Socialist Worker

Gambling on all our futures

Issue No. 1800

PENSIONERS ARE angry about poverty and insecurity-and millions more people will face the same problems in the near future. Around 2,500 pensioners met in Blackpool this week for the annual parliament organised by the National Pensioners Convention. Delegates were furious with a government that has let the basic state pension decline relative to earnings.

Now it is just £75.50 a week. If it was linked to earnings, as it used to be, it would be nearly £30 a week more. But it is not just the fall in the worth of the state pension that is causing hardship. Occupational pensions and private pensions also suffered more hammer blows last week.

A report from the international credit ratings agency Standard and Poor's said that British pension funds need another £100 billion to be stable. These companies have built up huge pension surpluses (and saved themselves billions of pounds) during the years of stockmarket boom.

They now expect workers to suffer when their shares are not performing so well. The result is that workers who might have expected a reasonable standard of living when they retire now face a desperate future. Hundreds of companies are closing 'final salary schemes' which guarantee a pension based on earnings.

Instead firms are cutting the money they put into pension funds and telling workers to gamble their savings on the stockmarket through private schemes. Safeway supermarket group and British Airways are the latest firms to make this move. Such pension cutting is as serious as a cut in wages. These attacks are likely to take place at one in four firms over the next two years.

Union leaders should be organising protests and strikes against these attacks, and for a decent state funded pension.

Stockmarket con leaves lives ruined

THE GOVERNMENT wants all workers to take out a second, private, pension to shore up the declining state pension. It is supposed to be paid for out of your wages, and involves staking your future on a big rise in the stockmarket.

This is the con which many people were lulled into over their mortgages. Endowment mortgages mean people pay interest on their loan and a sum each month into an investment policy. These were pushed relentlessly by banks and building societies during the 1980s and 1990s. The investment was expected to generate enough cash by the end of the mortgage life to pay it off.

But about six million people with endowment mortgages will need to find additional funds to pay off their loans, warned the Association of British Insurers last week. This came as endowment companies prepare to send letters to over ten million mortgage holders.

The association fears that 34 percent will receive 'red letters' revealing there is virtually no chance that their endowments will cover their mortgages.

Selling off hospitals just like used cars

NEW LABOUR health secretary Alan Milburn unveiled the latest phase of his drive to privatise the NHS last week. He placed newspaper adverts inviting private companies to take over running NHS hospitals.

Among firms indicating they would be quick to reply were Capita and Serco. Capita has already made a fortune from profiteering in privatised public services. Serco is the private firm that runs the Docklands Light Railway in London.

These firms will be handed lucrative contracts to run NHS hospitals. Yet the government still tries to claim that it isn't privatising the NHS. As GMB union leader John Edmonds said, 'What have things come to when the government is selling off parts of our health service as if they were selling a used car? People want their hospitals run by dedicated public servants, not by fat cats after a fast buck.'

Why they want you to die young

ONLY UNDER such a crazy system as capitalism could it be a problem that people are living longer. But politicians and financiers are in turmoil over the news that life expectancy is rising.

They claim that this will cause problems in financing pensions. Surely it should be welcome news that we can expect to live longer. Isn't it good that rates of lung cancer death among men have fallen by a third in the last decade? Perhaps the government would prefer us to all smoke heavily and die at a money-saving 60.

Life expectancy is not rising equally for everyone, however. In 1972 low paid men could expect to live to 66 and a half - that's just 18 months of retirement. Those in professional jobs lived to 72. Today low paid men live on average to 71. But those in professional jobs live to nearly 78 and a half.

Retired bliss?

A CAMPAIGN has started to raise the pension age. Frank Field, the former Labour minister, says it ought to be 74. Axa, the global insurance group, is pushing for 70. The bosses' Financial Times said last week, 'Governments must raise compulsory pension ages, and most individuals will have to modify their hopes of enjoying many decades of retired, well off bliss.'

Very few people get 'decades of bliss', but a push is now on to make things even worse. Proposals to raise the pension age have two aims. The first is to take us back to the situation where most working class people die fairly soon after retirement, thereby saving the state money. The second is to pressure us to save our own money so we can retire 'early' at, say, 65.

Sack workers and pick up a bonus

TELEWEST BOSSES are rewarding themselves for putting 1,500 workers on the dole. Four senior directors at the cable TV company gave themselves an extra £690,000 last week. That is despite claiming they had to sack the 1,500 workers because of the company's 'perilous financial state'.

Finance director Charles Burdick gets a £283,000 bonus, taking his total pay packet to £671,000 for last year. Chief executive Adam Singer gets £186,000, giving him a payout of £779,000 in total.

Telewest had the nerve to defend the bonuses, claiming they went to 'extremely high calibre people'. 'We take the view we have to motivate them,' said a company source.

THE CABLE firm NTL last week announced it was setting up a bonus scheme that could see bosses raking in hundreds of millions of pounds.

TWO TOP bosses at the Halifax and Bank of Scotland are getting bonuses worth an incredible £10 million. Chief executive James Crosby and deputy chairman Peter Burt will each be getting £3 million a year for the next three years. And that is on top of their annual salaries. Another six directors of the board are also set to pick up between £6 million and £7 million each.

PRUDENTIAL BOSSES claimed they had scrapped plans to pay out huge bonuses after they caused outrage last week. The firm had planned to give chief executive Jonathan Boomer a bonus of £900,000 on top of his basic salary of £660,000 a year. On Thursday of last week the Financial Times claimed the company had backed down. But the next day directors said the bonuses had merely been delayed. Sir David Barnes, chair of the remuneration committee, also told reporters that any changes they made would be 'modest'.


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Sat 18 May 2002, 00:00 BST
Issue No. 1800
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