Pensions changes provoke railway shut-down

2004

Railway workers in the UK seem determined to provoke a confrontation with their employers over changes to Network Rail’s pension arrangements.

Members of the Rail, Maritime and Transport (RMT) union employed by Network Rail have voted by 58 per cent to 42 per cent in favour of strike action that could involve some 7,000 signallers, controllers, and station staff across the UK.

The dispute centres around a three per cent pay offer, plus plans by Network Rail to end final salary pensions for new employees and the withdrawal of some travel perks.

Like one in four final salary schemes in the UK, Network Rail’s has been closed to new entrants to save £18 million a year. In its place, the company will contribute to a money purchase scheme, where the final pay-out depends on investment returns.

The move is in line with half of the UK's biggest employers who have also closed their final salary schemes to new entrants for cost reasons.

However RMT general secretary Bob Crow made it clear that he was not prepared for Network Rail to go the same way.

“Network Rail’s directors are happy to hand themselves telephone- number bonuses but when it comes to the workforce it is a different story. Without a word of negotiation they have closed a decent pension scheme and imposed a scheme no better than a glorified savings plan.

“Our members have made clear that their pensions are not an optional luxury that can be cut to help boost the bosses’ bonus fund.”

But Network Rail chief executive John Armitt pointed out that all the RMT members who voted in the ballot will still receive a generous final salary pension.

"What we think may have happened is that some people fear that because we have closed the scheme to new entrants that puts the scheme they are currently paying into at risk. It does not,” he said.

The strike ballot comes only a week after TUC general secretary Brendan Barber warned that mounting anger over the loss of workers’ pension rights could spill over into mass industrial action.

"Pensions have shot up the union agenda,” he said. “This is not because they have suddenly become of interest to activists and union leaders, but because they are a top concern for people at work.

"They feel let down, betrayed and angry at the retreat from good pensions provision by too many employers.”

Meanwhile, fears that the dispute around the pension scheme could spread to other parts of the rail industry appeared to be justified. The strike call was backed by the train drivers' union Aslef, which also warned employers not to change pension arrangements.

The RMT has also threatened to co-ordinate its strike action on the mainline railway with London Underground, where union members are involved in a separate pay dispute.

“Rail staff are not going to roll over quietly on pension rights" said Aslef leader Shaun Brady. "Let me be quite clear to all rail companies that any attempt to undermine or erode pension provision will be viewed as an attack on our members' rights and will be strongly resisted."

But rail workers can expect little sympathy from the tens of thousands of long-suffering commuters who will inconvenienced by the dispute – many of whom will be only too well aware about the erosion of their pension provision and for whom the sort of pension schemes enjoyed by many workers in former-public-sector enterprises such as the railways have long since disappeared.