Archive for November, 2010

Fiddling the size of the deficit

November 22, 2010

BECTU and the NUJ are both hoping to persuade the BBC to reopen the whole pensions question if the deficit turns out to be less than £1.5 billion. Quite apart from the implausibility of Mark Thompson agreeing to this, there is another reason for believing that this is not going to happen.

If you read Jeremy Peat’s Q&A in Ariel this last week (he’s the Chairman of the Pension Fund Trustees), he slips in a new point (new to me, at least). Apparently the assumptions that decide the level of the deficit – principally what’s called the discount rate – depend on the trustees’ judgement about the strength of the BBC’s commitment to the pension fund. If the trustees believe that the BBC is no longer as committed to the pension scheme as it once was, the discount rate goes down, and the deficit goes up. In other words, simply by telling the trustees that it is no longer willing to fund its commitments under the pension scheme rules, the BBC is able to increase the deficit, and so justify its decision to cut back benefits!

Even if the deficit looked like it might come in under £1.5 billion, all Mark Thompson has to do is lean on Jeremy Peat (and so far Peat has offered as much resistance as a feather in the wind) and remind him that the BBC is really not that committed to the pension scheme anymore. Down goes the discount rate (which in any case has to be signed off by the BBC), and up goes the deficit.

The more that comes out about this pensions robbery the more disgraceful it looks. We will look back on this and wonder how the BBC ever got away with such a blatant piece of thievery.

PS Tucked away in the next section of his Q&A, Jeremy Peat is good enough to confirm what I and many others have been saying for some time: namely that the BBC could reduce the deficit by giving the pension scheme rights over named assets (such as BBC Worldwide).


Assessing where we are

November 21, 2010

It was depressing this week reading Jeremy Dear’s statements about the “negotiations” with the BBC. It’s all down to improving CAB2011, he said in various different ways. What a tragedy that it has come to this. Despite a 70% mandate to take industrial action, the NUJ leadership prefers to put its faith in negotiations with an employer that has quite clearly ruled out further movement.

The mandate for strike action was about far more than this – it was about trying to defend the existing pension scheme. The only way to ring further concessions out of the BBC is strike action. What’s also so frustrating is that Mark Thompson clearly is worried about the prospect of continued industrial action. Last week he had the senior managers in the newsroom telling him that they couldn’t keep even the skeleton service they managed during the first strikes if industrial action persisted. Yet it’s now very hard to imagine the NUJ membership will be persuaded to go on strike – not when their own leader has retreated so far.

Meanwhile, all the energy to keep fighting is coming from a small band of dedicated activists. This week David Gallagher sent me the results of some freedom of information requests to the BBC. They show that the BBC hasn’t even considered alternatives that would have helped makee the existing pension scheme viable.

– The BBC has “no information” on what the effect of increasing the retirement age would be. In other words, it’s done no work on this key option for helping reduce the pension fund deficit.

– Ditto the effect of altering the measure of inflation used to uprate benefits from RPI to CPI.

– Lucy Adams has conceded in an email that the BBC has done no detailed modeling about the impact of a cap on pensions (for example capping pensions at a max £50K).

Any of these would have reduced the pension scheme deficit, and at considerably less cost to members than any of the options the BBC is about to enforce.

Then there’s the dishonesty. In 2008 the BBC signed a statement of funding principles for the pension scheme. It said the following:

“Any funding shortfall (ie deficit) identified by an actuarial valuation will be eliminated as quickly as the BBC can reasonably afford by payment of additional contributions over an agreed recovery period…”

When asked to comment on BBC management’s behaviour in breaking this commitment, pension scheme actuary Alison Blay said:

“I think the context of that is that in 2007 there wasn’t a deficit and so it was a fairly theoretical position”

Breathtaking, isn’t it? The BBC’s promises only count if they don’t have to be redeemed. Once the “theoretical position” becomes “reality”, the BBC simply says it never really meant it in the first place. If I behaved like that in my professional life I’d be fired. But not the morally bankrupt leaders of this organisation.

If the union wanted to, this  could form the basis for a stirring campaign against the BBC. Will they take up the opportunity?

Your last chance…

November 18, 2010

… to join the existing pension scheme. Rather surprisingly the BBC is not publicising this, but you can still join the defined benefit pension  scheme.  After December 1st, the defined benefit (DB) scheme will be closed to new members, and your only pension option will be the defined contribution (DC) scheme.

(Under the DB scheme you and the BBC pay in to the pension fund, and at the end your pension is related to how many years you’ve been in the scheme. Under the DC scheme you and the BBC pay into a different pension fund, which is invested in the market, and your returns depend on how well the fund has performed in the market.)

Regardless of how the current dispute plays out, I find it very hard to envisage circumstances where joining the DC scheme is better than the DB scheme. You’ll need to look at your personal circumstances but if you’re not in the DB scheme then I would look very seriously at getting into it NOW, whilst you still can!

UPDATE: 19th Nov

I spoke too soon. Lucy Adams has emailed everyone today about the impending closure of the DB scheme.

Strikes suspended

November 11, 2010

This afternoon the NUJ reps voted to suspend Monday and Tuesday’s strike action (subject to the BBC cancelling disciplinary action against 3 overseas union members who supported last week’s strikes). On Monday Mark Thompson said there would be no negotiations, now he is prepared to meet the NUJ – it feels like a concession of sorts.

The BBC has yet to respond. But earlier in the day Lucy Adams said that any discussions would only cover how to implement the deal, not renegotiating the terms of the deal. If that’s the case then all Mark T has agreed to is a chat, not negotiations. We’ll find out early next week: the first meeting is scheduled within a week.

Update: Mark’s email this pm makes it clear that there is no offer of negotiation on the table. I think we’re very quickly going to be back where we were – either the NUJ calls more strikes or the BBC wins hands down.

Concession… or is it?

November 11, 2010

Today’s Media Guardian carries a story suggesting that Mark Thompson is prepared to concede a key point: namely to re-open negotiations if the deficit is revealed to be below £1.5 billion when the valuation is completed at the end of March next year. The BBC is portraying this as a “clarification” rather than a concession, but given the steadfast insistence up until now that it would not re-open negotiations unless the deficit fell below £1 billion, it looks like a concession to me.

But, it may still be less than it looks. If the current deal is implemented at the end of November as currently planned, then the idea that meaningful negotiations can be had in March/April looks like a fantasy. Many people might already have signed up for CAB2011, so the BBC would have a ready made argument to kill any further negotiation. The key is this: will the BBC suspend implementation of the current deal until the deficit is revealed? If not, then the offer to hold further talks if the deficit falls below £1.5 billion is an empty offer.

One thing it does make clear: strikes work. The new offer is being made conditional upon the union calling off the strikes on Monday and Tuesday. Thompson is clearly rather more desperate to avoid further strike action than his uncompromising emails to staff would suggest. The temptation for the NUJ must be – now they have discovered his pressure point – to push a little harder. The risk is that the members may not follow.

The long haul

November 8, 2010

The BBC is setting itself up for the long haul, hoping that the strikes will eventually lose momentum.

Mark Thompson’s letter today, and Lucy Adams’ appearance on the Today programme both rely on the argument that because they’ve made a deal with the other unions they can’t now re-open negotiations. What nonsense! The other unions very reluctantly voted to accept the deal – their members would be only too happy to see the issue re-opened if it would lead to a better deal.

The NUJ’s case is simple and powerful: wait until we know the full size of the deficit before any decisions are taken about how it should be plugged. That’s a reasonable, sensible, moderate demand. The BBC wants to force us to make a decision before the full facts are known because it fears that its negotiating position will be substantially weakened when the true size of the deficit is revealed.

It’s now critical that the next strike is solid. Mark Thompson needs to know that our resolve more than matches his own. He may not want to back down, but there are people at the top of the BBC who could force his hand if the dispute drags on. Inflicting week after week of disrupted services on the audience when all the union is asking for is that a decision is delayed until the full facts are known will be a harder and harder position to sustain.

The Telegraph gets it spectacularly wrong

November 7, 2010

Today’s Daily Telegraph has an editorial that puts forward a rather curious and at times dishonest set of arguments.

Once again it advances the argument that our defined benefit schemes are more generous than the defined contribution funds found in most of the private sector. But in a slightly surprising turn,  it then castigates defined contribution pension funds, suggesting that they are unreliable and a rip off. You might think that made a pretty good case for defending our defined benefit pensions. But instead the editorial then shifts the argument: it suggests that the only reason the public sector can stick with defined benefit schemes is because the taxpayer stands behind them. Of course, this is simply not true at the BBC: our pension scheme has its own fund (currently in deficit). So for its own rhetorical purposes the Telegraph has lumped us in with unfunded public sector pensions.

This matters for an important reason. Our pension fund is NOT in crisis (contrary to the BBC’s pronouncements). It has a deficit, and there are plenty of alternative ways that this deficit could be eliminated, without the brutal reduction in pension provision that the BBC is suggesting. Indeed, there is compelling evidence that retaining the existing benefits would cost about the same as the changes the BBC has suggested. The BBC refuses to engage with these figures (although it is my understanding that the NUJ is considering whether to get a professional analysis of the pension fund deficit).

Mark Thompson gets his revenge…

November 5, 2010

…on Helen Boaden. She’s been forced to go and report the news herself.

Thompson himself seems to be keeping a low profile.

Meanwhile the Telegraph’s report gets in a couple of snide digs. You have the feeling with the Telegraph (and the Mail) that they believe workers in the public sector should really not be paid at all. The Telegraph comments that the BBC offer would still leave us with pensions that are better than many in the private sector. They don’t mention that our salaries include a significant discount to the private sector – a discount that we eventually get back (or at least partly get back) on retirement. (Anyone who doesn’t believe in this discount simply has to compare freelance rates with in house salaries – something my job involves all the time. The gap is usually around 20%.) It’s also important to stand up against those who continually argue for a leveling down in benefits: just because others have been forced to accept dramatic cuts to their pensions, that doesn’t mean we have to as well.

First day of strike action

November 5, 2010

It’s hard to talk about taking programmes off air as a success, but that is now the only weapon we have left. So the first day of strike action looks like a success; most of the main programmes (eg Today) off air or drastically cutback. Some of the big names also on strike.  It’s only the start – I can’t see any change in the BBC’s position until at least the next batch of strikes go ahead. But the first hurdle has been crossed.

The eve of the strike

November 4, 2010

Mark Thompson says in his email he “cannot see what earthly good” a strike will achieve.

The good it aims to achieve is a commitment (as suggested by the NUJ and now also by Helen Boaden) to withdraw the proposals until we know the real size of the deficit. We may not win – that is always a risk with industrial action. But for me the test is this: I’d like to be able to look back and say I did everything I possibly could to defend the BBC’s pension scheme. The cost of strike action is a few days pay. The cost of the BBC pension proposals is thouands and thousands of pounds for every year of my retirement. Put that way the loss of salary over the next few days is a small gamble with a potentially huge payoff. And the gambling odds aren’t that bad either. There’s clearly opposition to Mark Thompson’s strategy at the very highest level of the BBC. Now is the time to fight back and see whether we can make the whole pack of cards come tumbling down.

I’d put Mark Thompson’s words a slightly different way. Why on earth wouldn’t you go on strike when the cost/reward calculus is so potentially beneficial?