The government used last week’s Queen’s Speech to underline perhaps the most significant single assault on workers’ conditions for half a century – and yet hardly a voice was raised in opposition.
Millions of people now face the prospect of a “three mortgage society”. They will need a huge loan to pay for their college education, without which it is hard to get a decent job.
They will need a massive mortgage to pay for a house, because no council homes are being built.
And now they will need a third savings plan for their retirement because the state pension is inadequate – and doesn’t arrive until you are about to shuffle off your mortal coil.
The government plans to introduce a bill providing “long term reform” of the pension system. The proposed legislation would see the state pension age for men and women rise in stages up to 68 by 2046.
This measure will hit manualworkers hardest – they die much younger than the rich. A wealthy stockbroker will, in all probability, have a fat company pension that will allow a comfortable standard of living until they reach a grand old age.
A building worker or a shop worker will be lucky if they live beyond 68, and won’t get much, if anything, in the form of a company pension.
The Queen’s Speech did confirm that state pensions would be relinked to earnings within the next parliament. However, it failed to name a date for this. Previously, the government had said the link would be restored in 2012.
There will be no recompense for the breaking of the earnings link in 1980, and the failure to restore it by successive governments since.
A single pensioner would now be £54 a week better off if pensions had continued to rise with earnings.
Exact details of a new second pension system were not included in the speech.
This scheme is expected to see employees automatically enrolled into a system in which contributions of 4 percent of earnings are topped up with employer contributions of 3 percent and government tax relief of 1 percent.
There are widespread fears that under this scheme employers who presently pay in more than 3 percent will attempt to reduce their contributions.
The rise in the state pension age is a truly major assault. As national income rises, we cannot apparently afford rights won decades ago.
Yet union leaders did not frontally oppose it when the bill was announced last week. Only Mark Serwotka, general secretary of the PCS civil service workers’ union, condemned the “work till you drop culture” enshrined in the legislation.
The best response to the Queen’s Speech came from Dot Gibson, vice president of Britain’s biggest older people’s organisation, the National Pensioners Convention.
She said, “The Pension Reform Bill proposed by the government is likely to contain absolutely nothing of benefit to today’s 11 million pensioners.
“The best it will offer is a restoration of the link between the state pension and earnings in six years – by which time 3 million older people will have died.
“Between now and 2012 the value of the basic state pension in relation to the costs of living will continue to fall and relinking it to earnings at that time will only give an extra £1.40 a week more than under the present system.
“There is also no need financially to raise the state pension retirement age in order to fund a better state pension system. This is a government
smokescreen that tries to hide the £34 billion surplus in the national insurance fund.”
We need a storm of protest against the pensions plan.
What the Queen’s Speech outlined
- State pension age to rise to 68 by 2046
- No date set to relink pensions and earnings
- No recompense for breaking the earnings link in 1980
- Details for second pension scheme left unclear
Union activists push for new strike
by Nick Ruff chair of Kirklees Unison (personal capacity)
The lobby of parliament over the local government pension scheme, set for Wednesday of this week, must be the start of a serious fight.
The government and the local government employers are due to present proposals for a new pension scheme to unions on 30 November.
It is now clear that the new scheme will be significantly inferior to the current one. So Unison is preparing for an industrial action ballot in the new year.
This is very different from the optimistic statements given by the unions involved in the industrial action last March. Strike action was suspended, and negotiators said they were confident they could agree protection for existing members of the scheme and a better new scheme.
The strategy of the union leadership to call off the action has proved to be a disaster.
However, the recent initiative by Kirklees Unison branch to call a special conference to discuss pensions has shown that the dispute is far from over.
Over 90 local government branches, representing over 300,000 members, supported the call for a conference. The momentum of the campaign forced the union to organise this week’s lobby of parliament and provisionally call a conference for 14 February 2007.
The Kirklees initiative was specific to Unison branches in local government, but the call for further action must come from all across the unions who took part in the March strike.
The decision to call a conference is to be discussed by Unison’s national executive on 6 December.
Heather Wakefield, Unison’s national officer for local government, suggested to a Yorkshire and Humberside pensions briefing last week that if the new scheme is unacceptable then Unison will start a strike ballot in January and the conference in February will be cancelled.
A ballot would be welcome, but, instead of cancelling the conference, it should be brought forward to launch the campaign for a yes vote.
We don’t want to see the dispute turned on and off as it was in the past. We need to see the unions vigorously campaigning for action, and a conference will be the ideal way to start that.
How a rebellion was squandered
On 28 March this year, up to 1.5 million local government workers struck over the attacks on pensions. The strikes were hugely successful and popular among workers.
The government was changing the regulations and many workers who expected to retire at 60 were told they would have to work until they were 65.
In addition, the minimum age for drawing a pension was forced up from 50 years to 55 years.
This meant that workers made redundant between 50 and 55 were no longer entitled to an immediate pension.
Those attacks are going through.
The government is currently consulting on a new local government pension scheme but the options all represent a worsening of the scheme and are inferior even to the (bad) deals made with many other public sector workers.
The local government employers are trying to cap the amounts they pay into the scheme – but demanding that workers pay more!
These are the same employers who for many years in the 1990s enjoyed pensions holidays.
The vast bulk of workers in local government are low paid women. Many, especially part-time workers, are not in the scheme because they cannot afford to be, but the changes proposed will only add to this problem.
All these attacks are continuing because the unions did not follow up the success of the 28 March strike with further action.
Instead they relied on the goodwill of the government – which has taken weakness as an excuse to rampage further through pension provision.