Unrest in the Classroom

Abstract

British teachers are gearing up for what could be a continuation of the largest program of strike action to hit classrooms here since the 1980s. And this could make life very interesting for the United Kingdom government over the next few weeks. The source of their ire will be familiar to American readers: pension reform, amid an argument that goes to the heart of the debate over who should bear the cost of reducing the nation's public finance deficit. Teachers are in the front line of attempts by the coalition government here to find [pounds sterling]2.8 billion ($4.6 billion) of annual budget savings by cutting the public sector pensions bill. Unlike in the U.S., however, where local control still largely rules in education, the U.K. debate is happening at a national level because pay and benefits for most U.K. teachers are set by the Department of Education. This move, already hardly likely to go down well with public servants, also has been marked by a series of breakdowns in negotiations between the government and the unions, culminating in a one-day strike that closed or partially closed nearly half of the schools in England and Wales on June 30. (There appeared to be no relationship between these teacher actions and the rioting by mostly youth in August.) At the time of this writing, further industrial action in the fall seemed likely, with all seven teacher unions highly unhappy with the government position, and associations representing professions from civil servants to nurses also disenchanted. Teacher unions say the Conservative-led coalition is asking their members to pay more into their pensions, to work longer for them and then to receive lower annual payments when they do retire. Ministers respond that public sector pensions are more generous than those typically offered by private firms, and that they want to reduce the burden on taxpayers. The last set of public sector pension reforms here occurred just four years ago. In 2007, under the Labour government, which lost power to the right-of-center Conservative/Liberal Democrat coalition in May 2010, a review led to changes designed to lessen the cost of public sector pensions to taxpayers. For teachers, the 2007 changes required people entering the profession to work until 65, rather than 60, before retiring and drawing their pensions. They raised the amount teachers were required to pay into their pensions annually from 6% to 6.4% of their salaries. Finally, they backstopped the pension fund by requiring public sector employees to raise their annual contribution to the pension fund if life expectancy rises faster than expected and produces higher costs. Emergency budget When the current government came to power, it promised to look at the pension issue again. A so-called emergency budget consultation, called in June 2010 by Chancellor George Osborne to tackle the overall public finance deficit, announced a technical change in how inflation is calculated for pensions and pay purposes. This reduced the amount of pension payment and teachers' salary increases annually to reflect rising living costs. Teacher unions calculated that measure alone could cut the amount an employee receives over the lifetime of a pension by 15%. Last fall, Osborne followed this by setting out long-term public funding plans that would save the government [pounds sterling]2.8 billion ($4.6 billion) a year by 2014-15, by making public servants pay more into their pensions. In the spring, an independent report commissioned by ministers recommended further changes, including extending the retirement age so that most young public sector workers would work until age 68. In late July, ministers set out further details on how public sector workers would have to make a higher contribution toward their pensions. This was calculated on a sliding scale, with increases highest for the highest-earning workers: Contributions for teachers would rise by nothing for those earning less than [pounds sterling]26,000 ($42,500) a year, but by between 0. …