10 March 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.)

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.

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.

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.

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

Personal website: http://andreasbieler.net

2 February 2015

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