Socialist Worker

New Labour reneges on civil service pensions

by Sue Bond and Andy Reid
Issue No. 2007

Just two days before proposals for a civil service pension scheme for new entrants were due to be tabled, a leak last weekend revealed cabinet minister Hilary Armstrong’s plans to rip up last year’s public sector pension deal.

Worse terms are planned for both existing and new workers. Armstrong wants to cap employer contributions to the scheme. This means that if workers have the temerity to live longer they will “share the risk” by paying for it with reduced pensions or extra contributions.

Tony Blair and Gordon Brown want to copy the private sector bosses’ favourite “money purchase” schemes.

These replace clear and secure benefits with arrangements that shift all the “market risks” of higher pension costs away from employers and on to workers’ shoulders.

They cannot do this directly in the public sector so they are focussing on “sustainability” rules that will penalise future generations if they don’t die soon enough after retirement.

All this has been accompanied by a wave of media misinformation about “feather-bedded” civil servants getting two thirds of their pay as pension on annual salaries of £50,000.

The reality is that the average pension payout is £4,800 with a third of civil service workers earning less than £16,000 a year.

Faced with the prospect of strike action by over 1.5 million public sector workers last year, the government backed down.

It conceded that current civil service workers, health workers and teaching staff would have their pensions safeguarded.

But unions accepted that new entrants would have to work five years longer to get a full pension.

Even this temporary concession sent the CBI bosses’ organisations into a fury in case private sector workers would draw the lesson that strong union organisation and the threat of united action was the way to defend pensions and pay.

Unfortunately, instead of pressing home the advantage union leaders have allowed things to drift and fragment.

They have not followed up the 28 March strike by over a million workers.

Encouraged by the unions’ hesitation and disunity, the government has seized on the recent Turner Commission’s pension proposals.

These restore the state pensions link to earnings, but at a much lower level, in return for a increase in the retirement age to 68.

The government is back on the offensive. Every concession and compromise fuels its hunger for more.

United action can still halt and reverse the pensions plunder.

How dare Brown claim that decent pensions are no longer affordable when he plans to spend £25 billion upgrading the Trident nuclear missile programme?

Union activists must demand an end to union passivity and division and call for the return of a united fight across the public sector.

Accepting worse conditions for some workers will rebound to the cost of us all.

Sue Bond is deputy president of the PCS civil service union. Andy Reid is a member of the PCS national executive. They write in a personal capacity.


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News
Sat 1 Jul 2006, 00:00 BST
Issue No. 2007
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