Pension row provokes rail stoppage

2004

The first national rail strike in the UK for more than a decade is set to cause chaos next week as 15,000 workers at Network Rail and London Underground walk out in a 24-hour strike timed to cause maximum disruption.

At the heart of the Network Rail dispute are the company’s plans to close its final salary pension scheme to new entrants - a move which would not affect any current Network Rail employees.

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 simultaneous stoppage on London's tube system is part of a campaign by the RMT union for a 4-day, 35 hour working week – something that most of the tube’s long-suffering passengers can only dream about.

The tube walk-out also comes despite London Underground already saying that it will agree to the 35-hour week and offering an above-average pay settlement.

Bob Crow, the RMT's general secretary, said Network Rail had refused to budge on pensions, despite progress in settling other disagreements over pay and travel benefits.

"Our ballot for industrial action may have brought Network Rail to the negotiating table, but on pensions they have simply sat there with their arms folded," he said.

Network Rail said that the closure of the pension fund would have little impact on existing employees and would affect only new staff.

Its chief executive, John Armitt, said: "This strike is wholly unnecessary and comes as a surprise when talks had progressed so constructively."

But relations between the two sides were not helped by the award of six-figure performance bonuses last month to John Armitt and his deputy, Iain Coucher.

“The directors’ decision to go ahead with awarding themselves telephone-number bonuses for ‘financial efficiency’ will be seen by thousands of loyal NR employees as a grubby reward for pulling the plug on their decent pension scheme,” Crow said at the time.

The RMT has appeared determined to provoke a confrontation over pensions, while TUC general secretary Brendan Barber warned in May that mounting anger over the loss of workers’ pension rights could spill over into mass industrial action.

For rail and tube passengers, however, the dispute will be seen as an arrogant and unjustified display of union spite. As John Armitt said: “Neither we, nor the public, can or will understand why they are threatening to bring the country to a standstill when we have offered concession after concession.”