Members of the Rail, Maritime and Transport (RMT) union are striking in industrial action expected to close the London Underground for two days.
Passengers have been warned that many stations will be closed on Tuesday and Thursday - and to expect services to be “severely disrupted” on the morning following each of the strike days.
The strike is in protest at what the unions regard to be a threat to jobs and pensions.
Compared with the private sector and other parts of the public sector, the Transport for London pension scheme is generous.
Members contribute up to five per cent of their salary – while TfL contributes 6.66 times this amount, a sum equal to 33 per cent of their pay packet.
It costs TfL about £375m a year in pension contributions - though this reached £401m in 2021.
It is a “final salary” scheme – unlike those used for Metropolitan police officers, London firefighters and Greater London Authority staff.
An independent review commissioned by Mayor Sadiq Khan in 2020 into all aspects of TfL’s funding described the pension scheme as “generous” and said reforming it could save £100m a year by 2025.
The threat to pensions is one of two issues at the heart of the next week’s Tube strikes. The other is the axing of 500 to 600 station posts.
Are TfL pensions actually under threat?
Probably. Under the terms of the Government’s covid bail-out last June, TfL was required to review its pension scheme and identify options to put it in a “financially sustainable position”. The RMT fears the ratio of employee to employer contribution could fall from more than 1:6 to 1:2.5 as TfL looks to save millions, and potentially as much as £730m by 2024/25 if the Government gets its way.
When is this to happen?
Former trade union boss Sir Brendan Barber was asked by Sadiq Khan to review the pension fund and filed an interim report request last December. He is “on course” to send his final report to the Government by March 31, according to the mayor’s chief of staff David Bellamy.
Sir Brendan’s interim report won some support from some Tube unions. The TSSA welcomed its finding that the pension scheme was "the only benefit of substance on offer to TfL employees" and the recognition that "the overall benefits package at TfL tracks below the market median for a number of key roles”.
However the RMT has accused him of “moving the goal posts” and seeking to reduce TfL’s pension costs rather than conducting an open-minded review. It said the review was “laughingly misnamed” as independent.
What has led to the focus on TfL pensions?
A report commissioned by the mayor into TfL’s finances and future funding streams set the cat amongst the pigeons when it was published in December 2020.
It described the pension scheme as “expensive and unreformed”, “generous” when compared to the Network Rail and civil service schemes, and said reforming it could save £100m a year from 2025. This was then seized upon by the Department for Transport when it began negotiating hard over TfL’s bailout the following summer.
Is the TfL pension scheme in trouble?
Not according to its latest accounts. By the end of last March, the pension fund had £13 billion of assets – up £2.5bn in the most recent year. It invests in some of the biggest companies in the world, such as Alphabet, Microsoft and the Lear Corp in the US, Canadian Pacific Railway and Unilever in the UK.
The TfL pension fund has 84,000 members, of which 26,600 are currently contributing. More than 32,000 members are drawing a pension and 16,500 have deferred their benefits.
Unions say the pensions fund is 98 per cent funded and there is “no justification” for changing its terms.
What else is behind the strike?
The imminent loss of 500 to 600 station posts. TfL insists that nobody will be made redundant and the target will be reached will be made by not replacing already departed staff or those who leave or retire.
But the RMT has warned that “mass forced displacement” of staff is inevitable – meaning workers being redeployed to new stations, potentially further from their home.
It says that having fewer staff will result in those who remain having to work more “extreme shifts” – either opening a station early in the morning or shutting it after midnight. It also fears an increase in the number of staff having to work alone, increasing the risk of assault.
Will other unions join the RMT action next week?
Not officially. While Aslef members voted 98.8 per cent in favour of action last December if TfL imposes changes without consultation, unions have to give 14 days’ notice of strike action – and none has been received in time for next week. However many Aslef drivers or workers belonging to TSSA or Unite may refuse to cross picket lines. In any case, if the majority of the 10,000 RMT members fail to turn up for work, the Underground will not be able to open. TfL has admitted this and told passengers to work from home if they can.
Why are the unions so angry?
The impact of the pandemic cannot be underestimated. Long before vaccines, Tube staff stayed on the front line when covid was ripping through the capital and killing thousands. A total of 105 TfL staff have died in the pandemic.
The unions feel aggrieved that their members, having helped to keep the Underground running, are now potentially paying with their pensions and working conditions for the financial losses incurred by TfL purely as a result of the pandemic.
What does the RMT want?
“No changes whatsoever” to the final salary pension scheme, which it describes as “deferred wages” to support TfL staff in old age, and no reduction in headcount at London Underground that would harm the pension fund in the long term.
What does Sadiq Khan think?
Prior to being elected mayor in 2016, he pledged “zero days of strikes” https://www.london.gov.uk/questions/2016/3782. It has not turned out like that. Next week’s two full days of action, on the back of the unresolved dispute over the Night Tube, show the unions continue to hold power in the day-to-day running of the London Underground.
