Charm offensive stuns TUC

The tide has gone out on New Labour’s relationship with the unions. The sea is still there if you look, of course, but it’s a real plod to the water’s edge and sometimes you wonder why they bother.

After Tuesday’s hammering by chancellor Gordon Brown, who poured scorn on calls for reform to the law preventing secondary picketing, Wednesday’s delegates could have been forgiven for anticipating a rough ride on pensions from trade and industry secretary Alan Johnson, himself a former union general secretary.

The subject was introduced by Adair Turner, chairman of the Pensions Commission, former director-general of the CBI and vice-chairman of Merrill Lynch Europe.

Turner is a man who carries an impressive portfolio of extra-curricular interests: visiting professor at the London School of Economics and the Cass Business School in the City of London, he is also a cross-bench peer in the House of Lords.

In the old days, he would have been no more likely to set foot inside the TUC Congress than a goldfish joining a friendly shoal of piranha. But here we were without a sharpened fang in sight.

A mammoth task

A couple of days earlier, TUC general secretary Brendan Barber had been spotted at a Sunday evening press conference, clutching a newly published document, the back cover of which looked like a beach towel with red and black stripes. Solving the Pensions Crisis outlines, in 72 pages, the findings of a TUC pensions task group.

“The collapse of decent pensions in the private sector has been dramatic,” said Barber. “Half of salary-related pensions have been closed to new entrants in the three years between 2000 and 2003.

“Many employers have replaced salary-based pensions with new money purchase schemes. These provide a reasonable pension if contributions are high enough. But they are not,” he said.

The unions have got their dander up on public sector pensions all right. They had the government over a barrel just before the election, with threats of strikes in the public sector when there was talk of raising the normal age of retirement to deal with the funding crisis. John Prescott procured a deal in late-night talks with the unions on the evening of St Valentine’s day.

“It is not everyone who can say they spent St Valentine’s night with John Prescott,” said Gail Cartmail, national officer at Amicus. “But we can’t go back now. Our members deserve better than this.” Somehow you knew there was no love in the locker, however. Prescott’s deal was a kiss of convenience, no more.

Turner was not giving anything away. The Pensions Commission has to produce a report by the end of November but he did not reveal any titbits, merely underlining the scale of the challenge.

“It is good news that we are living longer,” he said. “The actuaries don’t think so, but I do.”

In fact, Turner pointed out, life expectancy has been going up every year since he was appointed chairman of the Pensions Commission, so if we can persuade him to stay on we might crack the problem of immortality.

The problem is, all this living longer is bad for pension funds. Employers really cannot afford it. Nor can the state fund and private funds. One possible approach involves compelling everyone to join schemes and compelling companies to provide them. That way the funding base would be more secure. Turner was not saying what he thought, but you got the strong impression he did not like that one.

No beach party

Elsewhere, a fiery speech from Dave Prentice, general secretary of Unison, reminded the delegates that this really was the TUC and not a beach party after all.

“The government had better look out if it thought his members were going to give up their pension rights without a fight,” he said, to loud cheers from the Unison delegates.

Then up stands Johnson. “I fully accept that our original approach was wrong,” he said. “Public servants have a right to expect proposals to change their pensions arrangements to be discussed and negotiated with their trade unions. That was not happening before – I hope that Brendan and his colleagues accept that it is happening now.”

So there it was: the tide had come in suddenly, just when we were least expecting it. The delegates broke out into friendly applause. “One of our own, always welcome here,” said a woman from the Public and Commercial Services Union. At least until next year.

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