Bloomberg News

U.K. Pensions Strike Shuts Schools, Fails to Disrupt Flights

December 01, 2011

(Updates with government estimates of number of strikers starting in second paragraph.)

Nov. 30 (Bloomberg) -- Members of 30 U.K. public-sector unions walked out in a dispute over pensions with Prime Minister David Cameron’s government, closing more than two-thirds of schools though failing to disrupt air travel.

The government said about 900,000 civil servants, local- government and health workers went on strike today. That was “significantly less than the unions predicted,” the Cabinet Office in London said in an e-mailed statement this evening. More immigration officials than expected turned up to work, Cabinet Office minister Francis Maude said, preventing delays for travelers arriving at airports.

Unions struck to protest plans to make government employees retire later and contribute more to their pensions. Ministers say the move, part of Cameron’s program of spending cuts to narrow the budget deficit, is fair because workers who contribute to public-sector pensions get benefits no longer available in the private sector.

“Today’s strike is inappropriate, untimely and irresponsible, especially while talks are ongoing,” Maude said in an e-mailed statement.

The Trades Union Congress, Britain’s umbrella labor movement, had said it expected as many as 2 million public- sector staff to strike.

Government Figures

The Cabinet Office said final figures showed 146,000 central-government civil servants walked out, less than a third of the total, while only 14 of more than 900 Jobcentres, as unemployment offices are known, were closed. About 79,000 health-service staff, less than 15 percent, failed to show up for work, it said. Thirty-two percent of local-government staff in England and Wales also went on strike, according to the Cabinet Office.

The prime minister told lawmakers in the House of Commons the strike was “something of a damp squib.”

Even so, the London Ambulance Service said this afternoon it was “under severe pressure” as a result of the strike, according to its website.

Colin Matthews, the chief executive officer of BAA Airports Ltd., which operates London Heathrow, Europe’s busiest hub, said passenger numbers were down about 25 percent on a normal day, helping avert disruption.

Matthews said the strategy pursued by Heathrow of running a full schedule while asking airlines to reduce the number of passengers on flights had paid off.

‘Common Approach’

“I’m really pleased that the airlines agreed to do what they have done,” he said in an interview at Terminal 3. “It’s unprecedented to get all the airlines to agree a common approach around the table and then get them to implement it.”

Passengers arriving at Heathrow said they were surprised by the speed at which they cleared immigration.

“It was quicker than ever. Everyone was very helpful and there seemed to be more staff than usual,” said Georgina Hamilton-Hopkins, from London, who was returning from a vacation in Miami on a Virgin Atlantic flight. “We thought it was going to be awful. Our plane was quite empty. Loads of people had changed flights but I had to be back at work tomorrow.”

Gatwick, London’s second airport, also reported no disruption, and Eurostar Group Ltd., which runs trains through the Channel Tunnel to London from Paris and Brussels, had no delays, according to its website.

Improved Offer

Chief Secretary to the Treasury Danny Alexander announced an improved offer to the unions on Nov. 2, after they had started holding ballots for strike action. The concessions included protecting existing pension rights for people 10 years from retirement, higher limits for government contributions and improved benefit-accrual rates.

“The strike is not going to achieve anything, it’s not going to change anything, it’s only going to make our economy weaker and possibly cost jobs,” Chancellor of the Exchequer George Osborne told BBC television today. “I would urge people, let’s settle this, let’s get back round the table and let’s settle this for the next generation.”

Osborne told lawmakers in his year-end statement yesterday that economic growth next year will be slower than previously forecast and the government will need to increase borrowing.

Pay Cap

Labor unions were angered by Osborne’s announcements of a 1 percent cap on public-sector pay increases once the current two- year freeze is over, an increase in the pension age to 67 and an easing of health-and-safety legislation. The chancellor also said he will make it easier for private companies to take over public-sector services.

Hourly wages for government workers are 7.5 percent higher than those in the private sector, the Institute for Fiscal Studies said today. While Osborne’s pay squeeze will narrow the gap, his pension overhaul will leave state employees with retirement incomes “on average substantially more generous than those enjoyed by private-sector workers,” Paul Johnson, director of the research group, told reporters in London.

The Office for Budget Responsibility increased its estimate yesterday of the number of public-sector workers who will lose their jobs by 2017 to 710,000, or 13 percent of employees in local and central government. The office previously predicted that 400,000 posts would be cut by 2016.

“I signed up to terms and conditions with this job, and the government’s changed them with the stroke of a pen,” Simon Kaplan, 47, a web editor in the Cabinet Office in London, said as he manned a picket line outside. “We have millionaires in Cabinet telling us we’re all in this together. They’ve no clue what it’s like trying to survive on pay that’s falling when food and fuel prices are rising.”

--With assistance from Katie Linsell and Robert Hutton in London. Editors: Eddie Buckle, Andrew Atkinson

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net; Steve Rothwell in London at srothwell@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net; To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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