By The Walrus
Downloading PDF. Please wait... Issue 294

Pension Revolt: Time for the TUC to Get its Finger Out

This article is over 16 years, 10 months old
Nothing better illustrates the utter cynicism at the heart of New Labour than the timing of its decision to launch an all-out assault on public sector pensions.
Issue 294

Nearly all of the key announcements – which affect millions of workers in the NHS, schools and universities, the civil service and local government – were made in the past two months, in a hasty rush of activity. With customary double-speak, health secretary John Reid and education secretary Ruth Kelly have both been trying to make out in their inimitably patronising fashion that doing away with existing pensions entitlements and making people work longer is actually a tremendously egalitarian measure.

Naturally, nothing could be further from the truth. The government has seized upon this particular moment because it had calculated that leaders of the major unions would be reluctant to embarrass the government – a Labour government – in the run-up to a general election. This wile had proven remarkably effective at the TUC conference last autumn, when Tony Woodley of the TGWU, Derek Simpson of Amicus, Dave Prentis of Unison and Kevin Curran of the GMB had all quite needlessly caved in to pressure not to censure the government over the war in Iraq.

To dress up this shameless capitulation as more like an act of intransigence, TUC leaders emerged from a special meeting of Labour’s national policy forum last August brandishing a piece of paper called the Warwick Agreement – supposed to contain an all-embracing list of 56 separate unshakable commitments, or ‘pledges’, from New Labour on a range of issues from fairness at work to defence of the public sector and jobs in manufacturing. Prominent among this list of absolutely firm pledges was an entire section on pensions protection, all of which might as well now go straight in the bin if the government is allowed to get away with such effrontery.

As John Reid and Ruth Kelly well know, there is absolutely nothing egalitarian about their plans for the pensions of nurses, teachers, local government workers and low-paid civil servants. In fact, their plans are all of a piece with those implemented during the Thatcher era, when the assets of previously state-owned pensions schemes – in industries like coal, the docks, the railways, buses, gas, water and electricity – were all systematically plundered as part of the privatisation process. The levels of surplus sloshing around in these schemes were so colossal at the time that they played the key role in providing the financial equity for the Lawson ‘boom’ of the late 1980s.

What Gordon Brown and his Treasury wonks now have in mind is that the public sector pension schemes which have so far remained relatively unscathed are now up for grabs. With a bit of luck, a successful ransack might even free up sufficient wherewithal to finance their increasingly ropy-looking privatisation programme.

In all of this, New Labour have banked heavily on the TUC ‘Big Four’ repeating their supine performance over Iraq – which, of course, is now under question with ballots for strike action being held across major unions.

Despite much media hype, the exodus from final salary pension arrangements has actually not been quite as uniform as is often made out.

In the past six months, in fact, many major firms have been forced to respond to deficits in pension funds – largely created by a downturn on world stockmarkets – by providing an additional cash boost and by increasing levels of contribution.

There have also been a number of important and successful disputes over existing protection arrangements – not least at Anglian Water, Birmingham Airport, Network Rail, Rolls-Royce and in the steel industry. All the signs are that public sector workers recognise only too clearly the genuine threat posed by the government’s latest plans. There have already been huge votes for strike action in local government and elsewhere.

This time the TUC really does need to get its finger out for the strikes and demos lined up in the next couple of months.

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