The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Monday, 2 February 2015

The Great Pension Robbery – UCU unravelling!


Only three years after closing the final salary pension scheme of USS for new members of staff in pre-1992 Higher Education (HE) institutions in the UK, the employers returned to the table with new demands. This time they asked for cuts to staff members’ pensions of around 27 per cent. Initially, the University and College Union (UCU) responded forcefully and carried out a ballot for industrial action: 78% of union members who participated voted for strike action and 87% voted for action short of a strike. The turnout of 45% was the highest in a national higher education ballot since UCU was formed in 2006. And yet, in January 2015 UCU settled for a negotiated deal, which was only marginally better for members than the initial proposals by the employers. Instead of 27 per cent of cuts, many members will now face cuts of somewhere between 20 and 24 per cent. How could this happen? In this blog post, I will provide a critical assessment of this struggle, drawing also on my own experience as a member of the Higher Education Committee (HEC), where the crucial decisions were taken within UCU.

Accepting the valuation methodology

Initially, there were positive signs. In view of the union resolve expressed in the strong support for industrial action in the ballot, divisions opened up amongst the employers. Several universities started to challenge the method with which the fund had been valuated. The calculations were unnecessarily cautious, it was pointed out, de-risking USS, for example, for the event that all pre-1992 universities would go bankrupt at the same time. Some universities also signalled concerns over their ability to attract high quality staff from overseas on the basis of the poor pension scheme on offer. The so-called crisis of the pension fund, many observers pointed out, was clearly manufactured and did not represent the actual health of USS. (See the blog by Dennis Leech for details of the debate around the valuation methodology.)

Photo by Plashing Vole
In meeting after meeting, the UCU negotiators stressed that they had challenged the valuation methodology of the pension fund. Instead of building on the divisions amongst the employers and engage in sustained industrial action, however, the HEC of UCU decided in October 2014 by majority to submit a counterproposal to the employers of how to de-risk USS. In doing so, UCU implicitly accepted the valuation methodology. This counterproposal contained major concessions, including most importantly the closing of the final salary scheme for all members. UCU entered negotiations on inferior terms and accepted from the beginning that major improvements of the initial employers’ proposals would not be possible. By January 2015, the results of these negotiations were presented. Final salary would be closed down for all and a hybrid system introduced with a defined contributions scheme for salary income above £55000. How could this happen? Was the analysis of the HEC majority incorrect?



The late Stuart Hall looked at situations of this type and argued that the problem is not that  analysis is incorrect, but that it is only partial. ‘In a world where markets exist and market exchange dominates economic life, it would be distinctly odd if there were no category allowing us to think, speak and act in relation to it. In that sense, all economic categories – bourgeois or Marxist – express existing social relations’ (Hall 1996: 36). Standard, liberal economic understanding is widespread and has become common sense also amongst the national leadership of UCU. The statement by members from the Independent Broad Left faction of UCU clearly reflects this. For example, the sentence 'unfortunately, financialised capitalism is not stopped in its tracks by reasoned argument or refusing to engage alone', demonstrates clearly how the notion of ‘there is no alternative’ has been accepted by these colleagues. When criticism was voiced of the UCU’s timid strategy within HEC, we were told ‘to live in the real world, not cloud cuckoo land’. Thereby, they have, however, overlooked that exploitation takes place in ‘the hidden abode of production’. Enforcing savage cuts to employees’ pensions of around 20 per cent, in other words cuts to employees’ deferred wages, is precisely such an instance, in which the exploitation of the workforce is intensified. People are expected to work at the same pace, but for significantly less income. And such an intensification of exploitation in the workplace can only be countered by collective industrial action. Nonetheless, this was never on the agenda of the HEC majority and UCU negotiators, who remained firmly attached to the limited liberal understanding of the current economic crisis.  


Succumbing to the ideology of ‘social partnership’

The UCU leadership had never been interested in organising a sustained campaign of industrial action in order to win this struggle despite the strong mandate given by members in the ballot. No clear industrial action strategy had been devised. The assessment boycott called on 6 November, in the middle of the first semester, caused consternation and havoc amongst members. As this is not a main assessment period, it individualised those colleagues, who had essays to mark, while many others could not be involved in the action. The fact that the action was called off less than two weeks later added further to the confusion. The most pathetic moment of the campaign came, when the UCU leadership called on colleagues to sign a petition lobbying the employers for a ‘fair’ USS pension scheme. What the UCU leadership seemed to have forgotten is that what is the right type of activism for organisations such as Avaaz, is completely inappropriate for a trade union in industrial conflict. The key difference between trade unions and other social movements is that the former have the unique power to ask their members to withdraw their labour collectively and, thereby, interrupt directly the production process. 

Photo by Plashing Vole

From discussions within HEC, it has become increasingly clear that the UCU leadership has succumbed to what the Norwegian trade unionist Asbjørn Wahl describes as ‘social partnership ideology’ (see The Rise and Fall of the Welfare State). This concept refers to a belief that gains for workers can be obtained purely by having discussions with employers. What is, however, increasingly forgotten is that the gains which were successfully negotiated after World War Two between employers and trade unions came on the back of mass mobilisations and successful struggles. Employers did not grant willingly concessions such as the welfare state. Trade unions and workers forced them into it. The situation is no different now. Universities were never going to agree on a different fund valuation methodology or a better settlement out of their own good will or on the basis of rational discussions. Only sustained industrial action would have been able to push them towards it. Negotiations are important, but only when they are based on a position of industrial strength.


As a result of social partnership, union leaderships become delinked from their members. UCU is no different here. Many members on the HEC including the UCU negotiators constantly spoke about the apparent unwillingness of members to engage in action, and yet it was totally unclear how they would know this, especially considering that a significant number of them had already retired and are no longer even present in the workplace. By contrast, in members meeting after members meeting organised across the country in January 2015, large majorities endorsed motions, which rejected the negotiated proposals. The moment members came together and discussed the proposals collectively, the sell-out became clear and the collective resolve to resist employers was strengthened. I do not know of a single meeting organised by a member of the Independent Broad Left, which resulted in a decision to endorse the proposals. They did not feel the need to do so, considering that they ‘know’ the position of the majority of UCU members anyway. In the end, the UCU leadership hid behind an electoral ballot, endorsing the negotiated proposals with 67 per cent of the votes for and 33 per cent of the votes opposed. Sitting individualised in their offices when having to make the decision and being told by their union leadership that the proposals were the maximum possible and that the only alternative would be a prolonged campaign of industrial action unlikely to lead to a better result, a majority of members resigned themselves to drastic cuts in pensions. It is noticeable that fewer members voted in the e-ballot than had participated in the initial ballot on industrial action.

Photo by Nick Efford

Nowhere to go – UCU on the sidelines

The employers’ attack on pensions in pre-1992 HE institutions has been the most savage attack on working and employment conditions in HE for many years. The negotiated proposals can only be regarded as an enormous defeat. The worst aspect is that this defeat did not come after a struggle, but was brought about through inaction. UCU never even attempted to fight the cuts. The signal to employers is clear, you can impose any cuts you want, UCU will not oppose you. As a colleague expressed it on an E-mail list, ‘worst of all, our members are now defenceless - as there is literally no industrial action we can now threaten the employers with that they will take seriously.’ The introduction of the defined contributions element also pushes the door wide open for the employers to come back in another of couple of years on the back of another dubious valuation of the pension fund, demanding further changes including potentially the transfer of the whole fund into a defined contributions scheme.

Of course, UCU can continue as an institution, which supports individual members in the workplace. UCU can continue to operate as a political lobbying organisation, as it does at the moment in a petition against the Counter-Terrorism and Security Bill.  As a trade union, however, with the potential to participate in the shaping of the wider HE policy framework it is finished. Having being unwilling to engage in serious industrial action, it has abandoned its classical role.

Photo by Plashing Vole

There may be one glimmer of hope on the horizon. Throughout the discussions within the HEC, I was heartened by the commitment of my colleagues from the UCU Left faction (see USS – An Unnecessary Defeat). Incisive in their analysis of the conflict, clear about the strategic requirements for a successful struggle and solid in their collective rejection of the leadership’s defeatist line of argument, they indicated what could have been possible. If there is an area from which a positive stimulation for union renewal can come in the future, then it is UCU Left


Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK

Andreas.Bieler@nottingham.ac.uk
Personal website: http://andreasbieler.net

2 February 2015

9 comments:

  1. "the UCU leadership hid behind an electoral ballot, endorsing the negotiated proposals with 67 per cent of the votes". Oh please. When the employers or media misrepresent the democratically-expressed views of Union members, we object, but when it leads to an outcome that you don't agree with, it's an act of cowardice on the part of the leadership? What mandate does this provide for any other course of action? Of course general meetings led to support for action. Branch meetings tend to attract a biased sample of the membership --- the angry, the militant. Favouring their views over the silent majority is no way to determine Union policy.

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    1. Thank you for this comment. It is a good example of someone, who pretends to know what the so-called 'silent majority' thinks, while branch meetings would only attract a biased sample of the membership and can, therefore, be disregarded. This is exactly the argument used by the Independent Broad Left on HEC, when they argue that members are not willing to take industrial action. We can, of course, all interpret our own positions into what this silent majority may think, but union policy should be determined in members meetings, where everyone can openly speak their mind and try to convince colleagues of their own position. Perhaps the author of this comment attempted to do so but was unsuccessful?

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    2. Your argument does not affect the fact that the UCU is now a busted flush.

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  2. The way that the UCU leadership has behaved on this is disappointing and does seem to have been tactically inept. Organizing any effective industrial action in HE is very difficult, but the one thing most academics are most willing (or perhaps least unwilling) to strike for is their pension, so in that sense it is an opportunity lost. However, I can't help but feel that the key battle was lost with the division in the scheme a few years ago, when the existing membership sacrificed the pensions of new joiners to try and save their own. This inevitably created a structural imbalance - did highly paid Profs (who lose the most from this reform) seriously expect new entrants on much lower wages (and often temporary contracts) to strike to defend their vastly superior pensions? Indeed, most of those in the Career average scheme will end up with a better pension than before under these proposals (albeit in return for increased contributions). I’m not surprised that the final salary scheme has been completely closed, but I am somewhat surprised that it has happened quite so quickly (I thought it would take another about five years, when the proportion of staff in the career average scheme would have been quite a lot higher).

    Marching the troops to the top of the hill to then come scurrying back down also only serves to illustrate the weakness of the union, as numerous colleagues from UCU left have been keen to point out. Of course it is somewhat ironic that by constantly pointing out the weakness of the UCU leadership the Left has probably only served to embolden the employers further. But the fact remains that barely a third of academics are in UCU, and of those many are unwilling (or unable) to take part in sustained industrial action. The salary deductions are punitive and (again particularly at the early career/temporary contract end of things, which is the group of colleagues who in many institutions actually do most of the teaching so have the power to have the greatest impact) the prospect of losing a chunk of take home pay for any sustained period is simply unaffordable for many staff.

    As such I have some sympathy with the union leadership who had to try and calculate how much pressure they could exert through industrial action without it just collapsing, and again demonstrating massive collective weakness. Most academics don't earn over the £55k threshold, and therefore most won't be dramatically worse off under the new scheme (even compared to the final salary one, given the improved accrual rate of 75ths rather than 80ths). The biggest losers by a long way are those in the FS scheme above this level. So again I suspect many would have concluded that embarking on possibly very drawn out phase of industrial action with no guarantee of success would simply not have been worth it. Many might actually conclude that they are better off cancelling their UCU subscription and using it to help fund the higher pension contributions.

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    1. Don't forget that this £55k cap is not tied to a salary spine point, or anything remotely sensible like that. The *plan* is just to move it with CPI. This means two things will happen: (i) when employers at some point in the future agree to an above CPI pay deal in a given year they will likely bargain with "not increasing the cap this year", and (ii) it's not just *some* staff who earn over £55k... if wages rise even a fraction above CPI over the next twenty years then it'll be pretty much ALL UCU members who are affected by the cap as they progress through their career. It's only the employers who care what proportion of current members are above and below the cap (as it tells them how much they need to pay). Us, the employees should be concerned about whether such a cap will affect us *in the future* which I would guess most staff would *hope it does* if they have any ambition of ever reaching Senior Lecturer level.

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  3. I think the anonymous comment makes an important point. I was an activist in MSF for many years and became a university lecturer pretty much by accident when I got a PhD at 51, working for seven years before a publish or perish cull thrust early retiirement on me.

    When I was a senior rep at GEC, pensions were a long way off in time - and a long way from the workplace in the group's structure. Organizing around them was difficult. I can understand why reps may see a compromise maintaining the status quo for existing members as attractive. How do you motivate employees who are told their own pensions are safe to go on strike to defend the putative pensions of possible future colleagues? The problem of a divided workforce may be seen, but how do you stir up the punters to have a go?

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  4. This was a massive historical defeat for the lecturers of the United Kingdom, which should as Andreas Bieler says be laid at the feet of the UCU HEC leadership. I do not share the view that only strikes can work; I actually think the marking boycott might have been a valid tactic if employed well, and one-day strikes had little power in the past five years, leaving members skeptical about their validity. I also believe that on pensions, given the balance of social forces, an orderly retreat was necessary and that meant sacrifice of the final salary scheme. But the line should have been held at defined benefit, and it was not. Now the consequences will ripple outward. The pension scheme, lacking employer contributions for those over £55,000 will be weakened and vulnerable and will surely go to defined contribution entirely in time. What will this mean? The employers pay far less into such defined contribution plans, employees are captive to the fees charged by financial services companies, which sap returns, and retirement becomes a roulette game based on market performance. Welcome to the neoliberal university.

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  5. I voted to accept the proposals, and for much the reasons cited by the long anonymous post above. The union was still--at any rate officially--defending the final salary scheme, and while that was not the only thing it was fighting for, this weakened its moral case. First, it amounted to asking junior members of staff who would never enjoy such a deal to risk swinging deductions to their salaries on behalf of their elders (including me). Where is the equity there? Moreover, those who would have benefited most from the final salary scheme's continuation would be those who will have higher pensions in any case--viz., professors. I am always in favour of extracting better terms for labour vis-à-vis capital, even for the better paid members of the workforce, but the moral urgency of ensuring that a professor should have a pension of £40k per year instead of £20k per year does not seem overwhelming. Finally, in defending UCU's position last autumn, I had some people ask me whether people who had achieved enough to get promoted early in their careers didn't *deserve* bigger pensions. It is not at all obvious to me that they do, but I also do not have a knock-down argument as to why they don't. Be that as it may, I did not relish the idea of telling my students that I was going to refuse to mark their papers and jeopardize their timely graduation partly in order to preserve a two-tier scheme that was (a) inequitable toward junior staff, and (b) disproportionately benefited the highest earners.

    That said, this was not only about final salary, as Alan Phelps writes above. Suppose we'd traded that demand away at the end, could we have extracted a better deal on the other issues? I agree with Andreas that we should reject the notion of a 'social partnership'--the employers certainly don't behave as if they were *our* partners--but putting it bluntly, were we strong enough that we could have won? We are not industrial workers in the 1950s--when union membership was widespread--but rather in a sector where only a minority belongs to the union. If we had the strength that Andreas's argument presumes, we wouldn't faff around with one-day strikes--we'd strike like a proper union and down tools for weeks if necessary. UCU, presumably, does not believe its members are prepared to do that; what reason is there to believe that enough of them are willing to hold the line on an assessment boycott when they are losing 25% or more of their salaries?

    Now, if most people *did* belong to the union, then we'd be in a completely different situation. And UCU Left is right to see that as the goal to be worked for. But we're not there at this point, and given the present correlation of forces, it seems likely to me that industrial action would have led to much suffering and little gain. I'm not a fan of Lenin, but one thing that must be said for him is that he generally knew when to fight and when to strike a deal. This settlement, I would say, is UCU's Brest-Litovsk.

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    1. Thank you for your thoughts Matthew. Yes, I am more confident that members would have been prepared to engage in sustained strike action. First, because this was clearly backed in the ballot on industrial action. Second, and perhaps even more important, industrial action is also a dynamic, collective process. Strikes always offer the possibility to talk to colleagues and convince them to join the action. Unsurprisingly, it is during times of industrial action that unions succeed most at recruiting new members. Finally, the members meeting at Nottingham University on 19 January, the one with the largest turnout for years, demonstrated the importance of regarding industrial action as a dynamic process. When colleagues realised how widespread the anger was against the draconian cuts and that other colleagues were also prepared to engage in sustained strikes such as Tuesday to Thursday every second week, very quickly a strong resolve developed to move forward collectively.

      Would UCU have succeeded, if we had had a better leadership? I cannot answer this question. There are no guarantees. But not even to have tried large-scale mobilisation has unarmed the union for any future campaign. The employers know now that they do not have to fear anything from us. They can do whatever they want. In my view, the settlement is not UCU's Brest-Litovsk. It is our Waterloo.

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