Socialist Worker

Government has millions of workers' pensions in its sights

by Charlie Kimber
Issue No. 1982

British Gas workers in Stockport were part of the strike before Christmas for decent pensions for future workers, see article.php?article_id=etcReport  (Pic: Dick Brown)

British Gas workers in Stockport were part of the strike before Christmas for decent pensions for future workers, see Report (Pic: Dick Brown)

Battles over pensions are unavoidable in the coming months if workers are not to suffer huge blows to their living standards.

The attacks, which greatly accelerated last year, are coming in every sector.

A key battleground is the local government pension scheme (LGPS), where Labour wants to push through even harsher assaults than the rest of the public sector.

Because an outline deal was agreed with NHS staff, teachers and civil service workers last year, the government now feels it can isolate local government workers and smash what is the biggest of all the public sector schemes.

If this happens, ministers will then press ahead with raising detailed issues to further worsen the schemes in the sectors covered by the 2005 deal.

The LGPS scheme has 2,250,000 members—almost one in ten working people in Britain.

These include nursery nurses, teaching assistants, home care workers, school meals workers, road gritters, meat hygiene inspectors, environmental health officers, fire control staff, college technicians, some bus drivers, admin and clerical staff, secretaries and cleaners.

From 1 October this year ministers want to abolish the “rule of 85” which allows some local government workers to retire at 60 on a full pension if they have been members of the scheme for 25 years. The abolition would hit every scheme member who turns 60 after 31 March 2013.

Nearly three quarters of LGPS members are women—many earning less than £6 an hour. They have saved 6 percent of their earnings expecting to be allowed to retire at 60, if they meet the “rule of 85”. Now that promise has been dashed.

The average LGPS pension is around £75 a week—hardly a fortune—but the average for a woman is a paltry £32 a week, reflecting low pay and the fact that many part-time workers could not join the scheme until 1995.

The proposals are out for consultation until 28 February.

The Unison union’s local government service group executive has already called for a strike ballot over the attacks—which are identical to or worse than the ones which saw huge votes for strikes just before the 2005 general election.

The top union leaders who agreed to the deal last year cannot be trusted to defend pensions now.

It is crucial that all the unions with members in local government are pushed to start preparing now for action, as well as lobbying against the changes and spreading information about the attacks.

At a local level trade unionists should be meeting across unions and sectors to step up the campaign.

A successful fight for the LGPS could kickstart a fight over pensions everywhere.

At the same time the firefighters’ pension scheme is also under attack. The Fire Brigades Union (FBU) says it will consider industrial action over the government’s plans.

From 2006 new recruits will have to work for 40 years to get a full pension, rather than 30 as at present.

FBU general secretary Matt Wrack says, “Our scheme is not over generous, nor is it inflexible. We pay far more contributions than most and get out what we put in.

“We are fundamentally opposed to the government’s proposals. It would create a workforce with two-tier benefits with a worse pension for new entrants.”

The FBU will hold an emergency conference in the near future to consider its next move.It’s not just the public sector which is facing an onslaught.

In the private sector Rentokil announced just before Christmas that it was closing its final salary scheme, not only to new workers but even to existing members.

This means replacing a relatively decent scheme with a wholly inadequate one which is much cheaper for the employer but nothing is guaranteed for the worker.

Rentokil is the first FTSE 100 company to take such action. Others will follow unless there is resistance.

Rentokil bosses say the scheme is too expensive. But from 1999 to 2004 the firm ceased all payments into the fund, although workers had to keep paying.

After enjoying this pensions holiday, the company now says the money has run out!

In his new year message Tony Blair signalled that the government is going to press ahead with increasing the pension age, as recommended by the Turner Commission.

We are all under attack and the unions must be forced to mount real resistance.

Order the new Socialist Worker pamphlet Pensions, Profits and Resistance. £1 from your Socialist Worker seller. Also available from Bookmarks, the socialist bookshop. Buy online at or phone 020 7637 1848.

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Sat 7 Jan 2006, 00:00 GMT
Issue No. 1982
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