Socialist Worker

Time to fight this pensions plunder

New Labour and big business are set to intensify their attacks on our pensions. Charlie Kimber outlines the attacks - and how we can resist them

Issue No. 2008

After last week’s parliamentary debate on the pensions White Paper it’s time to take stock of where we are with the struggle over pensions, what the government has tried to do, and how effective our side’s response has been.

Ministers set out to make people work longer and pay more for their pensions as soon as Labour was re-elected in 2001. In this they were in tune with a drive across Europe (and indeed the world) to slash welfare in order to boost profits.

It is a substantial rolling back of the trend for half a century of gradually improving pension provision for many workers. For example, the European Union’s Barcelona summit in March 2002 set out the aim of a retirement age of 65 for all workers instead of the average (at the time) of 58.

This was a declaration of war on workers across a continent, a plan designed to make the average working life seven years longer.

In Britain the government has sought to raise the state pension age and savage public sector pension schemes. Rights won over decades would be eliminated in years on the basis of a spurious hue and cry about a “demographic timebomb”.

These plans, quite rightly, caused an outcry from many workers. But they are all well on the way to being carried through. The White Paper recently unveiled by the government calls for:

  • The state pension age for men and women to rise to 66 in 2024, to 67 in 2034 and to 68 in 2044.
  • Future rises in the state pension to be linked to earnings rather than prices at some point during the next parliament. However, there will be no recompense for the fact that the breaking of the earnings link in 1980, and the failure to restore it by successive governments since, is now costing pensioners £52 a week.
  • People to be automatically enrolled into a national savings scheme, administered by private firms, from 2012 onwards.

When the principle of these changes was debated in parliament last week, none of the major parties spoke out against raising the pension age.

The result will be thousands more workers dying before they retire, and tens of thousands more forced to live on meagre benefits because they are too old to work, but too young to get their pension. Manual workers and those who live in areas where ill health is widespread will be hit the hardest.

Pathetic

The response by the trade unions has been pathetic. Although there have been token voices against the rise in the pension age, they have been submerged by a general welcome for the government’s plans.

However, the battle is not yet over. The White Paper proposals will be taken through parliament over an extended period of years. At every stage it ought to be possible to build a coalition of unions, pensioners groups, student organisations and others around slogans such as “We won’t work till we drop!”

Several union conferences - such as those held by the CWU, the GMB, the PCS and Unison - have already passed motions condemning key elements of the government’s plans. Activists should insist these do not remain simply as a paper policies.

Meanwhile in the private sector the number of final salary pension schemes open to new members has halved since 2003.

When final salary schemes are closed down, they are usually replaced with money purchase plans. These cost employers less than half as much as final salary schemes, but offer no guarantees for the worker.

Millions of workers are working longer for a worse pension. Pensions are effectively deferred wages - and taken together the attacks on pensions represent a 2 percent wage cut for the average worker this year.

Again, the unions have put up merely token resistance. The usual process is that the bosses propose some appalling plan, the unions reject it, the employers make some minor concessions and the union leaders then declare victory.

There have been notable exceptions - Scottish Power, some bus companies, parts of the rail system - where actual or proposed strikes have defeated attacks, or even won improvements. But they are far too few.

Each case has been treated as a separate dispute, not as part of a general offensive which has to be confronted head on.

This combination of a desperate poverty of ambition allied with fear of struggle has also bedevilled the growth of resistance to public sector pension cuts.

Twice in 2005 there seemed to be a chance of a great united public sector strike against the attempt by the government to worsen pensions and make every­one work five years longer.

In the first case the government bought time to get past the general election by postponing some of the changes. Then, at the end of that year, a framework deal was agreed with the unions which protected pensions at 60 for present teachers, civil service workers and NHS staff, but abandoned future staff to working to 65.

Socialist Worker said that this retreat by the union leaders would isolate local government workers, lead to a two-tier workforce and encourage more attacks in the future. All of this has happened.

One and a half million members of the local government pensions scheme are now offered a much worse scheme than the one agreed at the end of 2005.

The great strike of 28 March, which gave a glimpse of how pensions could be defended, has been followed by talks which have offered very little.

And last week there were leaks that the present civil service workforce will be asked to pay more for their pensions and definite news that NHS staff will pay more - which union leaders are urging workers to accept!

Compromise

Having held out the prospect of a better future when Gordon Brown takes over from Tony Blair, some union leaders are saying workers must accept poor deals now because there will be worse in store when Brown takes over.

Concessions and compromise, fuelled by a general political cowardice and pessimism, and given a particular twist by the refusal to seriously take on a Labour government, have inspired the bosses and the government to further attacks.

And all the while bosses are racking up still greater pensions for themselves, while many pensioners live on a pittance.

It is time for a new strategy. This requires the political willingness to confront Labour, and the rank and file pressure to make resistance effective.

Charlie Kimber is the author of Pensions, Profits and Resistance, available from Bookmarks. Go to www.bookmarks.uk.com


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Sat 8 Jul 2006, 00:00 BST
Issue No. 2008
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