Insights from the UK and beyond
The reform that breaks the camel’s back?
Trade union leaders have been warning for some time now that it would be pensions reform — not pay freezes or job cuts — that could prove the trigger for widespread public sector strikes this year.
Now activists, eager to punish the Conservative-Liberal Democrat coalition government, have all the ammunition they need in the Hutton pension review.
Few can argue that pensions do not need to be reformed. People in Britain are living longer, making it more expensive for the government and taxpayer to fund pension payments.
And private sector workers have long grumbled that the public sector has it too good when it comes to retirement.
Hutton’s recommendation to remove the final salary scheme was expected and hardly surprising.
But its consequences could be huge.
If the government adopts the suggestions of this former Labour minister, do not expect the unions to take it lying down.
Any prolonged industrial action across the public sector — fuelled by existing anger against spending cuts, a two-year pay freeze and forecasts of more than 300,000 state-funded job losses — could make life extremely difficult for the government and for the the health of the coalition partnership.
Private sector voters may have little sympathy for public sector workers when it comes to pensions, but it is less easy to argue against the union complaint that state-funded employees are having to pay a big price for a financial crisis they did not cause and past policies they did not choose.
Voters may not like the inconvenience caused by public sector strikes, but this time it could be different and the shockwaves of the public sector raid could prove long lasting.
One of the problems the Labour party had in the 2010 election was motivating its core supporters.
Angry public sector workers could prove a most valuable asset in forthcoming elections — both the local council vote in May as well as the 2015 parliamentary election.
Even if the economy has improved and the budget deficit has been slayed by 2015, the Conservatives and Liberal Democrats may still find themselves on the wrong end of a very sizeable and highly motivated public service vote.