By Charlie Kimber
Downloading PDF. Please wait... Issue 1996

Grassroots revolt can win Britain’s pensions fight

This article is over 15 years, 9 months old
The next national strike over attacks on the local government pensions scheme could draw in other groups of workers so that the day involves even more than the 1.5 million who struck on 28 March.
Issue 1996

The next national strike over attacks on the local government pensions scheme could draw in other groups of workers so that the day involves even more than the 1.5 million who struck on 28 March.

As well as regional strikes involving between 300,000 and 500,000 on 25-27 April, pressure is growing for a speedy announcement of another national stoppage. This could take place on 3 and 4 May, to coincide with the local elections.

That week is already scheduled to see a strike by 25,000 further education lecturers. And, as talks have broken down over job losses in the Department for Work and Pensions, around 90,000 civil service workers could also be on strike at that time.

A mass revolt by trade unionists would be an excellent backdrop to the elections.

But even if the strike is not during the elections, the priority is to make sure the next wave of action is as effective as possible, and to step up agitation for more national action.

That is the way to create the social movement and the sense of political crisis which delivered victory in France.

Every few days there are press rumours about moves towards a deal. It would be a mistake for activists to be transfixed by these rather than building hard for action.

The surest way to prevent a poor deal is to create a great groundswell of feeling at rank and file level for more action and a clear victory.

In every area union members should be organising now.

In Birmingham workplaces which had a big turnout on 28 March are twinning with those where the participation was more limited to swap ideas and help win even wider support.

In Glasgow activists are already organising coaches for the strike rally in Edinburgh.

Such demonstrations are important in heightening the mood of resistance and in giving strikers confidence that they are part of a big fightback.

In Southwark, south London, Tanya Murat, Unison convenor for libraries, says, “We are calling a meeting as soon as possible for the 600 Southwark Unison members in education.

“As part of the 28 March strike, 24 schools closed completely in Southwark and seven closed early. This was due to the solidarity and commitment of classroom assistants, midday meals workers and other staff.

“There are not many union stewards in these sections and we want to bring together the people who made the strike happen in the schools, the ones who won over their colleagues and made the action so effective.

“We can learn from them. The 28 March strike has given a chance to every union branch to involve people and make sure the next strike is more effective.”

Union leaders must reject this new, rotten deal

The Local Government Association (LGA) has circulated a document which it says it put to trade union negotiators and John Prescott last week as the basis for a settlement.

It offers virtually nothing to workers. Union leaders should reject it. It promises talks with “nothing ruled in, nothing ruled out” so long as certain principles are accepted by all—and the strikes stop.

The LGA is offering that up to half the savings resulting from the abolition of the rule of 85 should be made available to fund pension protection arrangements for existing staff.

This is the rule that allows some workers to retire at 60 if they have 25 years service. The LGA’s vague formula gives no hint of either how much money would be available or who would have their pensions guaranteed.

It does make clear that most of the money stolen from workers by worsening their pension scheme would be used as the councils and Gordon Brown deem fit.

Prescott and the LGA’s suggestions are based on “protection”. This means the rule of 85 is abolished and some of the money is used to offer groups of workers retirement at 60. as if the rule of 85 still existed.

Initially it was suggested that this would cover all those retiring before 2013.

Perhaps in future talks this might rise to 2020 or 2025.

But this is not the debate the unions should be getting into. John McDermott, Unison executive member, spoke in a personal capacity to Socialist Worker.

He said, “Unison conference policy is that there should be no detriment to the pension scheme and there is no mention of this in the LGA statement.

“It does not even offer guaranteed protection for existing members. It offers discussions on protection arrangements.

“The phrase ‘nothing ruled in and nothing ruled out’ has been heard before. Unfortunately it’s past meaning is savings ruled in for the employers and benefits ruled out for our members.

“The offer of up to half of savings and some of the commutation savings being recycled to improve or protect benefits appears to be worse than offered to Unison’s NHS members.

“We appear to have allowed ourselves to be negotiating on ground set by the LGA and Prescott. This document is about the future of the scheme not our present dispute.

“There should be no end to this dispute without a special conference and ballot of the membership once an offer is made that is worth putting to them.”

The next steps in the fight

The 11 unions involved in the battle over pensions have announced the next strike days. They are:

  • Tuesday 25 April for workers in the south east, eastern, south west and Greater London regions with a demonstration in London ending at Trafalgar Square.
  • Wednesday 26 April for workers in Scotland, Wales and Northern Ireland with a demonstration in Edinburgh
  • Thursday 27 April for northern, north west, Yorks and Humberside, East and West Midlands regions.

Rich live it up after A-day

The rich are already celebrating new pension tax dodges opened up by chancellor Gordon Brown’s new A-day regime. The changes, implemented on Thursday of last week, saw millions of pounds poured into special pension accounts by the very rich.

An outcry had forced Brown to scale back some of the tax relief he was ready to hand over.

He then partially retreated on these changes under counter-pressure from the rich, and left the central elements of the system untouched.

A few hours after the new rules came into operation, the Financial Times quoted John Moret, director of sales and marketing at Suffolk Life, saying that one client had already benefited from a £750,000 bonus being paid as a one-off employer contribution straight into their self-invested personal pension (Sipp).

This would save the client £80,000 tax.

Under A-day regulations, individuals with huge salaries can pay up to £215,000 in the first year into their pension schemes.

Previously contributions to personal pensions for the rich were limited to a small percentage of earnings.

Now managers and directors will not have to pay tax on bonuses paid into their pensions. Employers which pay bonuses in this way will also save money by claiming national insurance relief.

Investors have been busy making other changes.

Moret said one group of professionals had teamed up to put their business premises into a group of Sipps in place of cash contributions, while another private investor was in the process of putting their personal portfolio of shares into their pension scheme.

Ros Altmann, a former pensions adviser to 10 Downing Street, says the A-day rule changes are a “scandal” and a “bonanza for the rich”.

She said, “At a time when the government says it cannot afford to pay workers on low incomes who lost their pensions when their companies collapsed, it is prepared to pay millions of pounds in tax relief to the rich.”

BBC scheme is under threat

Strikes are programmed for the BBC after management said it may close the final salary pension scheme to new members and raise the retirement age for younger employees from 60 to 65.

“If the plan is as drastic as we think, we will strike immediately,” said Gerry Morrissey, assistant secretary general of Bectu, the largest broadcasting union.

The BBC’s present scheme offers workers a retirement income based on length of service and level of pay in the last year of work. But it will be replaced by a career average scheme, according to Bectu officials.

This would leave new members around 30 percent worse off.

Bectu says employees over the age of 50 may be asked to increase pension contributions. Union officials are meeting BBC executives on Thursday of next week to discuss the plan.

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