matter how strong the feelings may be in the public sector, that it’s not appropriate for this action to be taken?
John Fry: I do.
DD: Harriet Harman.
HH: Well I think one of the disappointing things about all of this is that it’s become very divisive as the private sector set against the public sector and you know I hate to see that happening, obviously I want to see everybody having a reasonable pension
HH: And the private sector you know there is a contribution in tax relief to the private sector. When we were in government we wanted to encourage everybody in the private sector to be able to have the opportunity to pay into a pension and have their employer contributing as well. So I don’t want, I don’t think that it is right for people in the private sector to feel that the public sector people are ge